Procurement and Tendering Flashcards
What is procurement?
The overall act of buying goods or services
What are the main factors that typically govern procurement route selection?
- Programme: is an early start on site required
- Cost: does the employer need cost certainty?
- Design: does the employer want control of the design? All design or just a portion?
- Employer’s experience: has the employer had previous construction experience?
- Sub-contractors: does the employer wish to retain control over procurement of sub-contractors or to nominate/name specialist subcontractors?
What procurement options can you name?
- Traditional
- Design & Build
- Management Contracting
- Construction Management
- Framework Agreements
- Partnering
What tender documents would be sent out for a D&B project?
- ITT
- Form of tender
- Employers Requirements (drawings, performance specification, scope of services)
- Draft Contract and amendments
- Preliminaries and general conditions
- Tender pricing schedule
- Pre-Construction Information
- Working practice: contractors working guide
- Tender query schedule
- Provisional programme
What tender documents would be sent out for a Traditional project?
- Tender instructions
- ITT
- Form of tender
- Preliminaries document
- Draft contract
- Pricing document; BoQ, activity schedule or cost estimate (cost+)
- Quality questions (experience / methodology)
- Completed design Drawings & specifications
- Pre-Construction Information
- Tender Return Slip
What’s an invitation to tender (ITT)?
A formal invitation to make an offer for supply of goods or services.
May follow a PQQ
What are instructions to tenderers?
- Explains the tender process
- Timescale for response
- An explanation of how queries will be dealt with
- Evaluation process and any evaluation criteria
- The submission required in response to the invitation to tender
What is a form of tender?
A covering document prepared by the employer and signed by the tenderer to indicate that it understands and accepts the various terms and conditions of the tender documents and other requirements of participation.
Might include:
- Return date / time
- Date, name and address
- The price and any adjustments
- Date until which the price remains valid
- Period of time allocated for the works, or completion date
- Acceptance of T&Cs
- Qualifications
- Who will bear cost of preparing the tender
- Confirmation of tender being genuine and bona fide
- Signature and tenderer details
How many contractors would you recommend tendering to?
3-6 Traditional
< 4 for D&B
- Due to the large overhead / abortive costs of producing tender information and evaluating it
Name three tendering procedures
- Single stage
- Two stage
- Negotiation
What documents should be sent out in a PQQ?
- Enquiry letter
- Project information schedule
- Project brief
- Evaluation details
- Pre qualification questionnaire
What should a project information schedule include?
- Project estimated value
- Employer, professional team, point of contact
- Tender procedure to be used
- Programme
- Procurement strategy / Contractor’s design requirements
- BIM requirements if applicable
- Contract and amendments
- Contract particulars including requirements for collateral warranties, third party rights, bonds, insurances
What is tender equalisation and why is it undertaken?
It is where tender returns are reviewed to ensure all bids are based on delivering the same scope of work (no exclusions etc).
It is undertaken to enable comparison of competing tenders.
What is Traditional procurement and what are the key features?
Traditional procurement involves separating design from construction.
The client appoints consultants to design the project in detail, contractors are then invited to submit tenders for the construction of the project.
Key features:
- Design is completed before competitive tenders are invited (other than temporary works)
- Contractor is employed to build what the designers have specified
- Contractors tender based on complete design
- Costs can be determined with reasonable certainty before construction
- Pricing documents can include - bill of quantities, specifications and drawings
- Client retains design consultants through Construction Phase to provide any additional design information, review Contractor’s designs and inspect the works.
What are the advantages and disadvantages of Traditional procurement?
Advantages:
- Client retains control of the design
- Tenders based on complete design therefore easier to compare
- Reasonable price certainty at contract award
- Post-contract changes are easy to arrange and value
- No built-in contractor risk premium
Disadvantages:
- Overall programme longer
- No buildability input into design
- No overlap between design and construction
- Client retains design risk
When is Traditional procurement appropriate?
Client has specific design requirements
Cost certainty is important
Shortest programme is not main priority
What is Design & Build procurement and what are the key features?
Contractor responsible for undertaking both the design and construction work for an agreed lump-sum price.
Client gives the tenderers the ‘Employer’s Requirements’ and the contractors respond with the ‘Contractor’s Proposals’ which include the price for the works.
Key features:
- Contractor is responsible for the design, planning, organisation, control and construction of the works to meet ERs
- Design team appointed by the client compile the client’s brief and produce the ERs.
- Contractor assumes the risk and responsibility for designing and building - prices in risk in offer
- Tenderers return their CPs in response to the ERs
- Original design team may be novated or contractor may appoint his own team
What are the advantages and disadvantages of Design & Build procurement?
Advantages:
- Single point of responsibility
- Earlier commencement on site
- Early price certainty
- Buildability input into design
- Design and construction risk sit with contractor
- More cost certainty than Traditional
Disadvantages:
- Client difficulty in preparing suitable brief
- Design only as good as ERs
- Client usually must commit to a concept design early
- Harder to compare tender returns
- Client changes can be difficult to value / expensive
- Client has less control over aesthetics and quality
- Contractor will build in risk premium
When is Design & Build procurement appropriate?
- Need to make early start on site
- Client wishes to minimise risk
- Technically complex projects (buildability input)
- Client doesn’t want to retain control over design development
- Refurbishment projects as risk of existing building is passed to contractor
What are the principles of Employer’s Requirements in a Design & Build procurement?
- Provide a description of the client’s requirements - specification, scope of services
- CPs are prepared in response to ERs - contractors suggested approach for designing and constructing the building
- Once contract let, client has no direct control over the contractor’s detailed design
- Contractor’s Proposals take precedence unless amended in contract
What is Construction Management procurement and what are the key features?
Works are constructed by a number of different trade contractors. The contractors are contracted to the client but managed by a construction manager.
Key features:
- Client places direct contract with each trade contractor
- Utilises the expertise of a construction manager who acts as a consultant and co-ordinates the contracts
- Construction manager has no contractual links to contractors (no financial or programme risk)
- CM provides programme, design co-ordination, and buildability advice
