Procurement and Tendering

Question 1

What is the difference between tendering and procurement?

Answer 1

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 (i.e. time, quality and
cost) and their attitude to risk

Tendering is an important phase in the
procurement strategy but procurement involves
much more than simply obtaining a price.
Tendering is:
* the bidding process, to obtain a price; and
* how a contractor is actually appointed

Question 2

What factors influence the selection of a procurement route?

Answer 2

Speed, Cost, Quality, Risk

Question 3

Procurement methods?

Answer 3

• Traditional
• D&B
• Management Contracting
• Construction Management

Question 4

How does management contracting work?

Answer 4

i. Employer appoints a Management Contractor, and the Management Contractor then appoints the trades direct, through a number of works contracts

ii. Management Contractor’s remuneration is based on the cost of the works packages plus agreed fees (to cover the Management Contractor’s overheads and off-site activities)

Question 5

How does construction management work?

Answer 5

employer appoints separate trade contracts to carry out the works, and a construction manager to oversee the completion of the works for a fee.

Question 6

What is the difference between management contracting and construction management?

Answer 6

Employer has a direct relationship with the sub-contractors under construction management and appoint someone to manage the project. Whereas, management contracting, the relationship is with the contractor who appoints the sub-contractors

Question 7

ASOS – What was included within the tender information?

Answer 7

i. An invitation to tender letter
ii. The form of tender or ‘tender submission’
iii. Preliminary documents and information around pre-construction and site management
iv. Contracts and contract conditions
v. A tender pricing and specs document
vi. Design drawings and project specs
vii. Tender return form

Question 8

What is a pre-construction information plan + who produces that?

Answer 8

i. document which provides the information already in the Client’s possession, or which is reasonably obtainable, to relevant CDM Duty Holders, such as Designer(s), Contractor, or Principal Contractor
ii. The Principal Designer

Question 9

What is the content included within a pre-construction information plan?

Answer 9

i. Description of the project
1. Programme dates, details of client/designers

ii. Client’s considerations and management requirements
1. Security of the site
2. Welfare provisions
3. Traffic management

iii. Environmental restrictions and existing on-site risks
1. Site boundaries
2. Asbestos

iv. Significant design and construction hazards
1. Materials requiring particular precautions

v. The health and safety file
1. Description of the required format and any conditions relating to its content

Question 10

ASOS - Negotiated with the phase 2 contractor – what were those reasons?

Answer 10

i. Exiting contractor relationship
ii. Ability to re-use rates from previous phase
iii. Contractor had knowledge of the building/lessons learnt

Question 11

KN – Why did you advise single stage traditional tender?

Answer 11

i. Cost certainty
ii. Client retains control of the design
iii. Competitive pricing
iv. Sufficient time in the programme to enable this option

Question 12

What does OJEU stand for?

Answer 12

Official Journal of the European Union - This is the publication in which all tenders from the public sector which are valued above a certain financial threshold according to EU legislation, must be published

Question 13

How would you deal with a front-loaded tender?

Answer 13

Front loading is generally not a pricing error
- Request contractor removes front loading, if the contractor refuses, this may be ground for disqualification

Question 14

On what grounds would you re-tender?

Answer 14

1. Insufficient tenders returned
2. Procedure was compromised
3. Significant design changes
4. If the client wishes to delay the tender

Question 15

What is the purpose of a tender report?

Answer 15

The tender report provides an audit trail for the selection process and might include:
* The background to the contract.
* The scope of the contract.
* Pre-qualification criteria.
* The tender evaluation criteria.
* Reasons for rejection of unsuccessful tenders.
* Reasons for the recommendation.
* A summary of any post-tender negotiations.
* Comparison with the pre-tender estimate.
* Any implications for the project.

Question 16

What is a tender report?

Answer 16

• Brief history of tender process
• Analysis of each tender submission + subsequent negotiation
• Report should conclude with clear recommendation of most suitable contractor

Question 17

Pros and Cons of traditional tendering?

Answer 17

Pros
1. Competitive pricing
2. Client retains control of design
3. Price certainty
4. Easier to value changes

Cons
1. Project Duration may be longer
2. No design input from contractor
3. Strategy based on price competition
4. Client retains responsibility for design
5. If design is not complete at tender, cost and time certainty may be reduced

Question 18

Pros and Cons of D&B tendering?

Answer 18

Pros
1. Single point of responsibility for design and construction
2. Earlier commencement on site
3. Early price certainty
4. Contractor buildability advice

Cons
1. Client has to commit to concept design early in project
2. Variations from brief may be difficult to agree
3. Difficult to compare tenders
4. Low quality

Question 19

Pros and Cons of Construction Management?

Answer 19

Pros
1. Project duration reduced due to design and construction overlapping
2. Prices may be lower due to direct contact with s/c
3. Roles, risks and relationships are clear

Cons
1. Price certainty not achieved until last package is let
2. Need an experienced client
3. Client has many consultants and contractors to deal with

Question 20

Pros and Cons of Management Contracting?

Answer 20

Pros
1. Retain control of design
2. Move risk or procurement onto contractor
3. Flexible with design changes

Cons
1. Not suitable for inexperienced client
2. Works begin prior to knowing final design
3. Less price certainty

Question 21

What is a framework agreement?

Answer 21

List of contractors selected by the client after a formal tendering procedure to work over a long period of time

Question 22

Pros and Cons of framework agreement?

Answer 22

Pros
- Preferential costs and rates for long term delivery arrangement
- Repeat work
- Only negotiate once
- Guarantee work stream

Cons
- May take time to secure a project
- Doesn’t always deliver value for money
- Complacency

Question 23

What is project partnering?

Answer 23

Project Partnering is a long-term structured management approach whereby two or more organisations commit to mutual objectives, trust (as a means) and joint problem-resolution methods to pursue improved cost effectiveness and continuous improvement in high-risk construction projects

Question 24

Pros and Cons of Partnering

Answer 24

Pros
- Conflict is reduced
- Better value for client
- Better predictability of time and costs

Cons
- Difficult to find a strong partner
- Less opportunity to find out what other contractors can offer

Question 25

What is the purpose of a PQQ?

Answer 25

enable the client to produce a short list of suppliers that are likely to be most appropriate for their project. Short-listed suppliers may then be invited to tender for the contract

Question 26

What information would you request within a PQQ?

Answer 26

• Company details (including legal status).
• Details of insurance cover.
• Financial information (such as recent accounts).
• Relevant experience.
• Information about technical and professional ability.
• Information about capability and capacity.
• Health and safety policy.
• Quality assurance policy.
• Environmental management policy.
• Equal opportunities policy.
• Relevant references.

Question 27

How do you score a PQQ return?

Answer 27

Where possible a scoring and weighting system should be prepared for rating submitted information and potential tenderers should be informed of the details of the system that will be used.

Question 28

What is a client brief?

Answer 28

The project brief is the final stage in the process of defining the client’s requirements for the development of a built asset
* The statement of need is the first attempt to describe the possible requirements of the project.
* The strategic brief develops from the statement of need and describes the client’s requirements in sufficient detail to allow the appointment of consultants. It is then developed further with the benefit of comments made by the consultants.
* The project brief is the key document upon which the design will be based.

Question 29

What is the Form of Tender?

Answer 29

Pre-printed formal statement in which the tender fills in the blank spaces
- Contractor provides company name, address and sum of money for which he offers to carry out the works
- Acknowledges and accepts the terms of conditions

Question 30

What is included in a Form of Tender?

Answer 30

• Form of contract noted
• Contractors details
• Tender Sum
• Time the price remains valid for
• Confirmation its genuine and bona fide

Question 31

What do you expect to be submitted as part of a tender submission?

Answer 31

• Previous experience
• Proposed team
• CVs
• Methodology
• References
• Programme

Question 32

What is the purpose of a tender analysis?

Answer 32

Process the QS undertakes to ensure all tender bids are compliant, ensure errors within submissions are corrected to provide the client a levelled tender cost

Question 33

How do you adjust for an error within a tender submission?

Answer 33

Create a post-tender Q&A document, to be issued to tenderers, highlighting errors within tenders for the contractor to correct
Give the contractor the opportunity to correct or stand by their cost

Question 34

What is included within a tender report?

Answer 34

• List of tenders received
• Unadjusted tender totals
• Post-tender adjustments
• Revised tender sums
• Qualifications and exclusions
• Tender analysis (comparisons)
• Recommendation