Procurement and Tendering Flashcards
What would you include when issuing a PQQ?
Enquiry letter
Project information schedule
Pre-qualification questionnaire:
- 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.
How is a project structured and delivered in terms of risk allocation and contractual relationships?
Client may be better suited to taking more risk and exposed through more contractual relationships, responsibilities.
Less experienced client that wants to minimise risk may opt for a design and build procurement route, whereby they have a single point of responsibility. The design, programme etc is all taken on by the contractor.
What are the pros/cons of the traditional procurement route?
Advantages:
- Quality of product is generally higher
- Client maintains control of design
- Post-contract changes easy to manage
Disadvantages:
- Longer project duration due to sequential phasing, no overlaps
- Buildability can be poor due to no Contractor involvement
- Design open to abuse
What are the advantages and disadvantages of the D&B procurement route?
Advantages
- Low cost risk as client pays lump sum for Contract, absorbing design/construction risk. Contract Sum will be inclusive of a %age fee to cover design development/risk
- Low time risk: due to the ability to begin construction before design has been completed means this is a fast track procurement route.
- Cost certainty, if a lump sum contract, known early on in the project timeline.
- Early contractor involvement generally is good for buildability
- Single point of responsibility for the client
Disadvantages
- High design risk. Client loses control over design. Contractors will aim to meet ER’s whilst maximising their margins
- Post-contract changes difficult to manage and often are expensive
What are the advantages and disadvantages of management contracting?
Advantages
- Fast track procurement option as early packages can be let whilst later packages are still being designed
- Client maintains design control
- Late changes accommodated so long as that package hasn’t been let
- Good buildability with early appointment of MC
Disadvantages
- MC is paid on a fee basis and doesn’t take project cost risk, leaving the client exposed
- Although procurement is fast, time certainty is poor until the final package is let
- Cost certainty is also poor until the final package is let.
What are the advantages and disadvantages of the construction management route?
Advantages
- Fast track procurement route as design and construction can overlap
- Arguably a cheaper price is obtainable due to cutting out the main contractor’s OH&P costs.
- Accommodates late changes if the package has not been let
- Client maintains design control
- Good buildability with early involvement of Construction Manager
Disadvantages
- Client must be experienced as all parties report to them.
- Time certainty is not known until last package is let
- Construction Manager may not be motivated by cost as he is appointed on a fee basis, resulting in high project cost
Why would you use management contracting over construction management or DB?
You may want reduced exposure/risk than construction management, so opt for management contracating so management contractor acts as buffer between subcontractors and client
You may wish to retain control over design. DB would see design responsibility passing on to contractor.
Which is most risk averse procurement route?
Traditional is very safe/balanced for client, especially w/ BoQ.
Turnkey project is also low risk for client in terms of responsibility, cost and time however only suitable for off-the-shelf products
What contract type would you use for traditional procurement route? (JCT TPN)
Lump Sum
Measurement Contract
Cost reimbursement
What contract would you use for DB procurement route? (JCT TPN)
- Turnkey
- Design and Build
- Contractors design portion in traditional contract
What contract would you use for management procurement route? (JCT TPN)
- Management contract
- Construction manager contract
- Design-Manage-Construct
What methods are there of calculating the contract sum?
- Lump Sum
- (Re-)Measurement (approx quantity contracts)
- Target Cost
- Guaranteed Maximum Price
What is procurement?
The act of obtaining goods or services from an external source
What is tendering?
Tendering is part of the procurement process
It is where a contractor is appointed to the project and a price for the works is obtained
Why would you use two-stage tendering?
- If there is not enough information to obtain a tender price for the works
- To overlap tendering with design period
- To utilise contractor in design period to add buildability
Why does OJEU exist?
EU Procurement Directives established public procurement rules through EU.
Public procurement rules enacted in UK through PC Regulations
What was the purpose of the EU Procurement Directives/OJEU?
Open up public procurement within the European Union and to ensure the free movement of supplies, services and works.
What are the tender options using OJEU?
Open
Restricted (w/ PQQ)
Competitive dialogue
Competitive negotiation
What is competitive dialogue?
PQQ > invited to open dialogue in which solutions developed > at end of process, final number of contractors are invited to tender
What is competitive negotiation?
PQQ > Negotiation > preferred bidder selection.
No formal rules or ending. Preferred bidder can be negotiated with post-appointment.
What are the OJEU value bands?
For Works contracts:
Central Govt + Other Contracting Authorities - £4.7m
Small Lots - £884k
For other contracts it is less.
How long does the OJEU tender process take?
Open Tender 35 days, 30 if electronic submission, 15 if PIN
Describe the tendering method on a project you have worked on (activities, timescales).
[respond with your own answer!]
Mine:
- Construction Framework
- Used medium band (4.5m - 12m
- Competition, 2 stage, DB, JCT DB Contract
- Regional lot London
- ITT = 3 weeks (incl site visit 2.5 weeks prior to deadline)
- Evaluation and appointment = 3 weeks; 60% quality 40% price
- Design development = 6 weeks
PCSA milestone 1 = 50% dd complete
PCSA milestone 2 = 50% dd complete
- Design development gateway = 2 weeks
- Planning submission = 4-5 weeks
- CPs = 8 - 10 weeks
- CP review 7-8 weeks (too much longer)
- Contract finalisation = 3 weeks
How long overall does the DfE Construction Framework tender process take for DB 2-stage? [only relevant if you’ve worked on schools]
Circa 45 weeks.
What will happen to OJEU post brexit?
During the transition period, PC regulations/EU directive still applies to OJEU will still be used
Post-brexit, a new UK regulations will govern public procurement
What did you evaluate tenders on for your project?
[respond with your own answer!]
Mine:
60% quality of submission, interviews
40% on price of model building (proximity to budget)
Who evaluated quality of submission?
[respond with your own answer!]
QS x2, PM
What has happened to OJEU since Brexit?
- Find a Tender went live at the end of the transition period (23:00 on 31 December 2020).
- Procurements on OJEU/TED that were commenced prior to the end of the transition period must be concluded on OJEU/TED.
- New procurements commenced after the end of the Transition Period must be advertised on Find a Tender.
What is a PCSA?
Pre Construction Services Agreement
Enable clients to employ contractors before the main construction contract commences.
How was the PCSA paid?
There were milestones, portions paid as they were achieved e.g. 50% of design dev, 100% design dev..
How was PCSA fee agreed?
Part of tender submission at stage 1 of 2-stage tender
What purpose does package opening serve?
- Transparency of tender returns/cost of works
- On the project I worked on, it was not to be added as part of their CSA offer. It was just to justify their first stage offer.
What did the contractor do in the PCSA period?
- Aided design development
- Prepared Contractor’s Proposals
Why had the tender sum changed at the end of the PCSA?
- Design had developed
- Asbestos survey came back, true extent of cost known
[your response may vary from the above]
What did the tenderers submit in the first stage?
- Cost Estimate based on Stage 3 design (often in 2-stage this will just be a schedule of rates)
- Prelims
- OHP
- Previous experience
[your response may vary from the above]
What tender documents would be sent out for a D&B project?
EMPLOYERS REQUIREMENTS
ITT Form of tender Declaration of non collusion Drawings, specification, scope of services Draft Contract Preliminaries and general conditions Tender pricing schedule Pre cons H&S Pack Working practice: contractors working guide Tender query schedule Provisional programme
What was included in your Tender Report?
Tender Report is a brief history of the tendering process and an analysis of each tender submission + subsequent negotiations
- Exec Summary
- Introduction
- Background and scope of contract
- Tender Evaluation Criteria
- Results
- Recommendation + WHY
- Comparison to PTE
Appendices: Full Returns, Normalisation sheet and Scorecards
What is the LDP2? [only relevant for residential-lead public procurement]
- A construction framework for residential-led development to support the mayor’s ambition to accelerate housing development
- 29 panel members pre-selected through a rigorous procurement process
- Applicable to Greater London
What are the 3 stages of the LDP2? [only relevant for residential-lead public procurement]
- Expression of interest
- Sifting Brief
- ITT
How did you ensure the tender process was fair?
- Made them sign a declaration of non-collusion
- Carried out tender normalisation so all tenders were based on same scope
- Circulated queries to all tenderers
- Prepare a Tender Report to document advice given. This will help in the case that a Contractor challenges the award.
What tender documents would be sent out for a traditional project?
- ITT
- Form of tender
- Preliminaries document
- Draft contract
- Pricing document
- Employer’s information requirements for BIM
- Drawings
- Specification
- Tender Return Slip
What’s an invitation to tender?
A formal invitation to make an offer for supply of goods or services.
May follow a PQQ
What are instructions to tenderers?
Gives overview of project, outlines key dates, instructions to tenderers, contract used, general conditions
What is a form of tender?
A document to be signed by bidder stating they will carry out works should they win the Contract. Declaration there will be no bribery, they will abide to rules of tendering etc.
What is an F10 form?
A form to notify HSE of any construction project
This is a CDM 2015 requirement
What do the CDM regulations define as construction works?
Works likely to last longer than 30 days
AND
have more than 20 workers simultaneously at any point OR exceeds 500 person-days
What is a section 106 agreements?
They are obligations attached to the land that is the subject of a planning permission.
Mitigate or compensate the negative impacts of the development.
E.g. requiring affordable housing, infrastructure contribution
For Phase 1, were there any risk allowances built into their submission?
[Respond with your own answer]
Central London - 5% OH&P
What’s EOI + SB? (LDP2 - only relevant for resi-lead public procurement]
Instead of finding out who was interested then sending out what was essentially a PQQ, both were done at the same time. To express interest, they would return the PQQ,
What’s a section 278 agreement?
Allows a developer to carry out works to public highways e.g. roundabouts, junctions etc required for the development
What are section 278 and 106 sections of?
The Highways Act 1980
Why did you choose LDP2 over say the construction framework? [only relevant for resi-lead public procurement]
Specifically for developers and for residential lead projects.
What questions would you not share a response for in a tender process?
Something that reveals sensitive information about that tenderer OR something that reveals an innovative original idea created by the tenderer.
I would share things that bring clarity to the project/process/scope
How did you track cost movement during the PCSA period?
Had a design development schedule, risk schedule type.
Noted all the changes during the PCSA period + put costs to them
How many people would you recommend tendering to?
3-6 traditional, no more than 4 for DB
How did the developers get onto the LDP2? [only relevant for resi-lead public procurement]
Standard Selection Questionnaire, then evaluated on a submission for a hypothetical project.
Rates submitted not required to be used in mini competitions but any variance should be justified
What are the requirements for using LDP2? [only relevant for resi-lead public procurement]
For UK public bodies to deliver Greater London schemes only
Must be residential lead.
What did you provide in the appendices of your tender report?
- Full submissions
- Evaluation matrices
- Normalisation
Have you ever awarded a contract to a contractor that had not submitted the lowest bid? Why?
[Respond with your own answer]
Mine:
- Had previous experience in the building so we knew they could work sympathetically to neighbouring tenants
- Had experience with the building’s MEP
What were the projects risk (Central London)?
[Respond with your own answer]
Mine:
- Tenants on floors above/below (danger w/ leaks, pipe bursts, noise)
- Only one goods lift, shared
- Access to building
How did you quantify the risks on the Central London project?
[Respond with your own answer]
Mine:
- List the risks
- Attach three possible scenarios w/ cost and likelihood of each one.
- Multiple these together and add up likely cost of each risk
- See if that was comparable to risk percentage attached
What was the methodology for the tender procedure for the strip out in central london?
[Respond with your own answer]
Mine:
- Sent out Tender Docs to 6 selected contractors
- They submitted bids
- We reviewed & normalised. Asked to firm up a few PSUMS. Asked them to add items they had not allowed for or provide further clarity.
- Conducted interviews where they presented themselves & how they would carry out the project. We raised a few questions.
- Evaluated 50% commercial 50% quality of submission/interview
- Issued tender report to client with our recommendation
- Following client’s approval/instruction, we send letters out confirming winner/losers.
What is a development agreement? [only relevant if you’ve had experience with developers]
It’s a contract between a client and developer regarding the development of a site