Level 1 - Tendering Strategies

Question 1

What is single stage tendering?

Answer 1

• A single stage tendering strategy is when a price is obtained for the whole construction works.
• Design information is issued to competing contractors and they return bids based on the information provided.
• There is a pre-set tender period which the contractors are given to price the project.
• Tenders are analysed and a preferred contractor is appointed to carry out the works.

Question 2

What is two stage tendering?

Answer 2

First stage is competitive and typically a contractor is selected based on:
• OHP
• Prelims
• PCSA Fee
• Programme
• Budget for the works
• Capability statement, method statement etc

Second stage - Contractor is appointed using a PCSA and is concluded with the agreement on a lump sum contract sum.

1st Stage = competitive. 2nd Stage = negotiated

Question 3

What happens during the second stage of a two stage tender?

Answer 3

• Contractor carries out pre-construction services
• Main construction works are negotiated with the contractor, splitting the works into packages
• Each package is designed, tendered for and cost agreed with the clients QS (tender event schedule)
• Once cost of all packages is agreed, client and contractor sign a contract

Question 4

What is a Pre-Construction Services Agreement?

Answer 4

It’s used in two stage tendering

Enables the client to employ the contractor before the main construction contract commences

Question 5

What does a contractor do in the PCSA period?

Answer 5

They are employed in a consultant role to aid development of the design
Prepare Contractors Proposals
Procure packages of work (and negotiates cost with the client QS)

Question 6

Can you name some tendering procedures?

Answer 6

Open tendering – offers greatest competition but can attract tenderers not suitable to carry out the works and waste time, effort and money (OJEU, public projects are required to advertise contracts)

Selective tendering – Only contractors invited to tender the works (usually 3 – 6 tenderers)

Negotiated – Only one contractor is invited to tender then submit an offer and the cost is negotiated (generally used for speed or if the client has a preferred contractor)

Question 7

What is serial tendering?

Answer 7

Tenders are typically based on a schedule of rates, which can be used repetitive works like maintenance for housing associations. The client then instruct works as a when required based on pre agreed rates

Question 8

Framework Tendering?

Answer 8

Used for clients that continuously carry out construction work (such as government bodies) to reduced procurement timescales. Framework agreements are already in place (such as rates, agreed OH&P, dispute resolution methods) which enable the Client to select framework contractors and instruct works

Question 9

What do you mean by you have learned the importance of adopting robust tendering techniques (RICS tendering strategies)?

Answer 9

Tendering strategies are linked to the clients objectives eg. 2 stage a contractor can be appointed earlier to provide buildability advice

Open tendering wont be suitable for some clients

Tender timescales need to be considered in relation to the clients programme

Question 10

What does the JCT tendering Practise note say about tender periods?

Answer 10

Traditional single stage (private sector) with no contractor’s design – a minimum of 28 days

D&B or Contracts with CDP - will depend on the nature and complexity of the ERs and the extent to which they are prescribe or the design has been developed
Where design has not been developed – 3 to 4 months
Longer time may be required for extensive specialist work
Shorter time required where design is developed

Question 11

What does the JCT tendering Practise note say about how to deal with errors in tenders?

Answer 11

Alternative 1 – Confirm or withdraw
Alternative 2 – Confirm or Amend

Alternative 1 – correction is not permitted
Alternative 2 – correction is permitted (for genuine errors)

Question 12

Given the current market what trends are you seeing associated with tender periods?

Answer 12

Tenderers asking for longer periods – big change since covid

Question 13

What does a PCSA include?

Answer 13

Design services

Buildability advice

Question 14

How long does a PCSA last?

Answer 14

Stated in the agreement

Question 15

PCSA have retention?

Answer 15

PCSA – not subject to retention

Question 16

What are the pricing alternatives?

Answer 16

Traditional
Alternative A – pricing schedule
Alternative B - BoQ