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JH APC > Procurement & Tendering > Flashcards

Procurement & Tendering Flashcards

1
Q

What is the traditional procurement route?

A

The design is completed by the client’s design team before competitive tenders are invited and a main contractor is employed to build what the designers have specified

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2
Q

What is the advantages of traditional procurement?

A
  • Retain control, meaning meets ER betters
  • Increase cost certainty
  • Easy to arrange design changes
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3
Q

What is the disadvantages of traditional procurement?

A
  • Longer Duration due to no overlap with construction
    -No contractor input
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4
Q

What is the design and build procurement route?

A

Contractor is responsible of full\part of the design.

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5
Q

What is the advantages of design and build procurement?

A
  • Single point of design responsibility
  • Early start on site
    -Earlier price certainty
    -Contractor expertise used
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6
Q

What is the disadvantages of design and build procurement?

A

-Relies on comprehensive ERs
- Client has to commit to early concept design
-Variations hard to arrange and expensive
- Harder to determine value for money

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7
Q

What is the management contract procurement route?

A

A management contractor is employed to contribute their expertise to the design and to manage construction with a management fee being paid to them for doing so

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8
Q

What is the advantages of management contract procurement?

A

-Shorter programme
-Contractor expertise used
- Easy change
- Competitively let

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9
Q

What is the disadvantages of management contract procurement?

A
  • price not received until the last package
    -Late design change will affect let packages
    -Little incentive for MC to reduce cost
  • Mc have little legal responsibilities for the default of the works contractor
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10
Q

What is the construction management procurement route?

A

The employer places a direct contract with each of the trade contractors and utilises the expertise of a construction manager who acts as a consultant to coordinate the contracts

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11
Q

What is the advantages of construction management procurement?

A

-Reduced programme
- CM contribution to design and planning
- Clear responsibilities
-Easy change in design without cost

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12
Q

What is the disadvantages of construction management procurement?

A
  • price certainty not achieved
    -Late design change will affect let packages
  • Client must have a hands on approach with lots of consultants and contractors
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13
Q

Most used procurement route?

A
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14
Q

What is a negotiated tender?

A
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15
Q

What is partnering in terms of procurement?

A
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16
Q

Advantages of partnering?

A
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17
Q

Disadvantages of partnering?

A
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18
Q

What is a two staged tender?

A
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19
Q

Advantages of two stages?

A
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20
Q

Disadvantages of two stages?

A
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21
Q

Name pricing documents at tender stage?

A

-BoQs
- SoRs
-CSAs
- Activity Schedule

22
Q

Name pricing options?

A
  • Lump Sum
  • Cost Plus
    -Remeasure
  • Target Cost
  • Guaranteed max price
23
Q

What is a lump sum contract?

A
  • Fixed priced for a set amount
  • Determined by the contractors estimating their cost + OH&P
24
Q

Two stage tender?

25
Advantages of Two stage tender?
26
Disadvantages of Two stage tender?
27
Advantages of lump sum?
- contractor takes on risk and benefits from increased profits -Employer cost certainty
28
Disadvantages of lump sum?
- High risk to contractor -Increased Tender price
29
What is a cost plus contract?
Cost reimbursable contract where the employer pays for the cost incurred + pre-agreed OH&P amount
30
Advantages of cost plus?
- Flexible -Inaccuracies in initial bid aren't as detrimental as lump sums contracts -Fluid design changes
31
Disadvantages of cost plus?
- Uncertain final value - Contractor may deliberately incur cost for higher profit
32
When are cost plus usually used?
- Unclear nature of scope -Suits emergency works such as infrastructure repair
33
Remeasurement contract?
- Cost agreed on pre-agreed unit rates -Works measured and priced on agreed rate
34
Advantages of remeasure contracts?
- Competitive tendered rates used
35
Disadvantages of remeasure contracts?
- Less cost certainty until project is complete - Risk to employer higher than lump sum
36
Target price contract?
- Set early in the project cycle - Cost savings and overruns are shared between the contractor and employer based on agreed terms ( pain & gain)
37
Advantages of target price contract?
- Contractor is incentivised to reduce cost - Risk is shared
37
Disadvantages of target price contract?
- Pain and gain mechanisms usually expose the employer to more risk than the contractor - Pain and gain can be hard to understand
38
What is procurement?
The act of obtaining goods and services for a construction project.
39
What factors influence procurement route selection?
-TIME -COST -QUALITY -RISK ALLOCATION
40
How does a traditional route work?
-The contractor takes responsibility and financial risk for the construction of the works to the design produced by the client’s design team for the contract sum within the contract period. -The client takes the design responsibility and risk for the design and design team performance. (Direct contractual relationship with the Architect)
41
When is a traditional route appropriate?
-If the employer has had the design prepared. -If the design is substantially completed at time of contractor selection. *-The client wishes to retain control over the design and specification. -If cost certainty at start on site is important. - The shortest overall programme is not the client’s main priority
42
How does a D&B route work?
The employer gives the tenderers the ‘Employer’s Requirements’ and the contractors responds with the ‘Contractor’s Proposals’, which include the price for the works. -Design responsibility goes to contractor
43
When is a D&B route appropriate?
- Early start on site, overlaps construction phase -Minimise client risk
44
How is design coordinated in D&B?
- Outsourced designer - Novated design team - In house
45
How does a Management route work?
-The management contractor has direct contractual links with all of the works contractors. -They have the responsibility for the construction works without actually carrying them out. -Not all of the design need be completed before the first works contractors start work. -The MC selects the works contractors through competitive open book tender. *-The client reimburses the cost of these packages to the MC plus their management fee.
46
When is a Management route appropriate?
- When an early start on site is paramount over cost certainty
47
How does a Construction Management route work?
-The trade contactors carry out the work. -Supervises the construction process and coordinates the design team. * No contractual links with the trade contractors or members of the design team. * Their role includes preparation of the programme, determining requirements for site facilities, breaking down the project into suitable works packages, obtaining and evaluating tenders, coordinating and supervising the works.
48
When is a Construction Management route appropriate?
-Early start needed -Maintenance of flexibility of design and construction strategy
49
Difference between CM & MC?
-CM the client is in direct contractual relationship with each trade -MC the client only has a relationship with the MC
50
What is a Guaranteed maximum price?
A lump sum contract under which there is no adjustment of tender price unless design changes are requested by the client inc design development risk

JH APC (8 decks)

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