Procurement and tendering Flashcards
1
Q
What are the different types of procurement routes and techniques?
A
- Traditional
- Design and Build
- Management Contracting
- Construction Management
- Guaranteed maximum price
- Single Stage
- Two – Stage
- Negotiated
- Lump Sum
- Re-measurement
2
Q
What is traditional procurement?
A
Traditional
• (JCT Standard, Intermediate, Minor works)
• Design-bid-build
• Contractor doesn’t take responsibility for design
• Design team (consultants) design the project
3
Q
What is D&B procurement?
A
Design and Build
• (JCT Design and Build)
• Main contractor appointed to design and construct
• Contractor takes responsibility for design
4
Q
What is management contracting procurement?
A
Management Contractor
• Number of works contractors, contracted to a management contractor
• Appointed by a client early in the process
• Management contractor = principle.
• One contract
5
Q
What is Construction Management procurement?
A
Construction Management • Several trades directly employed by client • Managed by a construction manager • Acting as an agent for the client • Like a consultant and management role.
6
Q
what is Guaranteed Maximum price?
A
Guaranteed Maximum Price
• Agreement with contractor that contract sum will not exceed an specified maximum
• No EOT claims
• Contractor is likely to tender high
• If the client makes any material changes, then this could still have cost implications.
• Used typically on D&B
7
Q
what is single stage procurement?
A
Single stage
• When enough information is required for the tendering party to submit a price against a design.
• The contractor is then appointed to carry out the project works.
8
Q
What is two stage procurement?
A
Two stage
• Allows for early appointment of a contractor
• Based on overheads, profit, schedule of rates, proposed team, programme, contract conditions e.g. insurance
• Uses a PCSA until stage two, where contract is negotiated.
• Contractor tenders works packages whilst designing.
9
Q
What is included in a tender pack?
A
• The form of contract and any amendments
• Outline programme
• Employers requirements
• Tender pricing doc (or contract sum analysis on D&B)
• Outline design
• ER’s/specs
- A letter of invitation to tender
- The form of tender
- Prelims (PCI, Site waste management plan)
- Tender return slip.
10
Q
what is included in the ERs?
A
- Occupational requirements
- Architectural performance criteria
- Services performance specifications
- Branding guidelines
- Conceptual design package
- Test fits
11
Q
How do you score tenders?
A
- Tenders are scored against a weighted criterion
* This could include cost, proposed team, design, gut feel
12
Q
What is the pre-qualification process? What questions are asked/
A
- Process prior to the competitive tender
- Larger selection of contractors
- Enables employer to create shortlist of contractors for tender
- Details include insurance, financial information, heatlh and safety policy, ISO accreditation, experience on similar jobs.
13
Q
What information do you provide when giving feedback to contractors?
A
- Feedback on team, presentation, approach
* Cannot disclose financial information.
14
Q
What is the difference between a negotiated and competitive tender?
A
- Negotiated – client negotiates with a single contractor
* Competitive tender – client issues tender to a set of contractors to competitively submit a response.
15
Q
What was the process when utilising a negotiated tender?
A
- Negotiated – client negotiates with a single contractor
* Competitive tender – client issues tender to a set of contractors to competitively submit a response.
16
Q
How can you ensure the client is still getting competitive pricing from negotiated tender?
A
• Costs can be benchmarked against competitive rates
17
Q
What is included in a benchmarking report?
A
- Comparison of schedules and rates
* Comparisons of OHP and Prelims
18
Q
How is the contractor engaged on a negotiated form of tender?
A
• A PCSA of a LOI
19
Q
What is the difference between procurement and tendering?
A
- Procurement is the purchasing of goods and/or services
* Tendering is the process involved in procuring e.g. competitive bidding.
20
Q
What guidance is there on procurement and tendering?
A
• RICS tendering strategies
21
Q
What is alternative A or B?
A
If any errors found in submission
• Alternative A = cannot make any changes. Contractor has to submit or withdraw
• Alternative B = can make changes
22
Q
What is the guidance on number of tenderers?
A
• Should be between 3 and 6
23
Q
What is the different between procurement and tendering?
A
- Procurement is the act of obtaining goods and services based on a Clients requirement of time, cost, quality, design risk.
- Tendering is part of that process and involves obtaining a price for the works from the Contractor, the bid process and appointing the Contractor.
24
Q
What tendering strategies are you aware of?
A
Single Stage tender and two stage tender.
25
How do you decide upon the procurement route and tendering strategy?
Understand the clients key drivers i.e. programme, risk, budget as well as understanding market environment.
26
What are the differences between traditional and D&B procurement?
```
Traditional:
Quality, full design
Design flexibility through variations and instructions
Design control
CDP items – some design risk transfer
Cost – may be lump sum cost benefits
Requires full detailed pack pre tender
Incomplete drawings lead to delay.
```
```
D&B
Time – fast track, overlap of design and construction.
Cost – lump sum
Single point of responsibility
Good price certainty
Novation can benefit quality
Low risk for client
Cheapest route to meet contract spec can lead to low quality
RFC will have cost/ time implications
Contractor carries risk for construction
```
27
What is the process to appoint a main contractor and get into contract?
1. Long list
2. Short list
3. PQQ
4. Invitation to tender
5. Mid tender interviews
6. Tender queries
7. Post tender interviews
8. Contractor selector
9. Appointment.
28
On your case study project, why did you do two stage tender?
At the time it was based on the market conditions, we didn’t think there was appetite for single stage as that is intensive and requires a lot of time and effort and we didn’t think we would get the interest.
29
How do you analyse tender returns and what is your recommendation based on?
- Assessment to identify tender that best meets the client’s needs and offers the best value for money can be beneficial in the long run.
- Pre-agreed analysis Matrix. Criteria may include Price, relevant experience, requirements, past performance, technical skills, resource availability, proposed methods, compliance.
- Criteria is weighted to reflect how important they are to the client. Weightings will be known to the tenderers in the ITT.
- Recommendation is then made based on best value tender.
30
Why did you recommend that a verification engineer was procured?
A verification engineer is a consultant that works alongside other engineering specialists to expertly verify and witness projects. This includes on-site and off-side tests to ensure the most stringent compliance with specifications and building/ project performance.
Benefits:
- Compliance of the contractor’s scope of work with the ERs
- Compliance of the contractor’s design with the applicable contractual standards and regulations
- Correctness and completeness of the design deliverables produced by the contractor
- Compliance with the applicable construction techniques and procedures, as specified by the contract and the applicable regulations.
- Allows time to resolve technical issues and prevent mistakes and errors potentially leading to disputes.
- Can help in design phase.
- Gives client confidence in the systems.
The client was risk adverse and was going to be occupying this building and wanted absolute certainty.
31
Why did you procure the AV contractor and catering contractor client direct?
To be answered
32
What does the guidance note on tendering strategies say?
To be answered.
33
How did you prepare your recommendation to the client?
I tabled my analysis based on the criteria and then wrote up a recommendation report to the client following advice from the consultant.
34
What set criteria did you analysis the AV and catering contractors against?
to be answered.
35
Why did you reduce the scope of the verification engineer? Were all the services not needed?
to be answered.
36
what is procurement?
Process to acquire goods and services.
| Includes – prep of procurement strategy, prep of contracts, selection of suppliers.
37
What is a procurement strategy?
Describes the mechanics of how the project will go about procuring and subsequently managing services and goods.
It identifies the client's goal,project drivers, assessment of potential procurement routes suitable.
38
What is a single stage tender?
- Single stage – more traditional.
- Used when all necessary information is available to calculate a realistic price.
- Where tenders are issued to Contractors to competitively price for the whole of the works following the completion of a Design pack (Stage 2, 3 or 4).
- Stage 4 pack means the Contractor has more information to base their bid on and can reflect in more accurate contract sums as opposed to provisional sums or pricing risk.
39
What are the pros and cons of single stage tender?
Pros -
- one price given for construction works as opposed to being split into two stages
- speeds up procurement process as doesn't need to be negotiated with contractor
- the discipline of a single stage tender should prevent construction proceeding without a complete design-clear statement of risk allocation
Cons
- no early contractor involvement
- client has limited opportunity to influence supplier list
- no work can commence until contract sum agreed
- firm price depends on design packages detail
40
What is two stage tendering?
Two stage – Used for early appointment of a contractor.
- First stage is a limited appointment is agreed allowing the contractor to begin work.
- Second stage is fixing the price through negotiation. - Two stage tender used when time is restricted as it allows design and construction to overlap.
- In the first stage, a design pack is issued at either RIBA Stage 2 or 3 and the Contractor returns with qualitative assessment, and prelims, profit + cost.
- They are appointed to input into the design on build-ability, materials usually under a PCSA.
- They then develop the designs with the design team and in the second stage produce a contract sum for the whole of the works based on that information.
41
What are the pros and cons of two stage tendering?
Pros
- Allows design and tendering to be overlapped
- Construction packages can be let out at the same time - Earlier start on site can be achieved
- Can promote collaboration
- Contractor can help to identify early risks
- Early contractor involvement to input on design and buildability
- Potential for early Client involvement when selecting supply chain
- as contractor involved early, reduces likelihood of disputes
Cons
- Won't get price certainty until the second stage of two-stage tender
- Risk that Contractor becomes embedded in the design team and may negotiate higher than market rates
- Unless all packages are firmed up, the Client will not achieve procurement cost certainty at the end of the second stage and may commence construction with prov sums to be firmed up-
- costs can occur if contractors design release requirements are not adhered to by the design team
- Contractor also has to be appointed at the right time in order to add valuable input into the first stage of the tender
- risk that negotiations fail and have to re-tender-extended negotiations can occur
- unclear statement of risk allocation
42
What is a pre-tender estimate?
1. To ensure the Client has enough funds to finance the project, ensure it is in line with their budget
2. Used to benchmark tender returns by the professional team
43
What is BS11000-1
- British Standard for public partnering. Partnering selecting in PPP projects.
44
Why is it important to have robust tendering?
1. Ensure accountability
2. Ensure transparency
3. That the correct price has been provided for the works
4. Reduce any claim of corruption
5. ensure everything has been picked up
6. Ensure parity
45
What is construction management?
Construction management is a procurement process whereby the Client is in contractual relationships with the works contractors and a Construction manager is appointed to manage and oversee the work. They are paid a percentage fee or agreed sum of the works.
46
What are the duties of a construction manager?
- Coordinate design and construction management procurement of trade contractors
- act as principal designer to fulfil CDM duties,
- manage works on site
- general site set up, welfare, safety scaffolding, site manager, security
- issues instructions to trade contractors,
- issues certificates
- issues EOT and evaluate claims
47
Pros and cons of construction management?
Pros
- If the client needs to start on site as soon as possible, design can overlap with construction to some extent 'fast track' route
- Client closely involved in each stage of design and construction where clients want 'hands on' involvement
- trade contractors can contribute to design and planning and value engineering
- changes in design can be accommodated given packages not let out
- because construction manager is appointed at the same time as the design team, procurement can start whenever necessary
- construction management can easily accommodate trade contractors on long-lead times and can get these market tested
- client and design team can select and influence selection of trade contractors
- no risk premium paid
Cons
- no cost certainty for client until works are let
- require experienced QS to draw up approximate estimates and cost plans
- contractor no risk of trade contractor default, in event of dispute must act in the interest of the Client
- unsuitable for inexperienced clients
- construction risks sit with client
- scope of works could develop well into construction phase
- delayed procurement could expose client to market fluctuations
- no design responsibility of design team, but gives design team a programme
- not liable for time and cost
- only liability is reasonable skill and care-construction management does not offer a guaranteed completion date from a single contractor supported by liquidated damages which are payable if it is not achieved. each trade contractor bound to complete works in accordance with trade contractor programme, because losses are unpredictable normally left 'at large' and losses must be proven is there is a breach.
- EoT in Construction Management, trade contractors can request if they have been delayed, knock on effects on other trade contractors and entitle them to recover loss and expense
48
What is management contracting?
- A procurement route whereby the Management Contractor is appointed to manage works of sub-contractors.
- The management contractor is in a direct contractual relationship with the works contractors.
- The client pays them the prime cost of the works as well as a %fee of the contract sum for their management.
- The agreement between Client and Contractor is likely to take place over preconstruction and construction activities with a notice serviced in between the two. Before that contracts cannot be let.
49
Pros and Cons of Management Contracting?
Pros
- Fast track projects as design and letting out of work packages can overlap, although design for the specific package has to be complete
- Client hands on involvement
- Trade contractors can input on design
- Changes can be easily incorporated given that packages involved with those changes haven't been left out
- Works packages are let competitively
Cons
- Cost certainty limited, price not known unless works have all been let
- Careful management of design team release drawings
- Risk with Client if design drawings released late
- May be gaps in works contractor packages that would normally be picked up by traditional contractor
- Client bears much of the risk , unsatisfactory for large/complex projects
50
Difference between construction management and management contracting?
Construction management - contractual link is between the Client and the trade subcontractors, other way round for Management Contracting. (client just pays them the fee)
Management contracting the client pays them the prime cost sum of the works + fee (as they are fee earning)
51
What is the basis for selecting a contractor?
Previous project experience, word of mouth, from meeting and contractors looking to secure new work
52
What is done at the beginning of a tender?
A pre-qualification questionnaire, financials, project team, experience, value added, financial checks if necessary.
Request a dunn and bradstreet report but cannot provide recommendations because our insurance doesn't cover us if we are inaccurate.
The aim of the PQQ is to ensure the proposed contractors have the relevant experience, financial standing and health and safety record.
53
What is a PQQ?
Series of questions for potential tenders which enables a short list to be produced:
- Experience
- Capacity
- Financial standing
- Insurance cover
- Company details
- Technical and professional ability
- BIM
- H&S policy
- Quality assurance policy
- Environmental policy
- Equal opportunities policy
Reason: To establish if a contractor is interested, has the resources and capability and financial standing to deliver a project of this size and complexity. If they have the experience and the adequate health and safety record and insurances.
54
What is the tendering process?
1. Pre-tender
- Form procurement team and strategy
- Express of interest
- PQQ – Long list to short list
- Tender docs
2. Tender
- Issue tender
- Issue tender addendums
- Close tender
3. Evaluations
- Initial evaluations
- Interviews
- Supplier shortlist
- Presentations and site visits
- Selection/ recommendation report
4. Award contract
- Negotiation of contract sum
55
Partnering and framework agreements?
- Collaborative working,
- Openness and trust
- Avoid re-bidding
- Risk of getting too comfortable
56
What are OJEU regulations?
- Regulations for public contracts.
- The European Union Procurement Directives establish public procurement rules throughout the EU is contracts meet a certain level of threshold value. (Also private projects if they are public ally subsidies e.g. lottery)
- OJEU values are published online.
- Public contracts must be advertised under the official journal of the European Union.
- Threshold for works contracts = Σ4,551,000
- Supply and service contracts for central government = Σ118k.
57
Why is it important to give contractors enough time to respond to a tender.
If tenderers are not given enough time, they may price risk because of uncertainty.
Tenders may be artificially high and not a true accurate reflection of the cost required to complete these works.
Tenders may also be artificially low if the Contractor missed out key information because they did not have enough time to review.
Contractors may also withdraw if tender period is too short rather than risk submitting what they feel would be sub-standard bid.
58
Why might contractors ask for an extension to the tender timescales?
Resource levels perhaps due to members of the team away with short notice,
underestimated time it took,
late information provided.
59
How do you deal with tender extension requests?
If an extension is granted, then extension must be given to all contractors so no unfair advantage is given.
As a risk mitigation, it is advisable for project manager to build a float into the programme for the possibility of a tender extension.
60
Name industry standard codes of practice that should be followed when tendering?
RICS new rules of measurement: cost planning for capital construction projects,
RICS Code of Measuring Practice
61
How do you deal with Tender queries?
I issue a template for a rolling tender query schedule and issue this to all tenderers.
This is to ensure parity is maintained throughout and there is no advantage given to one Contractor.
Name of the tenderer raising the query should not be mentioned. (via a blind copy to ensure tenderers identities remain confidential.
Tender queries should also be outlined in the instruction to tenderers.
62
What are tender addendas and are they good?
Not desirable as they can give tenderers impression of disorganisation within the project team.
However if new information is made available this should be shared. If additional information is likely to be issued this should be noted in the tender addendum.
63
Why have a mid-tender interview?
- opportunity to meet the project team,
- tenderers can raise queries face to face,
- often carried out on site, can be combined with site visits,
- opportunity to assess progress of each of the tenderers to date,
- opportunity to reaffirm commitment from both parties. - queries to be formalised and issued as tender queries or as an addendum to all contractors. To ensure they all have the same information.
64
Tender withdrawals - why might that happen?
Tenderers work commitments pick up and they no longer have the resources.
Perhaps after review of the information they do not think they can be competitive or if they believe the project is too risky.
65
What is included in a tender opening form?
1. date opened,
2. contract sum,
3. exclusions,
4. assumptions,
5. programme compliant,
6. if all documents have been submitted
66
Checking for errors and conflicts?
Cost consultant perform arithmetic check of tenders. Other things to note: conflict of interest (reviewing proposed list of subcontractors) any errors in programme dates
67
How do QS's normalise bids?
1. use average of submitted costs
2. use the highest price of tender returns
3. use the cost plan allowance for that particular element. The pricing of prelims and overheads and profits must also be equalised. RICS New Rules of Measurement: code for estimating and cost planning for capital building works and RICS New Rules of Measurement: detailed measurement for building works Prov sums must also be equalised.
68
How are OHPs assessed?
Contractors should split their % rate to show the rate for overheads and the amount for profit.
69
When do post tender interviews take place? And why are they necessary?
- after initial queries and equalisation process has taken place.
- Agenda to be created, design team invited.
- Chance to understand the Contractor's proposals and raise any queries.
- Any agreement made in post tender interviews should be confirmed back in writing to the tenderer.
70
Checklist of things to be returned at tender?
- Insurances are like-for-like,
- copies of insurance certificates,
- proposed sub contractor list,
- tender returns issued to design team for comment.
71
What are some advantages of framework tendering/agreement?
- The initial tender to get contractors onto a framework/approved list is similar.
- The focus is on choosing a good spread of competent contractors who can handle a potentially high volume of work from one client.
- They reduce procurement costs for large numbers of contracts.
- They provide greater continuity for potential work
- Agreed fees agreed at framework stage
72
Bills of quantities advantages and disadvantages?
- Bill of quantities risk sits with client team if any information is missed off,
- offers a more accurate and complete set of tender information - guards exactly what is required.
- RICS NRM 2 promotes bills of quantity but you can produce pricing documents in accordance with NRM1 as well
73
What does the JCT Tendering Practice Note 2017 cover?
General commentary on tendering strategies, focusing on selective single stage, two stage and competitive dialogue tendering procedures and model forms compiled by the JCT in appendices
74
Public sector procurement - what rules do they need to follow?
EU rules OJEU regulations if they meet a specific threshold the UK rules are at present in The Public Contracts Regulations 2015
75
Why do you only go out to 3 - 6 contractors?
The JCT practice note advises 3-6, and no more than 4 for design and build projects. This is because producing tender information is large overhead abortive costs for contractors, evaluating tender is an overhead costs and an efficiency in the industry. Contractors that have not been selected to go forward to the tendering stage should always promptly informed and provided feedback.
76
How do you check for bribery/anti corruption or anti money laundering?
Ask contractor to share their internal policies, or requirement for a certificate or undertaking from the Contractor that they have not been charged with any relevant offences.
77
Where should deadline of the tender be provided?
Form of Tender, or Invitation to Tender
78
Why is it important to set out scoring criteria in the Invitation to Tender?
If these were not previously established, the Employer and his professional team would be left open to challenge by unsuccessful tenderers.
79
How do you review consistency of Contractor's Proposals with Employer's Requirements?
The design team should be involved with the tender process from start to finish and they should review the Contractor's design and ensure it is compliant with the Employer's Requirements and therefore sign it off on behalf of the Client.
Post tender interviews can provide a good opportunity to start this exercise where reality checks can be made with both design team and contractor in the room.
80
What is the difference between Alternative 1 and Alternative 2?
Alternative 1 - tenderer is given details of the errors and afforded an opportunity of confirming or withdrawing his tender. This opportunity must also be given to all other tenderers. Where the tenderer confirms his tender, an endorsement should be added to the priced documents prior to acceptance. Signed by both parties.
Alternative 2 - tenderer given details of the errors and given the opportunity to either confirm his tender of amending it correct genuine errors. Where the tenderer confirms his tender, an endorsement should be added to the priced documents prior to acceptance. Signed by both parties. Where error is amended all of these need to be captured and amended in a letter. A copy of the letter should be attached to the tender acceptance letter or form. The acceptance letter must also refer to the letter of amendments or any rates and errors.
81
How could you ensure that Tenderers would submit a tender and not drop out?
You can issue a PQQ to assess if a contractor has resources, and is looking for work.
At the same time you can request additional information such as their financial standing, technical experience, health and safety record, company info and or if they've had any convictions.
82
How did you put together a tender list?
Through recommendations from the design team, colleagues, word of mouth or presentations/meetings with contractors who are looking for work.
83
You have tendered a project, and all tenders are returned on time, what do you do next?
Arrange a meeting with another qualified professional and perhaps members of the design and client if they so wish, sit down and open tenders.
Ensure a tender opening form is completed.
Then, cost consultant to assess for any numerical errors.
Design team to check if there are any design errors/missing items.
PM to check all documents submitted, insurance certificates, contract amends comments, health and safety record, no breaches etc.
Start equalising bids, so that they can be compared on a like-for-like basis.
Design team to complete scoring matrix, PM to conduct own assessment. Then shortlist is possible and invite contractors to post tender interview.
Produce recommendation report for the client.
84
Following your analysis of the tender returns, and preparation of your tender report it is apparent that one tenderer has made an error in his tender, what do you do?
At the very beginning of tender the Invitation to Tender should state how errors are to be dealt.
The JCT recommends either Alternative 1 or Alternative 2 .
Alternative 1 - notes the error discovered to the contractor and they can decide whether to confirm their tender or withdraw. If confirm the error and keep as is, endorsement added to contract documents to confirm this has been agreed by both parties.
Alternative 2 - notes the error, contractor to decide it they want to confirm and keep the error endorsement added to contract documents confirmed and signed by both parties. If errors revisited and amended, all of these need to be stated in a Letter, referred to the Acceptance Letter if they are the preferred contractor.
85
What if a Contractor made an error of Σ25,000 in addition of his tender , but his tender was Σ50,000 below the second lowest tender but the mistake was still lower than Σ25,000 even after amended - what do you do?
Alternative 1 or Alternative 2 applies.
If after the amendment they are still the lowest, then this would have to documented in a letter, and referred to the Acceptance letter.
However this is after all bids have been equalised and selected contractor is based not on the lowest cost but the best value for the Client.
86
Tenders are due in at noon on a particular day. You receive one a 12:30 what do you do with it? All other tenders are over budget and the other is lower - what do you do now?
1. They are late and not compliant as per JCT guidance note, should not be considered. However if you had requested both digital and hard copies and the digital copy had arrived in your inbox on time with all the other tenders and it was the same tender that was received in hard copy - the client needs to be made aware that the hard copy was late, but digital arrived on time and its their decision at the end of the day.
2. If no digital copy requested, all tenders are over budget and the other is lower - advise the Client that this happened and advise this may have given them a chance to amend their tender
3. You would recommend that they are not reviewed, ultimate decision sits with the Client.
87
Tenders are back 12noon and you are opening at 2pm with the client. One tender is returned at 1pm would you open it?
No, all tender returns should be opened at the same time with at least one other professional as a witness noting the date and time it was opened. Otherwise anyone could look through this and pass on information.
88
All tender returns arrive on time, however an hour after the contractor calls and wishes to reduce his tender by Σ100k. What would you do and would you tell the Client?
- Firstly because tenders have been submitted and unless any errors have been made, contractors should not be given any more time to amend it.
- The contractor could have been made aware of the other contract sums and offered the discount to win work, this is not in line with the RICS professional and ethical standards and advise the Client the tender sum cannot be reduced by Σ100k.
89
If there is an error in the bill of quantities and this is only noticed after the contract has been signed, who is responsible?
- The clients professional team drafts up the Bill of Quantities,
- the risk would sit with the client if anything has been missed out and at the Client's cost.
90
What is collusive tendering?
Collusive tendering occurs when several tenderers invited to tender and they collectively agree among themselves either not to tender, or to tender in such a manner as not to be competitive with the other contractors.
It has the effect of substantially lessening competition. The main reasons for this practice among contractors are that it provides an even distribution of construction work for all the contractors involved.
91
What are Preliminary Costs?
Costs required in preparation of construction works to commence, scaffolding, temporary power and electricity, lighting, security, site managing, waste removal etc.
92
What is PCSA used for?
- Early contractor involvement,
- consultant programme review,
- procurement,
- provide methodology and buildability and design advice,
- review basebuild info with design team,
- prepare logistics plan,
- provide cost advice,
- advise employer of market testing against subcontracts
93
Advantages/Disadvantages of Traditional Procurement?
Advantages
- Design control remains with Client
- Competitive fairness - as all tendering contractors are bidding on the same basis
- Changes are easy to arrange
- Reasonable price certainty at contract award
- well known procedures.
Disadvantages
- Design responsibility, design risk sits with Client
- If tender documents and design incomplete, could lead to cost and time uncertainty
- programme sequential
- Overall duration preconstruction will be longer - No contractor input during design stage - unlike D&B ,
94
What is your perception of the QS's role in relation to the design team?
- Assist with procurement strategy and contract selection,
- Execute the contract,
- Produce cost plan,
- Produce pre-tender estimate,
- Assist with collating tender documentation
- Assist with tender recommendation,
- Agree Final Account with Contractor,
- Issue valuation recommendation,
- review variations
95
Can you explain novation?
Novation is a contract that transfers the rights and obligations from one party to another e.g. architect to contractor in design and build two stage contract.
96
Are contractors selected on the lowest price?
Not, best value. In public projects, most value for money.
97
What would you expect to see in a procurement strategy report?
- Project objectives
- criteria for selection
- Procurement options
- chosen form of procurement (recommendation)
- Next steps and actions to be completed
98
Where does the risk sit with traditional procurement?
- Contractor takes responsibility and financial risk for tendered works
- Client takes the responsibility and risk for the design and the design team performance.
99
Who takes the risk on D&B?
- Employer gives the tenderers the ERs
- Contractors respond with the CPs, which include the price for works
- Risk transfer via novation
100
What are key performance indicators?
Enable all those involved in the construction supply chain to establish how they are performing on a project.
101
What do Novation Agreements contain:
```
The following clauses:
- Definitions and interpretation
- Warranties
- Novation, transfer and release
- pre-existing claims, indemnity and obligations
- The contract
- Successors
- Variations
- TPRs
- Assignments
Governing law and jurisdiction
```
102
What is open tendering?
Indiscriminate requests for tenders
+ve:
- no favouritism, opportunity for capable firms to bid,
- ve
- danger, lowest tender is inexperienced or has made lots of errors, no guarantee the lowest is capable or finanically stable, and total cost of tendering is increased.
103
What is selective tendering
Restricts the number of tenderers by pre-selecting a limited number of contractors to tender for work.
104
What is a form of tender?
- A pre-printed formal statement in which the tenderer fills in the blank spaces.
- He provides his name, address and the sum of money for which he offers to carry out the works.
105
The does a tender report contain?
It provides an audit trail for the selection process and might includes:
1. Background to the contract
2. The scope of the contract
3. Pre-qualification criteria
4. The tender evaluation criteria
5. Reasons for rejections
6. Reasons for reccommendaiton
7. A summary of any post tender negotiations
8. Comparison with the pre-tender estimate
9. any implications for the project.
106
What is the equalisation/ normalisation process?
1. Use an average of the submitted costs
2. Use the highest price form the tender returns
3. Use the cost plan allowance for that particular element
107
How do you verify a companyies financial standing?
Carry out a credit check to obtain P&L. Experion can be used. I am not a financial advisor and would advise my client to obtain expert advice from a financial advisor if any concerns.
108
If you are down to two tenderers, what negotiation process do you follow?
I would understand my client's objective and what we are trying to achieve. This way I can treat both contractors fairly. I would also have a witness in the negotiation with me so that a contractor could not challenge my approach.
109
What do you advise you client to pay attention to when appointing the contract to?
collateral warranties - who to take these out with.
insurance provisions - option A, B or C
Parent company guarantees and bonds.
110
What is the process to opening a tender return?
- Don't open until specified time
- make a note when received and sign, along with a witness.
- Fill out tender log and specify the price - sign this and the witness.
- check return is compliant
- check the form of tender is signed by the contractor
- Record tender return log.
111
What is the process of procuring a consultant.
- Issue RFP
- Very similar to that process of the contractor
- Recommend based on price, experience, insurances, CV and teams and qualifications, appreciation of the project objectives, resource and capabilities, PQQ for financial standing and terms of engagement.
