4.CL3- Procurment & Tendering

Question 1

What is procurement?

Answer 1

Procurement is a process of acquiring good, services or works from an external source.

Question 2

What are the factors affecting choosing procurement route?

Answer 2

Cost
Quality
Time
Risk

Question 3

What are the procurement routes?

Answer 3

1. Traditional
2. Design and Build
3. Management Contract
4. Construction Management

Question 4

What is Traditional Procurement

Answer 4

• Client appoints consultants to design the project in detail and prepare tender docs
• Contractors submit tenders on a single stage competitive basis
• When to use:
 Design is fully complete
 Client wishes to maintain control over design and spec
 Cost certainty
 Time certainty is not a priority
• RIAI, PW-CF1 Building Works Designed by the Employer

Question 5

What is Design & Build

Answer 5

• Client appoints contractor to design construct the works
• Client issues Employers Requirement Documents (ERD’s) which the contractor use to formulate their price. Very important for this to be a complete document as it gives contractor clear scope as to what to price
• Client may wish to appoint independent advisors to review contractor’s proposals, administer the contract and monitor works on site.
• When to use:
 need to make an early start on site – can overlap design and construction
 client wishes to minimise their risk – no responsibility for design
 technically complex projects which can benefit from the contractor’s expertise
 employer does not want to retain full control over the design development
• RIAI amended, PW-CF2 Building Works Designed by the Contractor

Question 6

What is Management Contracting

Answer 6

• Works are constructed by a number of difference contractors who are contracted to a management contractor
• Management contractor is appointed by the client early in the design process to use their experience to improve cost and buildability of proposals
• Management contractor is paid a fee to manage the building of a project on behalf of the client
• Sub-contract packages prepared for tender by the QS with input from MC
• Sub-contractors are selected and interviewed jointly by the DT and MC
• When to use:
 Large scale complex projects requiring early start on site
 Work needs to be started before design complete allowing overlaps between tendering and design
 Employer requires ECI to facilitate buildability and cost efficiency based on their expertise
 Client wants to maintain control of design while there is design flexibility throughout the construction process.
 Client wants to move risks of procurement and delivery to management contractor.
• PWC-CF10 Public Works for ECI (note projects must exceed €100 million).
• Specifically drafted RIAI blue forms, JCT Management Contract Agreements, NEC Option F Management Constract

Question 7

What is Construction Management

Answer 7

• Construction management is where the works are constructed by a number of different trade contractors contracted directly to the client but managed by a construction manager (CM).
• The expertise of the CM is used to coordinate the contracts and acts as a consultant to the client.
• The CM has no contractual links to the trade contractor or design team.
• CM is appointed early in the design process to improve buildability and design.
• When to use:
 Same reasons as MC.
 Only suitable for very experienced clients as they are required to place and administer trade contracts.
• PWC-CF10 Public Works for ECI (note projects must exceed €100 million).
• Specifically drafted RIAI blue forms or JCT Construction Management Agreements

Question 8

What is tendering?

Answer 8

The is a method of obtaining the resources to carry out required works.