Procurement & Tendering Flashcards
Difference between procurement and tendering
Procurement is the overall act of obtaining goods and services from external sources (i.e. a building contractor) and deciding the strategy on how those goods are to be acquired by reviewing the client’s requirements (i.e. time, quality and cost) and their attitude to risk. Tendering is the bidding process, to obtain a price; and how a contractor is actually appointed and it is an important phase in the procurement strategy but procurement involves much more than simply obtaining a price.
Why procurment is important in Construction?
1) Risks in Construction : Cost, Time, Quality, (TCQ) Geographically dispersed, Unforeseen Risks on site, Constructability , Technological adavancement. (GRCT) 2) Risk Management Tool
Main factors of selection a procurement path?
1) Time 2) Cost 3) Quality TCQ 4) Clent’s risk taking ability 5) Size/Complexity of the project 6) Need of Variations 7) Client’s involment RSVI
What are the most commonly used procurement paths available?
Traditional , Design and build, Management, Design and Manage
What is Traditional path, types and advantages and disadvantages?
Consultants prepare tender documents and then a main contractor is appointed. TYPES: i) SEQUENTIAL METHOD: Contrctor receive complete information and then proceed construction. ii) ACCELERATED METHOD: Contractor becomes part of design team by tendering , this can be done i) through the design by putting some (30%) works under provisional sum ii) Negotiation iii) Two stage tendering iv) Contraction by packagewise. ADV: Well known, QTLY is under Emp’scontrol , Power to change, Reasonable price cetainty , Variation can be easy, . DISADV: Time consuming, More variations (reduce cost certainty), Buildability is less
What is design and build path? Different types and advantages and disadvantages?
Single contractor will do the designing and construction. TYPES: 1)Single entry - The contractor is appointed at the beginning to design and construct the project (without competition), 2) Competitive entry - Selecting a suitable firm based on outline design and price (competition), then proceed with chosen firm 3) Develop and design - outline design is developed separately by the Consultant prior to inviting to submit their proposals. ADV: Cost certainity, Single point resposibility, Less time consuming, More buildability (CSLB) DISADV: Cost is high, Quality may be compromised, Variations are costly, Bid are difficult to compare(More suitable for simple buildings) (CQVC)
What is management path? Type and advantages and disadvantages?
Appointing a constrution manager to manage and co-ordinate the design and construction (fee based) TYPES: Construction Management and Management Contracting. In CM Client is having a direct contractual links with the contractors whereas in MC Contraction Manager is having the direct contractual links. More suitable for COMPLEX / FAST TRACK projects ADV: Direct contractual relationship, Direct Cost Control, Contractor can control the design DISDADV: Less Cost certainity, More responsibility
What is Design and manage path ?
Client invites management (single) contractor to take responsibility for also managing the design phase.(all procument works by specialist contractor) ADV: Single point resposibility, Less time consuming, More buildability DISADV: Quality /lost of design control, No direct contractual control
What is partnering & it’s advantages and disadvantages (Forms)
Partnering is a management approach used by two or more organizations to achieve specific business
objectives by maximizing the effectiveness of each participant’s resources. ADV: Less disputes, Open book win win culture, Early supply chain involvement, Improve design and construction times with certainty DISADV: Can be abused by one party, Requires more client involment, Cost of training , workshop etc., Lack of confidentiality
‘- PPC 2000 (Project Partnering Contract)
- NEC Partnering Option (New Engineering Contract),
- ICE Partnering Addendum
What is term (framework) contracts? Advantages and disadvantages?
Term contract enable employers and contractors to enter into long term arrangements where there is likely to be a regular flow of work for the contractor. Ex: Regular Maintenance (existing assets) / Minor works. ADV: call of for urgent requirements quickly, Ease of placing contracts (avoidance of repetition), Further competition amoung the framework suppliers (mini-competition). DISADV: Client needs to be sufficiently experienced, May restrict the overall choice of suppliers
What is Serial contracting?
Contract awarded to same contractor in series without a competition with same rates (repetitive design) Ex: To Build schools, Housing
What does it mean by Call off contract?
• Enter into a contract agreement for a certain period of time. They don’t know project going to start. Whenever starts they will give a work order. There is no guarantee that would get a project or not.
What is ‘turnkey’ and ‘develop and construct’ ? Can you explain?
In turnkey projects, the contractor will carry out the design, construction as well as supply and installation of fitting, furniture etc. as well. The client can come and occupy or use the building for his requirement.
In “develop & Construct” method the design will be developed upto a certain extend and then contractor will develop the design and carry out the construction works by himself.
What is Prime Contracting? Its advantages and disadvantages?
Prime contracting is a form of procurement in which the client enters into a relationship with a contractor who provides a single point of contact (prime contract) for a supply chain to deliver one or more projects. ADV: Improve supply chaiin management and collaboration, Economies of scale. DISADV: Exclude smaller companies, They can become too ‘cosy’ (danger of fraud)
What is PPP / PFI and Routes?
PPP - Private Private Partnerships, PFI Private Finance Initiative. PPP Routes : BOT- Built Operate and Tranfer, BOOT - Built Operate, Own and Transfer, BOO - Built Operate and Own
What is Strategic Alliance?
A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.
