Procurement and Tendering (Level 3)

Question 1

How do you develop an effective procurement strategy?

Answer 1

1. Define Project Requirements
2. Conduct Market Analysis
3. Risk Assessment
4. Select Procurement Method

Question 2

Are there other options beyond traditional and D&B? When would you use one over another?

Answer 2

Other options include:

o Management Contracting
o Framework Agreements

You would management contracting over D&B for high complexity projects and a contractor/ subcontractor expertise is required. They can provide valuable input during the design development phase.

Question 3

When would you advise the use of two-stage tendering? & what are the benefits?

Answer 3

Advise it on high value, complex projects with uncertain requirements.

o Early contractor involvement
o Risk mitigation – contractor capabilities.
o Cost certainty
o Time efficiency – shortlisting preferred contractors early and focus on detailed negotiations.

Question 3

How do you identify a client’s approach to time, cost and quality?

Answer 3

o Initial consultation
o Develop a project brief.
o Identify a client’s priorities.
o Review historical data from previous clients.
o Risk assessment and management.
o Communication and engagement.

Question 4

How does management contracting differ from construction management?

Answer 4

Management contracting is when the client appoints a contractor to manage the construction works on their behalf, including letting of packages etc.

Construction management is when the client hires a CM to provide project management services and acts as an advisor to the client, but does not construct the works

Question 5

In what situation would construction management be appropriate?

Answer 5

Complex projects which require expertise in project management.
Design-bid-build procurement routes where they provide an extra layer of project oversight and coordination.

Question 6

What is your understanding of PFI as a form of procurement?

Answer 6

PFI means Private Finance Initiative.

In a PFI arrangement, a private sector consortium typically designs, builds, finances, and operates a public infrastructure project over a long-term concession period.

Question 6

What are the factors that would be considered in deciding the most appropriate procurement route for a project?

Answer 6

The route needs to align with the project’s objectives, constraints and characteristics:

o Project complexity
o Tine constraints
o Budget and cost considerations
o Risk allocation and management.

Question 7

What sources of guidance do you use when you are procuring and tendering contracts or packages of work?

Answer 7

The RICS has guidance on tendering strategies, it outlines the different routes of procurement, issuing tenders, conducting interviews and scoring them.

Also standard forms of contract and government procurement guidelines.

Question 8

How do you determine which pricing document to use with a sub-contract?

Answer 8

o Project complexity
o Contractual framework
o Risk allocation.
o Payment mechanisms

Question 8

How did you choose the tenderer for the civil package on Forton?

Answer 8

Through CBA analysis once all tenders had been received. Once the scope was fully aligned, checks were made from an operational, technical and commercial perspective.

Question 9

Can you explain why you would use either a D&B or management contracting route?

Answer 9

D&B:

o Client deals with a single entity
o Overlapping design and construction phase
o Cost certainty

Management Contracting:

o Early contractor involvement
o Flexibility to manage change.
o Expertise within the Contractor and Subcontractor

Question 9

Why use an NEC Option A sub-contract?

Answer 9

o Fixed price approach
o Risk allocation on the subcontractor.
o Incentives them to get paid by completing activities

Question 10

What alternatives could you use to an NEC Option A and when would you use each of them?

Answer 10

o Option B – if the work was well defined and quantifiable.
o Option C – Project scope is not fully defined and they each have the incentive to save money.
o Option E – Project involves research or development where the scope is highly uncertain.

Question 10

Outline the contents of the invitation to tender for the package

Answer 10

o General enquiry document (brief work description, drawings, key dates, specifications etc.)
o Works information
o Form of contract

Question 11

How do you respond to queries from tenderers?

Answer 11

If a technical query arose, I would liaise with the relevant person who is best to answer, ensuring their bid is most accurate. If it was a commercial question, I would respond in a quick time frame and offer further help if required.

Question 12

How do queries from tenderers work their way into the sub-contract?

Answer 12

Queries were usually surrounding each parties’ obligations with the works. If the tenderer had priced for the contractor to provide something for them, this would be written into the works information such that it clearly aligns with their bid.

Question 13

How did you deal with errors & omissions from the tender?

Answer 13

I kindly advised them of the error once it was known, such that it is fair for all parties when entering into contract. Their bid then reflects a true price.

With omissions, if the tenderer is unwilling to take on the obligation, we would note this in our decision making for the package. If we are able to carry out the obligation without too much risk, we would consider letting the package with omissions.

Question 14

Can you outline an agenda for a review meeting with tenderer?

Answer 14

o Assigning roles and aligning communications
o Discussing scope in detail
o Technical and design obligations
o Key dates and programme
o Commercial (form of contract, payment terms, X clauses etc.)
o Health and safety
o Attendance schedule

Question 15

How did you conclude the tender negotiation for the reedbed liner package at Chorley?

Answer 15

Tender negotiations concluded with the awardee once we had discussed the terms of the contract payment terms and testing requirements. The tenderer raised concerns over cashflow and requested shorter payment terms, which we granted given the work they were to complete. Once we finalised terms and the pricing, I obtained approvals from senior management to let the contract.

Question 16

How did you satisfy yourself that the tenderer’s submission was correct?

Answer 16

o Early design involvement
o Checks with principal designer and site manager on specs and sequencing.
o Check their clarifications for anomalies with our brief.

Question 16

Given the significant variance between the quotations received on Forton, did you evaluate the appropriateness of the tendering process?

Answer 16

Yes, the significant variance derived from the other subcontractors pricing in a substantial amount more risk, whereas the awardee included less and proposed sound value engineering solutions.

We engaged each of the tenderers in the same format with the same information. I challenged each of them to look to make savings across their bid, pointing them in directions where they could possibly save money.

Question 17

What would you advise be done differently next time for the Forton civils package tender?

Answer 17

Next time, I would propose that the suppliers are engaged earlier in the design process. This would streamline solutions and give each tenderer the opportunity to consider how the works could be completed more efficiently. It would allow the price comparisons to be more comparable which would generate more considerations for us to decide.

Question 18

How did you advise unsuccessful tenderers? What did you tell them?

Answer 18

Advised them where they were higher than others.

Rate review for future works

Told them in a polite manner and that there is opportunity for further works.

Question 19

How did you advise unsuccessful tenderers? What did you tell them?

Answer 19

In a timely manner, I communicated that they were unsuccessful in bidding for this particular package. I respectfully, and clearly, highlighted areas of strength and improvement such that they can reflect on this feedback. I offered them an opportunity to seek further clarification if required and let them know of other upcoming packages in the framework where they could also bid.

During, I respect the other tenderers information and kept it confidential to uphold the integrity of the tendering process.

Question 20

Does the Procurement Schedule extend beyond the project? Is there opportunity to advise other projects and colleagues about lessons learnt from your individual project?

Answer 20

Each project has its own procurement schedule. It contains a plethora of information which gives clear visibility to each project team. There are elements which can be shared to other projects such as buying loss/ gains, lead times and specific terms.

Question 21

Can you provide an example of when your management of the procurement process has led you to advise senior management of a serious issue?

Answer 21

Hollins Lane PS works

Allowance of £100k at tender

Much more work involved due to temporary works and railway line difficulties/ ground conditions

Question 22

Name the different tendering strategies.

Answer 22

Open tendering - applies to anyone (advert in shop window)
Selective tendering - selected group for specialist works
Negotiated tendering - dealing with a single supplier and negotiating terms
Framework tendering - agreement for call off over time
Single and two stage tendering

Question 23

What is the difference between procurement and tendering?

Answer 23

Tendering is: the bidding process, to obtain a price
Procurement is; overall was of obtaining goods or services

Question 24

How do you determine which pricing document to use within a subcontract?

Answer 24

Complexity of works
Scope definition
Subcontractor experience/level of auditability
Design control
Contractual framework
Risk allocation
Resource