Procurement & tendering Flashcards
what is procurement
act of obtaining goods & services
what is tendering
how you go about obtaining goods and services
types of tender
open tender
competitive tender
single source
difference between 2 stage tender process and single stage tender process
single stage - full design and price based on that
2 stage- limited design, price on overheads & profits and then firm up in 2nd stage
market prefers 2 stage as less expensive to bid for
what is a negotiated tender ?
through single source, confirm tender price
examples- bloomberg- BES/ sweco/ F+P
Barclays- ISS
long lead items (SOE)
SAS ceiling- 36wk lead time, needed order placed before contractor was onboard. Order was placed and then they were novated to the contractor
requested at stage 3 the long lead items from the consultants any risk items, these were placed with teh contractor under PCSA, using advanced payment and protected with a bond
contract design portion
staircase- riskier design item, client wanted to pass over the risk
based on set of employers requirements,
then signed off following the design submission procedure, in schedule 1 of the JCT contract
the design then gets status
A- approved no comments
B- Approved with comments
C- rejected
what is typically in a PQQ
Company details
Insurance coverage (PI)
Financial information (company accounts/ cashflow)
Relevant experience
Technical/ professional ability/competence
Health and safety policy records
Quality assurance policy
References
what is a bona fide tender
a bid that is submitted in good faith, complete and in correct form (meets bidding requirements
why have a tender bond?
to stop idle tendering and protects prior to ensuring the preferred bidder can undertake the works
what are tender documents
Invitation to tender
Checklist for submission of tender
Contract conditions
Instructions to bidders
Scoring matrix
Form of tender
Tender specifications
Project information- drawings/surveys
Pricing document
Pre construction information
Tender questions eg methodology / teams experience/resource
Receipt of tender
tender process (step by step)
Step 1 – determine requirements
Step 2 – document requirements (tender docs)
Step 3- evaluate responses (to ensure they comply with tender) (bona fide tender return) and establish priorities – quality/time/cost/risk- add weightings to each component
Step 4- create evaluation framework- eg CBRE scoring cards for each tender . weighted scoring helps evaluate
Step 5- set deadline and process timeline
Step 6- reach out to bidders (Pre Qualification Questionnaire) to ensure they are suitable and invite them to tender
Step 7- PQQ/ ethics checks for BDO (then will get ITT or RFP) get cashflow from last 3yrs, dun & bradstreet report to understand credibility
Step 8- briefing document/ tender pack (may include a formal meeting)
Step 9- tender queries/ RFIs- all information is shared between all bidders, agree timescales for TQ
Step 10- brief evaluation team- understand process/ scoring mechanisms
Step 11- receive bids- electronic, have to be in by a certain date/time (in private sector if client is happy to they can receive late bids, public sector this is not allowed- becomes noncompliant)
Step 12- evaluate bids- check they are all compliant
Step 13- clarifications
Step 13a- short list
Step 13b- mid bid interviews
Step 13c- score interviews
Step 14- select preferred bid
Step 15- notify preferred bidder and seek confirmation that they are happy to go ahead with the tender they proposed (do not update other bidders until confirmation)
Step 15a- let other bidders know they were unsuccessful
Step 15b- offer feedback sessions
Step 16- finalise contract (bid forms a component of the contract) (tp b then added number of additional costs, worked with them to negotiate to reduce add costs)
Step 17- award contract
what is framework tendering
Under this arrangement, potential suppliers have an agreed overarching contract which lasts a certain amount of time- eg HSBC
Reduces procurement time
May be required to submit competivite tenders for a project with other framrwork contractors
whats in a procurement strategy
Procurement strategy – how do we get it done, typically at RIBA 2
Key considerations
Project type – large T1 contractor, complexity, construction methods, location- response leads you to type of contractor
Client objectives- time/cost/design control/ risk /complexity – then it comes up with best procurement route
Market conditions – oligopoly in London fir out market
Then sets out types of procurement
Then tendering options, then forms of contract – should always follow that approach
types of procurement
traditional
design & build
managment contracting
construction management
traditional procurement
step 1- (design) emplying consultants to develop design in detail & estimate cost of the works
step 2- (construction) contractor tendering
advantages of traditional procurement
employer retains control over design
tenderers produce tender submission based on the same information- easier to compare returns/ more cost certainty
disadvantages of traditional
project duration may be longer as limited opportunity to overlap design and construction
limited buildability input from contractor
design risk is retained by employer
changes post contract will be a variation
design and build
contractor designs & builds
advantages of D&B
all risk on contractor
client set employers requirements, contractor responds with contractor proposals
single point of responsibility on the contractor
buildability
contractor may know how to produce same quality for cheaper price/ materials
typically quicker than traditional due to overlap
disadvantages of D&B
contractors may try and drive best profit margins - risk of quality
design is only as good as the employers requirements
more complex to review tender returns
employer changes can be difficult to value
less cost certainty
employer has less control
contractor will build in risk premiums
when is D&B suitable?
need to get to site quickly
employer wants to minimise their risk
where project will benefit from early buildability
when client doesnt want to retain control of design
when is traditional suitable
employer has specific design requirements
cost certainty is required
when getting to site quickly isnt as important
least risk to client
design & build
riskiest for client
construction management
management contracting
management contractor manages entire building process then employs subcontractors through packages
paid a fee percentage based on all construction costs
responsible for overall construction works
advantages of management contracting
reduces overall durations
suitable for larger projects
balances control over design and build
single point of responsibility
buildability input early
packages are let competitively
disadvantages of management contracting
no price certainty until last package is let
proactive client required
collateral warranties required for all sub contractors
construction management
employer appoints subcontractors
direct contracts with each trade
construction manager appointed (client could do this)
construction manager programmes the works
CM has no contractual link with the trades
CM has no vested interest in financial outcome
advantages of construction management
get to site quickly
duration reduced design and construction can overlap
construction managers expertise
price may be lower as direct contracts
key disadvantages of construction management
price certainty not known until last package is let
need proactive employer for it to work
lots of management with consultants and contractors
How would you deal with errors in a tender return?
tendering strategies guidance note
alternative 1- give details of error and tenderer has op to confirm or withdraw
alternative 2- give opportunity to confirm offer or amend it
How did your market engagement sessions with contractors influence the procurement approach for the BDO project?
How did you ensure that all contractors had equal access to information during the tender query period?
If a contractor submitted queries after the deadline, how would you handle this situation to maintain fairness?
How did past contractor performance influence project allocation under the framework?
How do employer’s requirements differ for traditional procurement routes compared to design and build contracts?
How do you ensure that lessons learned from previous projects are effectively incorporated into future employer’s requirements?
If contractors showed limited interest in the project during market engagement, how would you adapt the procurement strategy to ensure the project proceeded smoothly?
If tender queries revealed inconsistencies in the tender documentation, how would you address these with the project team and bidders?
How do you ensure that tender documentation and scoring criteria are robust and aligned with RICS best practices?
What else does the JCT Tendering Note 2017 say?
“Preliminary Enquiry - including a project information schedule and pre-qualification questionnaire.
Invitation to Tender and Tender - covering the documents involved, the criteria and compliance.
Assessment and Award - covering assessment, examination of priced documents and related matters, and notification to tenderers.”
Do you accept late tenders?
on BDO, there were a number of late tender returns for the fire engineer tender, one party made the team aware and we agreed to extend the deadline for all parties. I would if aware in advance extend the deadline, as I mostly work in private sector
How do you ensure modern slavery is not present in the supply chain?
firms that turn over £36m have to produce aannual report on how they ensure there supply chain doesn’t allow modern slavery
What are the key considerations for a procurement strategy?
clients objectives on time cost quaoty risk, complexity of project, market conditions
