procurement and tendering Flashcards
why you need to choose the Appropriate procurement rout?
“to improve the overall performance
get the client satisfaction
balance between the Client requirement
manage the risk
achieve project objectives”
Criteria to consider during select the procurement rout
TIME, Cost Certainity , Quality, Risk , Design responsibility , project complexity , contract condition
what is management contracting
they are a part from the Employer and doing control and monitoring the construction
what is the role for the Management Contractor
appointed the Sub.co for all the packages( he will not do the work by himself )
Management Contractor fees
Ls or Monthly Or percentage
who carry out the design risk in Management Contractor
the Client , where the Client appoint design consultant do fo the full design
is the budget Management Contractor responsibility
No , client is responsibility for the overrun budget
who carry out the delay responsibility
any delay in construction will be the MC responsibility
what is the contractual relationship between the client and the subcontractor
there is no contractual relationship between the client and the subcontractor, MC paid directly to the Sub.co, but the client can entries in a separate agreements with Sub.co that they will warrant to carry out the work properly
what is the payment terms in MC
the Client Paid prime cost + MC fees (actual invoices )
what is construction Management procurement route
“it’s a procurement route where the client has a direct contractual with the trade contractors
Client responsible for the Delay and the Budget Overrun
CM only will manage and coordinate between all the parties , and The Client will directing the project “
what is the method to pay for CM
“Salary
percentage
agreed budget “
when you advice your client to choose the CM PROCUERMN ROUT
“for economical methods
overlap the design and the construction
Experienced Client
Complex and specialty projects
if your client need a flexibility in the design , and doing variation “
What is Design and Manage
“the client have direct contractual relationship with
1- Scope designer : Only will prepare the scope design as per the client requirement
2-Works Contractors : if any failure done on construction will be the client responsibility
3-Design & management contractor : their responsibility is to develop the design and manage the construction”
What is partnering approach , and what is the best procurement route to apply this approach ?why ?
Read from Munnas Notes
what is prime contracting
Read from Munas Notes
what is PPP?
It’s a public private partnership procurement method
Standard form of contract PPC 2000
what is PFI/PF2
Read from Munas Notes
what type of procurement to use for regular maintenance and repair work
Read from Munnas Notes
what is the main different between the frameworks agreements and Term contract
Read from Munnas Notes
what is Serial contracting
Read from Munnas Notes
what is the different between JV and Partanering
Read from Munas Notes
Explain the compilation of tender document process?
“The choices of procurement route and contract type will have a direct effect on how the tender documents are compiled. It is important to start the tender compilation process by producing a check list of what is required, depending on the procurement route and contract type.
The following items to be included when compiling tender document, it may change depends on the procurement route.
1. Invitation to tender letter : it describes the project, confirms the return date and the contact details for any quaries that are required.
2. Form of tender : This is the form that the contractor signs and returns with their proposal tender, in terms of both price and programme.
3. Contract conditions
4. Instructions to tenderers documents (conditions of tender) : It includes the proposed scoring mechanism, any applicable questionnaires, details for arranging site visits and details for submitting tender queries.The scoring cirteria will be project specific and should be agreed by the team before the tender is issued.
5.Project information (preliminaries/works information/employer’s requirements) : setting the base date, fluctuation procedures, completion strategies ( ie. partial possessions, sectional completion), the level of liquidated damages, method of payment strategy, performance guarantee strategy, insurance strategy, period of suspension, dispute resolution strategy and alternatives, collateral warrenty requirements and strategy, Joint Fire Code applications, etc.
6. Design informations: Construlatant’s design and specification, any specialist design information , A drawings/specification issue sheet.
7. Pricing document: The type of pricing document depends on the form of contract and the chosen procurement route. For a traditional project a full bill of quantities is a common pricing document.
8. Type of appendices: Health and safety documentation (pre-construction information), key surveys for the site building (drainage, asbestors, electrical, ecological), planning permission information, building control documentation, proposed warrenty/parent company guarantee/ performance bond wording, design responsibility matrix, party wall agreement, building condition surveys , risk register (outline which risk the tenderers are expected to take on.
“
What are the steps you would take before the tender analysis process?
“I will check for the arithmetical error for the prcing side of the tender return before any detailed analysis is undertaken. Also the following key issues to aware of are:
- obvious errors in programme date.
- any qualifications that render the tender null and void.
- conflicts of interest ( eg. review proposed key subcontractors).
If any other significant error or conflict is discovered, then I will contact the contractor as soon as possible to clarify the qualification/issue. If I could not resolved, then, I will inform the tenderer that they will be discounted from the tender process.”
How do you manage tender queries?
“All the information provided between the parties treated as confidential.
- I will log all the queries.
- I will answer all quaries in timely ( in writing)
- I will distrubute the answer to all the tenderers.
- Tender addendums and notices will be part of tender submission.
- Each notices contain returnable covering sheet to acknowledge its receipt on writing.”
How do you deal if there is a unpriced item in the lowest tenderer?
“If there is any unpriced item in the priced BOQ, I need to check, whether they are priced somewhere else or they have given any qualification that they did not price these items, or included in some other items or other palce.
If the tenderer qualifications are not allowed in the instruction to tenderer to unprice any items, then I will go ahead with tender committee’s decision. There are mechanism in the tender manual, if there is no price for any item, I can use rate of highest for the item from other contractors to do the tender evaluation.”
Define ‘post tender clarification process’?
”- Post tender clarifcation issued to resolve all outstanding matters during the tender technical evaluation and obtain all missing information and compare all bidder against the Technical Evaluation Criteria.?
- Post Tender Clarification (PTC) to be issued to indivitual tenderers with specifying return date and time.
- Tenderer to response the acknowledgement of PTC.
- Provide ample time to reply.
- Reply received to be logged and pass for evaluation team.
- Further clarification may send to bidder.
- Post tender interview.”
What is your advice to the client when the all the tenderer price are trastically lower than Engineer’s estimate?
I will check Engineer’s estimate for any arithmatical error, mistakes, then I will check tenderers’ submission. If they have any unpriced item, or if any missed items, if all the submissions are ok, then I go with tenderer’s submission. If the tenderers have not selected certain items, then It is needed to be re-tendered.
“What are the advantages and disadvantages of Traditional Path/Design-bid-
build/Separated Method?”
“Advantages
Quality is under Employer’s control (Design Prestige)
Power to change (Avoid prohibitive cost of change)
Cost certainty
Less contractor risk premiums/low tender price
Relatively low tender preparation costs \ Disadvantages. No single point responsibility of design and construct
Time consuming
Variations are expected
Claims / design errors ….
Buildability (Constructability)”
“What are the advantages and disadvantages of Design & Build Path /Integrated
Method?”
“Advantages
Price is more certain prior to construction
Single point responsibility – less design issues
Less time consuming
Buildability (Constructability)
Disadvantages
Cost of the project? Risk Premiums
Difficulty in comparing tenders
Quality may be compromised (design prestige)
Variations might be costly”
What is management contracting ?
“Contractor performs the role of managing the works contractors who carry out
the works.
The MC acts in a professional capacity, providing the management expertise and
buildability advise required in return for a fee to cover OH & Profits. In this
method, the Construction work is completed using a series of separate works or
trade contracts which the main contractor is responsible for managing. The
contractor does not actually do the physical work, but is paid a sum for managing
the project through the various works packages.”
What are the Role of Management Contractor?
“Pre-construction stage
Advising on work packages
Selection of work package contractors
Construction stage
Programming
Managing
Instituting of cost control techniques”
What are the advantages and disadvantages of Management Contractor Method?
“Advantages
Early start – early completion
Contribution by experienced contractor to manage
Changes? – yes! /Accommodate later design decisions
Buildability and economical designs
Disadvantages
Cost certainty
No single point responsibility for design and construction
Management costs might be high”
What is procurement ?
“acquisition of goods and/or services from one place to another. furthermore,
Construction is one of most risk engaged profession. The proper Procurement is
good tool to share risk between parties to the contract and/or transferring process
of the risk to the most suitable person to undertake it.”
The difference between tendering and procurement ?
“Procurement is the overall act of obtaining goods and services from external
sources (i.e. a building contractor) and includes deciding the strategy on how
those goods are to be acquired by reviewing the client’s requirements.
Tendering is an important phase in the procurement strategy but procurement
involves much more than simply obtaining a price. (RICS Guidance Note, 2015)”
Role of QS in Procurement ?
“ Determine Employer’s Requirements
Assessing the viability of project and providing advise
Recommend organization structure of the project Advising on appointment of consultants and contractors
Manage information and coordination
“
What are the Risks in Construction you can identify?
“ Cost fluctuations
Time
Geographically dispersed
Quality concerns
Regulatory Authority Changes
Unforeseen Risks on site
Constructability & Buildability
Technological advancement”
What are the Main Factors of selecting procurement path?
“ Client’s risk taking ability and know how
Time – Speed & Certainty
Cost – Lowest, Value, Whole Life, Certainty
Quality – Assurance, Design prestige
Complexity & project size
Need of variations
Client involvement
Accountability
Market Condition”
Types of Contract/ Contract Strategies/ Payment Mechanism?
“1. Lumpsum
2. Re-measurable/Measure & Value
3. Cost Reimbursable/Cost plus/Prime Cost Contract Fixed: Cost + Perecnetage% AND Cost + Fixed Fee
4. Cost Reimbursable/Cost plus/Prime Cost Contract: Flactuating Target AND GMP”
Lumpsum
Payment method Contractor agree to
Lumpsum variants
“with quantity
without quantity (Drawings and specs only) - suitable for small project early start”
Suitable for?
Full developed or substantial developed design.
Forms of contract using this payment method?
“FIDIC yellow and Silver
JCT SBC with quantity
JCT SBC without quantity”
Most risky contract type to Contractor?
Lumpsum without quantity (Drawings and specs only), and lumpsum in general
Can lumpsum price change?
Yes, Lumpsum is not FIXED PRICE and NOT GMP.
When lumpsum price can change? And difference between GMP, Fixed price?
“Lumpsum (all inclusive): Perform agreed Works within deifned period, as per contract terms based on lumpsum price.
No variation/eot/claim/inflations/adjsutments triggred then contractor paid lumsum as agreed.
If actual work more than contract then price will increase due to variation/Relevant events/ PS/Laws/fluctation/inflation.
IF cost of contract works less than lumpsum price contractor benefit otherwise client benfeit.
GMP: Works invocied as actual cost plus fixed fee until GMP, when costs+fee exceed GMP contractor bears the excess. below GMP is saving to client as its COT PLUS Basis.
Fixed price: or firm price is contract sum not adjusted for price increase/inflation. Fixed price including all risks that lump does not.
its not neccessarly in client interest as it would attract risks premium and pricing for unknown risks that might not occur.”
Benefits of lumpsum
“Cost certinaity providing clear client requirements and complete design.
Quality,
Competitive price.
Incentive for contractor to finish early.
Programme certainity
Disadvantages: usually slow/sequential if required full design development, involve risks allowance by contractor.”
What is best contract type or change flexibility?
Re-measurable and Cost plus Fixed Fee
In a Lump sum Contract, Drawings shows 100 number of lighting pole wherein the BOQ Shows 10 number. Engineer instruct the omission for the entire lighting pole in the Contract. How much the omission value?
“Priorty of documets and take drawings qty? or omitt as per BOQ qty becasue contractor priced only what in BOQ?
Munnas notes answered omit from BOQ 10 numbers because contractor priced for 10 numbers”
