Procurement and Tendering Flashcards
What are the different types of procurement on a construction project? Describe each of the four most common routes?
- Traditional procurement – Sequential process where design is fully completed by clients design team. Competitive tenders are invited and a main contractor is employed to build what has been designed. Client retains control of design team. Fixed lump sum.
- Design & Build – Contractor is responsible for design, planning, coordination and construction of works to Employers requirements. Employer gives ERs and contractor gives CPs which include price, programme and design.
- Construction Management – Employer places direct contract with each of trader contractors and utilises the expertise of a construction manager who acts as a consultant to coordinate contractors
- Management Contractor – Management contractor employed who provides their expertise to design and management project. Management contractor has direct contractual links with all of the works contractors and has the responsibility of the works. MC selects contractors through open book tenders and client reimburses costs of packages plus fee.
What factors affect the procurement route of a specific project?
Time/Programme
Cost
Quality
Risk appetite
Size and complexity of project
Market appetite
Client experience
What is PFI?
PFI is private finance initiative. Private sector designs, builds and finances and operates an infrastructure project for between 20-30 years in return for pre agreed unitary payments. On expiry of that time period,it is handed over to government free of charge. Scrapped in 2018.
What is partnering and is it a good idea?
Partnering is a collaborative management approach that encourages openness and trust.
Parties become dependent on one another for success.
More appropriate on large, long term or high risk projects.
What is a lump sum tender?
A single price is provided for completion of all works, agreed before works begin.
What is a remeasurement contract? Where might you find one?
A remeasurement contract is where the contract sum is not finalised until after completion but assessed on a remeasurement to a previously agreed basis.
Where amount or type of work can be reasonably described but the amount cannot, unknown below ground?
What is GMP?
A Guaranteed maximum price is a limit on the amount that the owner will have to pay on the project. Shifts cost risk onto contractor. Can cost less than estimated and provide a saving to the client. Sometimes the savings are shared to incentivise the contractor. Contractor charges labour& materials plus OH&P
Two stage tender usually.
What is a PQQ?
A pre-qualification questionnaire ascertains the suitability of a contractor or supplier. Contractor answers a list of questions based on the clients or the project teams requirements. Level of experience, capacity, and financial standing, previous experience.
What might you include within a PQQ?
- Structure of company, registered office address.
- Financial statements and accounts.
- Insurance statements.
- Have the directors been subject to criminal or civil court action?
- Previous Projects
- Capacity
What is a single stage tender?
A single stage tender is when the all the project information is released in one stage. The contractors will return a price and the contract is awarded from the tender returns.
When would you have to tender using the OJEU rules ? (What is OJEU)
The OJEU is the Official Journal of the European Union.
The OJEU rules for procurement must be followed when a public procurement process is undertaken and when a project meets certain thresholds.
what is a two stage tender?
A two stage tender is where a contractor is selected on the basis of an indicative programme, there OH&P, or there preliminaries costs, methodology and logistics.
Then under either a bespoke agreement or PCSA and they then assist the consultancy team in design development, buildability, or undertaken design development themselves. Obtain prices for work packages from sub contractors on an open book basis.
What documents would make up the tender document?
- ITT
- FORM OF TENDER
- Drawings and specifications
- Pre construction information
- Programme
- General conditions
- Payment dates
- Project specific preliminaries
- Generic preliminaries
- Tender Queries
- ITQ Letter
- Confirmation of receipt of tender
- Tender Sum analysis
What information would you usually ask contractors to complete in a single and two stage tender?
Single stage tender – Confirmation of tender return, any potential contractual amendments, CSA, programme
Two Stage tender – First stage – OH&P, Prelim costs, indicative programme, PCSA Fee, Form of tender – Bona Fide Tender
What is a negotiated tender?
Tender process carried out with a single contractor.
Where there is a preference in contractor, either from experience or circumstance.
PQS negotiates costs with the contractor.
Who complies tender documents? Why is it important to ensure that this is done in a thorough fashion?
The PQS and design team. Anything missed in the contract that should have been included may either cost the client extra money, or time.
Provides the contractor opportunity for excuses for changes on the project costing money.
Ensure risks are apportioned correctly.
Ensure the design is carried out correctly.
What do you understand by the term base date?
Base date is the reference from which any contractual changes are referenced against. Can adjust contract sum, EOT or which rules apply to contract. Changes to VAT, statutory regulations .
What happens if a tender is sent through by a contractor after the tender return date/time?
Disqualify the bid. Otherwise not fair on other tenderers.
What is the process you go through when you receive a tender return?
Tender opening process with records to ensure impartibility – in presence of client and project manager
Analysis – tender comparison, inclusions, exclusions, normalisation calculations.
Tender queries and responses.
Quality assessment against cost, holistic decision.
Decision made – formulate tender report and submit to client with recommendations.
Once decision made, inform the unsuccessful tenderers and successful tender.
What is front loading and what would you do if you suspected it is being used?
Cashflow usually an S Curve. Front loading is disproportionately loading costs early on in a project to assist cashflow.
I would query cashflow with contractor, inform client you believe the contractor is looking to front load and this may be indicative of that organisations financial health.
Why is it important to have a record of tender opening?
To ensure a transparent and impartial process.
What would you include within a tender report?
- Description of procurement route and who was issued with an ITT and who returned.
- Contractor selection and any tender addendums.
- Scoring matrix.
- Details of inclusions and exclusion and normalised tender returns, and quality score.
- Details of any tender addendums.
- Agree contract sum and a reconciliation with pre tender estimate and tender analysis v all tenders received.
- A final recommendation of suggested next steps for clients.
Additional design information is issued by the architect during the tender period. How would you approach this situation?
if the architect issues additional design information, I would review it thoroughly to understand its impact on the project. I would then assess any necessary adjustments to the scope, budget, and timeline. If required, I would communicate any potential changes to the contractors and may issue an addendum
When you issue information to tenders is it normal that this information would also be copied to the client and design team? Why might this be important?
Client needs to be informed throughout the process. They need to know the basis that contractors are pricing on and need to know that their desired design is what has been issued.
Design team should be aware of what has been issued, can inform if anything has been missed and whether anything further needs to be issued.
