Procurement and Tendering

Question 1

You discussed an open-book tendering process on BT Stadium House; what are the other methods available?

Answer 1

In a closed-book tender, Lancer Scott provides a single, fixed price for the entire project without disclosing the detailed cost breakdown of materials, labour, and other expenses. The client or project owner does not have visibility into the actual costs, unlike in an open-book tender, where cost transparency is a key feature.

Question 2

Talk me through an open book tender process.

Answer 2

An open book in construction is a transparent tendering approach where the Lancer Scott shares detailed cost information with the client, allowing for full transparency of costs.

Question 3

Why do you think the employer’s QS wanted to be privy to the subcontractor prices?

Answer 3

1. It allows for full transparency of costs and demonstrates to the client that they are getting the best value from the market.
2. Additionally, this is how the client adjudicates their tender process by employing an open-book approach.

Question 4

Why wouldn’t you accept tenders at face value?

Answer 4

1. A tender adjudication objectively evaluates and compares submitted bids to ensure that the most suitable contractor is selected.
2. An example of this was on BT stadium house when a contractor did not include the full scope and front-loaded their quotation.

Question 5

You’ve talked about front loading; what is front loading, and how did you identify it?

Answer 5

Front loading in a tender return is when a contractor inflates the prices of initial work items in the project to receive higher payments earlier in the contract, even though the actual costs incurred at that stage may be lower.

This practice improves the contractor’s cash flow in the early stages but can pose risks to the client, as it distorts the true cost distribution over the project’s duration.

I identified this by completing a subcontractor analysis and comparing each rate side by side to highlight anomalies.

Question 6

When you identified that the rate was high compared to the other returns, did the opportunity exist to rationalise with that contractor?

Answer 6

I went through the post-tender query process, and the contractor confirmed they were happy to stick by the rate, which was a red flag.

Question 7

You talked about red flags. If a contractor is front loading, what are the prevalent risks or red flags?

Answer 7

This could indicate that the contractor has cashflow problems or is struggling financially.

Question 8

What would you do if the client said they were happy to proceed even with the front-loaded quotation?

Answer 8

It distorts the true cost distribution over the project’s duration, and if the package had to be relet, the client would be financially harmed as the client would have already paid for the lion’s share of the package.

Question 9

What if the client insisted on using them?

Answer 9

It potentially raises a red flag regarding credit issues, so I would conduct a further credit check.

If the client insists on my advice, I recommend putting some form of security, such as a performance bond or PCG.

Question 10

If the client insists on appointing someone, do you have to?

Answer 10

No, as the subcontract sits with Lancer Scott, and it’s ultimately Lancer Scott’s risk.

Question 11

If the subcontractor had agreed it was an error, what would be the process, or what would happen next? If they acknowledged it, that rate was an error.

Answer 11

JCT has produced a tendering practice note where two options are suggested to deal with errors; one of these options is usually drafted into the tender pack

Alternative 1:

1) The tenderer should be given the details of the errors and afforded the opportunity to confirm or withdraw the tender

2) If they withdraw, the next lowest bid is considered

Alternative 2:

1) The tenderer should be given the opportunity to confirm their offer or amend it to correct genuine errors

Question 12

Do you credit check contractors?

Answer 12

Lancer Scott’s onboarding process is quite onerous. Part of the process is checking the contractors’ accounts and finances and completing PQQs. However, I am aware this can change over time, so they are also completed periodically when required.

Question 13

You then advised on appointing an alternate contractor; what underpinned that advice?

Answer 13

The alternative contractor’s bid was more comprehensive, covering all areas completed. Additionally, I deemed this a more accurate reflection of the true cost.

I was also able to check the rates against Lancer Scott’s in-house cost data, as we have a large cladding portfolio.

I could dismiss the original quotation, and I still had two, along with in-house cost data, to undertake a comparison.

Question 14

Out of curiosity, how did that contractor perform?

Answer 14

Unfortunately, the client couldn’t proceed with the second stage due to logistical issues within their business.

Question 15

I can see you have experience in design and build, both single-stage and two-stage. Can you tell me how those processes differ?

Answer 15

In single-stage tendering, contractors submit a full bid, including design, cost, and programme, in one go. It’s suitable for projects where the design and scope are clearly defined.

In two-stage tendering, the process is split into two phases. First, contractors are shortlisted based on their technical and financial qualifications. In the second phase, they submit detailed proposals for the second stage. This method is ideal for large, complex projects with early contractor involvement.

Question 16

You said you had been involved in the bidding process; talk me through your bid on the Caerphilly Foss market.

Answer 16

The project was identified on Proacts, an online procurement platform. The bid included the CSA, programme, quality document, and a detailed section on social value.

I was involved from the bidding stage, undertaking estimating duties and also assisting with the quality aspect.

I contributed to the social value section identifying:

1. Education Initiatives – delivering presentations.
2. Protecting & Improving the Environment – recycling and waste management.
3. Promote Local Skills, Employment & Training – employing local trades and labour.
4. Healthier, Safer and Resilience with Partners in Communities - Donations or in-kind contributions to local community projects

Question 17

What were the scoring criteria?

Answer 17

Caerphilly Ffos Market was 80 / 20 on cost and programme, 80 in favour of cost.

The quality document was made up of:

1. Programme
2. Method Statement
3. Health and Safety
4. Relevant Experience

Question 18

Why do you think they favoured cost over quality?

Answer 18

On this project, the client was a local authority; therefore, cost was a key driver in demonstrating that public resources were being used responsibly.

Quality was also important, as this project served as the first project under the 2035 place-making plan, which means it set a benchmark for future schemes under the plan.

Question 19

You also noted that you had to draft clarifications. Can you give me an example of three clarifications?

Answer 19

On our cladding schemes, we typically make the client aware of exclusions such as:

1. Works to the existing structure.
2. Relocation of tenants.
3. Dealing with asbestos, if none has been identified in the pre-construction information.

On Caerphilly:

1. Foundations left from previous use.
2. Delays associated with uncovering any artifacts on the castle grounds.
3. Delays associated with sectional agreements. SAB approval.

Question 20

What would be the circumstance where the client would reject a clarification?

Answer 20

An example of this could be a change to the scope or methodology. For example, if the client requested plastering walls but the tender had allowed for tape and joint, this would give the tender an unfair advantage over other tendering contractors. When the client has asked for something and you have priced something different, that gives you an unfair advantage.

When contractors can’t fix the price for the time required in the form of a tender.

Question 21

You talked about adhering to tender deadlines, for example, on BT Stadium House. What if you had received late tender returns?

Answer 21

I would consider rejecting it if it breaches the rules and gives them an unfair advantage. However, as it is in the private sector, I would have to run this by the client to see how they would like to proceed, as BT is a private client.