Procurement and Tendering Flashcards
What is procurement & tendering?
Procurement is the process of acquiring the goods & services necessary for an organisation to function.
Tendering is a part of this process, which involves selecting a contracting and selecting a price for the works, through a bidding process.
Importance of procurement strategies?
Defines how the project will be procured; establishes the processes for procuring a design / construction team. This is important as it defines the contractual relationship, risk allocation and design responsibility for a project.
Key procurement routes?
Traditional – Architect or design organisation will complete design (typically RIBA Stage 4) before a contractor bids for the work based on the technical design info. Usually lump sum contract with architect usually as Contract Admin
D&B – Single point of responsibility for design and construction. Employer will complete ER ’s and issue to tenderers, contractors will then respond with CP’s which include a price.
Construction Management – Employer will divide the works into the various packages and then employs a CM to oversee the packages, maintain a Master programme, coordinate with the design team and often acts as Contract Admin for the various packages.
Management Contracting – Contractor is employed to divide the works into packages, take out separate contracts with various subbies and then manage those packages. The MC is paid a fee for this role and will hold direct contractual links with each of the works contractors.
What are Framework Agreements?
- Agreement between supplier / service provider and client where the terms are agreed and specific projects or pieces of work are ‘called off’ under this agreement.
What is Partnering?
2 organisations (eg. funder / contractor / design team) work together to seek efficiency through achieving a mutual objective and sharing the gains.
Key driving forces for selecting a procurement strategy?
- Client’s brief, what do they want delivered and how?
- Balance of priorities between time, cost and quality
- Client’s experience level and risk appetite
- Market forces
- Financing
Which procurement route is best to achieve best results for each of time / cost / quality?
Heavily dependent upon the project specifics, different projects will impact differently.
However, typically D&B / CM faster start on site. D&B will give cost certainty. Traditional gives more control over quality.
Different tendering processes?
Open tendering – Advertised work in journals, websites, industry publications and anyone can register an interest in tendering
Selective tendering – Shortlist formed by the client / project team, those parties invited to tender
Single contractor – Contractor is selected and then negotiations are undertaken, shortlist of one parties
How does tendering process work? (D&B)
- Single stage – Identical tender info is issued to tenderers, usually RIBA Stage 4, with bids returned and analysed on the basis of cost, quality etc. Building contract taken out between two parties
Advantages
- Best price through a competitive tender process
- Fixed price achieved
Disadvantages
- No early contractor involvement, can lead to lower buildability
- Slower, as more design info needed in order to tender - 2 stage – Allows for a faster procurement of a contractor. Tender information issued at RIBA Stage 2/3, with a contractor appointed under a pre-construction services agreement. They are then involved in developing detailed design, working through design issues.
Advantages
- Faster contractor procurement, brings with it efficiencies / increased buildability
- Separates the process of selecting a contractor and confirming a price, giving opportunity to go back to the market at Stage 2
- Collaborative approach between client / contractor
Disadvantages
- Less competitive tender process, higher contract cost?
- Additional preconstruction cost
- Collaborative nature required, or else unlikely to be successful
What is a Negotiated Tender?
-Single stage tender process with one contractor who returns a price, this is then negotiated by the client team.
-Benefits are that much faster process, however competitive aspect is lost.
-Public sector strongly against this approach, as a general rule.
How might a client go about selecting a tenderer from a list?
PQQ / Shortlisting
-Shortlisting can be done through the issue of a Pre-Qualification Questionnaire (PQQ) to tenderers, they will fill this in with info such as financials, project experience, H&S policy, current workload.
-Selection criteria will then be used to order the entries and select a shortlist.
Scoring Matrix
-This will act in a similar way to the above selection criteria, with criteria and weighting applied to each. This ensures that the selected tender is most suitable and also allays any fears of bias etc.
How would you evaluate discrepancies in a contractor tender return?
Review all submissions to ensure included key requirements, use a scoring matrix to score them.
Public Contracts Regulations 2015
-Contracts above certain thresholds (eg. £5.3m for works contracts) must: * Advertise publicly on Find A Tender website * Evaluate tenders on the basis of existing selection criteria
