P&T Flashcards
What is procurement?
The overall process of acquiring construction work or services
What factors should be considered when selecting a procurement route?
- The specifics of the project
- Risk apportionment
- The client objectives regarding cost, time, control, quality and risk
What factors affect the procurement route of a specific project?
The clients objectives in terms of ;
- Cost
- Time
- Control
- Quality
- Risk
And any additional specific requirements on the project.
What is a procurement strategy?
A procurement strategy entails weighing up the benefits risks and financial constraints of a project which will be reflected in the choice of contractual arrangements.
What is traditional procurement?
The design is completed by the client’s design team before competitive tenders are invited and a main contractor is employed to build what the designers have specified
What are some key characteristics of traditional procurement?
• Full documentation is required before the contractor can be invited to tender for carrying out the work
• Client has control over the design (Generally no design responsibility on the contractor)
• The terms of many traditional contracts require the client to appoint a professional consultant to act as independent contract administrator
• Making changes during the construction stage will be expensive
• Administrative matters relating to valuations and payments are in the hands of the independent contract administrator
When might tradition procurement be appropriate?
• If the employer has had the design prepared
• If the design is substantially completed at time of contractor selection
• The client wishes to retain control over the design and specification
• Cost certainty at start on site is important
• The shortest overall programme is not the client’s main priority
What are the advantages of traditional procurement?
• Competitive fairness and transparent process – increase value for money
• Design led – can ensure quality
• Price certainty before commencement
• Well known procedures
• Changes are reasonably easy to arrange and value
What are the different types of procurement on a construction project? Describe each of the four most common routes.
- Traditional & General Contracting
- Design and Build
- Management Contracting
- Construction Management
What are the disadvantages for traditional procurement?
• Overall project duration may be longer than others – sequential process
• No input into design and planning by the contractor
• Strategy based on price competition – could lead to adversarial relations
• Dual point of responsibility – design team for design and contractor for construction If design not complete at time of tender, cost and time certainty are reduced
What contracts might be used for traditional procurement route?
JCT – minor, intermediate, standard with quantities
What are three main types of types of contract for traditional procurement?
• Lump Sum Contracts- Contract Sum is determined before construction work is started- “with quantities” “without quantities”
• Measurement Contracts- where the contract sum is not finalised until after completion, but is assessed on a previously agreed basis
• Cost Reimbursement contracts – where the sum is arrived at on the basis of prime (actual) costs of labour, plant and materials, to which there is an added amount to cover overheads and profit. (High Risk to the client!!!)
At what RIBA stage would a tender happen in a traditional procurement?
Stage 4 (Technical Design)
What is D&B procurement?
Where the contractor is responsible for the design, planning, organisation, control and construction of the works to the employer’s requirements for a lump sum price
How does D&B work?
The employer gives the tenderers the ‘Employer’s Requirements’ and the contractors respond with the ‘Contractor’s Proposals’, which include the price for the works
What are employer’s requirements?
They provide a description of theclient’srequirements, including; thespecificationfor the building, thescope of servicesrequired from thecontractorand an allocation ofriskfor unknown items.Proposals are then prepared in response to theemployer’s requirements
When might D&B be appropriate?
- Where there is a need to make an early start on site – can overlap design and construction
- Where the client wishes to minimise their risk – not got responsibility for design
- For technically complex projects – benefit of contractor’s expertise
- Where the employer does not want to retain control over the design development
What are the advantages of design and build?
- Single point of responsibility for design and construction
- Earlier commencement on site (depends on how
- Early price certainty
- Benefit of contractor’s experience harnessed during design
What are the disadvantages of D&B?
- Client may find it hard to prepare a sufficiently comprehensive brief
- Client has to commit to a concept design early
- Variations from the original brief are difficult to arrange and often expensive
- Harder to compare tenders – harder to determine if getting value for money
- Need to check that the contractors proposals satisfy ER
- Ease of fabrication may be prioritised above aesthetic quality
- Client loses control design once the contractor is appointed.
What is novation?
• A new contract that transfers the rights and obligations of one contractual party to a new third party i.e. design rights and obligations of architect transferred to contractor
If the design team is novated what should the client put in place?
A collateral warranty to the design team to give them remedies for breach of contract
What is management contracting?
• A management contractor is employed to contribute their expertise to the design and to manage construction and is paid a fee for doing so.
• The overall design is the responsibility of the clients design consultants, the contractor will only be responsible for defining packages of work and then for the management of the various trades.
How does Management Contracting work?
- The management contractor has direct contractual links with all of the works contractors
- They have the responsibility for the construction works without actually carrying them out
- Not all of the design need be completed before the first works contractors start work
- The MC selects the works contractors through competitive open book tenders
- The client reimburses the cost of these packages to the MC plus their fee
- The MC’s role is low risk – get prime cost plus a fee
When might Management Contracting be appropriate?
- Where the client does not want cost certainty before commencement
- Where an early start on site in a priority
What are the disadvantages of Management Contracting?
- The price for the works is not received until the last package has been let
- Changes to the design of later packages may affect packages already let - expensive
- There is little incentive for the MC to reduce costs
- May become a ‘post box’ system
- In practice, the MC has little legal responsibility for the defaults of the works contractors
What is construction management?
The employer places a direct contract with each of the trade contractors and utilises the expertise of a construction managers who acts as a consultant to coordinate the contracts
How does Construction Management work?
- The trade contactors carry out the work
- The construction managers supervises the construction process and coordinates the design team
- The CM has no contractual links with the trade contractors or members of the design team
- Their role includes preparation of the programme, determining requirements for site facilities, breaking down the project into suitable works packages, obtaining and evaluating tenders, co-ordinating and supervising the works
When might Construction Management be appropriate?
- On large, complex projects were the advantages of CM can be put to use e.g. upfront build ability knowledge, programme advise, specialist input from trade contractors
- Where early start on site is key
- Flexibility in design, procurement, construction strategy
- Where price certainty before commencement is not key
- Where the client is experienced in construction
What are the advantages on Construction Management?
- Overall project duration reduced by overlapping design and construction
- Construction manager can contribute to the design and project planning processes
- Roles, risks and relationships for all parties are clear
- Changes in design can be accommodated without paying a premium
- Prices may be lower due to direct contracts with trade contractors
- Client has means of redress to trade contractors through direct contractual links
What are the disadvantages of Construction Management?
- Price certainty not achieved until last trade package is let
- Changes to later packages may adversely affect packages already let - expensive
- Need an informed, pro-active client
- Client has a lot of consultants and contractors to deal with – not just one – more fees
- Client could be taken to adjudication at the same time by all subcontractors
What is the difference between management contracting and construction management?
• Under construction management the client is in direct contractual relationships with each of the trade contractors and the construction manager isn’t
• Under management contracting, the MC is in direct contractual relationships with the trade contractors and the client is in contract with the MC only
How do you identify the client requirements before recommending a procurement route?
Through detailed discussions with the client and design team to identify their priorities in terms of cost, time, quality, risk, control requirements and experience
If the client wishes to start on site ASAP what route would you recommend?
Construction Management or Management Contracting
What is Public-Private Partnerships (PPP)?
A public-private partnership (PPP) is a long-term agreement between a government and a private company. The goal of a PPP is to deliver a service or project that would normally be provided by the government.
What are the advantages of Public-Private Partnerships (PPP)?
Allows private investment in public infrastructure.
Transfers risks to the private sector.
Can improve efficiency and innovation.
What are the disadvantages of Public-Private Partnerships (PPP)?
Higher Costs – Private financing is more expensive than government borrowing.
Complex Procurement – Extensive planning and legal agreements can cause delays.
Long-Term Commitments – Contracts are long, limiting flexibility for changes.
Profit-Driven Focus – Private sector prioritizes profits, potentially compromising quality.
Risk of Poor Value for Money – Improper risk allocation can lead to higher costs for the public sector.
Public Opposition – Concerns over reduced control and accountability.
Contractor Failure – Risk of private partner failure leading to additional public sector costs.
How do you ensure a procurement route aligns with a client’s objectives?
Conducted feasibility analysis, considering budget, risk, quality, and timeframe.
Presented procurement options with clear recommendations based on project priorities.
What is tendering?
A structured process of generating quotations from supplier or contractors looking to obtain an award of business activity, under competition or via negotiation
What are the key documents included in a tender package?
ITT (Invitation to Tender), drawings, specifications, BoQ, contract conditions, and return documents.
What are the advantages and disadvantages of a two-stage tender process?
Pros: Early contractor involvement, better risk management; Cons: Uncertain final price, potential delays.
What is the role of the tendering strategy in procurement?
Ensures a fair, competitive process to select the best contractor.
Can you describe the purpose of a Pre-Qualification Questionnaire (PQQ)?
Filters bidders based on experience, financial stability, and capability.
Can you explain the stages of the tendering process?
Prequalification, tender documentation, bid submission, evaluation, negotiation, and contract award.
What is the difference between open and selective tendering?
Open allows any contractor to bid; Selective invites only pre-approved contractors.
How have you evaluated tenders in a project? What were the key criteria?
Price, quality, experience, methodology, and compliance with tender documents.
Have you dealt with any tender queries from bidders? How did you respond?
Responded formally, clarified ambiguities, and ensured fairness in responses.
What issues have you encountered in tendering, and how did you resolve them?
Example: Budget exceeded → Negotiated value engineering options.
Can you explain how you ensured tender compliance with regulations?
Checked against procurement rules, ensured fairness, and used scoring criteria.
Have you had to advise a client on the most suitable tendering procedure? What factors did you consider?
Considered project complexity, risk, client priorities, and market conditions.
Can you explain how you handled a situation where a tender came in over budget?
Advised cost-cutting measures, re-tendering, or scope reduction.
What factors should be considered when compiling a tender list?
Financial stability, experience, past performance, resources, health & safety record, and workload capacity.
What methods are used to pre-qualify contractors?
Pre-Qualification Questionnaires (PQQ), Expressions of Interest (EOI), and framework agreements.
What is included in a Pre-Qualification Questionnaire (PQQ)?
Company details, financial records, past project experience, health & safety policies, insurance, and references.
What are the advantages of pre-qualifying contractors?
Reduces risk, ensures capable bidders, streamlines the tender process, and improves quality.
What are the key risks in failing to pre-qualify contractors properly?
Risk of contractor insolvency, poor performance, non-compliance, and disputes.
Can you describe a project where you compiled a tender list?
Identified project requirements, sourced contractors, issued PQQs, evaluated responses, and shortlisted bidders.
How have you assessed a contractor’s financial stability before including them on a tender list?
Reviewed audited accounts, credit ratings, turnover, profit margins, and liquidity ratios.
What challenges have you faced when pre-qualifying contractors, and how did you resolve them?
Issue: Insufficient responses → Solution: Extended deadline and directly contacted potential bidders.
How do you determine the ideal number of contractors to include on a tender list?
Typically 4–6 bidders for competitiveness, depending on project scale and procurement strategy.
What is single-stage tendering?
A process where contractors submit a single competitive bid based on full tender documents.
Used when design is complete and cost certainty is needed.
What is two-stage tendering?
Involves an initial selection based on a preliminary price and capability assessment.
The second stage involves negotiation on detailed pricing and design development.
What are the advantages of single-stage tendering?
Provides cost certainty before contract award.
Encourages competitive pricing.
Simple and straightforward process.
What are the disadvantages of single-stage tendering?
Contractors may price with risk allowances due to limited engagement.
Less flexibility if changes are needed post-contract award.
What are the advantages of two-stage tendering?
Early contractor involvement improves buildability and risk management.
Allows design development while securing contractor input.
Can lead to a more collaborative approach.
What are the disadvantages of two-stage tendering?
Less price competition in the second stage.
Final cost uncertainty until stage two is completed.
Possible risk of contractor having too much influence.
What is competitive tendering?
Multiple contractors submit bids, and the best offer (usually based on price and quality) is selected.
Encourages fair pricing and market competition.
What is negotiated tendering?
A client negotiates directly with a preferred contractor rather than inviting multiple bids.
Used when a contractor has specialist expertise or previous involvement in the project.
What are the advantages of competitive tendering?
Ensures market-driven pricing.
Provides transparency and fairness in selection.
What are the disadvantages of competitive tendering?
Can be time-consuming.
May not always result in best value if lowest bid is chosen without considering quality.
What are the advantages of negotiated tendering?
Faster procurement process.
Better collaboration between client and contractor.
Suitable for complex or specialist projects.
What are the disadvantages of negotiated tendering?
May not ensure the best price.
Less transparency compared to competitive tendering.
What is tender analysis?
The process of evaluating submitted tenders to determine the most suitable bid based on predefined criteria.
What are the key factors considered in a tender analysis?
Price, quality, compliance with tender documents, contractor experience, methodology, program, and financial stability.
What is a weighted scoring system in tender analysis?
A method where each evaluation criterion is assigned a weight based on its importance, and bids are scored accordingly.
What is an abnormally low tender, and how is it addressed?
A bid significantly lower than others, potentially due to errors or unrealistic pricing. It requires clarification from the bidder and justification before acceptance.
What are the risks of selecting the lowest tender?
Quality compromise, potential financial instability of the contractor, increased variations, and potential disputes.
Can you describe a tender analysis you have undertaken?
Reviewed bids based on price, technical submission, program, and compliance. Identified errors, clarified anomalies, and provided a recommendation report to the client.
How do you handle arithmetic errors in tenders?
Notified the bidder and requested confirmation of corrections before proceeding with evaluation. Ensured adjustments did not alter competitive standing.
What document details how errors are to be dealt with?
Instructions to Tenderers
What are the ways we can deal with errors in a tender submission in JCT?
Alternative 1 and 2
What is Alternative 1?
“The contractor will either be invited to stand by the tender price or to withdraw
If they withdraw, the next lowest bid may be considered
If they stand by the tender, an endorsement should be added to the priced bills indicating that all rates and prices inserted therein by the tenderer are to be considered as reduced or increased in the same proportion as the correct total or priced items exceeds or falls short of such items”
What is Alternative 2?
“The contractor should be given the opportunity of confirming their offer or amending it to correct genuine errors
Should they elect to amend the offer and the revised offer is no longer the lower, the offer of the firm now lowest in the competition may be examined
If the tenderer elects not to amend the offer, an endorsement will be required as above”
How have you advised a client on choosing between the lowest and most technically suitable tender?
Presented a cost-benefit analysis, highlighted quality concerns, explained long-term value, and recommended a balance between price and performance.
What steps do you take to ensure fairness in tender analysis?
Follow a structured evaluation process, use predefined criteria, document findings, and ensure transparency and consistency across all bidders.
How do you assess a contractor’s financial stability during tender analysis?
Reviewed financial statements, credit ratings, past performance, and checked for any ongoing disputes or insolvency risks.
What is a tender report?
A document summarizing tender submissions, evaluating bids, and recommending the most suitable contractor.
What key information is included in a tender report?
Tender return summary, evaluation criteria, bid prices, compliance assessment, exclusions/clarifications, risk analysis, and recommendations.
Why is a tender report important?
Provides a structured evaluation of bids, ensures transparency, and helps clients make informed decisions.
What are the typical evaluation criteria used in a tender report?
Cost, quality, experience, methodology, program, financial stability, and compliance with tender requirements.
How are tenders usually analyzed in a tender report?
Through comparative analysis, weighted scoring, and compliance checks to determine the most advantageous bid - tender scoring matrix
What are some common reasons for disqualifying a tender submission?
Non-compliance with tender instructions, incomplete documents, unrealistic pricing, and failure to meet qualification criteria.
Can you describe a tender report you have prepared?
Yes, I compiled a report comparing three contractors based on price, program, and compliance, leading to a justified recommendation.
How have you ensured fairness and transparency in a tender report?
Used objective criteria, documented all evaluations, provided a clear audit trail, and avoided bias in recommendations.
What steps do you take when a tender report identifies significant cost differences between bids?
Investigate anomalies, request clarifications, assess scope understanding, and consider value engineering options.
How do you handle a situation where the lowest bid is significantly lower than others?
Conduct due diligence, check for errors, request a breakdown, assess feasibility, and consider potential risks.
Can you explain how you compare quality vs. cost in a tender report?
Use a weighted evaluation system, consider lifecycle costs, and assess non-price factors such as experience and methodology.
How do you deal with a situation where a client wants to select a higher-priced tender?
Justify the decision based on quality, risk reduction, or added value while ensuring transparency in the selection process.
What is partnering
A long term approach or structured business relationship which involved two or more organisations working together to achieve specific mutual objectives.
What is project partnering?
“All members of the professionam team become involved in the partnering process at design stage - incl. contractors.
Ownerhsip of risk is spread between parties and a collaborative approach is encouraged.”
What is strategic partnering?
“Long term relationship used to establish a working relationship over a number of projects over a long period
Framework agreements are used to set out contractual terms and conditions for future purchases.”
Are you seeing developers continue to do CAT A? What alternatives do they have?
Not doing cat a – carbon, sustainability, contribution
If you were tendering now how would you protect the client from ISG fall out?
Financial checks
In your tender recommendation for Silbury House, how did you justify to the client on the selection of the contractor?
Tender Scoring Matrix
What are the benefits of early contractor engagement?
Cost certainty
Surveys
What are some considerations with modular construction?
Benefits
- potential savings on prelims compared with traditional construction
- programme benefits
- cost savings (consider economies of scale)
Risks
- economies on scale e.g. cost savings are larger when there are more modular pieces
- damage on way to site
Tolerance can cause issues, needs o be measured correctly
What is a re-measurement strategy?
A construction contract where the final price is based on the actual amount of work completed, rather than a fixed price
What is a cost reimbursable contract?
The contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee
What is a target cost contract?
A type of contract where the contractor is paid their actual costs, plus a percentage fee, and the target cost is agreed upon at the beginning of the project. The contractor and employer share the cost overrun or savings based on a pre-agreed formula.
