Procurement and Tendering Flashcards
What is procurement?
The overall act of obtaining goods and services
What is tendering?
The obtaining and selection of prices and providers for the services.
What are the four types of procurement?
- Traditional
- Design and Build
- Management Contracting
- Construction Management
What are the 5 types of tendering in construction?
- Open
- Single
- Two-Stage
- Negotiated
- Framework
What are the advantages of traditional procurement route?
a. The client is responsible for producing the pricing document, and therefore the quantities in the contract
b. There is no overlap between design, tender and construction
c. Certainty of time is gained at tender stage (can plan ahead)
d. Full competition of tenderers, with full design
e. Control of quality of design, so certainty
f. Little risk as you get certainty of cost, time and quality
Retaining control over design can lead to higher quality
Offers higher level of cost certainty before commencement
Design changes are easy to arrange/value
What are the disadvantages of traditional procurement?
Don’t get early buildability from contractor
Can be time-consuming due to the sequential nature of the process
Limited scope for innovation and creativity as the design is finalized before construction begins
Potential for disputes and conflicts between the client, designers, and contractors
May result in higher overall costs due to change orders and variations
Limited collaboration between contractors and designers, which can result in missed opportunities for value engineering and cost savings.
Multiple parties for the client to deal with
It also means that contractors can’t provide any value engineering or design input on the project until the tender stage
Longer overall project duration
No contractor design input
When might traditional procurement be appropriate?
When client wants certainty of cost, competitiveness, certainty of time but isn’t concerned with a longer tender process, and wants certainty of quality
What is two stage procurement?
a. When a competitive tender is sought between contractors where they submit their OH&P, prelims CV’s method statements etc based on little design. Then a tenderer is selected to progress to stage 2 which he then submits his full priced tender with 3 quotes on packages, and costs are negotiated. The contractor is paid a pre construction services agreement fee to start building design.
b. Not as competitive as contractor can select the subbie quotes, and as he has the contract In a way and fees may have been paid, it is difficult or costly to get out of, so contractor can increase prices. Although quality of construction and buildability is good due to early engagement, the client could lose control of some of that design
Can you tell me the difference between Construction management and management Contracting?
MC – where a Management Contractor has contracts with subbies and work packages are let. This is usually tendered on minimal design and packages are let as the design progresses based on which work is needing built first.
CM – where Construction Manager is appointed by client (expert) to manage subcontracts, the client is signed into these subcontracts directly. A very fast procurement route where the design and tender happens consecutively
Advantage and disadvantage of Management Contracting?
Good when client doesn’t care about cost certainty, but needs an early start on site. Very short programme. Price not known until the last package. Changes to design later on can be expensive.
Advantage and disadvantage of Construction management?
Large complex projects where early start is key. Design tender construction all happens simultaneously. Lots of admin, don’t get cost certainty.
What is a framework?
An agreement between a buyer and suppliers, where the buyer has a long standing arrangement of works over time in the future, where the works are of a similar nature, allowing individual contracts to be let off of these framework agreements.
What practice notes are you aware of relating to tendering?
I am aware of the guidance note - tendering strategies 2015
What would you do if a tender was returned 1 minute after the deadline?
I would not open the tender, as this would give an unfair advantage to this tenderer, as the other tenderers where not aware of this extra time. 1 minute is still past the deadline, and the other tenderers may have submitted much earlier. Fraud, collusion. If private client it is at their discretion to open them. If public, you cannot open them.
What if the client insisted you open the tenders?
I would advise the client that he is free to open them, but would advise this is not what I am going to do, and produce my report based on this tender not being bona fide.
How has Brexit affected tendering? What legislation is there for tendering?
a. In October 2024, new procurement act comes into force
b. Deliver VFM / public benefit / transparency / integrity
c. New digital platform
What is the least risky procurement route?
It would depend on the construction project, client, and design requirements, but generally speaking traditional is seen as less risky, as you get cost certainty up front with pricing the stage 4 design, and the contractor wont price risk in due to this. There is programme certainty as the design is completed and all accounted for in the contractors programme, so should be minimal Prov Sums etc. There is quality certainty as the client retains this control, and has say over the design.
What is OJEU?
The Official Journal of the European Union, I am aware there are thresholds for advertising.
Why would traditional and D&B have different tendering timescales?
D&B may be longer due to the required design
Why might D&B have different number of tenderers than traditional?
It may have less to give contractors chance they will win the work.
How do you ensure that the costs returned under a negotiated tender are fair and reasonable?
I would request 3 different quotes from the subcontractor packages such as joinery, M&E, and finishes. I would also compare these rates to recent tendered rates, and in house cost data, more so if I have the data from the same contractor.
As opposed to the prelims, what other documents did you have to produce for the tender documents on a project you have worked on?
On the UoL Adrian Decant project: a.I had to produce the contract sum analysis as the main pricing document for the contractor to fill in to form part of the contract. Also created a form of tender. I created a schedule of all contract documentation, which acted as a table of contents. I produced a tender clarification log to include in the pack for tenderers to fill in their clarifications and queries.
How were the contractors selected prior to sending out the EOI?
A shortlist was created by myself and the client based on past experience, trust, the type of project, and location. A shortlist of 7 contractors was created to send the EOI to.
How could you ensure that the contractors are in a suitable financial position to undertake the work?
I would advise the client to carry out a Dunn and Bradstreet financial check on the contractors. I would also ask for the companies annual turnover and any company profit and balance sheets.
Can you elaborate on the framework pricing agreement and how these rates were agreed?
The rates were agreed as part of a framework tender around 2 years ago, these form part of the framework and current design iteration that projects are based upon. Costs on a project level were then returned and analysed based upon the previous framework costs where they were uplifted for inflation, design change and project specific design elements.
What do you understand by the term value for money and how did you advise the client that it had been achieved on the data centre equipment project?
This depends project to project and what the client wants, to me VFM is achieving or exceeding the clients requirements at a reasonable price.
Under what procurement route was the UoW Beehive project tendered and why?
It was a Design and Build Procurement route, as the works involved specialist m&e works. The design and quality was not necessarily a priority for the client, but it had to meet the minimum requirements set out by the adopting authority, therefore I advised the client due to this, it would be better for the contractor to handle this risk
When preparing a tender report, what information would be included?
Project overview, figures of the tenders, a matrix of what was requested in the Form of Tender and what was submitted, were any non compliant, a comparison of rates, elements etc, contractors submitted programmes,
Have you ever conducted a Pre-Qualification Questionnaire? Why is this important to do in the procurement process?
On the UoN energy centre project, I drafted a PQQ which was issued to a longer list of contractors, as this scheme was high value, was important to the client, and the programme allowed for this exercise.
b. This helps whittle down the longer list of contractors to a shortlist, highlighting key strengths of the contractors, and if they are suitable for this project, based off prior similar experience, proposed project team/CV’s, experience with the client, and other key client drivers.
On UoB Demo, you noticed the issue in the prelims for the contract, did you miss these during the tender documents?
a. I was using the clients preferred preliminaries template for this contract, which didn’t include any facility for contractors welfare location, therefore I advised the client this should be included in the standard template, and sent out a clarification to all tenderers via the portal to include for this in their tender return.
Can you advise how you analysed the tenders and how you ensured they were analysed fairly?
I first carried out a clarification, query and normalisation process to level the tenders, so all have included/excluded the same items, and made the same assumptions regarding the design. This ensures they are all pricing with the same assumptions and knowledge. Any additional info or Q&A’s out of this were shared between tenderers.
Did you distribute the queries to all contractors or just the contractor that has asked the question?
I distributed the queries and more importantly the answers to all contractors, ensuring that any reference to the contractor was removed.
Why did you advise on introducing new tenderers and to carry out a competitive tender? What could this bring to the tender process?
a. I advised this to provide commercial assurance on the project, as I was aware the single tenderer was already on the wider scheme, the contractor would see this as an opportunity to add cost as there is no competition they think the project is already theirs to have.
b. Adding in competition would make the rates tendered more competitive as contractors are then competing to win the project, it also adds diversity in that different contractors price things in a different way, offer solutions, and will possibly use a different supply chain.
If a contractor appears to be in financial difficulty, how do you advise your client?
Look at company accounts, previous work complete, ensure he can provide a bond
Can you tell me the factors that influence procurement selection?
- Priority of cost certainty/time to S.O.S./quality control
- Level of experience of the client
- Risk profile of client (Transfer/Acceptance/Avoidance)
- Ability to change scope of works – control
- Project complexity
You mention you have experience working on Framework Agreements, What are the adv/dis.adv of framework agreements?
It is quick to appoint contractors and there are reduced tender costs for suppliers. It can encourage collaborative working through working with the same suppliers and lessons learned as a result and a reduction in disputes.
There however is no guarantee of future work and it is only suitable for works of a similar nature.
Why did you use a two-stage tender on University of Nottingham Works?
When design was not fully developed and time is constrained, as it allows design to be completed alongside tendering, or if the design would benefit from contractor input. Traditional tendering generally doesn’t require contractor input unless it is particularly complex, and is therefore not really suited to two-stage; whereas CM/ MC & D&B are; D&B can help contractor’s understand the design leading to fewer provisional sums.
What are the advantages/ dis-advantages of two stage tendering?
Advantages – Design & tendering can be overlapped. Increased contractor input on design. Some degree of competition
Disadvantages – Lack of cost certainty until second stage. Lack of competitiveness during second stage. If negotiations don’t go well employer may have to re-tender.
How would you increase competition during the second stage?
I would request at least 3 quotes for each package (open book tendering) we would also request copies of quotes and check measures and rates on these and challenge if appropriate.
What did you include in your tender report that you issued to the client on the UoB project?
You are basically showing the process to the client.
-Executive Summary
-Introduction
-Basis of Tender (docs/ contract/ key dates etc.)
-Receipt of Tenders (as received)
-Examination of tenders (adjustments made/ arithmetical errors etc.)
-Final Tender position
-Comparison with pre-tender estimate and explanation of any differences
-Recommendation and Conclusion
-Appendices (Tender opening form/ form of tender/ tender queries etc.)
Prompt… So were the tenders received the same as the final tender offer?
What should be considered when selecting a procurement route?
The specifics of the project
The clients objectives regarding:
Cost
Time
Control
Quality
Risk
