Procurement and Tendering Flashcards
What is procurement
Procurment is the overall act of obtaining goods or a service from an external source.
What is traditional procurment
Traditional procurment sees the client in a direct contract for services with consultants and a direct building contract. The consultants will have no link to the building contract unless nominated as a contract administrator by the client.
What are some types of procurment
Traditional, Design and Build, Management contracting, Construction Management
What are some advantages and disadvantages of traditional procurment
Pros - Longer design stage leads to higher quality design and build, Responsabilities are clear cut between design and build team, Most of the control is with the client.
Cons - Typically slower than other procurment methods, Confusion may arise when there is input from a specialist contractor.
What is design and build procurment
The contractor is responsible for the design, planning, organisation, control and construction of the works to the employers requirements. The employer will provides the tenderers with employers requirements and the contractor provides contractor proposals which include a price for the works.
What are some advantages and disadvantages of Design and Build procurment
Pros - early start on site, client can minimise their risk, single point of responsability, early price certainty.
Cons - client may stuggle providing a coherent breif, variations from the breif can be difficult and expensive, ease of fabrication may be proritised over aestetics, client has to commit to a design early.
What is construction management procurment
Construction management is a procurement route in which the works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager. The construction manager acts as an agent for the client, administering and co-ordinating the works contracts.
What is management contract procurment
Management contracting is a procurement route in which the works are constructed by a number of different works contractors who are contracted to a management contractor. The management contractor is generally appointed by the client early in the design process so that their experience can be used to improve the cost and buildability of proposals as they develop, as well as to advise on packaging (and the risks of interfaces).
What standards govern procurement
BS 8543 construction procurment policies, stratergies and procedures code of practice.
ISO 10845 Construction procurement
What does BS 8543 focus on
Preparing a business case. The use of value management. Collaborative working practices. The consideration of value in selection criteria. Early engagement with the supply chain. Change control. The adoption of formal gateways and reviews. Exit strategies.
What is tendering
Tendering is an important phase in the procurment strategy including the bidding process, to obtain a price ; and how a contractor is actually appointed.
What is single stage tendering
The most common form of tendering. The process is as follows;
- Expression of interest letter is often sent to multiple contractors
- invitation to tender documents are sent to those who respond to the EOI (RIBA stage 4)
- Contractors are given a predetermind period of time to provide their submission
- The submissions are anyalised against time, cost and quality
- A single tenderer is selected and they enter a contract
What is two stage tendering
Increasing in popularity in recent years. The process is as follows;
- Information is provided to multiple contractors at RIBA stages 2 or 3
- A preferred contractor is chosen based upon the quality of their bid, team, preliminaries price, OHP allowance.
- the contractor joins the design team and commits to a pre-construction services agreement
- once the design is developed to RIBA stage 4 the contractor presents their bid.
What is negotiated tendering
- begins with a single stage tender with a single contractor requesting their initial price
- at submission their price is negotiated with the clients Quantity Surveyor until an agreement is made
- not often used for public tendering as it lacks the competative advantage of formal bidding
What are some factors to consider when choosing a tender period
- project complexity
- the size of the project
- time of year (christmas break, summer holidays)
- market conditions
What is a framework agreement
Used by clients who continuously commision construction works such as social housing providers. This allows the client to call upon goods and service providers to complete work on a specific portfolio over a specified amount of time.
What are some example of framework agreements
JCT framework agreement (FA) 2016
NEC4: Framework contracting
What are some advantages of a framework agreement
Reduces procurment timescales,
Reduces learning curve,
Greater predictability of costs and programme,
Promotes ‘right first time with zero defects’
What is BS 11000-1
It provides a framework specification for creating collaborative business relationships.
What is Partnering
A collaberative management approach that encouraces openness and trust between parties to a contract. This can be adopted for a one off or can be use over a number of projects.
What are some example of Partnering contracts
Project Partnering Contract 2000
Team Partnering Contract 2005
ICE Partnering Addendum
NEC4: Alliance Contract
What is an Alcatel period
Public contracting authorities must leave a period of least 10 days between a contract award decision and the formal award of the contract. This is known as the standstill (Alcatel) period.
What is an Alcatel notice
A short report containing the justification as to why the selected tender has succeeded and why the others had been declined.
What is the risk of an Alcatel notice
The information provided within an Alcatel notice should be carefully considered as unsuccessful tenderers may use this information to challenge the award.
What is a VEAT notice
“Voluntary Ex-Ante Transparency Notice” (VEAT)
It’s used when a contracting authority has awarded a contract to a supplier without first having published an open tender, which opens the work up to the rest of the market. They can then, voluntarily, choose to publish a VEAT to allow the market to challenge the decision.
What is replacing OJEU and how does it differ.
OJEU is the official journal of the European Union where all publically procured tenders are posted. After Brexit and January 1st 2021 the UK will no longer use OJEU and use “Find a Tender” the UK alternative. There will also be alternatives for Scotland, Wales and Northern Island.
It differs in various ways;
- England public works only
- The introduction of open frameworks
- remove barriers for SME
- requirement to provide more information throughout the life of a contract
How are public contracts procured
Public Contracts Regulations 2015
What is Public Contracts Regulations 2015
the Public Contracts Regulations 2015 was established to replace the equivalent EU directive.
It covers;
- When the regulations apply
- Public tender process
- Awarding public contracts
- Managing risks with public procurement
What procedures are set out in Public Contracts Regulations 2015
- Open procedure
- Restricted procedure
- Competitive dialog
- Competitive procedure with negotiation
- Innovative partnership
what is Open procedurement in Public Contracts Regulations 2015
- Single-stage process
- Open to all
- Clarifications can be made but no negotiation
- Used when tenders are easy to evaluate
- Submission 35 days from Find a Tender
what is the Restricted procedure in Public Contracts Regulations 2015
- Two-stage process - EOI/PQQ then full tender
- Minimum of 5 suppliers
- Used for simple projects with significant interest
- Clarifications can be made but no negotiation
- Submission 30 days from Find a Tender
what is Competitive dialog in Public Contracts Regulations 2015
- Two-stage process - EOI/PQQ then the dialog
- Minimum of 3 bidders
- Used where bidders need to adapt or contribute
- PA can eliminate a bidder
- Remaining bidders invited to submit a tender
- PA can negotiate further with the final bidder
what is Innovation Partnership in Public Contracts Regulations 2015
- Allows a longterm partnership for a new innovative product or a service
- Likely to be a multistage tender with eliminations
- Submission 30 days from Find a Tender
What is the Lord Young Reforms
2015 amendments to;
- Increase participation of SME’s
- Publish tenders on “Contracts Finder” website
- Ban PQQ below a threshold
- 30-day payment terms required
What are some mechanisms for mitigating risk in Public Contracts Regulations 2015
Reg 21 - Confidentiality - PA prevents disclosure of confidential information
Reg 24 - Conflict of Interest
What is a PQQ
A pre-qualification questionnaire sets out a series of questions for potential tenderers to answer regarding their level of experience, capacity and financial standing.
when do the public contract regulations apply
Reg 2 - contracting authorities governed by public law
Reg 5 - Public bodies purchasing good or services above a threshold
(£4.5m for contracting works, £65,000 - £180,000 for supply or design contracts)
What are some examples of public bodies
Bank of England Historic England Highways England British Museum NHS England Natural England Police Public Health England
What is contained within the Tendering Practice Note 2017
Preliminary Enquiry - including a project information schedule and pre-qualification questionnaire.
Invitation to Tender and Tender - covering the documents involved, the criteria and compliance.
Assessment and Award - covering assessment, examination of priced documents and related matters, and notification to tenderers.
What is a tendering guidence document
JCT Tendering Practice Note 2017
What are some expected changes to the public procurement regulations 2015
Comination of various other public procurement regulations.
Increased theresholds.
Simplified procedures limited to The Open Procedure, The Competitive Flexible Procedure and The Limited Tendering Procedure.
Change from “Most Economically Advantageous Tender” to “Most Advantageous Tender”
Introduction of a debarment list where a contractor will remain for 5 years following exclusion.
