JS Procurement Tendering Flashcards
How does the use of a negotiated tender method impact the competitiveness of the pricing for a construction project?
As there is only one tenderer, they know they are not bidding for the lowest tender, so the price is more likely to be higher than if it was a competitive tender
On ‘Walstead Park’ what was your advice to your client?
My advise to the client was that the tender for the enabling works was returned over budget, so I advised my client that moving to a competitive under could help drive a more competitive price, due to there being more contractors in the process. Negotiating with one contractor, their is a risk they are less competitive with their costs
Why would a competitive tender provide better value for money?
There are more contractor’s involved in the tender process, so it is more likely tenderers will be more competitive in their pricing. The risk of a negotiated tender is that as there is only one contractor, they will be less competitive with their pricing.
How can you ensure competition under a negotiated tender?
Ensure that the contractor has signed up to an open book basis and 4-5 quotes are provided for each element of the works. Also, check costs they are providing against benchmarking to ensure these costs are reasonable.
Can you identify some of the risks associated with moving to a competitive tender?
Increased time and effort to re-tender the works which would increase the project programme, contractors bidding for the lowest cost so being less transparent with their costs
What are the disadvantages of a negotiated tender?
Less innovation
Less competitive in terms of price
Can be seen as anti-collaborative
What are the advantages of a negotiated tender?
Continuing relationship between the contractor and client
Negotiation between one contractor can expedite the procurement process
Contractor more transparent with costs as not bidding lowest to win
On ‘Amazon fit-out commercial project’ what was your advice to your client
My advise was to go with a single stage, traditional procurement route, this was because the Client want to take a proactive approach and main design responsibility throughout the design development. They also wanted cost certainty at the time of contract
In your procurement strategy report, you evaluated both the design and build and traditional procurement routes. Could you briefly outline the advantages and disadvantages of these two routes, highlighting the key differences in risk allocation?
Why did you recommend the traditional, single-stage procurement route over design and build for the specific client and project discussed in your report? What were the key considerations that led to this recommendation?
First, the client had a strong preference for maintaining control over design and quality.
Second, the project was not particularly time-sensitive, so the faster delivery of design and build was not a crucial factor.
Additionally, the traditional route allowed for more competitive pricing and greater transparency in risk allocation, aligning with the client’s objectives and the project’s nature
How does the risk allocation differ from a traditional to a design and build?
Under a traditional, the client would assume all risk except the construction risk, where with a design and build, the contractor takes on risk for the design and construction and cost.
Amazon Fit Out - Describe the process of producing an initial ‘long-list’ of potential contractors for a construction project. What factors would you consider in creating this list?
Which tier contractor would be most suitable; would you get the A team of a tier 2 contractor or the B team of a tier 1 contract (value was only £10m).
Contractors happy to work with a traditional procurement route,
working in a live building,
previous experuences
Amazon Fit Out Project - Discuss the importance of a Pre-Qualification Questionnaire (PQQ) in the contractor selection process. How does it contribute to the shortlisting of contractors?
A PQQ ensures that tendering contractors are qualified enough to carry out the work and have the capacity as a company.
How can you ensure fairness and transparency during a tender evaluation process?
Use a jointly developed scoring matrix to evaluate tenders objectively. Provide personalized feedback to unsuccessful contractors and maintain clear communication throughout the process.
On Sussex Creasent, can you go into detail about the tender report you issued?
*First was an introduction into the project; scope, project team, intro into the report, key dates
*Then I described the process; who tendered, any quires raised, addendums, form of contract, info issued
*Then I talked about the tender returns, compliance with timeframes, tender submissions (cost programme), details about the commercial review, price examination, dealing with errors and non compliance items
*Then I evaluated the tenders; talked about the scoring matrix and the split between cost and quality
*Then I gave my recommendation
On BP Phase East, what procurement route did you chose?
It was a construction management procurement route
Why did you pick CM on BP Phase East?
Because for the client time and quality were the biggest factors. With a CM procurement route you are able to
What about the allocation of risk on BP Phase East?
What would you include in a tender opening form?
Cost, programme, OHP, signed and witnessed
On Sussex Creasent, what information did you issue to tenders
Initial Tender Enquiry: Enquiry Letter, Project Information Schedule and PQQ
Tender Docs: ITT, Form of Tender, Contract Condititions, Instructions to Tenderer, Prelims / ERs, Pricing Document, Typical Appendices
What is a enquiry letter
States to confirm interest and includes the project information schedule
What is the project information schedule?
Includes the project value, professional team, tendering procedure, programme, requirements to design, contract used and CPs
What is included within a PQQ
Company financials, health and safety, supply chain information, right to work, quality assurances, experience
What is a ITT
Invitation to Tender formalises the invite, sets the return date and the process for queries
What is a form of tender?
Contractor signs the form and returns their tender, including price and programme
What is included within the instructions to tender?
Proposed scoring mechanism, details to visit site, how errors will be dealt with, information about pre and post tender interviews
What is included within the Prelims document?
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Where the project is described in detail and where the contractual obligations that the contractor is being asked to undertake is outlined
What are some typical appendices?
H&S information, key surveys, planning information, section agreements, party wall agreements
What was included in the tender report you issued on BP Phase East?
An introduction into the report, a comparison against the two main procurement routes and the pros of cons of each, making the client aware of the risk allocation under each procurement route. The state of the market at the time of tender
Can you talk me through the tender review on BP Phase East Decorations package?
Queries included:
H&S manager allocation
Provisional Sums
VE proposals
What is a Pre Tender Estimate?
An estimate of costs based on the information at the time of tender, providing a basis after the tenders are returned
Is a competitive tender always going to return a cheaper price than a negotitated?
No, nothing is ever certain in that aspect.
On Walstead Park, what risks did you identify if you move away from a Neogitated
Two risks:
Programme increases to re-tender
Not certain costs will come back cheaper
What is included within a form of tender document?
Cost, programme, any potential VE options or different methodologies, signed by director
Sussex Creasent - How did the price compare to your pre tender estimate?
Did a comparison of the prelims, contract works, OHP and risk allowances
Amazon Fit Out - Can you talk me through your advise on the PQQ?
The client wanted advice on which contractors to tender to, so I drew up a long list and advised that a PQQ should be used to fitler out the non suitable tenders. This would help identify the tenderers that were most suitable to work on the project, giving the client a set list of contractors.
What are some factors affecting choice of procurement
Fundamental - Time, Cost, Quality
Other important - scope, nature of works, control by the client, H&S requirements, certainty of costs, changes during construction
What is a cost reimbursement contract?
Contractor is carrys out the works and is reimbursed for actual costs incurred plus agree fee for OHP
If a contractor is undertaking CDP items under a traditional procurement route, what things do they need to take out?
PI Insurance
Grant of copy right licences
Warranty to the employer
What are some advantages of two stage tendering?
Early involvement from the contractor.
Potential for an early start on site
Contractor can help identify and manage risk.
What types of things would you include in a PCSA?
A PCSA will define the services that are required of the contractor during the PCSA period, similar to a consultancy agreement. It should make clear what the contractor is undertaking, whether they have design liability and method of payment.
What are some advantages of single stage tendering?
Tenders are more competitive and cost certainty is achieved
Removes the escalation of costs during the second phase
Reduces the risk of receiving unsuitable tenders
What types of things do you need to consider when selecting a contractor?
Firms financial standings
Capacity to carry out the work
Experience or project skill
Competence and resources in respect of statutory health and safety requirements.
What are some advantages of negotiated tendering?
Time and cost savings involved in removing the tender process (unless tenders far part).
Client has flexibility in terms of
What are some advantages of competitive tendering?
More competitive tender and price.
More contractors tendering so drives innovation
Commercial approach and accept more commercial and contractual risk.
What are some disadvantages of two stage tendering?
Cost certainty may not be achieved before construction starts.
Additional preconstruction fees are incurred for the main contractor.
Contractor can take advantage of the second stage negotiation and increase costs.
Potential for parties to not agree the contract sum with a risk of retendering.
What are some disadvantages of negotiated tendering?
Few options for the client to choose between so may be less innovation.
Costs can be driven by lack of competitive bidding.
When would you consider using a negotiated tender?
o Business relationships
o Early SOS
o Continuation contract
o State of the market
o Contractor specialisation
o Geographical area
What are some disadvantages of competitive tendering?
Longer tendering process compared to negotiated.
Requires a full committed supply chain – all contractors willing to bid
What type of things do you need to consider when setting a time period for a tender?
The complexity of the project.
The size of the project.
Time of the year
Market Conditions
Sussex Creasent West - Talk me through the list of documents you issued on your tender?
I issued an invitation to tender letter, the form of tender, instructions to tenderers, preliminaries document, pricing document,
What are some things included within the prelims document?
Information about project particulars (who the team are, site location), information about the site (refers to existing utilities surveys, site investigation reports, soil and ground water) what form of contract is to be used and the CPs, list of amendments that are required,
Amazon Fit out Project
How did you present your advice to your client?
I produced a procurement report and issued it to my client before setting up a meeting to run them through the report.
Sussex Creasent - Did you not establish a list of provisional sums in the tender docs?
I did, the prov sums were listed within the prelims document, however, if a contractor included any additional prov sums i made note of this.
Amazon Fit Out Project
What advice did you give on risk allocation? What does this mean?
Risk allocation is how the risk is shared amongest the parties. I advised the client that with a traditional, they retain a lot more risk such as cost risk, design risk and performance of the design team. With design and build, a lot of the risk offset to the contractor
Amazon Fit Out Project
What do you mean by design responsibility?
The client is responsible for completing the design for construction and then The client will be responsibile should there be any defects resulting from an error of design
What H&S documents would you include within the tender?
Pre Construction Information and risk register.
I would also look to include a quality question around Methodology and Working in a Live Environment and how they would deal with:
Noise, dust & vibration mitigation measures
Services isolations procedure
Proposed delivery route and site compound location
Provide a summary of your Health and Safety objectives
Amazon Fit Out Project
What was your adivce on the PQQ?
After the Client asked for advice on which contractors to invite for tender, I advised the client that a PQQ should be used to shortlist the long list of contractors I had drawn up.
Amazon Fit Out Project
Elaborate on the criteria you would recommend including in a Pre-Qualification Questionnaire to assess the capability of contractors for a specific construction project.
I included 7 sections in total:
Corporate Particulars including name, registered office, VAT number
Financials: 2/3 years accounts, turnover, details for bank references
Technical capability and record; technical skills and capability
Health and safety information
Describe the process of producing an initial ‘long-list’ of potential contractors for a construction project. What factors would you consider in creating this list?
Which tier contractor would be most suitable; would you get the A team of a tier 2 contractor or the B team of a tier 1 contract (value was only £10m). Contractors happy to work with a traditional procurement route, working in a live building, previous experuences
Did your advice on the PQQ work?
Yes
1.
Once you received the PQQ back, how did you select the shortlist for the tender?
On your PQQ, how did you present you advice to the client?
I created an excel document with the long list of contractors and some key information about each before presenting it to the client in a meeting. I then showed the client a typical PQQ and how it would be utilised on the project
Sussex Creasent
You mentioned you compiled ERs, can you tell me something specific that was included?
Project Overview
Contractor’s scope of service (what is required from them)
Form of Contractor’s Proposals
Format requirements for CSA
Specifications
Drawings if have been developed
Proposed form of contract and amendments
Requirements for warranites
PI and other insurance requirements
Sussex Creasent
Name something specific you included with the ERs
