Bidding & Competition Flashcards
What is a bid
Formal proposal and offer (legal)
Highest price a client will pay to purchase a development (procurement)
Lowest price a contractor would undertake a contract for (procurement)
Characteristic of a bidding market
Competition is based on winner takes all
What is traditional bidding
Practice associated with the award of a contract through competitive tendering
Substantial client input
Basis of award either best value or lowest cost
What is the Social Value Act 2012
All public sector project must factor in economic, social and environmental well being in contract awards
What is a decision to bid
Collective judgement from senior management to balance market opportunities and risk
Factors considered include:
Company objectives and policies
Contract information
Capacity
Capability
What are the d2b outcomes
Reject
Provisionally accept awaiting further information / negotiation if possible
Unconditionally accept
What are the d2b review gates
Pre-qualification
Upon receipt of tender documents
At tender adjudication
How is the bid/price determined by contractors
Estimators’ report
Includes project and stakeholder characteristics, conditions of contracts and estimating assumptions
Tender adjudication
The process whereby senior management assess the tender estimate and decide on the mark up to apply
How is mark up determined
Global assessments based on strategy, skill and experience
Friedman’s model shows a theoretical process but is rarely used in practice
What is a reasonable bidding efficiency
20%-30%
How is bidding addressed in practice
Mark up determination
Bidding behaviour can differ in particular markets or external conditions
Major contractors strive for a balanced portfolio of projects
What is the bidding process
SC quotations
Estimator’s report and d2b
Project schedule
Tender adjudication
Bid submission
Bidding team
Estimator
Assistant/administrator
QS
Planner
PM
Buyer (if not QS)
How is bidding performance tracked
Cumulative tenders submitted to cumulative tenders won
Cumulative value of submitted to tender awards
Summary of tender results
Risk pricing methods
Risk workshops
Qualitative assessment
Quantitative assessment
