Prequalification questionnaire, Single Stage Tender and Tender Returns and Analysis

Question 1

751 What is a prequalification questionnaire? (231)

Answer 1

This is a pre tender exercise to ascertain if a company is suitable to tender of the works it asks questions about their level of experience, capacity and financial standing.

Question 2

752 What is the purpose of a PQQ?

Answer 2

To whittle down the number of potential candidates to invite to tender. This saves time for both parties, the Client in having to tender to those it may not wish to work with and the contractors for work they are unlikely to win.

Question 3

753 What might a PPQ ask for?

Answer 3

• Company details
• Relevant information about technical and professional ability
• Project case studies
• Financial information such as company accounts
• References
• Health and safety records and policy
• Environmental management policy
• Equality opportunities policy
• Insurance documents

Question 4

754 A credit check is usually part of a PQQ. Where could you get this done?

Answer 4

Dun and Bradstreet report or credit agency like Experian.
Single Stage Tendering

Question 5

755 What is single stage tendering?

Answer 5

A competitive tendering process where by all those tendering bid on the same information (usually RIBA stage 4, detailed design) in an attempt to win the work.

Question 6

756 What are the key advantages of single stage tendering?

Answer 6

• Competitive pricing as all companies are in direct competition.
• Fixed price - Employer fixes the price at the end of the tender period

Question 7

757 What are the key disadvantages of single stage tendering?

Answer 7

• Little to no buildability input from the contractors
• The price is only as good as the design information
• Contractors may be unwilling to tender in a good economic climate (too much competition)

Question 8

757 What are the key disadvantages of single stage tendering?

Answer 8

• Little to no buildability input from the contractors
• The price is only as good as the design information
• Contractors may be unwilling to tender in a good economic climate (too much competition)

Question 9

758 If you had a £25m new build project under D & B (single stage) how long would you allow for the tender period?

Answer 9

Depends largely on how complex the project is. There is time needed to develop the design and then actually price that design. Allow 10 – 12 weeks as a starting point and increase or decrease, as necessary.

Question 10

759 What is two stage tendering? (239)

Answer 10

Stage one – The Client provides an outline project design and the contractors then compete for preferred status. Usually chosen on the quality of their bid, quality of their team, prelims & OH & P. The preferred contractor then joins the design team on a consultancy basis using a Preconstruction Services Agreement (PCSA)
Stage 2 – Once the design is sufficiently progressed the contractor enters into a detailed contract negotiation with the employer to agree the final price, contract conditions and programme.

Question 11

760 What are the key advantages of two stage tendering?

Answer 11

• Overlaps design and construction. Early start on site may be possible
• Early appointment of the contractor can assist in buildability
• Employer may be involved in sub-contractor selection
• Opportunities to VE the contractors design
• Improved risk identification

Question 12

761 What are the key disadvantages of two stage tendering?

Answer 12

• Contractor has less incentive to price the 2nd stage competitively
• Additional cost of the contractors PCSA fee
• Potential for the negotiation to fail and the parties do not go into contract

Question 13

762 What is negotiated tendering?

Answer 13

This is single stage tender when a single contractor submits a tender return for the project. Both Parties then negotiate the contract price.

Question 14

763 What are the key advantages of negotiated tendering?

Answer 14

• Simplicity
• Speed. Negotiated tenders can have programme advantages if undertaken in good faith.
• Client has flexibility in choosing who they want to work with.
• Time and cost saving from not having to prep the tender, wait for returns and then analyse
• Call allow ECI

Question 15

764 What are the key disadvantages of negotiated tendering?

Answer 15

• May not be competitive. Might actually be at a premium
• Potential for delay of the negotiations become protracted
• Heavy reliance on trust
• Can be seen as anticompetitive and exclusive

Question 16

765 How could you justify value for money on a Negotiated tender?

Answer 16

Insist on an open book approach when agreeing subcontract packages and a minimum of 3 quotes to be provided for each element (this would need to be agreed up front)
Tender Returns and Analysis

Question 17

766 What is a form of tender?

Answer 17

This is a formal document that asks the bidder to confirm that they accept the terms and conditions of the tender and any other requirements that are stipulated. Will also ask them to confirm their price and programme.

Question 18

767 What information is typically included in a form of tender? (247)

Answer 18

• Tender sum
• How long the price remains valid
• Construction period
• Confirmation that it is a bona fide tender
• Tenderer details and signature
• Acceptance of the terms and conditions

Question 19

769 Once tenders have been submitted, what should be examined for compliance with the invitation to tender and tender instructions?

Answer 19

• Arithmetical and pricing errors
• Pricing method, check for front loading
• On a D & B compare against the ER
• Signed tender form, including all relevant details
• Resolve any qualifications
• Enquire about any items that have not been priced

Question 20

770 What happens if a tender is submitted late?

Answer 20

Public sector – Generally it should not be opened, returned to the person named in the ITT and disqualified. However, proportionality needs to be considered. If there is an issue with the entity procuring the works system (be it digital or physical) this needs to be taken into consideration.
Leadbitter & Co Ltd v Devon County Council – Case where tender was uploaded before the deadline the bidder noticed some documents had been missed from the upload. They tried to upload them but the system wouldn’t allow this. They emailed the missing documents over 30 mins after the deadline. However, the council rejected and disqualified the tender because it was implicit in its tender instructions that it was the “tenderer’s responsibility to ensure that all relevant documents were upload and that an incomplete set of documents would render any submission invalid.” It was also stated that “any submission submitted outside of the portal would not be considered”
BAM PPP V NTMA – BAM were submitting a tender they had informed NTMA 15 minutes before the deadline that 8 documents (out of 280) were not ready for submission. NTMA ended up considering the tender and clearly set out their reasons for doing so:
The tender was complete by 18:13 (assume a 17:00 deadline)
BAM already had 7 of the 8 documents ready before the deadline i.e. only one contained new information.
The tender documents were not modified after 17:00 (assumed deadline)
NTMA was satisfied that no unfair advantage had been obtained by the late upload
Private sector – It should be discussed with the Client and understood if they wish to accept. The safest option is not to consider the bid as there may be the potential for fraud, collusion, bid-rigging risk etc.

Question 21

771 Would you open a late tender submission for a school project?

Answer 21

The bid should not be opened and returned to the sender.

Question 22

772 What is the danger of accepting an exceptionally low tender?

Answer 22

• That the bidder has misunderstood the project
• That elements have been missed/ arithmetical or pricing errors
• That the bidder is trying to undercut the competition/buy the work
• That they are expecting a large amount of change on the project and are expecting to make their money there
• Or the bidder is in financial difficulty and needs the work which could lead to problems down the line

Question 23

773 How do you deal with qualifications within the tender?

Answer 23

Clear instructions must be given as part of the tender for qualifications. It could potentially lead to the big being disqualified. These must be resolved with the bidder before the contract is signed.

Question 24

774 How do you deal with errors identified in the tender submissions?

Answer 24

As part of the tender you should state how errors will be dealt with. JCT has two ways of dealing with this – Tender Practice Note 2012
Alternative 1: Tenderer should be given the details of the errors and afforded the opportunity to confirm (as it stands) or withdraw.
If they withdraw the next lowest tender will be considered.
Alternative 2: Tenderer should be given the opportunity of confirming their offer or amending genuine errors.
NEC – No specific guidance on this. RICS Tendering Strategies 1st edition refers back to the JCT guidance.
As long as it is clearly stated in the tender how errors are dealt with, and that is adhered to then you shouldn’t have a problem.

Question 25

775 What would you do if you considered a contractor submitting the lowest tender to be in financial difficulty?

Answer 25

As part of the initial tender the contractors should be asked to provide financial information and be informed that the Client may choose to carry out financial checks on them. This should ideally be carried out on all bidders as it may identify problems.
A performance bond may be sought as part of the contract to insure the Client should the contractor default on its obligations. Also a parent company guarantee may be used.

Question 26

776 On what grounds would you advise the Client to retender? (256)

Answer 26

• If not enough tenders were returned
• If the tendering process was compromised
• If all tenders were significantly higher than the pre tender estimate. Tendering to different contractors may produce a lower price
• If the Clients design has changed significantly for some reason or the Client has a different financial pressure

Question 27

777 How would you deal with a front loaded tender?

Answer 27

• Front loading is generally not a pricing error.
• Ask the contractor to remove the front loading or the bid may be disqualified.
• Some situations require front loading to a certain extent. Where expensive items on long lead times need to be ordered at the start of the project could give the appearance of frontloading but discussing this with the Client and contractor should resolve the issue

Question 28

778 How could you reduce the risk of contractors pulling out during the tender process?

Answer 28

• Prequalify the bidders, this helps to reduce the number of bidders down, gets rid of bidders you don’t wish to work with and gives the comfort that those remaining are in contention of winning the work based on a genuine competitive tender.
• Ensure tender information is correct and that enough time is given for tender returns
• Check the bidders have the time and capacity to complete the tender

Question 29

780 What is the contract sum analysis document under the D & B?

Answer 29

This is an alternative pricing document to a schedule of works (SoW) or BoQ. Often prepared in a standard format by the employers team to support the tender analysis. Employers team usually requests that all tenders are returned on the same CSA format.

Question 30

781 What information is usually included within a tender analysis report?

Answer 30

• List of tenders received
• Initial tender return totals
• Qualifications and exclusions
• Post tender adjustments
• Issues to be resolved
• Comparison of tender returns
• Comparison with PTE
• Recommendation

Question 31

782 If the tender were received on time, but the works were delayed and did not commence until a few months later, what would you need to check?

Answer 31

Check the form of tender which should state to what date or how long the tender is valid for.

Question 32

783 If the contractor (in their tender return) put a cost against an item and marked it provisional, what would you do?

Answer 32

I would seek further information from the contractor and ask for it to be removed, subject to tender instructions this may invalidate the submission.

Question 33

784 If you think the delivery programme is tight. How can you give comfort to the contractor regarding LD`s (to avoid them excessively pricing their tender sum)

Answer 33

Offer an LD free or LD holiday period which relieves the contractor of the financial burden of delays until after the LD free/holiday period. Or offer a reduced LD for a period of time to ease the burden also.

Question 34

785 What is the purpose of a PTE?

Answer 34

This is carried out after the tenders have been issued and is the CM pricing the works as they see the current market conditions using in house and external pricing data. When the tender returns come in, they can then be compared to the PTE to see if they are within a reasonable margin.

Question 35

786 What happens if the tender prices are higher than the PTE?

Answer 35

An acceptable margin of error should be allowed for as there will be variations in the majority of pricing exercises. The PTE can be analysed alongside the tender returns to see where the significant variations lie.
Changing market factors should also be allowed for. Historic pricing date will not have taken into account the increased costs for dealing with COVID-19, the war in Ukraine or the increased cost of living as a result of various market factors.
If the increased costs are genuine then the project team can look at value engineering the scheme to reduce cost.

Question 36

768 When seeking tenders for construction work, in addition to the actual price for the work, what additional information might be requested from the contractor?

Answer 36