Negotiated Tendering

Question 1

What is a negotiated tender?

Answer 1

• A single stage tender carried out between the employer and a single contractor.

Question 2

What are the key advantages of negotiated tendering?

Answer 2

• Employer has flexibility to choose preferred contractor.
• Time and cost savings in comparing and analysing multiple tender submissions.
• Faster process potentially resulting in reduced project programme.
• Process can facilitate early contractor involvement.

Question 3

What are the key disadvantages of negotiated tendering?

Answer 3

• Possibility of delays to the project if negotiations are protracted.
• Potential to pay a cost premium due to lack of competition.
• There is a reliance on trust between parties.
• It can be seen as anticompetitive and exclusive.

Question 4

How could you justify VFM in a negotiated tender?

Answer 4

• Insist on an open book approach and a minimum of 3 quotes to be provided for each subcontract package.