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RICS APC - CJDO > Procurement and Tendering > Flashcards

Procurement and Tendering Flashcards

1
Q

What is procurement?

A

The act of obtaining goods/services for a project.

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2
Q

What factors determine procurement route selection?

A

Client objectives.
Time, cost, quality, risk.

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3
Q

Name all four procurement routes?

A

Traditional procurement.
Design & Build.
Management contracting.
Construction Management

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4
Q

What is Traditional Procurement?

A

Separate design and construction. Employer appoints consultants and contractors tender based on scheme.

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5
Q

Key advantages of traditional procurement?

A

Employer retains design control.
Design is mostly finalised before build tender.
Reasonable price certainty.

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6
Q

Key disadvantages of traditional procurement?

A

Project duration can end up being longer.
Limited contractor input on buildability.
Design risk retained by employer.

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7
Q

When is traditional procurement appropriate?

A

Employer has specific or detailed design requirements.
Cost certainty is important.
Programme length isn’t important.

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8
Q

What is design & build?

A

Contractor completes design and executes construction phase of the project.

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9
Q

Advantages of design & build?

A

Earlier on-site start.
Benefit of contractor experience.
More risk rests with contractor.

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10
Q

Disadvantages of d&b?

A

Design only as good as employer requirements.
Complex to compare tender returns.
Employer has less control.

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11
Q

When is D&B appropriate?

A

Where early start on site is needed.
Employer lower risk profile.
Buildability input on complex projects.

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12
Q

What are employers requirements? (ER)

A

Used to describe document produced by employer to set out requirements.

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13
Q

What are Contractor’s Proposals? (CP)

A

Response to employers requirements, produces detailed design information.

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14
Q

What is construction management?

A

Employer directly appoints sub-contractors, and hires a construction manager to manage the sub-contracts with no contractual link.

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15
Q

Advantages of construction management?

A

Speed for early start on site.
Prices could be lower due to direct contracts with trade contractors.
Employer has contractual link with contractors.

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16
Q

Disadvantages of construction management?

A

Price certainty not achieved until last trade package is let.
Procurement requires an experienced employer/client.
Employer must manage all contractors themselves.

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17
Q

When is construction management appropriate?

A

Experienced client.
Early start on site.
Flexibility to make changes to design with smaller impact on time/cost.

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18
Q

What is the riskiest procurement route for the employer?

A

Construction Management.

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19
Q

What is Management Contracting?

A

Employer appoints a management contractor to manage the entire building process, who appoints trade contractors.
Direct link with trade contractors.

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19
Q

Advantages of management contracting?

A

Management contractor helps with buildability.
Single point of responsibility.

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20
Q

Disadvantages of management contracting?

A

Price certainty not achieved until last package let.
Requires proactive employer.

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20
Q

When is management contracting appropriate?

A

Flexibility required.
Early start on site.
Buildability input from mgmt contractor needed.

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21
Q

Difference between management contracting and construction management?

A

Management contracting has direct links to the contractor, construction management has direct links to the employer.

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22
Q

What is a framework agreement?

A

Umbrella agreement that a party enters with one of more suppliers.

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23
Q

How long do frameworks last?

A

Typically 4 years, but can range between 2-10 years.

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24
Q

Advantages of having a framework?

A

Strong relationships and collaboration.
Time saving.
Rates and prices already agreed.

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25
Q

Disadvantages of having a framework?

A

Contractors and suppliers can become complacent.
Can be restrictive to new suppliers.

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26
Q

Why might employers choose a framework agreements?

A

Continuous commission of work.
Invite tenders on a call-off basis.

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27
Q

What is project partnering?

A

A broad term used to describe collaborative approach.
Ownership of risk is spread between the parties.

28
Q

Key advantages of partnering?

A

Overall programme can be shorterend.
Risk of conflict reduced.
Better communication.
Better predictability of time and cost.

29
Q

Disadvantages of partnering?

A

Less opportunity to understand other potential partners.
Difficult to find the right partner.

30
Q

What is tendering?

A

Process by which employer invites contractors to place a bid for work on a construction project.

31
Q

Difference between procurement and tendering?

A

Procurement is the act of obtaining goods and services and the strategy of how.
Tendering is a phase in procurement that obtains a price through bidding.

32
Q

What are the three main tendering options for construction projects?

A

One Stage
Two Stage
Negotiated

33
Q

What documents are included within a tender pack?

A

ITT.
Contract conditions.
Tender scoring matrix.
Project information.
PCI.
Quality questions.

34
Q

What is a bona fide tender?

A

Bid submitted in good faith, that completely meets the conditions of bidding requirements. No collusion.

35
Q

What is OJEU?

A

Official Journal of the EU.
Houses public sector contracts over procurement thresholds.

36
Q

RICS guidance for tendering strategies?

A

Tendering Strategies.

37
Q

What is a PQQ?

A

Pre-Qualification Questionnaire - contains:
- Company details.
- Insurances.
- Finances.
- Experience.
- H&S records.
- Environmental policy.
- Equal opportunities policy.

38
Q

What is the purpose of a PQQ?

A

To reduce the number of potential tenderers to those who could be successful.

39
Q

Where can businesses get a credit check?

A

Dun & Bradstreet.
Experian.

40
Q

What is single stage tendering?

A

All competitors given a chance on identical tender documents.

41
Q

Advantages of single stage tendering?

A

Competitive tender process.
Fixed price.

42
Q

Disadvantages of single stage tendering?

A

No buildability input from the contractor.
Price is as good as design.
Too much competition.

43
Q

How long would you allow for a tender period?

A

Dependent on complexity. 12 weeks would be reasonable.

44
Q

What is two stage tendering?

A

Stage 1 - Employer provides outline design and contractors complete for preferred status. Preferred contractor joins as consultant on PCSA.
Stage 2 - Contractor enters into detailed contract negotiation to agree on final price.

45
Q

Advantages of two stage tendering?

A

Early appointment of contractor to work in parallel with design team.
Earlier start on site.
Increased value engineering opportunities.

46
Q

Disadvantages of two stage tendering?

A

Contractor has less incentive to price second stage competitively.
Cost of contractor pre-con fee.
Potential for negotiation stage to fail.

47
Q

What is a negotiated tender?

A

Single stage tender between employer and one contractor.

48
Q

Advantages of negotiated tender?

A

Simplicity.
Speed.
Flexibility in terms of choosing preferred contractor.
ECI.

49
Q

Disadvantages of negotiated tender?

A

Possibility of delay if negotiations are long.
Cost premium due to lack of competition.
Reliance on party trust.

50
Q

How do you justify value-for-money in a negotiated tender?

A

Insist on open book approach when agreeing subcontracts, with min. of 3 quotes to be provided for each element.

51
Q

What is a “form of tender”?

A

Contractor usually signs and returns it.
Acknowledgement that tenderer accepts T&Cs of tender docs.

52
Q

What information is included in “form of tender”?

A

Tender sum.
Date until which price is valid.
Construction period.

53
Q

When seeking tenders for construction work, what additional information might be requested?

A

Track record of previous experience.
Proposed team and hierarchy.
Methodology.
References.
Programme.
H&S.
Social Value strategy.

54
Q

When tenders are submitted, what should be examined for compliance with ITT?

A

Calculation errors.
Pricing errors.
Check that form of tender is signed.
Resolve qualifications.

55
Q

What happens if a tender is submitted late?

A

Public sector - documents accepted.
Private sector - discussed with employer to understand if they would accept.

56
Q

What is the danger of accepting a very low tender submission?

A

Contractor may be lowballing with a view to recovering costs with claims/variations.
Poor financial position of contractor.
Inaccurate pricing.

57
Q

How do you deal with qualifications in tender submissions?

A

Unauthorised qualifications may invalidate tender.
Parties should resolve before signing.

58
Q

How do you deal with errors in tender submissions?

A

1 - tenderer given details of errors, and can confirm or withdraw.
2 - tenderer can confirm or amend it to correct errors.

59
Q

What would you do if the contractor with the lowest tender was in financial troubles?

A

Company accounts will be reviewed to assess financial stability.
Performance bond.
PCG.

60
Q

When would you advise a client to re-tender a project?

A

Not enough tenders returned.
Tendering procedure is compromised.
Design changes since original tender.

61
Q

How would you deal with a front-loaded tender?

A

Request that contractor remove front loading.

62
Q

How do you reduce the risk of contractors pulling out during the tender process?

A

Ensure tender information is accurate.
Ensure tender period is sufficient.
Go through PQQ.

63
Q

What is contract sum analysis document under D&B?

A

CSA is an alternative pricing document to a Schedule of works or BoQ.

64
Q

What is included in a tender analysis report?

A

List of tenders received.
Initial totals.
Qualifications.
Adjustments.
Revised sum.
Comparison of tenders.

65
Q

If a tender was on time but project was delayed, what would you check?

A

Check the “form of tender”, which would show how long price was valid for.

66
Q

If you think delivery programme is tight, how can you give comfort to the contractor regarding LDs?

A

Can include a LD free period.

67
Q

What is a Pre-tender estimate?

A

PTE is a last cost check before issue to tender.
Can be used to compare against tender submissions.

68
Q

What if tender prices are higher than Pre-tender estimate?

A

Could be due to market conditions.
Reconcile to find differences.
Could value engineer.

69
Q

Where must a tender be posted publicly in the UK?

A

Find a Tender

70
Q

What are the PCR Thresholds updated earlier in 2024?

A

Central/sub gov Supplies and services - £139k/£213k
Light touch regime - £663k
Works - £5.3m

RICS APC - CJDO (24 decks)

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