Procurement and Tendering - Level 1 Flashcards
How do you develop an effective procurement strategy?
The procurement strategy should be developed from an objective assessment of the client’s needs and the project characteristics. Key to the appropriate selection of a strategy is the identification of the primary objectives of the client, the apportionment of risk, and the decision as to who is responsible for design.
The assessment, based upon the business case for the project, should identify the relative importance of key elements, such as performance, price and time, as judged against the risk of under-performance, enabling a suitable balance to be achieved.
Are there other options beyond traditional and D&B?
The Management route.
When would you use one over another?
They are suited to different types of tendering procedures. For example, Design and Build would be beneficial in a two-stage negotiated tender where the design can be developed during the tendering process. Where a traditional procurement route is more suited to a single stage tendering process as the design is already fully developed so the works can be competitively priced.
When would you advise the use of two-stage tendering?
I would advise to use two-stage tendering where time is constrained (as it enables design and tendering to overlap). It is also used if the design process would benefit from the technical input of a contractor in the later design stages. In this sense it is used to obtain the early appointment of a contractor.
Benefits?
- Increased contractor involvement in design
- Ability to overlap design and tendering
- Some degree of competitive tendering during the first stage for preliminaries and profits
- Contractor involvement may reduce outstanding design//construction risk
How do you identify a client’s approach to time, cost and quality?
Identifying the best way of achieving the client’s objectives where I will need to identify what the client’s attitudes and key drivers are, and state them in a way and in a language that is understood by the entire project team. This can be achieved by assisting the client with the formation of their own ‘brief’ for the project.
How does management contracting differ from construction management?
Under a construction management route, the client does not allocate risk and responsibility to a single main contractor. Instead, the 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.
With this management contracting, a management contractor is engaged by the client to manage the whole of the building process. The contractor is paid a fee on top of the construction costs for doing so. The fee is based on the estimated costs of the works as established by the quantity surveyor – usually adopting a cost plan as the basis for budgeting. Management contracting was popular in the 1980s and 1990s, but this popularity has diminished since then.
In what situation would construction management be appropriate?
Construction management is most often adopted for large or complex projects, but there is no intrinsic reason for this. It has particular benefits for projects where there is a high degree of design innovation, where the client wants ‘hands on’ involvement, or where design flexibility is needed throughout the project process. As the client bears much of the construction risk with this route, it is prudent for the client to have adequate risk management capability.
What is your understanding of PFI as a form of procurement?
Public Private Partnerships are arrangements where a project or service is provided by the private sector in partnership with the public sector. There are many such arrangements; the most common in the construction sector is known as Private Finance Initiative (PFI).
PFI project involves a long-term contractual arrangement (usually of 25-30 years) between public- and private-sector parties through a concession agreement.
What are the advantages of a two-stage tender process to a client?
The process allows the client to identify a partner with the right experience and that understands their needs. It also enables the client to conclude matters such as levels overheads and profit at the first stage.
What are the factors that would be considered in deciding the most appropriate procurement route for a project?
Selecting and evaluating the most suitable procurement methods and strategies for a project involves considering various factors such as project complexity, budget, timeline, and risk tolerance.
What current challenges is Covid and/or Brexit bringing to Procurement & Tendering?
Material and Labour cost increases
