EDITING Part B Flashcards
Advantages of a competitive single stage tender
Competitive
Transparent
Fair
Lump sum
Disadvantages of a competitive single stage tender
- Slow, linear process
- Uncertainty of outcome for contractor
- Time consuming and expensive tender preparation
Advantages of a multi stage tender
- The Contractor can join the design team earlier so expertise is available during design
- Faster
Disadvantages of a multi stage tender
- Increased risk for client as final cost is unknown when works have begun
- Can reduce design possibilities
Describe a single stage tender
- Prices are sought from several contractors at the same time
- Identical information is supplied to all tenderers
- A lump sum price is provided for contract works
- Variations can be used to change the fixed price throughout construction
Describe a multi stage tender
Work is split into packages and tendered separately to enable work to start on site prior to finishing or finalising the design
NZIA SCC 2018
B2 Extensions of time to the contract
How do extensions of time to the contract arise, how are they administered and what effect do they have on the contract?
Enter answer
NZIA SCC 2018
B3 Liquidated Damages
What are liquidated damages, how are they valued and applied, and what impact do they have on the project?
Enter Answer
NZIA SCC 2018
Bonds
What type of bonds are there? What is their purpose and duration? How and why are they used?
- Contractor’s performance bond
- Contractor’s bond in lieu of retentions
- Principal’s bond
NZIA SCC 2018
Defects liability period
What is the purpose of the DLP?
The Defects Liability Period is a period during which the Contractor must correct defective work and materials. The default period is 3 months.
NZIA SCC 2018
Defects liability period
Where does the DLP sit within the contract programme?
After practical completion, before the final account
NZIA SCC 2018
Defects liability period
What happens immediately before, during and after the DLP?
Before
Practical Completion
During
Defects identified and made good
After
NZIA SCC 2018
Describe how building costs are estimated, who estimates them and at what stage are they estimated?
Answer
List the stages of a project in order
Pre-Design • Concept & Preliminary Design • Developed Design • Detailed Design • Procurement • Site Set-up • Contract Administration • Project Observation • Practical Completion • Defects Liability period • Final Account
What is procurement?
The way in which a contractor is obtained to construct the project
Why does the procurement process matter?
- It impacts which contract is the most suitable.
- It impacts the type, extent, and timing of documentation
- It impacts the fee charged by the architect
Describe a Negotiation contractor selection method
• One or possibly 2 Contractors price the job in an open manner with discussions between the parties.
• This can allow for alternative design and construction
approaches to be considered which may save time and/or cost
• Used where Contractors with specialist skills are required
Describe a P&G (Preliminaries & General) and Margins contractor selection method
• Fast track method where full documentation not available at the start but sufficient information is required to understand the scope of project
• Allows Contractor to join the design team near the start
and still be chosen in a competitive manner
(This is from lecture but needs clarification)
• P&G = Preliminaries and General or General– Contractor’s costs to run the job.
Site establishment costs.
• Margins = profit Vary in value– 10%? Boom times = 17% in remote areas
• Auckland commercial 8-10% some 12.5%
What is tendering?
• a competitive process for choosing a Contractor
within a fair environment
• establishes a Lump Sum price for carrying out the
contract works
• Usually price-based choice – the lowest, but can be
based on other defined attributes
• Can be used with a number of different contract
types, e.g.NZIA SCC 2018 or NZS 3910:2013
How are tenders selected?
- Public (or open) tendering
- Pre-qualification
- Selected or approved contractors
- By invitation (select list), selective tendering
- Direct negotiation (single source)
What is “public (or open)” tendering?
The project is publicly advertised - Open to all
- Can get tenderers who are not suitable
- Used where accountability is required
- Public sector projects
- Simple or Low risk projects
What is “pre-qualification” tendering?
• Pre-qualification initial stage, via public advertisement
for expressions of interest
• Obtain performance and financial viability of firms to
reduce the list of potential tenderers
• A selected number of pre-qualified contractors are then
invited to tender in a second stage competition
• Complex, high risk or high-cost projects
What is “selected or approved contractors” tendering?
- A register or panel of approved contractors is established for particular types of work
- E.g. KāingaOra (Housing New Zealand)
- Tenderers are invited from the pool on a rotational basis or several chosen each time
- Repetitive works
- Ongoing roll-out programmes
- Same client and project types
What is “selective tendering (by invitation)”?
• Contractors invited to tender based on recognised
capabilities to suit the project requirements
• Client agrees and confirms tender list
• Short list may result from pre-qualification process
• Only contractors whom you would want to carry out
the project should be on a tender list
• Specialist projects
• Private sector clients
