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Chaim - APC > Procurement and Tendering > Flashcards

Procurement and Tendering Flashcards

1
Q

What are the different procurement routes available?

A
  • Traditional
  • Design and Build
  • Construction Management
  • Management Contracting
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2
Q

List the different tendering procedures?

A
  • Single Stage
  • Two-stage
  • Negotiated
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3
Q

What are the different contractor selection techniques?

A
  • Open Tendering
  • Selective Tendering
  • Single Contractor Selection
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4
Q

What is procurement?

A

Procurement is the overall act of obtaining goods
and services from external sources.

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5
Q

What is tendering?

A

Tendering is:
* the bidding process, to obtain a price; and
* how a contractor is actually appointed

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6
Q

What are frameworks?

A

Frameworks enable buyers to procure goods and services from a list of pre-approved suppliers, with agreed terms and conditions and legal protections.

They can often be split by:

  • Product/Service
  • Region
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7
Q

What legislation for procurement are you aware of?

A
  • Public Contract Regulations 2015
  • Utilities Contract Regulations 2016
  • Defence and Security Public Contract Regulations 2011
  • Concession Contracts Regulations 2016
  • Procurement Act 2023
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8
Q

What factors will influence the procurement route chosen by the Client?

A
  • Funding: availability and readiness.
  • Time: completion date required and if sectional completion is required.
  • Performance: the Client’s quality requirements.
  • Capital v Operational Cost.
  • Risk: risk to the client in proceeding with the project.
  • Complexity: the nature of the project.
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9
Q

Are you aware of any RICS guidance for procurement?

A

The RICS has published a Tendering Strategies Guidance Note.

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10
Q

What are employer requirements?

A

This will often be used on a design and build project, this sets out the employers objectives for the project and will include:

  • Project Overview
  • Scope of Works
  • Specifications
  • Risk Register
  • Site drawings
  • Site Information
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11
Q

What is a contract sum analysis?

A

Normally prepared by the contractor on a design and build project.

Breakdowns down the project into its different elements and provides an associated cost.

Level of detail available/provided will influence the granularity of the contract sum analysis.

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12
Q

Using traditional procurement, when would contractors be invited to tender?

A

Undertaken at RIBA stage 4 once the design is complete.

Design risk sits with the Client.
Construction risk is with the Contractor.

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13
Q

What are the advantages of traditional procurement?

A
  • Accessible to inexperienced Clients
  • Low Risk
  • Certainty with cost, important if funding is constricted.
  • Client has the ability to influence the design due to contractual relationship, ensuring quality and bespoke.
  • Competitive fairness in the bidding for the works.
  • Wildly adopted method so understood by the market and supply chains.
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14
Q

What are the disadvantages of traditional procurement?

A
  • Slow as design needs to be complete prior to construction contractor being procured.
  • Lack of design and construction overlap could increase risk of change at a later date impacting cost and programme.
  • Any attempts to accelerate will reduce cost and time certainty.
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15
Q

Provide an overview of the design and build procurement route?

A

Overlapping of the design and construction.

Single contractor bears the design and construction risk.

Fixed price lump sum.

Client may appoint an initial design team to prepare the concept design, with the design team then being novated to the contractor.

Potential issue of a fitness for purpose responsibility on the contractor.

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16
Q

What are the advantages of design and build?

A
  • Single point of contact for the Client:
    • reducing resource requirements for contractor management.
    • reduced risk.
  • Clearly stated Client requirements will ensure relative price certainty.
  • Construction and design overlap speeds up the construction timescales.
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17
Q

What are the disadvantages of design and build?

A
  • Difficult for the Client to prepare an adequate brief and employer requirements.
  • Requires the Client to commit to the concept design.
  • Difficult to compare bids as design and therefore cost and programme will vary.
  • Change to scope is expensive.
  • Lack of Client influence in design can result in a reduced quality.
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18
Q

Provide an overview of the construction management procurement route?

A

Client appoints a construction manager.

Construction Manager - fee earning professional, that coordinates the design and construction activities.

Contractors are employed directly by the Client.

Client needs to be involved in discussions with the construction manager and for paying of suppliers, therefore an experienced Client is required.

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19
Q

What are the disadvantages of construction management?

A

Low price and time certainty.

Requires a proactive client.

Relying on a committed construction manager.

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20
Q

What are the advantages of construction management?

A

Fast process as design and construction can overlap.

Ability to facilitate design changes at later stages with relative ease, providing the work packages have not yet been awarded.

Client having direct contracts with the suppliers can provide lower prices due to cashflow certainty.

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21
Q

Provide an overview of the Management Contracting procurement route?

A

Contractor selected to manage the whole of the works and is paid a fee on top of the construction costs.

Direct contractual relationships exist between the contractors and the management contractor.

Design team is appointed by the Client so they bear this risk.

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22
Q

What are the advantages of Management Contracting?

A

Overlapping of design and some of the work packages makes management contracting a “fast track” route.

Management contractor and suppliers can have input into the design.

Ability to facilitate design changes at later stages with relative ease, providing the work packages have not yet been awarded.

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23
Q

What are the disadvantages of Management Contracting?

A

Low cost and time certainty.

Relying on a committed management contractor.

Reduced resistance to contractor claims as these will be passed back to the Client.

Gaps in contractors work packages may not be picked up.

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24
Q

What is open contractor selection and when would it be used?

A

A procurement method where a client publicly invites bids from various contractors to compete for the opportunity to carry out a project.

It is open to all.

Used when:

  • The Client wants to explore a variety of innovative solutions from different contractors.
  • For significant projects requiring a wide range of expertise and competitive pricing.
  • Government and public sector projects to ensure transparency and fairness.
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25
Q

What are the pros of open contractor selection?

A

Pros

Transparency: The process is open and transparent, reducing the risk of favoritism and corruption.

Competition: Encourages competition, which can lead to better pricing and higher quality proposals.

Diverse Solutions: Attracts a wide range of contractors, offering diverse and innovative solutions.

Fairness: Provides equal opportunity for all qualified contractors to participate.

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26
Q

What are the cons of open contractor selection?

A

Cons

Time-Consuming: The process can be lengthy due to the need to advertise, receive, and evaluate numerous bids.

Resource-Intensive: Requires significant resources to manage the tendering process and evaluate bids.

Risk of Low-Quality Bids: May attract bids from contractors who are not fully qualified, leading to potential issues with project execution.

Confidentiality Concerns: Sensitive project details are made public, which might not be suitable for all types of projects.

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27
Q

What is selective contractor selection and when would it be used?

A

Is a procurement method where only a pre-selected group of contractors are invited to submit bids for a project.

Used:

Specialized Projects: When the project requires specific expertise or experience that only a few contractors possess.

Quality Assurance: To ensure high standards by inviting only those contractors with proven track records.

Confidential Projects: For projects that involve sensitive information or require a higher level of confidentiality.

Time Constraints: When there is a need to expedite the procurement process by limiting the number of bids to evaluate.

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28
Q

What are the pros of selective contractor selection?

A

Quality Control: By pre-selecting contractors, the project owner can ensure that only high-quality, experienced contractors are considered.

Efficiency: The process is faster and less resource-intensive compared to open tendering, as fewer bids need to be evaluated.

Reduced Risk: Limits the risk of engaging with unqualified or unreliable contractors.

Confidentiality: Better suited for projects that require discretion and confidentiality.

29
Q

What are the cons of selective contractor selection?

A

Limited Competition: Reduces the level of competition, which might result in higher costs or less innovative solutions.

Potential Bias: There is a risk of favoritism or bias in the selection of the pre-qualified contractors.

Exclusion of New Entrants: New or smaller contractors may be excluded from the opportunity to bid, potentially stifling innovation and market growth.

Transparency Issues: The process may be perceived as less transparent compared to open tendering.

30
Q

What is single contractor selection and when would it be used?

A

Is a procurement method where a project owner or client selects one contractor to carry out a project without soliciting bids from other contractor.

Used:

Specialized Expertise: When the contractor possesses unique skills, technology, or expertise that are not readily available from other sources.

Urgency: In situations where time constraints necessitate a quick selection process, such as emergency repairs or urgent projects.

Long-Term Relationships: When there is an established, trusted relationship with a contractor who has consistently delivered high-quality work.

Proprietary Products or Services: When the contractor is the sole provider of a specific product or service required for the project.

31
Q

What are the pros of single contractor selection?

A

Speed: The selection process is faster since it bypasses the need for a competitive bidding process.

Quality Assurance: Working with a known and trusted contractor can ensure consistent quality and reliability.

Cost Savings: Potential for cost savings through long-term partnerships and negotiated pricing.

32
Q

What are the cons of single contractor selection?

A

Lack of Competition: Absence of competitive bidding can lead to higher costs and less incentive for the contractor to offer the best price.

Risk of Complacency: The contractor may become complacent, leading to potential declines in performance or quality.

Dependence: Over-reliance on a single contractor can create vulnerabilities if the contractor fails to deliver or faces issues.

Transparency Issues: The process may be perceived as less transparent and fair compared to competitive bidding.

33
Q

What are some of the key principles of the new procurement act?

A
  • Value for Money
  • Integrity
  • Public Benefit
  • Transparency
  • More open to SME’s.
  • Central digital platform for suppliers to register details.
  • Act does not cover Scotland.
34
Q

What tender queries were raised on the Aircon project?

A

One of the suppliers raised queries around:

  • Safety staff requirements
  • Provison of welfare.
35
Q

Why is it important to update all suppliers on tender queries at the same time?

A
  • Ensures a fair and transparent process.
  • Procurement regulations require equal treatmeant.
  • Providing the information at different times may put some suppliers at a disadvantage.
  • Not acting in a fair and transparent manner may open NR to claims from tendering suppliers.
36
Q

How is your response to the tender queries added into the tendering documents?

A

They are added in as a Tender Addenda.

37
Q

What infromation was did you log when requesting supplier quotes for electrical materials?

A
  • Value of quote
  • Date of return
  • Any missing items or difference in specification of the quoted item.
38
Q

Why was the most expensive quote for materials chosen on Goostrey?

A
  • Other suppliers not being able to provide all the required materials in the timeframe need, works would have been delayed if another supplier was utilised.
39
Q

What was the direct award threshold? What are they? And why are they necessary?

A

The direct award threshold was £50K.

Allows NR and contracting authorities to direct award without the need to undertake a mini-competition for small amounts of work.

NR right to direct award will have been setout in the framework agreement, this ensures fairness and transparency.

40
Q

What is the purpose of the fast track assurance?

A
  • Requirement under the Utilities Contract Regulations.
  • Shows procurement regulations have not been bypassed.
  • There are no conflicts of interest.
  • Value for money is still being achieved.
  • Justify supplier selection.
41
Q

What information did you provide in the fast track assurance?

A
  • Declaration of no conflicts of interest.
  • How supplier was delivering value for money: cheapest quote & willing to adopt CDM responsibilites at no extra cost.
42
Q

What benefits does a mini competition under a framework provide?

A
  • Increased competitiveness from suppliers.
  • More tailored solution and innovative offering.
  • Speed and efficiency.
43
Q

What is a mini competition with tendering?

A

Suppliers under a framework are invited to tender against one another for a Client’s work.

44
Q

What information did you provide in the sourcing strategy?

A

Framework to be engaged.

Desire to undertake mini competition.

Estimated value of the works.

45
Q

Through negotation on the Mersey Rail Tunnel lighting project, what savings did you achieve?

A

The orignal quote received was for £54K however the Client’s design budget was only £49K. Through negotiation I was able to have the quote reduce in line with the Client’s budget, bringing a savings of £5K.

46
Q

What negotiation style did you adopt?

A

I adopted a collaborative negotiation style.

Other negotiation styles:

  • Competing
  • Avoiding
  • Compromising
  • Accomodating
47
Q

Are you aware of any negotiation models?

A

The Harvard Principles of negotation:

  1. Sperate the individual from the issue.
  2. Focus on their interest, not their position.
  3. Develop multiple soloutions.
  4. Objective criteria for which solutions can be tested against.
48
Q

What was the Aircon framework?

A

Under NR’s buildings framework there is a lot for heating and cooling systems.

49
Q

What is the purpose of the new procurement act?

A

Following the UK’s exit from the EU, the new procurement act brings together all the legislation under one act in a simpler and more transparent manner.

50
Q

What are the key underlying principles of the new procurement act?

A
  1. Value for Money
  2. Maximise Public Benefit
  3. Transparency
  4. Integrity
  5. Reduce/remove barriers for SME’s
51
Q

What is the National Procurement Policy Statement?

A

A statement setting out the Government’s strategic priorities in Procurement.

52
Q

How long is the standstill period?

A

Under the new Procurement Act this is now 8 days from Contract Award Notice.

53
Q

What is the purpose of the standstill period?

A

Oppurtunity for unsuccesful bidders to raise concerns and legal challenages.

54
Q

How do you commercially assess tender submissions?

A

Assess in line with the clients pre-determined scoring criteria.

Check tender for errors and any conflicts, raise necessary tender queries, check any anomalies or omissions.

Normalise/equalize tenders.

Post tender interviews

55
Q

How are tender errors dealt with?

A

Method for dealing with errors would be outlined in the instruction to tender documents.

Usually contractor has to standby their offer or is given the opportunity to correct.

56
Q

How was tender normalisation carried out on the EV charging project?

A
  • A clear BoQ pricing document was provided in the tender documentation in line with RMM1.
  • Suppliers provided their rates against each item and their prelims breakdown.
  • Establishing the tender documents in this format eased the process of tender normalisation and comparison of tender returns.
  • The pricing documents were compared with inhouse benchmarking data and one another to identify best value .
57
Q

What is tender normalisation?

A

Adjusting the scores of tenders to a common scale, making it easier to compare them objectively.

Normilisation = (Lowest Tender Score/Tender Score) * 100

58
Q

For the Mersey Rail Tunnel lighting project, how did you determine which supplier to engage with for direct award?

A

Looking at the suppliers on the framework, chose supplier based on them having provided a good quality service for similar works on another recent project at a competative price.

59
Q

What advise did you provide for the Air conditioning projects procurement?

A

Framework to be engaged with.

Need for mini-competition and unable to direct award.

Drafted the commercial review of the tender report, rating the suppliers.

60
Q

Where does Network Rail’s activities fall in public procurement?

A

They are classed as Utility Activities.

Schedule 4 of the Act: Utility Activities - Provision of service to the general public for transport.

61
Q

What are the KPI requirements under the new act?

A

Under Section 52 - Any public contract with an estimated value over £5Million must set at least 3 KPI’s.

NR KPI examples:

Pounds in the Ground.
Design Quality.
Cost v Budget.
Schedule Performance.
No. Defects.
Health and Safety incidents

62
Q

How does supplier exclusion work under the new act?

A

Schedule 6 - Mandatory Exclusion Grounds:

  • Offence under the Corporate Manslaughter & Corporate Homicide Act 2007
  • Offence under the Counter-Terrorism Act 2008
  • Conspiracy to commit fraud.

Schedule 7 - Discretionary Exclusion Grounds.

  • A slavery and trafficking prevention order has been made.
  • Convicted of an offence that has potential to harm the environment including the life and health of plants and animals.
  • Supplier has become bankrupt.
63
Q

When may a contracting authority Direct Award?

A

This is set out under Schedule 5 of the new Procurement Act - Direct Award Justifications.

Reasons include:

  • Over riding public interest - maintenance of Critical National Infrastructure
  • Unique work of art
  • Supplier having intellectual property rights.
  • Novel goods or services.
  • Lack of competition due to technical reasons
  • Unavoidable Urgency - not as a result of omissions by the CA and could not have been foreseen.
64
Q

What information must a framework contain?

A

(a) A description of goods, services or works to be provided under contracts awarded in accordance with the framework;

(b The price payable, or mechanism for determining the price payable, under such contracts;

(c) The estimated value of the framework;

(d) Any selection process to be applied on the award of contracts;

65
Q

What is an open framework?

A

A framework that allows for the award of future frameworks based primarily on the same terms as the original framework.

Award of second framework within 3 years of the first frameworks start date.

And subsequent awards within 5 years of awarding the second framework.

Maximum framework duration is 8 years.

65
Q

What is a framework?

A

A list of pre-approved suppliers, with agreed terms and conditions and legal protections.

66
Q

What are some key benefits of a framework?

A
  • they reduce procurement costs for large numbers
    of contracts for similar works;
  • they provide a greater continuity of potential work
    and thus increase competitiveness.
  • Time savings in procurement of future works.
  • Agreed terms reduces risk.
67
Q

What are some of the limitation of a framework?

A

Reduced access to alternative suppliers - reducing ability to negotiate with other suppliers.

68
Q

What type of frameworks are you aware of?

A

Single Supplier

Multiple Suppliers

Dynamic Purchasing Systems

Chaim - APC (14 decks)

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