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Omar Assoc RICS prep > Procurement and Tendering > Flashcards

Procurement and Tendering Flashcards

1
Q

What is procurement?

A

The act of obtaining goods or services from an external source

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2
Q

What is tendering?

A

Tendering is an important phase in a procurement strategy.

It is:

  • the bidding process, to obtain a price; and
  • how a contractor is actually appointed
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3
Q

What are the common procurement routes?

A
  • Traditional
  • Design and Build
  • Management Contracting
  • Construction Management
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4
Q

What is the traditional procurement route?

A
  • Project can be broken into sequential phases: Brief, Design, Tender then Construction
  • Client appoints design team. Design is fully developed. Full design is tendered. Winning Contractor constructs design.
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5
Q

What are the advantages and disadvantages of traditional procurement?

A

Advantages:

  • Quality of product is generally higher
  • Client maintains control of design
  • Post-contract changes easy to manage

Disadvantages:

  • Longer project duration due to sequential phasing, no overlaps
  • Buildability can be poor due to no Contractor involvement
  • Design open to abuse
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6
Q

What is the design and build procurement route?

A
  • Design and construction phases overlap. Project is tendered before design is complete, Contractor finishes design. Allows design and construction phases to occur concurrently.
  • Good brief is important to avoid Contractor designing a building not fit for purpose.
  • Contractor take on risk of the project
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7
Q

What are the advantages and disadvantages of the D&B procurement route?

A

Advantages

  • Low cost risk as client pays lump sum for Contract, absorbing design/construction risk. Contract Sum will be inclusive of a %age fee to cover design development/risk
  • Low time risk: due to the ability to begin construction before design has been completed means this is a fast track procurement route.
  • Cost certainty, if a lump sum contract, known early on in the project timeline.
  • Early contractor involvement generally is good for buildability
  • Single point of responsibility for the client

Disadvantages

  • High design risk. Client loses control over design. Contractors will aim to meet ER’s whilst maximising their margins
  • Post-contract changes difficult to manage and often are expensive
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8
Q

What is management contracting?

A
  • Management Contractor is appointed to manage the project
  • Project is split into Works packages which are individually let through MC
  • MC is paid on a fee basis and is brought into the project early on in the project timeline
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9
Q

What are the advantages and disadvantages of management contracting?

A

Advantages

  • Fast track procurement option as early packages can be let whilst later packages are still being designed
  • Client maintains design control
  • Late changes accommodated so long as that package hasn’t been let
  • Good buildability with early appointment of MC

Disadvantages

  • MC is paid on a fee basis and doesn’t take project cost risk, leaving the client exposed
  • Although procurement is fast, time certainty is poor until the final package is let
  • Cost certainty is also poor until the final package is let.
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10
Q

What is the construction management procurement route?

A
  • Construction Manager is appointed as a consultant
  • Client has many points of responsibility: Consultants (incl Cons Manager) and all trade contractors
  • Project is split into trade packages and client is responsible for each sub-contractor
  • Design and construction phases can overlap
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11
Q

What are the advantages and disadvantages of the construction management route?

A

Advantages

  • Fast track procurement route as design and construction can overlap
  • Arguably a cheaper price is obtainable due to cutting out the main contractor’s OH&P costs.
  • Accommodates late changes if the package has not been let
  • Client maintains design control
  • Good buildability with early involvement of Construction Manager

Disadvantages

  • Client must be experienced as all parties report to them.
  • Time certainty is not known until last package is let
  • Construction Manager may not be motivated by cost as he is appointed on a fee basis, resulting in high project cost
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12
Q

What is prime contracting?

A
  • Prime contracting is a procurement route in which a Contractor is appointed by a Client to deliver one or more projects
  • Contractors are appointed based on tender submissions of their Schedule of Rates
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13
Q

What is serial tendering?

A
  • Serial tendering is a tendering mechanism that can be used in a prime contracting procurement route
  • Serial tendering involves submitting a schedule of rates for your tender bid, or pricing a hypothetical Bill of Quantities for a typical project
  • The winner of the tender will be appointed as and when the client requires their services. Useful for a client that has repeat work or maintenance.
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14
Q

What Contract would you use in a prime contracting procurement route?

A
  • JCT MTC 2016
  • Measured term contract.
  • Defines works covered and over what term (2-3 years typically)
  • Estimates likely value and size of individual orders
  • Agreed on schedule of rates
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15
Q

What is PPP/PFI?

A
  • Public Private Partnership

- Public Finance Initiative

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16
Q

What are PPP/PFIs?

A
  • Joint ventures between the public and private sectors
  • Generally, the public uses PPP/PFI to procure a service from the private sector, such as providing a hospital or train station
  • In return for the asset, the public sector pays a regular fee to the private funder
  • Generally these relationships last 25-30 years, and the end of which the asset is handed back to the public
  • The private sector is responsible for the maintenance of that asset throughout it’s lifecycle
  • There are many variations of PPP/PFI
  • The advantage for the public sector client is that they can build needed infrastructure such as schools and hospital at no CAPEX cost
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17
Q

What is the RIBA Plan of Works 2013?

A
  • Comprises of 8 work stages

- establishes boundaries between stages and details tasks and outputs at each stage

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18
Q

What is RIBA Stage 0?

A

Strategic Definition

  • Identify client’s Business Case and Strategic Brief
  • Establish project programme (will be reviewed at every stage going forward)
  • Initial considerations made for assembling project team
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19
Q

What is RIBA Stage 1?

A

Preparation and Brief

  • Develop Project Objectives
  • Develop Project Budget (Order of Cost Estimate)
  • Develop Initial Brief
  • Undertake Feasibility Studies
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20
Q

What is RIBA Stage 2?

A

Concept Design

  • Prepare Concept Design
  • Develop Cost Information (Cost Plan)
  • Consider strategies for sustainability M&O, handover, H&S and risk assessments
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21
Q

What is RIBA Stage 3?

A

Developed Design

  • Prepare developed design including coordinated and updated proposals for structural and MEPH.
  • Develop Cost Information (Cost Plan)
  • Review and update strategies for sustainability M&O, handover, H&S and risk assessments
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22
Q

What is RIBA Stage 4?

A

Technical Design

  • Prepare technical design to include all architectural, structural, MEPH and specialist subcontractor design information.
  • Prepare and submit Building Regulations submission and any other third party submissions requiring consent.
  • Develop cost information. (Bill of Quantities)
  • Review and update strategies for sustainability M&O, handover, H&S and risk assessments
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23
Q

What is RIBA Stage 5?

A

Construction

  • Construction of project inclusive of offsite manufacturing
  • Resolution of design queries
  • Regular site inspections, for the PQS to value works complete and variations from the Contract
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24
Q

What is RIBA Stage 6?

A

Handover and Close Out

  • Handover of building and conclusion of Building Contract
  • Final Account settled
  • Defects Liability Period; defects made good prior to Certificate of Making Good Defects certified and remaining retention released
  • Carry out activities listed in handover strategy
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25
Q

What is RIBA Stage 7?

A

In Use

  • Concludes handover strategy activities incl post-occupancy evaluation
  • Contractor may be back for maintenance if part of contract was to provide maintenance
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26
Q

Why is it important to have a robust tendering strategy?

A
  • Accountability
  • Auditing
  • To ensure everything has been picked up
  • Parity
  • Reduce claims of corruption
  • Ensure correct price is paid for proposed works
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27
Q

What are the standard rules for tendering?

A
  • All tenderers must receive the same information
  • If one submits a query, all must receive the query and response. The exception to this is if the response would reveal a particular suppliers commercial proposal/programming advantage/methodology.
  • After the deadline has closed, all tenders must be opened with a witness
  • Submissions must be compliant, and submitted prior to deadline

Read JCT Tendering Practice Note 2017

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28
Q

What is single stage tendering?

A
  • Obtaining a price for the whole construction works
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29
Q

When would you use single stage tendering?

A
  • Where ERs are sufficiently defined so it can be easily priced
  • Usually done at RIBA Stage 4 so tendering contrators receive most detailed information to base bid on
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30
Q

What is two-stage tendering?

A

Tender process split into two stages:

1) Tender enquiry documentation issued to Contractors at RIBA Stage 2 or 3. Rather than requesting a bid, Contractor is chosen based on quality of bid, team, preliminaries price, OH&P allowances. Sometimes provisional bid is requested based on the ERs provided but carries less weight than in single stage.
2) Preferred contractor joins design team on a consultancy basis on a PCSA (Pre-Construction Service Agreement). During this time they develop the design. At the end of the PCSA period they submit their Contract Sum for the project, which will often be subject to negotiation with the client/PQS.

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31
Q

When would you use two-stage tendering?

A
  • When time is a constraint as it allows an overlap between design and tendering
  • When the design process would benefit from technical input of Contractor (buildability)
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32
Q

What is selective tendering?

A
  • Contractors are only allowed to tender by invitation
  • Reduced tender period: less time-waters and less tenders to process
  • Appropriate for specialist works
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33
Q

What is open tendering?

A
  • Anyone can submit a price, open to the public
  • Can attract time wasters, takes longer to process tenders
  • Greatest competition so best for driving down price
  • PQQ process can be used to filter time wasters
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34
Q

What is competitive tendering?

A

Competition with multiple tenderers bidding for the Contract

  • Good for ensuring a competitive price for the works
  • Tender process is longer than negotiated tendering
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35
Q

What is negotiated tendering?

A
  • Where a client approaches a single Contractor, generally based on previous track-record or partnership. Contract Sum is negotiated between the two parties, as opposed to a bidding process in competition with other Contractors.
  • Benefits are a fast tendering process, disadvantage is without the competition it may be more expensive.
  • Negotiated tendering is not allowed by many public bodies/government departments as it is difficult to prove Value for Money. - RICS Tendering Strategies
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36
Q

What is Competitive Dialogue?

A
  • A number of tenderers are shortlisted
  • Tenderers talk with client/consultants until acceptable solution is found for clients needs (practically and commercially)
  • At least 3 tenderers required for public procurement with Competitive Dialogue tendering.
37
Q

What is a Pre-Qualification Questionnaire? (PQQ)

A
  • A series of questions for potential tenderers regarding expeience/capacity/financial standing
  • Must satisfy PQQ to be eligible to tender
  • Cuts down list of tenderers, reduces time and cost of tendering process
38
Q

What do the Tender Documents typically consist of?

A
  • ITT (Invitation to Tender)
  • Form of Tender
  • Preliminaries Document
  • Form of Contract & Amendments
  • Employers Information Requirements for BIM
  • Drawings
  • Specification
  • Pricing Schedule
  • Tender Return Slip
39
Q

What is an ITT?

A

Gives overview of project, outlines key dates, instructions to tenderers, contract used, general conditions

40
Q

What is a Form of Tender?

A

A document to be signed by bidder stating they will carry out works should they win the Contract. Declaration there will be no bribery, they will abide to rules of tendering etc.

41
Q

What is a preliminaries document?

A

Describes the works as a whole, specifies general conditions and requirements, including things such as sub-contracting, testing, completion etc. The costs associated with preliminaries (general costs to deliver the project such as power, site huts, site staff etc) are submitted by the Contractor as part of their Contract Sum.

42
Q

What is a tender return slip?

A

Included in the tender submission, this slip stipulates the content is not to be opened before a set time/date, includes the title of the contract, return address and tender check list.

43
Q

What is best value?

A
  • refers to the most advantageous combination of the whole-life cost, quality (fitness for purpose) and sustainability (in terms of the economic, social and environmental benefits) available to meet client requirements.
  • CABE value handbook defines different types of value
44
Q

Tender Analysis - What criteria would you assess the tenders against?

A
  • Price
  • Quality (experience, understanding of requirements, past performance, technical skills, resource availability, methodology, management skills and systems)
  • Compliance with ITT requirements
45
Q

What would you include in a tender report?

A
  • Scoring matrix (e.g. 1 - 5, 5 being perfect answer)
  • Weighting of each category (e.g. methodology may be 10% of total score)
  • Results (score in each category, multiplied by category weighting %age, all added up to give total score)
  • Show tender queries and responses
  • Show prices submitted and prices after normalisation
46
Q

What is partnering?

A
  • A concept that can be applied to procurement
  • Co-operative relationship between business partners to improve performance in delivery
  • Collaborative, non-adversarial
  • Initiated through partnering charter, or two-party contract aligned to partnering.
  • Reduces disputes, win-win culture, but can be abused.
47
Q

What are the requirements for public sector procurement?

A
  • Contracts above EU threshold must comply with the Public Contracts Regulations 2015
  • Notice must be published on OJEU
48
Q

What is the Public Contracts Regulations 2015?

A
  • Apply to public projects above a certain threshold (£4.5m for works contracts)
  • Aggregation rules apply so project cannot be divided into smaller projects sub-threshold
  • Private projects included if publicly subsidised
  • Projects must be advertised on OJEU. Tender period lasts over 30 days,. Can be reduced to 15 in some circumstances (PIN, prior information notice give).
49
Q

What are the OJEU tender procedures?

A
  • Open procedure; anybody can bid, no PQQ or shortlisting. Anyone interested sent tender information.
  • Restricted procedure; PQQ to shortlist candidates. Only successful candidates invited to tender.
  • Competitive dialogue; begins with PQQ. Shortlisted bidders enter into dialogue to discuss project, develop solutions. Following this, successful tenderers are invited to bid.
  • Competitive negotiation procedure; begins with PQQ. Tenderers are invited to negotiate. No formal rules or ending. Negotiation can continue on after preferred bidder is selected.
50
Q

How long are projects generally advertised for in the private sector?

A
  • 14-21 days adequate for single stage tender

- longer if period coincides with a holiday

51
Q

How long would you expect the tender period to be?

A
  • varies based on tender procedure

- 3-4 months where Contractor’s design portion required e.g. design and build projects, two-stage tendering.

52
Q

What are the key methods used to pay Contractors?

A
  • Lump Sum
  • Re-measurement
  • Reimbursable
  • Target Cost
  • Guaranteed Maximum Price
  • Periodic payment
  • Milestone payment
  • Staged payment
  • Activity Schedule
53
Q

What is the LDP2?

A
  • A construction framework for residential-led development to support the mayor’s ambition to accelerate housing development
  • 29 panel members pre-selected through a rigorous procurement process
  • Applicable to Greater London
54
Q

What set of rules does public sector procurement adhere to?

A

The Public Contracts Regulations 2015 (PC Regulations)

55
Q

Why were PC regulations implemented?

A

EU Directive 2014/24/EU

56
Q

When do PC regulations apply?

A

When the Employer is a ‘Contracting Authority’ and the contract awarded a ‘public contract’

57
Q

Name three tendering procedures

A

Single stage, two stage, competitive dialogue.

Covered in JCT TPN 2017

58
Q

Name four forms of tendering

A

Open, selective(restricted), negotiated.

Different types of work may require serial tendering or framework tendering.

59
Q

Why may post contract changes cost more in a D&B project?

A

Higher mark up. Contractor takes on more risk as they own design.

60
Q

What would be included in a procurement report?

A

I have never written one however one would include:

  • exec summary giving overview
  • intro
  • review of client/project objectives and constraints, critical factors
  • review of procurement options, +-
  • recommendation based on above
61
Q

When reviewing tenderers, how would you review a companies financial standing?

A

We don’t do it, reviewed by Dunne&Bradstreet

62
Q

What tender documents would be sent out for a D&B project?

A 
ITT
Form of tender
Declaration of non collusion 
EMPLOYER’S REQUIREMENTS 
Draft Contract
Preliminaries and general conditions
Tender pricing schedule
Pre cons H&S Pack
Working practice: contractors working guide 
Tender query schedule 
Provisional programme
63
Q

What would the difference be between the tender documents for D&B and a traditionally procured project?

A

Instead of employers requirements, you would have architects drawings, MEP drawings etc

64
Q

Who is responsible for a mistake in a tender submission?

A

Depends on which alternative (1 or 2)is stipulated in the form of tender.

As per JCT PN2017, I have used alternative 2 on my projects. This is where the contractor is given the opportunity to confirm his offer or amend it, followed by an endorsement that this is there final offer.

FYI - alternative 1 stipulates the contractor must confirm or withdraw, followed by letter of endorsement.

PUBLIC - public sector employers will have developed their own procedure for handling these issues

65
Q

What documents should be sent out in a PQQ?

A

Enquiry letter
Project information schedule
Pre qualification questionnaire

JCTTPN17 gives model forms of the above

66
Q

What is the minimum period for response to public project PQQs?

A

30 days from OJEU notice

15 in urgent cases

67
Q

How long would you expect a PQQ to be out for on a private project?

A

14-21 days, longer if there are holidays or substantially detailed questions

68
Q

What should a project information schedule include?

A 
Project estimated value 
Employer, professional team, point of contact
Tender procedure to be used 
Programme 
Contractors design requirements 
BIN requirements if applicable 
Contract used and any amendments  
Contract particulars including requirements for collateral warranties, third party rights, bonds, insurances
69
Q

What are the four categories of a questionnaire in a PQQ?

A

The basic factual particulars

Questions relating to financial matters and good standing

Regulatory and compliance matters

Technical capacity (capabilities, skills, past performance)

70
Q

How many tenderers should be shortlisted in a DB scheme?

A

No more than 4

71
Q

Generally how many tenderers should be shortlisted through a PQQ process or otherwise, excluding DB schemes?

A

3-6

72
Q

How long do you expect the tender period for a single stage tender to last, private and public?

A

Minimum 28 days for private

Minimum 35 days for projects subject to PC regulations

For design and build projects, this may be extended to 3-4 months, but this entirely depends on the complexity and development of the design

73
Q

What is the best value criteria?

A 
Quality
Price
Technical merit
Aesthetic
Functional and environmental characteristics 
Running costs
Cost effectiveness
Lifecycle costs 
Period required for completion

The criteria and respective weighting’s relative to price must be set out, identified and confirmed in the ITT

74
Q

How are tender submissions assessed?

A

Commercially

Best value (public should be based on best value, price may be an aspect of best value)

75
Q

What would happen if the employer does not stick to the scoring criteria set in the tender docs?

A

Result open to challenge by unsuccessful tenderers

76
Q

Once the tender evaluation is complete, what is the difference in notification between public and private projects?

A

In cases where PC regulations apply, there is a 10 day standstill period for any challenges following notification of intended award.

77
Q

When would you use a framework contract, and why?

A

For a client that is continuously commissioning works, because:

  • it reduces procurement timescales
  • reduces learning curves/risks
78
Q

What should framework contract documents define?

A
  • Scope of works
  • Possible locations of works
  • Services likely to be required
  • Contract conditions used for pre-construction services (design)
  • Contract conditions used when works are executed

The supplier may propose pricing mechanisms for different types of contract used

79
Q

What are the different types of planning apps?

A

Outline planning app - to understand whether a development is likely to be approved before significant cost commitment

Detailed planning app - full set of info submitted to LA

80
Q

Who applies for planning?

A

Lead designer / client / PM

81
Q

What’s the procedure for securing planning permission?

A

Contact local planning authority to understand procedure

Generally - planning meetings, submit drawings, issue notices, public consultations, published on planning portal, pay fee

82
Q

What is a party wall award?

A

Sometimes Party Wall Agreement, it’s document produced by the two party wall surveyors (or the “agreed surveyor”) which resolves the dispute that was triggered when the party wall notice was not consented to

83
Q

What are Party Wall Notices?

A

Notifying a party tenant/neighbour of works to be carried out to an adjacent property

84
Q

What’s the difference between an Invitation to Tender and Instructions to Tenderers?

A

Invitation to Tender - a formal invitation to make an offer for the supply of goods or services. Includes Letter of Invitation to Tender + tender docs

Instructions to Tenderers - Instructions regarding tender procedures

85
Q

In the construction phase of a D&B contract, who is responsible for: ERs, CPs

A
  • ERs = client, unless contract is amended

- CPs = contractor

86
Q

Are there provisions for a QS in JCT DB 16?

A

No.

87
Q

What happens to the final date for payment in a JCT IC if a payment certificate is not issued, but a payment notice is issued 3 days later?

A

The final date for payment is pushed back 3 days (the nr of days between the “final date for payment” and the issue of the payment notice).

88
Q

JCT IC - What’s an interim certificate?

A

Certificate of what the CA is telling the client they should pay the contractor

89
Q

What provisions for dispute resolutions are there in JCT IC/DB?

A

Adjudication, arbitration, legal proceedings (litigation)

Omar Assoc RICS prep (11 decks)

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