Case study Flashcards
What level of cost detail have GT provided to establish whether their proposal is based on robust supply chain selection and tendering?
They must qualify with the QDC requirement and provide a minimum of three quotations per works package.
Mclaughlin and Harvey stated their reason for withdrawing was resourcing another bid, was the ITT issued late?
It was issued slightly later in the year than stated in the initial engagement due to a delay obtaining Cabinet office approval.
How was the Market engagement undertaken?
RFI’s were issued questioning the interest issued with a few lines overview of the project.
Questions were asked around the contract and if there was a preference to split or not, there were also questions surrounding what would make the contract more appealing.
Following the RFI’s, engagement sessions were had to give more detail on the project around design, sites, outcomes, brief, cost, risk.
The ITT docs were only issued to 2 nr contractors? Was there a selection process to identify these contractors and why only 2 nr?
Contractors available were dictated by the LOT under the CCS framework in which 18 were available, only two received the ITT as they were the only ones who responded to the EOI
How much over budget was the GT ROC?
45% over the approved budget
QDC – What is this and what were the implications?
Qualifying Defence contract – applicable when there is only one supplier / negotiated tender meaning there is a requirement for additional information in the tender return including three quotations for each works package that forms the overall price to ensure a fair tender return and VFM.
If you did the process again, would your advice to the client remain the same?
I would have pushed harder to have a commercial strategy earlier, and possibly advised going out to tender earlier at end of RIBA 2 into a 2 stage D&B route.
In the instance of having 3 contractors involved, and one requested an EOT to the tender return date, what would you do?
Have a discussion with the client to discus programme impact, and weigh up the risk of delay vs the contractor dropping out and any impact this would have on the competitive advantage of the procurement exercise. If agreed this would be communicated through the e-tendering portal, all contractors would be notified of the EOT.
What does working in MOD impose on how you manage a project?
- Hierarchy
- Security
- Process driven
- Clear brief and desired outcomes
- Frameworks adopted
- Set templates
- Set processes, procedures and timescales
Why was the CCS was the chosen framework for this project, and were other frameworks considered?
A procurement workshop was held in January 2022 where the following frameworks were considered:
* Crown Commercial Services Modular Building Solutions – this framework was not viewed as suitable due to the design and nature of the works required.
* SCAPE - this route was not deemed appropriate due to the complexity of schemes and potential risk by engaging within only one supplier.
* Crown Commercial Services - Construction Works and Associated Services – deemed most suitable due to the number of suppliers available including capability and competitiveness. The workshop concluded that the CWAS is a known framework to DIO, offering several lots and access to suitable suppliers.
What was the cost & technical split in the ITT?
- Technical 60%
- Social Value 10%
- Cost 30%
Option C was adopted, were other contract options considered?
Yes option A & Option C were considered.
Option A was discounted on the basis of current market conditions and hyperinflation which has resulted in an industry reluctance to sign up to an Option A contract. This was confirmed in feedback sought during the RFI stage.
Other DIO projects have recently encountered supplier inability to sign up to the tender validity period, in some instances of no greater than 30 days due uncertainties within the supply chain. This is not achievable within the tender process where a standard period of 90-120 days is required to seek necessary approvals.
What are the disadvantages to use of option C on this project?
Option C may have drawbacks in a competitively tendered environment, where Contractors are more likely to offer unsustainable prices to win the contract with a view to increasing the target price during delivery. This risk will need to be fully considered at the evaluation stage, however noting that this is a ‘call off’ competition such risk will lesson in selecting this option. The rates held at FW can be carefully reviewed and analysed prior to award with the support of a DIO Quantity Surveyor (QS) to mitigate further
What were the reasons for opting for an NEC option C contract?
o Cost certainty achieved at the offset
o Current DIO preference
o A cost-plus contract which permits a pain/gain share mechanism in relation to an agreed target-built cost from an activity schedule.
o Likely to be more attractive to industry than the original intention of a fixed price firm contract as it permits payment of defined costs plus or minus savings or over-spend.
o This Option provides a more collaborative approach in working with industry to lessen the perceived risk in entering a contract of this nature and value.
o In utilising Option C, the financial risk is reduced for the Contractor operating through a cost reimbursable approach. This is likely to attract greater competition for the project whilst also incentivising the contractor to drive savings and deliver
Disadvantages to one contract for all three sites?
- Risk of delivery placed on one contractor. The process will place even more emphasis on selecting the most appropriate contractor.
- The combined cost (capital and revenue) including VAT may necessitate additional scrutiny if works to all three sites are procured under one contract.
- The Construction Works and Associated Services (Framework Agreement) – as procured under the Crown Commercial Service) stipulates that the works are allocated by LOT values (namely £0 - £3m, £3m - £10m, £10m - £30m, and £30m - £80m). The total value of all works if procured under one contract is likely to fall within the £30m - £80m category. This may present an issue with regards to direct appointment of one contractor undertaking all the works.
- A main contractor may perceive a greater commercial risk in being appointed to design and construct on three separate site locations (including the associated disruption with obtaining labour, materials, and other site-specific location considerations) rather than being appointed under a single source location.
- Regional constraints with the geographical spread of each project location.
