Procurement and Tendering Flashcards
What are the two tendering options under JCT?
Option 1, can stand by the offer or withdraw.
Option 2, Can amend the error so that the tender sum either increases or decreases or withdraws the offer.
What are the main types of Procurement methods
⁃ Traditional Procurement (Client engages design team and Contractor direct)
⁃ Design and Build (Client engages Contractor who then employs designers)
⁃ Management Contracting (Contractor performs the role of managing the works Contractors who carry out the Works)
⁃ Construction Management (Construction Manager is employed to arrange trade contracts and monitor them)
What stage should the ER’s be prepared to on a D&B project?
- There is no defined stage however the risk need to be considered, if the design is not developed you expect the contractor to price the risk of developing the design.
Why wouldn’t you use D&B?
If I have an experienced team of people that can manage all different packages.
When quality is not a priority
Suits Clients that don’t have the service the requirement of very complicated process and the premium for a contractor to take the risk
What is management contracting?
Management Contracting – unique/specialities building (TIME)
The Client employs the design team to design the building and an MC on a fixed % fee to manage the sub-contracts.
⁃ Pro: D&B overlap quicker / MC expertise / MC is responsible for delivery
⁃ Cons: Costs are not fixed / sub-contractor conflict / Client involvement is high / Client assume high level design risk
⁃ Risks: costs are not fixed / design is not complete / lack of PI subcontractors / MC is not responsible for design defect
What is Construction Management?
Construction Management – Mainly used in US companies (TIME)
The Client employs the design team to design the building and a CM on a fixed % fee to manage the sub-contracts. Client appoints sub-contractor
⁃ Pro: D&B overlap quicker / Each sub-contact is tendered individual competitive
⁃ Cons: Costs are not fixed / No single point of contact / Client assume high-level design time costs risk/client involvement is high
⁃ Risks: costs are not fixed / design is not complete / CM is not liable for programme delay / Lack of PI cover contractors
When would you use a D&B?
D&B – Used on building with simple design (TIME & COST)
⁃ Pro: Single point responsibility for D&B / Contractor expertise / early costs certainly / D&B is overlap and is quick
⁃ Cons: Client relinquish control design (quality may suffer) / client changes difficult & expensive / ERs must be clear
⁃ Risks: Quality end result / D&B PI insurances / D&B team lack expertise
When would you use a Traditional?
Traditional – Used on broad range building types (COST & QUALITY)
⁃ Pro: Full design approved / Early cost certainly / standard forms contracts
⁃ Cons: slower procurement timer / NO contractor expertise / design has to be fully complete before tendering
⁃ Risks: Increase costs / no single point of responsibility / PC may be inadequate
What’s included in a invitation to tender?
⁃ A letter of invitation to tender.
⁃ The form of tender
⁃ Preliminaries (including pre-construction information H&S and site waste
⁃ CV / Organisational chart / certificates
⁃ management plan);
⁃ contract documentation;
⁃ ERs
⁃ A tender pricing document (or contract sum analysis on design or Schedule of Rate)
⁃ build projects);
⁃ Design drawings,
⁃ Specifications.
⁃ Submission of bona fide tender
⁃ Procurement price
⁃ Risk- this route offers design certainty, cost certainty and programme certainty. However, a client should consider that will retain all design risk.
⁃ Cost- Construction costs can be determined with reasonable certainty before construction starts, which can be particularly attractive to clients with a strictly limited budget.
⁃ Quality- Client retains control of quality
⁃ Fairness- Competitively fair
⁃ Established- most linear and commonly used method of construction
⁃ Why choose a Design and Build procurement method?
⁃ Risk- Contractor assumes risk and responsibility for design
⁃ Cost- Cost certainty
⁃ Quality- Specialist and experience buildability advice
⁃ Programme- Overlap of design and construction (reduced design and construction periods), programme certainty
⁃ Increasing in popularity
Whats included in a tender submission?
⁃ Tender return slip ⁃ A completed tender pricing document ⁃ Schedules of rates; ⁃ An initial construction phase plan; ⁃ Any design proposals or method statements ⁃ Programme ⁃ Procedures to be adopted ⁃ Demonstration of capability ⁃ Key project personnel, which may require submission of CVs; ⁃ Management organisation; ⁃ Plant and labour resources and availability; ⁃ Prior experience, and ⁃ References.
What is a PQQ?
Stands for pre-qualification questionnaire
First stage of the tender process. Prior to ITT
Enable the client to produce a shortlist of suppliers likely to be appropriate for the project to invite to tender.
Whats it the different types of tender
⁃ Open tender ⁃ Negation ⁃ 1 stage ( competitive) ⁃ 2 stage ⁃ Mini tender (framework)
What is two-stage tendering processes?
- Separates the processes involved in selecting a contractor from an outline scope of works.
- Allows early appointment of a contractor and use their expertise’s, prior to the completion of all the information required to enable a fixed price.
- Generally used on a D&B Project where the employer’s requirement are not well developed for the contract to calculate a realistic fee.
⁃ 1st stage – A limited appointment is agreed allowing the contractor to being work.
o A pre-construction and construction programme.
o Method statements.
o Detailed preliminaries including staff costs.
o Agreed overheads and profit.
o CV’s for proposed site and head office staff.
⁃ 2nd stage - A fixed price is negotiated for the contract.
o A schedule of rates to be applied to the second-stage tender.
o Agreed fees for design and other pre-construction services.
o Tendering of any packages that can be broken out and defined.
o Agreed contract conditions to be applied to the second-stage construction contract.
What is the benefits and cons of 2 stage tender?
Two stage tendering
Pros: (Speed / Supply chain influence )
• Earlier commencement on site
• Allows for contractor input on specialist design areas during the construction phase when work is unknown
• Allows for flexibility in design and collaborative working
Cons: (costs are less well known /
• Greater cost risk as the contract is signed before the final cost is known however packages can be tendered and then wrapped into one lump sum
• Design information needs to be complete during construction and in line with the contractor’s programme
Whats are the pros and cons of a D&B
Pros: Single point of responsibility / Cost certainty
• Potential to overlap design and construction phases
• Contractor involvement in design and resolution of buildability issues
• Cons: Design controlled by the contractor
• Restricted scope for change post-contract can lead to high change premiums
• Careful drafting of the employer’s requirements is needed to ensure the required quality standards
• The contractor specification may be cost driven rather than quality driven
• Risk premium will sit with the contractor as they select what to spend this on
