Procurement And Tendering L3 Flashcards

Question

What is procurement?

Answer 1

The process of purchasing goods or services for a construction project. Many different routes by which design and construction of a building can be procured. The selected route should follow a strategy which fits the long term objectives of the client's business plan.

Answer 2

The selection of the contractor that will construct the works. However, depending on the procurement route, this could be for a wider range of goods and services. The overall objective is to achieve a price for the works

Answer 3

Advantages of traditional: - Client has full control of design - Competitive tender done single stage -Cost certainty - Less risk priced in by contractor as full design is complete Disadvantages of traditional: -Typically take longer as full design is needed before tender takes place -May lead to higher level of prov sums and risk items -No contractor involvement for design

Answer 4

I would organise a procurement workshop with the client. I first understood the client brief and built on from this at the meeting. This would involve asking key questions related to the clients drivers relating to time, cost, quality and risk and then looking at the level of priority of each. Other key considerations would be the project type (size of project, complex design with specialist input needed?), market condition, statutory regulations (OJEU).

Answer 5

Single stage tendering is when the contractor bids for the works with a complete design and this would be for the full amount of the works and will achieve cost certainty. A 2 stage tender is when the 1st stage is under a pre-construction services agreement, whereby the contractor will take part in the design and selection of subcontractors. There is less cost certainty as the cost could go up/down for the main contract works.

Answer 6

I would advise a client to select a 2 stage where specialist design input is needed more than cost certainty. If the works is of a simpler nature then a single stage can achieve cost certainty.

Answer 7

- 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

Answer 8

- Faster to complete as works are done in parallel with design - Client retains control of design - Contractor can still have design input - No cost certainty until packages are let

Answer 9

-When projects need to have a quick completion date. -When works are of complex nature and contractor will not take on liabilities -

Answer 10

In MC the contractor will have contracts with subcontractos whereas in CM it is the client.

Answer 11

- Record on tender opening sheet (price and programme) at correct time and date - Check for errors and conflicts - Raise tender queries - Equalisation/ Normalisation - Agree cost with contractor - Recommendation - Notify tenderers of result

Answer 12

Firstly, I would advise to the client that the correcting of errors should always be at the discretion of the client. Then, following the JCT Tendering practice note I would advise: Alternative 1- Give details of error and afford opportunity to confirm or withdraw. Where tenderer has accepted error, all rates and prices in the document should be reduced or increased at the same proportion as the corrected total of priced items. Alternative 2 - The tenderer should be given an opportunity of confirming his offer or of amending it to correct genuine errors. If the tenderer does amend his tender figure, and possibly certain of the rates in his documents, he should either be allowed access to his original tender to insert and initial the correct details or be required to confirm all the alterations in a letter.

Answer 13

Invitation to tender (ITT), including cover letter with tender return information. Form of tender. Contract conditions and employer's amendments. Instructions to bidders including how errors will be dealt with. Tender scoring matrix. Project information, drawings, specifications, surveys, planning conditions etc. Pricing document. PCI (Pre-construction information). Quality questions (such as experience and methodology). Receipt of tender.

Answer 14

I assembled a query sheet which i sent to each contractor. I then compiled all of the queries and answered them which was sent back to all contractors.

Answer 15

The scoring matrix was 80% cost and this was recommended because the works was of such a simple nature. The qualitative scoring element was split into 3 parts, with programme, engagement with neighbours and health and safety/previous experience forming the other part.

Answer 16

This year is the transition period, so there will be no change, however EU processes like OJEU still remain uncertain and depend on the UKs deal with the EU.

Answer 17

Official journal of the European Union. Public projects must comply with the regulations if the value of contracts is above specified thresholds. Aggregation rules apply to projects tendered in parts to prevent clients from avoiding the requirements of the regulations by simply dividing projects up into contracts that are below the threshold.

Answer 18

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.

Answer 19

 Safest Option is not to consider- (Fraud, Collusion, Bid-rigging)  If private client it is at their discretion (Advise of dangers though)  Public client: Late cannot be accepted, few minutes late…judgement call needed, to accept need authorization in writing from council/ LA  Advise accepting late tenders sets standard, contractors may in future also not keep to deadline

Answer 20

My advice would be impartial regardless of the tender amounts.

Answer 21

A pre-qualification questionnaire (PQQ) sets out a series of questions for potential tenderers to answer regarding their level of experience, capacity and financial standing. prior to being invited to tender.

Answer 22

There were multiple complicated design elements where the project could have benefited from a contractor's input. This included: - Bathroom pods - Facade - MEPH

Answer 23

This was because the main contractor may price an element of risk into the enabling works. Going directly in a separate contract with an enabling works contractor meant that this risk was evaded before the main construction works would begin.

Answer 24

This was scored based on the quality of the submission; criteria included their approach, programme, co-operation with neighbours, health and safety and resource.

Answer 25

At the procurement workshop, I discussed with the client what their key drivers were. The main three were time, cost and quality. The design team also recommended that some elements such as facade and MEPH would benefit from a subcontractor specialist input. The client also wanted to transfer risk to the contractor and wanted an early start date. As a result, I recommended the 2 stage design and build approach.

Answer 26

I presented a matrix whereby I input a set of criteria with scores 1-10 and the matrix pointed towards the design and build route. I then explained the benefits of all 3 with pros and cons listed on my presentation. Furthermore, I created a procurement recommendation report.

Answer 27

This post tender interview, was effectively a tender settlement interview with the preferred contractor where I was able to clarify on the prices they submitted which seemed ambiguous. Questions I asked included: will you agree to the cost of the FFE item which is priced as per the pre-tender estimate?

Answer 28

I advised that due to the nature of the works, which was of a simple nature, and the client wanting to keep a tight budget, a competitive tender with 80% scoring would be best. The companies chosen for an expression of interest were known to the client and consultant team that were capable of producing works.

Answer 29

The client brief

Answer 30

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.

Answer 31

Used for FM.

Answer 32

The contractor will appoint a design team, the design will commence. Once designs are complete, there must be a conversation between the design team, if KPIs are ticked, the designs will be passed to the contractor's commercial team who will price the project. The client's QS team will then advise the client on the prices. QS will monitor all subcontractors prices throughout the subcontractor procurement.

Answer 33

Usually only if it is a historic or complicated building where the project would benefit from extra contractor design. Normally always single stage and 2 stage for DB.

Answer 34

Open tendering allows anyone to submit a tender to supply the goods or services that are required. Selective tendering only allows suppliers invited from a pre-selected list to take part in the tender process.

Answer 35

Most economically advantageous tender. A contractor selection process which does not just use price as a means of winning the contract. Contractors must be informed of the criteria as part of the tender document.

Answer 36

- Expression of interest for tenderers (based on previous projects and client approval - below OJEU value) - Once received, informed them of tender docs and ITT release - Prepared tender doc and issued ITT - Met on site to answer questions (only gave information away which was in tender doc and rest went in query list issued as addendum). - Received tender docs and recorded on opening tender record - Checked for errors and inconsistencies - Produced tender document (tender analysis, qualitative assessment, qualifications, normalisation, tender procedure, recommendation).

Answer 37

A bid submitted in good faith, complete and in prescribed form which meets the conditions of the bidding requirements. Confirmation that the supplier has not concluded with another party when compiling the tender.

Answer 38

Any information to be exchanged can be transmitted using electronic media such as: + physical media (any physical platform for holding the platform for holding the data, including CD, DVD and memory sticks); + email; and + web-based technology.

Answer 39

• Where a project is over a certain value it must be advertised in the OJEU: • There are 4 procedures under OJEU:- o 1) Open - any contractor allowed to tender for the work o 2) Restricted - carried out in 2 stages 1st stage - open, 2nd stage - only contractors are invited that meet specific criteria o 3) Negotiated - where competition is inappropriate, a single contractor is approached to negotiate a price. o 4) Competitive Dialogue - Provides alternative to open and Restricted Procedures under OJEU. Similar to ECI process except that all contractors are involved • A PIN is placed in OJEU at start of year to indicate what projects coming up. • Once the project is let a Contract Notice is placed in OJEU providing further details of procedure to be followed. • Once the contract has been awarded a Contract Award Notice must be published in the OJEU within 48 days of award.

Answer 40

Public procurement contracts 2015.

Answer 41

From the 1st of January 2021, the UK is not subject to EU procurement regulations and therefore no longer follow rules outlined for OJEU tenders. . Tenders will now be published on a new e-tendering portal, called Find a Tender Service (FTS).

Answer 42

* Effectively strategic partnering * Contractors are asked to bid for a project on the basis that if they build this one satisfactorily, others of a similar type will follow and the same bill rates will be used

Answer 43

Tenders may contain a number of comments or technical qualifications, which may include proposals for alternative similar approved materials. It is essential that the surveyor seeks clarification and recommendation from the relevant surveyor on these matters, for clarification within the tender analysis report, if necessary. The surveyor should assess the financial implications of each and every proposal. In order for the client to be able to make an informed decision as to which contractor to appoint, it is normal practice for the surveyor to issue a detailed tender analysis report.

Answer 44

Depends on how generic the VE option is. If a bespoke option I would seek legal advice.

Answer 45

-the stage at which design certainty is assured; risk allocation; -the stage at which cost certainty is achieved; -the point of financial commitment by the client; -the experience required by the client; -the input required by the client; and -the overlapping of the stages, e.g. design and construction.

Answer 46

- Competition to work on the 1st stage - 1st stage will include basis of fixed lump sums for management and supervision staff and preliminaries; approximate quantities and firm works tenders for the major sections of work that have been designed (if any), and provisional sums for the remaining work. - Cost certainty is achieved at the 2nd stage with the main contractor working as an intermediary between the design team and subcontractors.

Answer 47

- earlier start on site - the provision of contractor advice, with surveys, exploratory works and mock-ups - influence and control over sub-contract packaging - Shorter tender documentation period. - The compatibility of the main contractor and the sub contractor for CDPS elements can be achieved by including a list of sub-contractor names in pre-qualification documents.

Answer 48

- There can be problems with the CDPS design not meeting the employer's requirements; this can be addressed by early contractor involvement. - Needs the careful control of the interface between one CDPS and another, or between the CDPS- and consultant-designed elements. This introduces an element of cost and programme risk. - There will be a programme and cost penalty if the scope and value of the provisional sum works change significantly. - Requires the adaptation of standard contracts.

Answer 49

- In the PCSA there is a copyright clause to allow the client to use the design with a new contractor.

Answer 50

The key is to identify the clients objectives and key drivers It terms of time cost and quality. Other factors such as risk allocation should also be considered. It's unusual to satisfy all elements with one procurement route. Consideration must be given to the clients list of priorities to identify the most appropriate procurement route.

Answer 51

1) Traditional procurement (1 and 2 stage) 2) Design and build 3) Management contracting 4) Construction management

Answer 52

Disadvantages • Full design pre-tender is slow • Competition or tendering cannot be commenced until the design is complete – reduction in cost & time certainty • Overall project duration may be longer than others – sequential process • No input into design or planning by the contractor

Answer 53

• The employer may have a specific or detailed design requirement. • Cost certainty is important (traditional has significant advantages over construction management or management contracting procurement routes). •The shortest overall program is not the employees main priority

Answer 54

Disadvantages • only as good as the employers requirements, the employer may find it difficult to prepare sufficiently comprehensive brief. • Low client ability to control design and specification • Harder to compare tenders – design proposals need to be balanced against price, and it is vital to check that the proposals satisfy the client’s requirements. • Ease of fabrication may be prioritised above aesthetic quality • Cost control more difficult due to less detailed pricing. Variations (client changes) tend to cost more due to the lack of a detailed pricing structure. • The contractor will build in risk premiums into their tender return.

Answer 55

1) where there is a need to make an early start on site, design and build has potential to overlap design and construction 2) where the employer wishes to minimise their risk profile design risk has passed on to the contractor 3) for technically complex projects to design with benefit from the contractors, buildability input. 4) where retaining control of the design, is not a priority.

Answer 56

The contractor and their design team will have design responsibility. Therefore it is likely additional professional indemnity insurance will be required.

Answer 57

The expression employees requirements are used to describe the documents produced by the employer to set out its requirements in relation to the projects (including performance, specifications, drawings, initial designs etc.) and this is what the design and construction of the works will be based on.

Answer 58

1) CPs offered by the contractor, which responds to the employers requirements 2) in these documents, the contractor will produce detailed design information based on the employers requirements, which will require further development throughout the course of the project.

Answer 59

Design and build this is because the design risk is transferred to the contractor

Answer 60

The contractor may use their own in-house designers, or they can appoint external consultants. The employers original design team can also be innovated to the contractor.

Answer 61

The employer directly appoints multiple subcontractors (referred to as trade contractors) instead of employing a single main contractor. The single feature that makes construction management unique, particularly from management contracting, is that the employer places individual contracts with separate specialist/contractors themselves. Key points: •The employer places a direct contract with each trade contractor and utilises the expertise of a construction manager to coordinate the works. • The construction manager programmes and coordinates the works. • The construction manager has no contractual link with the trade contractors. • The construction manager has no vested interest in the financial outcome of the project and bar professional negligence, carries no risk.

Answer 62

Speed (early start on site). Overall project duration reduced by overlapping design and construction. The construction manager can contribute to the design and project planning processes. Changes in design can be accommodated without paying a premium. Prices may be lower due to direct contracts with trade contractors. The employer has means of redress with trade contractors through direct contractual links.

Answer 63

Price certainty not achieved until the last trade package is let The procurement route requires an informed experienced and proactive employer to work The employer has a lot of consultants and contractors to manage.

Answer 64

The employer is experienced in construction and has the suitable resources to manage the project. The employer wants to achieve an early start on site. The employer wants the flexibility to make minor changes to the design / specification throughout process with minimal impact on time or finances. The project is technically complex and requires detailed engagement of specialist consultants and trade contractors.

Answer 65

Construction management. This is because the employer places individual contracts direct with each trade contractor and the construction manager carries no risk (barring professional negligence).

Answer 66

Overall project duration can be reduced by overlapping design and construction. The management contractor will provide buildability input. Single point of responsibility (management contractor). Trade packages are let competitively and transparently. There can be considerable flexibility in the design, with changes being made throughout the construction process.

Answer 67

Price certainty not achieved until the last trade package is let. Requires an informed and proactive employer to be successful. Depending on how the construction manager is remunerated, there may be a built-in disincentive for the construction manager to minimise costs.

Answer 68

When an early start on site is a priority. Flexibility in design is required. Buildability input from the management contractor is required. Where cost certainty is not a priority for the employer.

Answer 69

Construction management - The employer directly appoints multiple trade contractors to execute the works. Management contracting - The employer appoints a management contractor who in turn appoints the works contractors.

Answer 70

A framework agreement is an umbrella agreement that a party enters with one or more suppliers (who may be contractors, subcontractors, suppliers or consultants) to establish governing terms. A framework usually sets a strategic partnering relationship for the procurement of goods, works or services.

Answer 71

Typically, a framework agreement last for 4 years, however, this is determined by the buyer. they can range between 2 and 10 years

Answer 72

Framework agreements can help to develop stronger relationships between the parties involved and encourage long term collaboration and co-operation. Time saving (can speed up the procurement of goods and services). Repeat work and continuity of delivery. Rates and prices are usually agreed upfront.

Answer 73

The contractors, suppliers or consultants can become complacent. Bidders will invest time and money to be awarded onto a framework and then potentially not receive any work through them. May be restrictive to new suppliers who offer innovative, new, solutions with the changing and evolving nature of technologies for example.

Answer 74

Employers that are continuously commissioning construction work might want to reduce procurement timescales, learning curves and other risks by using framework agreements. A framework allows the employer to invite tenders from suppliers of goods and services on a call-off basis as and when required.

Answer 75

A framework agreement rarely provides any specific commitment in terms of project and value of works. It is more focused around being an approved supplier. A contract is usually a specific fee, with project scope and timelines allowing you to quote and tailor your product/service for the specific job at hand.

Answer 76

Partnering is a broad term used to describe a collaborative management approach that encourages openness and trust between the contracting parties. There is more opportunity for building working relationships, finding improvements and planning investment. Ownership of risk is spread between the parties and a collaborative approach is encouraged to delivering the solution and overcoming problems.

Answer 77

The overall construction and design programme can be shortened. The likelihood of conflict is reduced. Improved communication and mutual objectives. Improved customer satisfaction. Improved value for the employer. Improved buildability (early involvement of contractors for example). Better predictability of time and cost.

Answer 78

Less opportunity to understand what other contractors/potential partners have to offer. Difficult to find a strong partner which have the same objects, ethics, attitude etc.

Answer 79

Procurement is the overall act of obtaining goods and services from external sources and deciding the strategy on how these goods are to be acquired. Tendering is a phase in the procurement strategy and deals with obtaining a price through a bidding process and deciding how a contractor is appointed.

Answer 80

Company details (including legal status). Details of insurance cover. Financial information (such as company accounts). Relevant experience. Information about technical and professional ability. Information about capability and capacity. Health and safety policy and records. Quality assurance policy. Environmental management policy. Equal opportunities policy. References.

Answer 81

Dunn and Bradstreet report Credit agencies such as Experian

Answer 82

Tender documents are issued to several competing contractors who are all given the chance to bid for the project based on identical tender documentation

Answer 83

The employer benefits from a competitive tendering process which can lead to more competitive pricing. The employer can benefit from a fixed price through this tendering process,

Answer 84

No buildability input from contractor (at the point of tender). The price is only as good as the design information. Contractors may be unwilling to tender in a good economic climate (too much competition).

Answer 85

The tender period is largely dependent on the complexity of the project. However, 10 to 12 weeks would be reasonable as it will take some time to interpret the employers requirements.

Answer 86

Stage 1 The employer provides an outline project design and contractors then compete for preferred contractor status. The preferred contractor is usually chosen based on the quality of their bid, the quality of their team, preliminaries and OH&P allowances. The preferred contractor then joins the design team on a consultancy basis using a pre-construction services agreement (PCSA). Stage 2 Once the design has sufficiently progressed, the contractor enters into a detailed contract negotiation with the employer to agree the final price, contract conditions and programme.

Answer 87

Early appointment of the contractor to work in parallel with the design team. Early involvement of the contractor to benefit from buildability input. Earlier start on site is possible. Employer involvement in subcontractor selection. Increase opportunity to value engineer (VE) with the contractor's input. Improved opportunity to identify project risk.

Answer 88

The contractor has less incentive to price the second stage competitively, negotiations may therefore be difficult. Additional cost of the contractor's pre-construction fee. Potential for the negotiation stage to fail (contract sum not agreed).

Answer 89

A negotiated tender is effectively a single-stage tender carried out between the client employer and one contractor. Negotiated tenders are obtained by the client, inviting one contractor of their choice to submit a tender response for the project.

Answer 90

173. Simplicity. Speed, a negotiated process can have programme advantages if undertaken in good faith. The employer has flexibility in terms of choosing their preferred contractor. Time and cost savings involved in comparing and analysing multiple tender submissions. The process can allow early contractor involvement.

Answer 91

Possibility of delay if contract negotiations are protracted. Potential cost premium due to the lack of competition. There is a heavy reliance on trust between the parties. It can be seen as anti-competitive and exclusive.

Answer 92

Insist on an open book approach when agreeing subcontract packages and a minimum of 3 quotes to be provided for each element of the works (this would need to be agreed upfront with the contractor).

Answer 93

The contractor usually signs and returns this document with their proposed tender submission. It is formal acknowledgment that the tenderer understands and accepts the terms of conditions of the tender documents and any other requirements that are stipulated. The document also includes the contractor's price and programme.

Answer 94

Tender sum. The date until which the price remains valid. Construction period Confirmation of the tender being genuine and bona fide. Tenderer details and signature. Acceptance of terms and conditions.

Answer 95

Track record of previous experience (for example, case studies). Proposed team and hierarchy. Methodology or approach. References. Programme. H&S information. Value engineering proposals. Logistics plans. Social value strategy. Diversity and inclusion policy.

Answer 96

Arithmetical errors. Pricing errors (items not priced). Pricing methods (front loading). Compare the contractor's proposals against the employer's requirements for compliance (D&B procurement). Check the form of tender is complete and signed. Resolve any qualifications.

Answer 97

Public sector project - the documents should be accepted. Private sector project - the matter should be discussed with the employer to understand if they would like to accept. The safest option is not to consider (potential fraud, collusion, bid-rigging risk etc).

Answer 98

The tender should be discarded on the basis of the project is funded by the public sector.

Answer 99

The contractor may be trying to 'buy' the project with a view recover their costs with variations and/or claims. It could indicate the contractor is in a poor financial or cash flow position and they are eager to win the work at any cost. Areas of the project may not be priced accurately, potential for an adversarial relationship to develop post contract.

Answer 100

Procedures associated with qualifications should be outlined in the tender instructions. If the qualifications are unauthorised, it might invalidate the tender (leading to disqualification). The employer team and contractor should look to resolve the gualifications prior to signing the contract. Any outstanding matters should be clearly documented in the contract to avoid future disputes.

Answer 101

JCT have produced a tendering practice note where two options are suggested to deal with errors. One of these options is usually drafted into the tender pack Alternative 1: The tenderer should be given the details of the errors and afforded the opportunity of confirming or withdrawing their tender. If they withdraw, the next lowest bid is considered. Alternative 2: The tenderer should be given the opportunity of confirming their offer or amending it to correct genuine errors.

Answer 102

As part of the evaluation process, the company accounts would be reviewed to assess the financial stability of the contractor (if not already complete at PQQ stage). This could lead to disqualification if the contractor is having financial difficulty. Consider a performance bond. In the event the contractor fell insolvent, the employer would be able to call on the bond and appoint another contractor to complete the project. Consider a parent company guarantee.

Answer 103

Not enough tenderers returned tenders. The tendering procedure is compromised for some reason. If tenders were not at the cost level required and it was believed that re-tendering to different tenderes would provide a different result. Design changes or VE has been carried out that has significantly changed the design that was originally tendered on.

Answer 104

Front loading is generally not a pricing error. Request contractor removes front loading, if the contractor refuses, this may be grounds for disqualification.

Answer 105

Ensuring the tender information is as accurate as possible. Ensure tender the period is long enough (extend if required). Go through the PQQ (pre-qualification questionnaire) to ensure the correct tenders are selected. Check the contractor has time capacity to complete the tender.

Answer 106

Not enough tenders returned. The tender procedure was compromised in some way (potential fraud, collusion, bid-rigging etc). Significant design, methodology or programme changes after issuing the tender documents.

Answer 107

A contract sum analysis (CSA) is an alternative pricing document to a schedule of works (SoW) or bill of quantities (BoQ). It's often prepared in a standard format by the employer's team to support the tender analysis. The employer's team usually request that all tenders are returned via the same CSA format.

Answer 108

List of tenders received. Initial tender return totals. Any qualifications identified. Post-tender adjustments. Revised tender sum. Issues to be resolved. Comparison of tender returns. Comparison with pre-tender estimate. Recommendation.

Answer 109

Check the form of tender, this would show how long the price (the offer) was valid for (for example 60 or 90 days after the tender return date).

Answer 110

I would seek further information from the contractor and request this to be removed, subject to the tender instructions. This may invalidate the submission.

Answer 111

The contract and be amended to include a liquidated damages free period, for example, damages would not be levied for the first three weeks, or levied at 50% for a defined period

Answer 112

A pre-tender estimate (PTE) is the last cost check of the project before it is issued to tender. The design should be sufficiently developed at this stage; therefore, the PTE should be an accurate reflection of the works. The estimate can then be used to compare against the tender submissions.

Answer 113

This could be down to market conditions or some other external factor such as COVID-19 or Brexit. The employer's team should reconcile the tenders against the pretender estimate to identify where the major differences are. The team could look to value engineer the project if the prices are over budget.