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1. The contract documentation process

Contract documentation involves the development of complete and appropriately co-ordinated documents including working drawings and specifications, suitable for tendering and construction.

The contract documentation process
The contract documentation process

Step 1: Pre-tender estimate

Utilising cost plan D demonstrates that the project is still within budget. This estimate will also be used to assess tenders received.

Step 2: Approval to advertise

Approval for commencement of tendering will be with the health service / agency where a capital funding agreement (or deed) has been established. In all other cases, the project control group (PCG) will endorse the tender documentation and pre-tender report prior to tendering. The health service / agency will be required to seek approval to tender from the Infrastructure Planning and Delivery (IPD) branch. The submission for approval to tender shall reflect a sign off by the health service / agency that the tender documents, as far as can be ascertained, are true and accurate reflections of the functional requirements and are in accordance with the approved scope of works and budget.

Subject to the project being within budget, all other issues having been addressed and confirmation of funds being available, IPD can then give approval to tender.

The government conditions of tender shall apply and a copy of these should be obtained from the Department of Health and Human Services.

Step 3: Tendering

The following is a list of information to be made available or supplied to tenderers:

  • schedule of tender documents
  • condidtion of tender
  • copy of the AS2124 (1992) contract Annexure Part A (delete which options do not apply) and the special conditions of contract, which are contained in Annexure Part B
  • required form of tender
  • arrangements for closing of tender period
  • arrangements for opening of tenders
  • arrangements for return of late tender documents
  • if facsimile tenders are acceptable
  • validity period for tenders
  • arrangements for site inspection by tenderers
  • deposit, if any, for tender documents and conditions for its return
  • process for tenderers questions
  • pro forma for tender evaluation
  • contact person and telephone number
  • selection criteria used to assess tenders.

Tender documents, tender form and conditions of tendering

It is preferred that the tender form and conditions of tendering be bound together as a discrete document to be issued, along with the project specification, working drawings, bill of quantities (if required), general conditions of contract, any special conditions and such schedules as the Superintendent determines applicable.

The department's policy is that competitive tenders be called for all works and services.

For capital works projects a fixed lump sum or lump sum with rise and fall tender will generally be required. Any departure from these will require prior approval from the department, through IPD.

Tender period

Generally it would be expected that a tender period of three to four weeks would apply. Small, simple projects may be tendered over a period of two weeks. Complex or extra large projects may warrant additional time as set out in the Australian and United States fair trade agreement (AUSFTA).

Validity period

It must be clearly stated in the tendering conditions that a validity period for tenderers to hold their tender price apply from the date of closing of tenders.

General conditions of tendering

The standard government conditions of tendering is a separate document, and does form part of the tender documentation. The ability to not award a contract or to award to the non-lowest tenderer is normally set out in the conditions of tender. All such instructions belong only in the conditions of tendering.

Conforming tender

Any tender being considered for acceptance must comply with the tender documents. However, the tenderer may also provide an alternative tender submission.

Informal / late tenders

Any tender may be rejected which does not comply with any requirements, or which contains conditions, provisions or qualifications not required or allowed by the tender documents. Usually, tenders submitted by facsimile are not acceptable. It is also government policy that late tenders will not be considered and returned unopened to the tenderer where possible.

Alternative tender submissions will only be considered if a conforming tender is also submitted.


If clarifications or changes to the tender documents occur during the tendering period (i.e. prior to tenders closing), all tenderers shall be notified in writing in the form of a written addendum.

The consultant shall ensure that all tenders received incorporate any addenda issued. It is also important that there be only one consultant contact person for the tendering period.

Prerequisite to acceptance

Subject to the contract conditions the principal (refer to the ‘Parties to the contract’) may, before any tender is accepted, require tenderers to submit information as follows:

  • identify previous experience
  • building practitioners number
  • certified Victorian industry participation program (VIPP) plan including list of resources to be applied to project
  • ability to perform work
  • priced bill of quantities (for projects over $3-5M)
  • schedule of rates
  • construction program
  • methods of construction
  • estimated monthly cash flow
  • schedule of technical items
  • proposed sub-contractors
  • completed tender forms - undertakings
  • financial details (including bank guarantee)
  • current commitments
  • nominated site foreman and key personnel including their allocated time to be spent on the project.

Construction program

It is important to ensure that acceptance is not made of a tenderer's offer, which includes a construction program in which the time for practical completion is at variance with the time stated in the tender documents.

The time for milestones such as lock up and practical completion is to be stated in the annexure by the principal / superintendent. The tenderer may be allowed to submit a different tender price for an alternative proposal and completion date.

Submission of tenders

The tenderer or an authorised representative is to sign the tender, and the tenderer shall not alter or add to any tender documents except as is provided for in the documents.

In addition to the completion of the information required on the tender form, at the time of tendering, tenderers are also required to complete the schedule of undertaking of compliance with government industrial relations policy, and any other schedules required to be completed from time to time as part of the special conditions of contract. Tenderers will also be required to provide identity numbers for WorkCare, long service leave purposes. Also necessary is the completion of specified statutory declarations as required by government policy.

Financial assessment of tenderers

Tenderers who have been short-listed and selected to respond may be assessed to determine their financial viability. The department may require that the assessment be undertaken by an independent qualified agent to determine likelihood of failure, quantum of bank guarantee and rating of company.

Step 4: Contractual documentation

The documents and the project must have all relevant authority approvals.

Bill of quantities

For projects in excess of $3-$5M in construction costs, a bill of quantities is likely to be required.

Standard lump sum contracts

The department requires the use of the Australian standard general conditions of contract AS2124-1992, together with the Victorian government special conditions of contract. Other forms of contract are subject to specific IPD approval.

Annexures to AS 2124 – 1992, general conditions of contract

Part A annexure

It is important that consultants recognise the contractual responsibilities to be defined within AS 2124 – 1992, which may directly impact on the department involvement.

The annexure part A is to nominate the following:

  • form of guarantee
  • date of possession of site
  • construction period (working days)
  • components of tender documents and order of precedence
  • defects liability period
  • principal
  • superintendent
  • insurance alternative (principal controlled insurance)
  • liquidated damages.

Part B annexure

Annexure part B to AS2124-1992 is the medium by which deletions, amendments and additions are conveyed to tenderers. This is where the special conditions of contract are included in the tender documents.

For the latest version of special conditions of contract’ refer to the IPD branch.

Statutory declaration

To ensure compliance with approved tendering practices, it has been determined by government that for all building and construction contract tenderers shall provide a statutory declaration. The statutory declaration is to indicate that no collusion has taken place and that no arrangement provides for a fee to other tenderers and/or trade association.

The declaration should be provided as a prerequisite to acceptance of tenders.

A copy of the statutory declaration is attached at the end of this document.