Procurement and tendering (L2)

Question 1

Why was traditional procurement the most suitable route for the Yew Tree Farm project?

Answer 1

• In the first instance, cost certainty was important for the client due to limited sanction for scheme (rendering a Re-measure, Management Contracting and Construction Management routes as less appropriate compared to Traditional)
• Secondly, speed was not of concern for the client as there was no regulatory commitments in this case (rendering D&B, Re-measure, Management Contracting and Construction Management routes as being less appropriate compared to Traditional)
• Thirdly, the client wanted to retain control over the design and there was no requirement for Contractor input into the design or planning stages due to low engineering complexity of the project (rendering D&B, Management Contracting and Construction Management routes as less appropriate compared to Traditional)

Question 2

What are the risks/ disadvantages with this route?

Answer 2

• The risk for design sits with the client
• The overall project duration maybe longer compared to other routes due to the sequential nature on that construction cannot commence until completion of the design
• Little to no buildability as the contractor is not involved in the design or planning stages
• Adversarial potential due to the strategy being based upon price competition

Question 3

What tender documents did you produce?

Answer 3

• The choice of procurement route and contract type will have a direct effect on how the tender documents are complied.
• Yew Tree Farm procured on a traditional basis using an NEC3 ECC main Option A form of contract and so the tender documents are produced were as follows:
   Instructions to Tenderers
   Form of Tender
   Contract Data part one and two
   Works Information
   Site Information (NOT USED)

Question 4

How did you go about managing the tender queries?

Answer 4

• Tender queries where managed through the use of a TQ register
• All tender queries raised were added the register and answered back to all tendering contractors (to ensure no one contractor is given an unfair advantage)
• The name of the tenderer raising the query was kept confidential
• Both the date the tender query was received and responded to was also captured

Question 5

Tell me about the tender addendum, why was it necessary?

Answer 5

• It became apparent that a slightly larger kiosk than originally specified in the Works Information would be required in order to accommodate telemetry requirements.
• Consequently, a tender addendum was issued with new drawings to describe the enlarged kiosk as soon as it became apparent.

Question 6

What type of pricing document was used?

Answer 6

• The type of pricing document depends on the form of contract and the chosen procurement route
• Yew Tree Farm was procured under a traditional procurement route using an NEC3 Option A form of contract thus,
• An Activity Schedule was used
• This was prepared and priced for by the Contractor

Question 7

Why was this the most suitable pricing document?

Answer 7

• Given that the project was procured on a Traditional basis using an NEC3 ECC main Option A form of contract
• Additionally, Cost certainty over a lower price was more important to the client and so
• An Option A with an Activity Schedule would provide the client with a higher degree of price certainty albeit at a slightly higher cost compared to an Option B/ Bill of Quants where there is less risk for the Contractor which may achieve a lower price but, where the Client would be taking the risk for the accuracy of the quantities resulting in less cost certainty

Question 8

How do you go about selecting the most suitable tenderers for a project?

Answer 8

• There are three main types of contractor selection techniques
   Open – which may be required if the procurement is subject to regulations
   Selective– which is in the form of a shortlist of suitable contractors drawn up by the design team or using supply chain accreditation systems such as Achillies to identify suitable contractor and
   Single contractor selection/ negotiated – which is a shortlist of one
• If Open or Selective is used this will involve a pre-qualification process such as interviews or pre-qualification questioner (PQQ) to ensure tenderers are suitable
• However, at United Utilities we have a number of Framework Agreements with suitable contractors for various types of projects that we can call-off and so the need for pre-qualification is reduced

Question 9

What criteria do you assess?

Answer 9

• Relevant experience
• Financial standing
• Health and safety records