Procurement, competative & negotiated tendering

Question 1

Options of procurement in construction

Answer 1

Traditional Procurement:

• contractual link is between the client and the main contractor.
• risk is passed down the supply chain
• generally the main contractor is wholey responisble for the project performance
• benefit: cost and quality (at expense of time)

Design & Build:

• A shortlist of contractors provide a design proposal with estimated costs - in effect a design competition
• can provide for easy completion and price is more certain
• benefit: time and cost (in expense of quality potentially)

Management contracting:

• work carried out via work packages, management contractor appointed early on for a fee and is control of exeution of works.
• benefit: time and quality at expense of cost.

framework agreements:

• they are not binding contracts
• the provide suppliers with access to a stream of work where the pricing model has already been negotiated.

Question 2

explain the different types of competative tendering

Answer 2

open tendering:

• advertisement inviting contractors to apply for tender documents
• traditionally lowest tender wins

selective tendering:

• architect selects suitable contractors
• usually limited to 4-6 reputable firms

two-stage tendering:

• this approach is to speed up procurement
• uses a bill of waunities
• lowest tender usually selected

serial tendering

• a number of projects tendered under on contract
• supermarkets, petrol stations etc

continuation tendering
- maybe used on a large complex project, project is broke down into identifiable phases and offered for tendering

Question 3

explain negotiated tendering

Answer 3

negotiated tendering:

• client selects a contractor
• only 1 firm is involved
• based of the reputation of the contractor
• specialist skills
• sound financial position
• business relationship with the client
• negotiated tendering can take time and considerable negotiating skills
• negotiation based on cost estimenation or nominated b of q
• new rates are negotiated by breaking down the old bofq and adjusted for new circumstances