Procurement and Tendering Flashcards
What is procurement and what is tendering?
Procurement is the overall act of obtaining goods and services from external sources (i.e. a building contractor) and includes deciding the strategy on how those goods are to be acquired by reviewing the client’s requirements.
Tendering is an important phase in the procurement strategy but procurement involves much more than simply obtaining a price.
Tendering is: the bidding process, to obtain a price; and how a contractor is actually appointed
Why Procurement important in Contraction?
Risks in the construction therefore use as a risk management tool
Main factor of selection a procurement path?
Cleint's risk taking ability / know-how Time Cost Quality Complixity / Size Need of variations Client involment Accountability
What are the commonly used procurement routes available in the industry?
Traditional
Design and Build
Management Path
Desing and Mange
What is Traditional path, types and advantages and disadvantages?
Desing will be done by Architect then Contractor will be selected through tendering.
Two types : Sequencial and Accelerated method (Contractor become part of design team by tendering))
Advantages and disadvantages of Traditional path?
ADVANTAGES: Quality is under Emp's control Power to change (design-led) Reasonable price certainty Variation can be easy Well known
DISADVANTAGES;
Time consuming
More Variations (reduce cost certainty)
Buildability is less
What are the Methods you can use to accelerate the tradition paths?
- Design 70% and balance 30% to put as Provisional Sum (Ex: MEP works)
- By Negotiation
- Two stage tendering
- Construction by package base (enabling work, substructure)
What is Design and Build path and its types?
Desing and constrution by single contractor
Type
- Single entry - The contractor is appointed at the beginning to design and construct the project (without competition)
- Competitive entry - project documents would be produced outlining the client’s space and quality requirement (normally 3 -5 contractors) proposal includes; design, specifications, price and completion date
- Develop and design - partial or outline design is developed separately by the Consultant designer prior to inviting to submit their proposals.
Advantages and disadvantages of Desing & Buld?
ADVANTAGES; Cost certainty Single point responsibility Less time consuming More buildability
DISADVANTAGES; Cost of the project is high Quality may be compromised Variations are costly Bids are difficult to compare
What is management path?
Management Contacting: Management contractor is engaged by the client to manage the whole of the building process.
Construction Management:
Client employs the design team, with a construction manager engaged as a fee-earning professional to manage, programme and co-ordinate the design and construction activities and to facilitate collaboration.
Advantages and disadvantages of Management Contracting?
Advatages:
Early start, early completion
Contribution by experienced contractor to manage
Change can be done
Disadvateges:
Cost certainity
Management costs are high
Advantages and disadvantages of Contraction Management?
Advatages;
Direct contractual relationships
Can be started eary
Cost should be controlled directly
Disadvatages:
More contractual resposibilities
Cost certainity
Complex coordination & Communication
What is the difference between Management Contracting and Construction Management path?
Contractual link with package contractor. in Management contracting contractual links with the package contractors is with the Management contractor whereas in Contraction Management direct contractual link is with Client.
What is Design and manage path ?
It is a combination of Design & Buld and Management Contracting where tendering & selection done by scope designer and the the desing and construction done by Desing and managem contractor.
Advantages and disadvatages of Design & manage path?
ADVANTAGES;
Single point responsibility
Less time consuming
More buildability
DISADVANTAGES;
Quality/lost of design control
No Direct contractual control
What are term contracts?
Term contract is where contractor undertake series of work orders over a period of years often within a define geographical area based on schedule of rates measure and pay. Ex: Facility Management , Maintainence Worjk
Advantage and disadvantages of a Term Contract?
ADVANTAGES:
- Ability to call off urgent reuiremetn quickly
- Ease of placing contracts without repetition
- Can have mini competitiion amoung suppliers
DISADVATAGES;
- Client needs to be sufficiently experienced and resourses to manage concurrent contracts
- Needs lonr term commitment and continuing programme of work
What is Serial contracting?
Contracts awarded to same contractor (pre qualified list) in series wihout competitive prices, often with same rates / prices. Ex: School / Housing
What is Prime Contracting?
Client enters into a relationship with a contractor who provides a single point of contract for full supply chain to deliver one or more projects.
Advantage and disadvantages of a Prime Contracting?
ADVATAGES;
Remove the need for client co-ordination of multiple supply chain contracts
Clear lines of communication and accountability
Improve supply chain management
Improve collaboration
Economies of Scale
DISADVATAGES;
Exclude smaller companies
They can become too ‘cosy’
Danger of fraud
What is meant by partnering?
Partnering is a co-operative relationship between business partners formed in order to improves performances in the delivery of projects.
Advantage and disadvantages of Partnering?
ADVANTAGES Less disputes Early supply chain involvement Open book & win/win culture Integration design process with construction
DISADVANTAGES Can be abused by one party Requires more client involvemen Cost of training, workshop etc. Needs to be practices over a series of projects
What is suitable procurement route for a nuclear power plant?
Specialist knowledge therefore Desing and build is more suitable
What is suitable procurement route to buld a factory building in a quick time?
Simple building withour complexity therefore recommend D&B
What is suitable procurement method for an mix developement project with many packages?
Recommend Management path, if client has the know-how I recoment to go with the Contraction mangement if he does’t then go with Management Contracting
