Procurement for dredging projects starts with a call for competitive bids guided by recognised tendering procedures.
The aim of such a procurement effort is to arrive at a cost-effective contract for implementing a dredging project. Ideally a contract should not be the lowest price, but the best value price.
Dredging contracts can be roughly split into two project groups:
- Large-scale capital dredging projects which tend to be complex and require high quality standards. These projects often include considerable risks and are costly. They therefore require a qualified and experienced contractor who can assemble a flexible team.
- Maintenance dredging projects which are usually more routine and will have less chance of encountering unexpected adverse physical conditions.
When formulating a contract for the procurement of services from a dredging contractor, a number of key factors should be considered:
- In what timeframe must the work be completed?
- What is the budget for the project and is that fixed?
- What level of quality is required and/or expected?
- How technically complex is the project?
- How flexible are the parameters of the operation? Can changes be expected?
- What are the risks and what are the risk allocations, that is, which party is responsible for which risks?
The client will set the parameters for the dredging project and is charged with determining the need for the project in terms of its own budgetary considerations, the need for the project in general and the cost-benefit analysis for the investment.
The contractor will analyse the above-listed factors and determine the cost of the project. This will include estimating the complexity of the project, the dredging plant that will be needed and the number of employees.
A tender usually refers to the process whereby authorities, governments and financial institutions invite bids for large projects that must be submitted within a finite deadline.
An open public announcement may be made or a written invitation may be sent to potential suppliers of a particular good or service to inform them about the information required for the buyer to make a procurement decision. Issuing a tender document typically begins the tender process by which qualified and interested suppliers are evaluated based on such elements as their price, availability and proposed delivery terms.