Procurement and Tendering Shortfalls Flashcards
What are the key advantages of traditional procurement?
- Employer retains design
- Design finished before contractor’s tender
- Price cetainty can be achieved
- All tenders price on the same documentation
What are the key dis-advantages of traditional procurement?
- Lengthier time than D&B
- Zero contractor input
- Risks held by the Employer
- Dual points of responsibility
When is traditional procurement most appropriate?
- When time is not a priority
- When Client wants to retain control over design
- When cost certainty is important.
What are the key advantages of design and build?
- Single point of responsibility
- Cost certainty
- Contractor’s experience used
- Quick start on site.
What are the key dis-advantages of design and build?
- Design is only as good as the client’s requirements
- More complex to compare tender return
- Don’t know what you’re getting in terms of quality and look
- Contractor builds in risk premiums
When is D&B most appropriate?
- when there is need to start on site asap
- projects which are complex and would need the experience of a contractor
- inexperienced client - lower risk
- retaining design, not a priortiy
What are Contractor’s proposals?
Where the Contractor responds to Employers Requirements - detailed design for the Client’s approval.
What is Construction Management?
Employer directly appoints multiple sub-contractors.
- Construction manager programmes and co-ordinates work, they have no contractual link with trades, construction manager carries no risk.
Design needs to be available.
What is Management Contracting?
Employer appoints someone like LOR/Skanska to manage the build.
Management contractor paid a fee.
Design doesn’t necessarily need to be available.
What are the advantages of Construction management?
- Speed to site
- Project duration reduced by overlapping design and construction
- Changes easily accommodated
- Prices lower due to direct link with trade contractors
What are the dis-advantages of Construction management?
- price certainty not achieved until last package let
- requires a pro-active employer to work
- Employer has lots of consultants to manage.
When is construction management appropriate?
- When the employer is experienced and has resources to manage project
- Employer wants quick start on site
- Employer wants flexibility
- When project is complex and needs input from specialists.
Which route is most risky for the employer?
Construction management because the construction manager carries no risk (apart from professional negligence) and there is a wide range of people to deal with.
What are the advantages of management contracting?
- Packages let competitively
- Single point of responsibility
- Have management contractor buildability input
What are the dis-advantages of management contracting?
- Price certainty not achieved until last package let
- Requires pro-active employer
- Can be expensive based on fee
What is a Framework?
An umbrella agreement where a party enters into an agreement with one or more suppliers/subcontractors/consultants to establish terms.
How long can a framework agreement be?
2 - 10 years. But usually 4 years.
What are the advantages of frameworks?
- Can help develop stronger relationships between parties
- Time saving - can speed up procurement/sale of goods
- Rates and prices agreed up front.
- encourages collaboration.
What are the disadvantages of frameworks?
- Contractors/suppliers can become complacent
- May restrict new suppliers who offer innovation etc.
- Bidders can invest time and money to be entered into a framework but not potentially receive any work.
Why might an employer choose a framework?
- To support reduced procurement timescales
- A framework allows
Why might an employer choose a framework?
- To support reduced procurement timescales
- A framework allows
Why might an employer choose a framework?
- To support reduced procurement timescales
- A framework allows
Why might an employer choose a framework?
- To support reduced procurement timescales
- A framework allows employer to invite tenders from suppliers on a call-off basis.
What is partnering?
Example - the Wessex capacity alliance
- Collaborative management approach which encourages trust and openness
- risk spread across parties
- Encourages contractors to work together to meet a common goal.
What are the advantages of partnering?
- Conflict reduced
- Improved value
- Improved customer satisfaction
- Improved buildability
- Improved communication
what are the dis-advantages of partnering?>
- might be differing cultural views, ethics, attitudes
What information is included within a tender pack?
- ITT - Invitation to tender letter, information
- Employers requirements
- Contractual conditions
- Pricing document
- Drawings
- Scope
- Specifications
- Information on how errors will be dealt with
what is a bonafide tender?
A tender which is submitted in good faith, complete and meets the bidding requirements without collusion.
What is the OJEU?
- Official Journal of the European Union
- It’s an online portal.
- Now that the UK has left the EU, the UK now use a new portal service called FTS (Find a Tender) service
What is a PQQ?
Pre-qualification questionnaire - Helps the contractor/employer see if the tendering party has the right skills, knowledge etc. to undertake the job
What is the purpose of a PQQ?
Reduces the number of tenderers and leaves those who are genuinely right for the job.
What is a single stage tender?
Issued at RIBA stage 4.
A select number of tenderers are given one opportunity to submit their bid forward.
Tendering process usually 10-12 weeks.
What is a two stage tender?
Stage 1 - employer provides information to contractors.
the contractors then compete for preferred bidder status.
Preferred contractor enters into a PCSA.
Stage 2 - Once design complete, employer enters into negotiation with contractor to agree the final contract, programme information etc.
What is negotiated tender?
Involves only one Contractor who is invited to submit their price for a project.
What is a form of tender?
- Contractor signs and returns with their proposed submission.
what information is in a tender?
Tender sum, construction period, tenderer details and signature, acceptance of terms and conditions.
Apart from price, what else would you need from a tenderer?
- H&S information, logistics plans, social value strategy, inclusion and diversity policy, previous experience
Once tenders have been submitted, what should be examined?
- pricing errors
- Pricing method
- Resolve qualifications
- numerical errors
- Items not priced
- Front loading
What is the danger of accepting a low tender?
- Tenderer may try to recover their costs in the future via VO’s
- Tenderer may be in poor financial position and eager to win work
- Project may not be priced accurately and cause issues down the line.
How would you deal with errors within a tender?
Option 1 - Tenderer given details of their errors with an opportunity of confirming or withdrawing.
Option 2 - Tenderer given the opportunity of confirming their offer or amending it to correct genuine errors.
How would you deal with errors within a tender?
Option 1 - Tenderer given details of their errors with an opportunity of confirming or withdrawing.
Option 2 - Tenderer given the opportunity of confirming their offer or amending it to correct genuine errors
How would you deal with a front loaded tender?
- Request that the contractor removes the front loading.
What is included within a tender analysis report?
- list of tenders received
- Comparison of tender return
- Recommendation
- Any qualifications
- Issues to be resolved.
