Procurement and Tendering Flashcards
What is procurement?
The process of purchasing goods or services. The Procurement route should follow a strategy which meets the objectives of the client.
What is tendering?
The process of selecting a supplier that will deliver the goods or services.
What are the different procurement routes?
- Traditional
- Design and build
- Construction Management
Level 3 - What are the main elements of the contract award paper on Beckton Depot and what did you advise?
- Summary of works
- Contract choice
- Any issues/risks
- Tender process and results
- My recommendation
- Approvals
I recommended the contract be awarded to the Most Economically advantageous Tender.
What is MEAT?
Most Economically Advantageous Tender.
A contractor selection process which does not just use price as a means of winning the contract. Price and quality determine the recommended contractor.
What price quality ratio did you chose for Beckton depot tender?
- Price 60%
- Quality 40%
- I advised that although quality was important the lower complexity of the works meant a higher weighting should be given to the price.
Level 3 - On Elephant and Castle ID Survey what were the stages of the procurement process?
- I wrote a procurement strategy
- Created and issued tender documentation to suppliers
- Evaluated tender returns
- Awarded a contract to the winning bidder.
Level 3 - When writing the procurement strategy for Beckton Depot enabling works why did you advise design and build would be best?
I advised the client that as they needed to make an early start on site that their was opportunity to overlap design and construction. The client was risk averse so this option meant the design and build risk all sit with the contractor. The design was not overly complex and the employer had a list of requirements that would give the desired outcome regardless of methodology.
Level 3 - On Elephant and Castle ID Survey what were the stages of the tender process?
- Shortlisted suppliers were issued an expression of interest
- Prepared and issued ITT docs
- Managed Tender clarifications
- Evaluated Tender returns
- Managed consensus meeting
What should you first examine on return tenders?
- Signed form of tender
- Arithmetical Errors
- Pricing errors Pricing methods i.e. front loading
- Qualifications Check proposal against employers requirements
Level 3 – Why did you advise on procuring through a pre-qualified list of suppliers and how did you do it?
The project manager had a focus on minimizing time and risk. I advised that selective tendering is faster than open tendering as pre-qualified suppliers can be used to shortlist potential tenderers. This included their level of experience, capacity for the size of the works and financial standing. This then narrows the search to suppliers who are capable and able to do the work.
How did you chair the tender evaluation consensus meeting on Elephant and Castle?
- Invite all the tender evaluators to a meeting
- Go through each evaluator score for each bidder and question.
- Confirm the requirements of each question
- Invite the evaluators to discuss why they scored the score they did.
- Mediate the discussion to reach an agreed score to settle on for each question.
- Record the results
How would you deal with errors and omissions in a tender?
The method of dealing with errors should have been outlined in the instruction to tenderers. The basic options are either to allow the contractors to correct their error or for the contractors to stand by their price. The basic options are either to allow the contractors to correct their error or for the contractors to stand by their price.
If a tenderer is late in submitting his bid, what would you advise the tenderer?
That the tender being accepted would be at the client’s discretion, however it is likely they would not be accepted to avoid fraud, collusion or bid-rigging.
What is traditional procurement?
• The design is completed by the clients design team before competitive tenders are invited and a main contractor employed to build what the designers have specified. • Contractor takes risk for construction • Client takes risk for design
What are the advantages and disadvantage of traditional procurement?
Advantages: More control over design, Cost certainty of construction, Greater opportunity to value engineer Disadvantages: Takes longer, Design and build are separate so no interface, Two tender periods
What is Design and Build Procurement?
Where the contractor is responsible for the design of the works and then the construction. Usually 1 or 2 stage to the tender. The employer will detail their requirements and the contractor will design it to meet them requirements and build it.
What are the advantages and disadvantage of design and build?
Advantages: Single point responsibility, more efficient and quicker, better buildability. Disadvantages: Client has lets control on design, less emphasis on quality, harder to compare tenders with differing designs
What is Management Contracting?
• A management contractor is employed to contribute their expertise to the design and to manage the construction and is paid a fee for doing so • A method where overall design is the responsibility of the client’s consultants, and the contractor is responsible for defining packages of work and then for managing the carrying out of this work through separate trades or works packages
What types of tendering strategies are there?
• Single stage tendering • Two Stage tendering • Negotiated Tender
What is a single stage tender?
Single-stage tendering is the more traditional route, used when all the information necessary to calculate a realistic price is available when tendering commences
What is a 2 stage tender?
A two-stage tender process may also be adopted on a design and build project where the employer’s requirements are not sufficiently well developed for the contractor to be able to calculate a realistic price. In this case, the contractor will tender a fee for designing the building along with a schedule of rates that can be used to establish the construction price for the second-stage tender.
When would you advise a client to follow a negotiated tender path?
- When the client has a pre-existing relationship with a contractor. - When the works needs to go on site quicker with less time and resource gone into tendering - When OJEU is not required
What are the advantages/disadvantages of single stage tender on traditional contracts?
Advantages - Most competitive price - The most linear form of tendering Disadvantage - No contractor involvement - May lead to high levels of provisional sums and risk items on the client side - Programme implication to include tender period
What are the advantages/disadvantages of 2 stage tender on MC/CM contracts?
Advantages - Increased contractor involvement in design - Some degree of competition - Ability to overlap design and tendering Disadvantages - Lack of competitiveness during 2nd stage - Programme implication to include a tender period
What are the advantages/disadvantages of negotiated tender on MC/CM contracts?
Advantages - No tendering required in programme Disadvantages - No competition at all on Prleims and OHP and programme
How does CM differ from Management Contracting?
In MC the contractor will have contracts with subcontractors whereas in CM it is the client.
What are the advantages/disadvantages of single stage tender on D and B contracts?
Advantage - Most competitive price Disadvantage - Contractor not fully understanding may lead to a ‘higher risk allowance’ - Programme implication to include tender period
What are the advantages/disadvantages of 2 stage tender on D and B contracts?
Advantages - Contractor involvement may reduce outstanding design/ construction risk - Ability to overlap tendering and design Disadvantages Lack of price certainty until the end of the second stage. Potential for a Contractor not to retain a focused commitment through the second stage of the tendering process (thereby not achieving the most advantageous and timely work package prices) All work package costs are transferred to the Client.
What are the different types of partnering contracts?
Partnering agreements include the project partnering contract PPC2000, the term partnering contract TPC2005, the NEC partnering agreement and the ICE Partnering Addendum. There is also JCT Constructing excellence.
