02 Tendering Flashcards
What is involved in the tender process?
- Take an initial brief to understand employer’s requirements for tendering
- Choose a suitable tendering strategy with the project team
- Collate and produce the invitation to tender documents and issue in the appropriate manner
- Deal with tender queries and ensure they are answered in a timely manner
- Open and analyse tender returns, collate tender queries and produce a tender report
- Advise the client on more complex tendering issues
Outline the main tendering procedures.
- Single-stage tendering
- Two-stage tendering
- Negotiated tendering
How does single-stage tendering work?
- Invitation to tender documents are issued to a number of competing clients who are all given the chance to bid for the project based on identical tender documentation
- Contractors are given a predetermined amount of time to submit their tenders
- Returns are analysed in terms of cost and quality and the preferred contractor is then selected
What are the advantages and disadvantages of single-stage tendering?
Advantages:
- Most competitive price
- Client retains greater control of design
- Most linear
Disadvantages:
- No contractor involvement
- May lead to high levels of provisional sums and risk items on client side
- Programme implication to include tender period
How does two-stage tendering work?
- First-stage tender enquiry documentation is issued to bidding contractors
- The preferred contractor is chosen based on the quality of their bid, the quality of their team, their preliminaries prices and OH&P allowances
- The preferred contractor then joins the design team on a consultancy basis using a Pre-Construction Services Agreement
- The preferred contractor then works with the professional team to complete the design before presenting a bid for the works
What are the advantages and disadvantages of two-stage tendering?
Advantages:
- Contractor involvement in design (may reduce client risk for D&B procurement)
- Some degree of competition (prelims and OH&P) compared to negotiated tendering
- Allows an earlier start (ability to overlap tendering and design)
Disadvantages:
- Lack of competitiveness during second stage
- No incentive for contractor to mitigate risk for traditional procurement as a traditional contract will leave most of the risk with the client
- Programme implication to include tender period (although can be overlapped with design)
How does negotiated tendering work?
Effectively a single-stage tender but with a single contractor who returns an initial price, which is then negotiated with the client’s professional team
What are the advantages and disadvantages of negotiated tendering?
Advantages:
- Most contractor involvement in design (may reduce client risk)
- No programme implication of tendering
- Can build trust between client and contractor
Disadvantages:
- Lack of competitiveness
- May not be suitable for public procurement contracts
What is serial tendering?
- Combines normal competitive tendering (whether single or two-stage) with negotiation
- Often used for clients who have a number of phases of similar work
- The original competitive tender serves as a basis to negotiate the following phases of work
What are the advantages and disadvantages of serial tendering?
Advantages:
- Contractor selected in a competitive environment in the first phase, so follow on negotiations should be sound
Disadvantages:
- As time goes by, the basis of the original tender will no longer be applicable and would need renegotiating anyway
What is electronic tendering?
E-tendering is defined as the electronic issuing and receipt of any tender documentation in electronic format as part of the procurement process
What are the advantages and disadvantages of electronic tendering?
Advantages:
- Reduces tendering costs through reduction in paper, printing and postage costs
- Less environmentally demanding
- Avoids the need for double or triple entry of the same information
- Ability to track and limit time of tender opening
- Collation of tender queries in one place
Disadvantages:
- Some contractors may be unfamiliar with this process
- Technology requirements may restrict participation
What is OJEU?
Official Journal of the European Union (OJEU) is the central database for European public sector tender notices
What is the relevance of OJEU in the tendering procedure?
The European Union Procurement Directives establish procurement rules throughout the EU, which apply to any public sector purchases above defined thresholds
What is the purpose of the European Union Procurement Directives?
The purpose of the Directives is to open up public procurement within the EU to encourage the free movement of supplies, services and works
How are the European Union Procurement Directives enacted in the UK?
The Directives are enacted in the UK by the Public Contracts Regulations
What is the current threshold required for works under OJEU?
Approx. £4.3m
What is TED in relation to OJEU?
OJEU compliant tenders are published on TED (Tenders Electronic Daily), which provides free online access to all EU opportunities
What guidance notes are available in relation to tendering?
- RICS Tendering Strategies Guidance Note 2014
- RICS e-tendering Guidance Note 2010
- JCT Tendering Practice Note 2012
- NBS Guide to Tendering: for Construction Projects 2011
Could a client be sued by a tenderer for ignoring the tender procedures?
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What sort of information would you expect to see in the tendering rules for a project?
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On your projects, how do you deal with queries from tendering contractors during the tender period?
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In two-stage tendering, what are contractors generally asked to submit for the first stage?
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How would you manage the first stage of a two-stage tender?
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What is a pre-construction services agreement and when would it be used?
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How would you guarantee best value on the second stage of a two-stage tender?
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How would you use mid-tender interviews on a project?
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Explain your strategy when negotiating a contract sum.
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Explain to a client how the EU tendering regulations might affect his project?
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What process would you follow for a public sector client that wanted to tender something with a value of £3m?
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At what point during the tendering phase of a project would you expect to set a GMP and why?
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A client wants to construct a specialist facility, where a contractor?s input on buildability would be very helpful. What tendering strategy would you recommend?
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A national retailer is about to embark on the refurbishment and re-branding of 100 stores across the country. How could serial tendering help them?
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A client has a five-year plan to develop the facilities on his manufacturing site. He plans to spend £500 million. How could a framework help?
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Halfway through a single-stage selective tendering process your client wants to make changes to the design. What advice would you give him and how might you incorporate the changes?
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What is a reverse auction and how might it be used in the tender process?
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List all of the documents you would expect to find in a set of tender documents for a single-stage selective tendering process on a traditionally procured project.
- Invitation to tender
- Form of tender
- Conditions of tender
- Contract conditions
- Project information (prelims/works information/employer’s requirements)
- Design information
- Pricing document
- Pre-qualification questionnaire
- Appendices (H&S information, surveys, statutory consents information, risk register)
List all of the documents you would expect to find in a set of tender documents for a single-stage selective tendering process on a design and build project.
Same as traditional tender but with employer’s requirements, which may include:
- Type of structure
- Function
- Size
- Quality
- Aesthetics
- Costs in use
What information would you include in a letter of invitation to tender?
- Project description
- Documents included to base tender on (drawings, schedules etc.)
- Date of issue
- Deadline for return
- Contact details for queries
- Signature and date
What information would you include in a form of tender?
- Contractor name and address
- Sum offered to carry out the works
- Timeframe between acceptance of tender and start on site
- Construction programme length
- Parent company details (if applicable for a PCG)
- Validity period (i.e. length of time offer remain open for acceptance)
- Signature and date
Additional information pre-completed prior to issue:
- Project title
- Employer/consultant name
- Documents referred to (drawings, schedules etc.)
- Confirmation of error procedure
- Confirmation of deadline for submission
What information would you include in the conditions of tender?
- Return date
- Documents to be returned
- Proposed scoring mechanism for PQQ
- Details for arranging site visits
- Details for submitting tender queries
- Error handling procedure
- Dates for mid- and post-tender interviews
What are prelims?
Prelims provide a description of the project that allows the contractor to assess costs that do not form part of any work ‘package’ but are still required by the method and circumstances of the work.
What details are typically included within prelims?
- Project particulars (e.g. summary of the works, employer, CA and PD details)
- Site details (e.g. existing buildings, access, parking, hazards)
- Contract details (e.g. commencement/completion date, LADs, rectification period, retention amount, requirements for insurance/bonds/warranties/guarantees)
- Management of works (e.g. requirements for programme, monitoring, site meetings)
- Quality management procedures (e.g. substitution of products/methods, inspections, testing)
- Health and safety (e.g. requirements for PCIP, CPP, security, protection against noise/vibration/pollution/dangerous substances/fire)
- Facilities (e.g. welfare provisions, site offices, plant, waste clearance, water, electricity, IT and communication equipment, protection of work, PPE, site transport, setting out)
- Operation of finished works (e.g. requirements for O&M manual, H&S file)
- Planning conditions
- Outstanding statutory approvals
- Party wall requirements
- Emergency services obligations
- Collaborative practices
How do prelims differ from preambles?
Preambles detail workmanship/materials clauses and provide an explanation of how documents are to be used (e.g. schedule of works to be read in conjunction with workmanship/materials clauses)
Explain how you have produced a preliminaries document for one of your projects.
Standard sets of preliminaries can be obtained via NBS and altered to suit the contract
A client asks you how much design information you will need to compile an employer’s requirements document on a design and build project. Explain what you will need and why?
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What is the purpose of pricing documents?
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What is a bill of quantities?
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What are the benefits of using a bill of quantities?
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Name some different types of pricing document and how they differ.
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How do you deal with queries about the design information when compiling a pricing document?
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Why do we use standard methods of measurement in relation to tendering?
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When would you expect to use a schedule of works rather than a bill of quantities?
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What are the preambles in a bill of quantities?
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How would you produce the preliminaries section of a bill of quantities?
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What is the difference between ‘prime cost’ and ‘provisional sum’?
Prime Cost Sum (aka ‘PC Sum’):
- An allowance for the direct (actual) cost of materials, plant and labour associated with a production process
Provisional Sum:
- Allowance for specific elements of work not yet defined in enough detail for contractors to price, including work that the client may not decide to have carried out
When might you use a PC sum?
May be used when an item has already been purchased by the client or where there is a specific installation by a company with a strong existing relationship with the client
When might you use a provisional sum?
May be used when work is required below an existing structure, where ground conditions cannot be determined until the structure is demolished and the ground opened up
What is the difference between an undefined and a defined provisional sum and what are the implications of using either?
Defined provisional sums are those where the following information is provided:
- Nature of the work
- How and where the work is to be undertaken
- Extent of the work (e.g. quantities)
- Any specific limitations
Undefined provisional sums are those where the information required for a defined provisional sum cannot be provided
NB: defined provisional sums are considered to have been accounted for within the contractor’s price and programme (i.e. he takes the risk), whereas undefined provisional sums are not (i.e. the client takes the risk, so contractor may be able to claim for an extension of time and/or loss and expense)
Where would you find the definitions for an undefined and defined provisional sum?
RICS New Rules of Measurement 2: Detailed Measurement for Building Works
What is a PQQ and how would you put one together?
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What questions would you ask in a PQQ?
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When compiling tender documents, what health and safety information do you need and where would you get it from?
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If you wanted the contractors to submit alternative tenders, how would you include this in the tender documents?
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How does electronic tendering affect tender documentation?
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You have been asked to put together the tender documentation for the first stage of a two-stage tender. Explain how you would go about it and what sort of documentation you would need.
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You have been asked to compile a schedule of rates for use in a measured term contract. How would you go about it?
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What selection techniques are available in the tender process and how do they differ?
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What is an approved list?
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What procedure would you go through in order to pre-qualify a contractor for a tender list?
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How many tenderers should there be on a tender list?
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Who should be involved in compiling a list of tenderers for a project?
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In your experience, what factors affect the ease with which you are able to compile a list of tenderers?
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What are the dangers of having inappropriate tenderers on the list?
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How might you establish the financial stability of a contractor?
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What written submissions might you ask contractors to make prior to an interview?
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What is a scoring matrix in the context of a pre-qualifying interview?
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How would you find out if a contractor was interested in tendering for a project?
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When and in what publications might you advertise a tender?
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Where would you find the rules governing the selective tendering process?
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What is the process when opening tenders?
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How do you deal with late tenders on your projects?
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What would you do with a tender that missed the deadline by only a few minutes?
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What would you say to a client that instructed you to accept a late tender?
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If a client insists a late tender is opened - what would you do?
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What would you do if your client was a Local Authority and they instructed you to accept a late tender?
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Would you accept a late tender return for a private client?
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What does JCT Practice Note 2012 say about dealing with late tenders?
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What is the process when assessing tenders and what would you be looking for?
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What information would you expect a contractor to submit on a single-stage selective tender for a traditionally procured project?
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When analysing a pricing document, what other documentation can you use to help check the pricing?
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What options are there for dealing with errors in tenders and which documents define the procedures?
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If a contractor has made an arithmetical error in its tender, but wants to stand by its price, how would you adjust the pricing document?
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What is benchmarking and how can it be used in tender analysis?
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How would you go about analysing a contractor?s preliminaries?
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How would you go about checking a tender for front loading?
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When would you call in a tenderer?s BQ for analysis?
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What is a contract sum analysis and when are they used?
- Prepared by the contractor as part of their tender on design and build projects
- Breaks down the contractor’s price into a form allowing the client to analyse it and compare it with the other tenders (as a BoQ is unlikely to be used on D&B projects)
- It can then be used as a basis for calculating payments to the contractor as the works progress
Where would you find a suitable template for an elemental contract sum analysis?
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Describe the elements you might expect to find in an elemental contract sum analysis.
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What is a qualified tender?
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What would you do if a contractor had qualified their tender?
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What should be included within your tender report?
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If a tender had been withdrawn, how would you include this in your tender report?
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A client does not want to accept the lowest tender, but is not sure if he can do that. What advice would you give him?
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What are the dangers for your client of accepting a tender that is too low?
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All four tenders come back and are 50% higher than your cost plan. What would you do?
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How would you notify a successful tenderer?
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Do you need to notify unsuccessful tenderers and if so, how would you do it?
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