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RICS APC PM > Procurement and Tendering > Flashcards

Procurement and Tendering Flashcards

1
Q

What is procurement?

A

Process of acquiring construction work or services

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2
Q

What should be factored in when selecting a procurement route

A

Specifics of the project
Objectives for risk, time, cost, control and quality.

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3
Q

What are the main procurement routes?

A

Traditional
Design and Build
Construction Management
Management Contracting

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4
Q

Traditional procurement is?

A

Client designs the work, Contractor submits a fixed price and programme to deliver the works.

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5
Q

When is traditional procurement suitable?

A

When the design has been completed prior to tender.
When the client wishes to retain control over the specification.
Cost certainty being a priority.
Programme not being the first priority.

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6
Q

What contracts can be used for traditional procurement route?

A

Minor works, intermediate and standard building contract.

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7
Q

Design and Build procurement is?

A

Client designs the outline specification and passes the full design responsibility to the contractor who submits a price that may contain provisional sums and programme to deliver the works.

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8
Q

When is the Design and Build procurement route suitable?

A

When the client wants an earlier start on site. Design and construction can be overlapped.
When control of the design is not the priority.
Where client wants to minimize risk of design responsibility.
Where buildability input is desired.

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9
Q

What contracts are suitable to Design and Build procurement route?

A

JCT Design and Build contract.

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10
Q

Under D&B What proportion of the design will the contractor be responsible for?

A

Depends on the level of design information completed to date, it may be full design or it may be down to coordination if a robust RIBA stage 4 exists.

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11
Q

In D&B Who carries out the design for the contractor?

A

Depends on contractors capability:
They may have in house capability.
They may outsource to a consultant design team.
The client’s architect and team may be novated (common occurrence).

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12
Q

What is Novation?

A

A separate contract formed between the contractor and design team to deliver the design for the works.
In this scenario the employer no longer has a contractual link with the design team and therefore a collateral warranty may be requested to provide a link for claims for breaches arising prior to the point of novation.

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13
Q

What is management contracting?

A

I have not used this procurement route but I am aware of it.
Contractor employed to provide their expertise to the design and manage the construction - paid fee for doing so.
Management contractor takes out contracts with all works contractors.

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14
Q

When is management contracting suitable?

A

Where client does not want cost certainty prior to commencement.
Early start is priority.

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15
Q

What contracts can be used for management contracting?

A

JCT Management contract.

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16
Q

What is the construction management procurement route?

A

Employer places a direct contract with trade contractors. Uses the expertise of a construction manager to coordinate between trades.

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17
Q

What are the key attributes of a Construction Management procurement route?

A

Trade contractors complete works.
Construction manager coordinates.
Employer takes out contracts directly.
Avoids paying Main Contractor OH&P.
Allows an earlier start on site.
Overlaps design and construction.
If appointed early enough, allows CM to bring buildability expertise to the project.

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18
Q

What contracts would be used under construction management?

A

For construction manager - JCT Construction Management Agreement.
For trade contractors - JCT Trade Contracts

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19
Q

Difference between management contracting and trade contracting?

A

Client has direct contracts with trades under CM. Under MC it is the management contractor.

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20
Q

What is PFI?

A

Private Finance Initiative.
Used in public sector projects. Becoming less common.

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21
Q

What is tendering?

A

Tendering is the method of obtaining resources to carry out the works.

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22
Q

Main methods of tendering?

A

Open Tendering
SELECTIVE - Single Stage or Two Stage
Negotiated
Joint Ventures

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23
Q

What is open tendering?

A

Indiscriminate request for tenders
Gives description of work for suitability

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24
Q

Advantages and disadvantages of open tendering?

A

ADVANTAGES:
Competent contractors may come forward that may not have been on a selective list.
No favoritism.
Should secure competition.

DISADVANTAGES:
Lowest tender may be inexperienced.
May not guarantee desired number of returns or quality.
Cost / time of tendering may be increased.

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25
Q

What is selective tendering?

A

Whereby selected contractors are invited to tender for works on a single or two stage basis.

26
Q

What is single stage tendering?

A

Contractors must submit a cost and programme for the works as a lump sum offer.

27
Q

Advantages and disadvantages of single stage tendering?

A

ADVANTAGES:
Capable, preapproved firms submit bids.
Lump sum offer provided.

DISADVANTAGES:
Due to lump sum basis, may include high levels of risk allocation.
Does not afford ability to benefit from contractors construction experience to offer commercial benefit prior to contract being let.

28
Q

What is two stage tendering?

A

Separates the process of selecting the appropriate contractor from pricing the works.

29
Q

Tell me about the first stage. In two stage tendering

A

Contractors are invited to submit a first stage bid, usually encompassing preliminary cost, programme, declaration of OH&P and proposed supply chain.

30
Q

Tell me about the second stage.

A

Contractors prepare and submit a price with the selected contractor on the basis of the first stage, usually on an open book basis.

31
Q

Benefits and disadvantage of two stage

A

ADVANTAGES:
Removes adversarial approach.
Allows early contractor involvement.
Potential earlier start on site.
Allows client input to supply chain selection.

DISADVANTAGES:
Cost certainty may not be achieved prior to works starting.
Contractor could take advantage of second stage tender and increase costs.

32
Q

What is negotiated tendering?

A

Where a contractor tenders the work without competition, usually because the client has worked positively with them before.

33
Q

How does negotiated tendering work?

A

No competition - usually higher price.
May be desired due to higher standard of work or relationship.
Contract sum is negotiated based on rates.

34
Q

OJEU stands for?

A

Official Journal of the European Union. Public sector tendering portal. I have not used it but I am aware.

35
Q

Tell me main tender documents?

A

ITT (Invitation to tender)
Instruction to tenderers
Conditions of proposed contract
Pricing document
Design information
Employers Requirements (if D&B)
Contractors Proposals (if D&B)
Preconstruction information
Form of Tender

36
Q

What information should the instruction to tenderers contain?

A

Date for return
Address to return to
Site visit details
Key contact details
Programme length
Confirmation process
How tender should be submitted

37
Q

What is the form of tender?

A

A preprinted form with blanks for key information by the tenderer such as price of work, programme offer etc.

38
Q

What are the employers requirements?

A

Typically used on D&B projects.
They contain the design information the client wishes the contractor to build.

39
Q

What are contractors proposals

A

Typically used on D&B projects.
They contain the contractors proposals to the employers requirements and form the basis of the offer.

40
Q

Tell me how contractors are selected for tender?

A

Through a pre-qualification process or PQQ.
The extent of this is the discretion of the client.
It may contain information such as:
Past experience
Busines capability
Financial standing
Health and safety records

41
Q

What is electronic tendering?

A

A common approach in the industry today.
Tender documents are uploaded to a portal and each tendering party is provided access and a return space. This can be done via EDMS systems such as aconex, viewpoint etc.
There must be a clear notification process in place for any changes.

42
Q

How many contractors would you typically tender to:

A

Depends on the scale of project.
RICS provides guidance.
Due to cost of tenders being high, this is typically limited to 4-6 contractors.
Client may chose to offer renumeration to tenderers at their discretion.

43
Q

How are tender periods determined?

A

Depends on complexity, procurement route and tendering strategy.
Based on my individual experience:
If D&B probably 8 weeks - large element of design.
If two stage traditional then first stage can be 2-3 weeks. Second stage may be 6-8 weeks.

44
Q

Why should a quantity surveyor check tender returns.

A

To confirm:
Any errors in measure or quantities.
Any rates abnormally high, may be an error.
Any gaps in tender.

45
Q

Consideration for evaluating tenders?

A

Not based on price alone!
Health and safety
Sustainability approach
Logistics approach
Quality of return
Proposed team and relevant experience
Qualifications

46
Q

If a tender is late?

A

Generally should be disregarded. Ultimately up to clients discretion but does not set a good precedent. If Public Sector it should be disregarded immediately (risk of collusion or price rigging).

47
Q

Danger of accepting lowest price?

A

May have missed scope.
Quality may not be as per other returns.
May lead to adversarial relationship on site and risk of variation claims and EOT/L&E.

48
Q

What happens if tender is above cost plan and Pre tender estimate?

A

Could be market influences (current examples being inflation and war in Ukraine)
Need to reconcile to budget and seek to offset through VE or client may chose to draw on contingency.

49
Q

How do you deal with errors in pricing schedule?

A

QS should identify errors to tenderer who may chose to confirm and amend or withdraw.

50
Q

Under traditional procurement route, tenderer returns an alternative method of construction, what would you do?

A

Assuming this has been requested in the tender documents, evaluate.
If not, ask for compliant bid.

51
Q

How are Qualifications dealt with in a tender?

A

Procedure should be set out in instruction to tenderers.
If not invited, they may make tender uncompliant - disqualifying bid.

52
Q

On what grounds might a client wish to retender?

A

Not enough returns.
Tender procedure believed to be compromised.
Tenders not at cost level required and retendering believed to produce a different result. I.e. if VE process completed - changing baseline.

53
Q

How are tender commercial return evaluations carried out?

A

QS will check submissions against cost plan/ PTE to identify any rates or measures that do not align.
Ensure all amendments during tender period have been made.
QS will prepare tender report providing summary of process, costs and recommendation.

54
Q

What is included within a tender report?

A

Summary of tender process
List of tenders received / withdrawn
Summary of cost plan, PTE and Programme
Summary of tender opening
Summary of tender analysis including cost, programme, KPIs.
Summary of final bids or BAFOs
Recommendation
Residual risks

55
Q

What is a PCSA?

A

Pre Construction Services Agreement

56
Q

When are PCSA’s used?

A

Generally in a two stage tender strategy. First stage has established contractor as the preferred contractor. Second stage is to develop design and arrive at cost for works.

57
Q

What is the purpose of the PCSA document

A

To document the SERVICES AND DELIVERABLES contractor will provide prior to signing a building contract.

58
Q

What types of PCSA are there?

A

JCT provides a standard form.
Bespoke documents can be drawn up by legal professionals if desired.

59
Q

Have you used a PCSA on your projects?

A

Yes - For both a Design and Build contract and for the appointment of a specialist contractor (facades) which is what my case study is based on.

60
Q

So would you recommend the use of them?

A

Yes - they allow early engagement of contractors and draw upon their experience and expertise to develop the design which may not have been benefited from in a traditional single stage scenario.

RICS APC PM (25 decks)

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