Procurement & Tendering

Question 1

What is procurement?

Answer 1

The overall process of acquiring construction work or services.

Question 2

What is tendering?

Answer 2

A structured procedure for generating quotation from suppliers or contractors looking to obtain an award of business activity either under competition or via negotiation with a single contractor.

Question 3

What should be considered when deciding on a procurement strategy?

Answer 3

1. The specifics of the project.
2. The client objectives regarding:
   a. Cost
   b. Time
   c. Control
   d. Quality
   e. Risk

Question 4

What are the 2 main processes of tendering?

Answer 4

1. The bidding process
2. Appointment

Question 5

You mention single stage tendering, can you give an example where you have used this? And why it was chosen?

Answer 5

I have used single stage tendering on the UCB Link refurbishment as the client had a list of trusted and capable contractors from previous projects which were suitable to tender for the scheme.

Question 6

You mention two stage tendering, can you give an example where you have used this? And why it was chosen?

Answer 6

I have used two stage tendering on the MTC Cell 4 project. As this project was of secure nature, specialist contractors and sub-contractors were required. Two stage tendering allowed early involvement of the contractor, allowing the client and design team to utilise their experience and buildability advice early.

Question 7

You mention negotiated tendering; can you give an example where you have used this? And why was it chosen?

Answer 7

I have used negotiated tendering on the UCB Moss House project due to the client and contractor’s relationship having successfully carried out various smaller value projects.

Question 8

What are the different types of procurement strategies?

Answer 8

1. Traditional
2. Design & Build
3. Management contracting
4. Construction management

Question 9

How do you identify the Client requirements before recommending a procurement route?

Answer 9

I would hold detailed discussions with the client and design team to identify their priorities in terms of cost, time, quality, risk, control requirements and experience.

Question 10

What procurement route if client wants an early start on site?

Answer 10

Depends on other client requirements. If cost is not key, CM or MC would be ideal as shorter to no tender period. If cost is key, D&B route.

Question 11

What is traditional procurement?

Answer 11

1. Where the design is completed by the client’s design team before a competitive tender is issued and the main contractor is appointed to build what the designers have specified.
2. Contractor = takes responsibility and financial risk for the construction of the works to the design produced by the clients design team.
3. Client = takes responsbilibyt and risk for the design and design team performance.

Question 12

When might traditional procurement be appropriate?

Answer 12

1. Employer has had the design prepared already.
2. Design is substainally complete at the time of contractor selection.
3. Client wishes to retain control over the design and specification.
4. Cost certainty is important early (SoS).
5. Shortest overall programme is not the clients main priority.

Question 13

What are the benefits and drawbacks of traditional procurement?

Answer 13

1. Benefits
   a. Retaining control of design might lead to higher quality.
   b. Offers increased levels of cost certainty before commencement on site.
   c. Design changes are reasonably easy to arrange and value.
2. Drawbacks
   a. Project duration may be longer due to no design/construction overlap.
   b. No design and planning input by the contractor.
   c. Strategy based on price completion may lead of adversarial relationships.
   d. Dual point of responsibility (contractor = construction & client = design).

Question 14

What is design & build procurement?

Answer 14

1. Where the contractor is responsible for the design, planning, organisation, control, and construction of the works to the ERs.
2. Employer gives tenderers the ‘ERs’ and contractors respond with their tender returns (CPs), including a price.
3. Client transfers design responsibility to MC who holds contractual relationship with architect.

Question 15

When might D&B be appropriate?

Answer 15

1. Early start on site required (design/construction overlap).
2. Client wishes to minimise their risk due to transfer of design responsibility to MC.
3. For technical and complex projects that require contractors’ expertise.
4. Employer does not want to retain control over design development.

Question 16

Who carries out the design for the MC on a D&B?

Answer 16

1. Outsourced to design company.
2. Novated architect.
3. In-house design team.

Question 17

What are the benefits and drawbacks of design and build procurement?

Answer 17

1. Benefits
   a. Single point of responsibility.
   b. Earlier start on site.
   c. Early price certainty.
   d. Use of contractor’s expertise during design.
2. Drawbacks
   a. Clients may find it hard to prepare a sufficiently comprehensive brief.
   b. Client has to commit to concept design early.
   c. Variations from initial brief are hard to arrange and costly.
   d. Harder to compare tenders and determine value for money.

Question 18

What is management contracting?

Answer 18

1. 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.
2. MC has direct contractual links to all sub-contractors.
3. MC has responsibility for construction without carrying out work.
4. MC selects work contractors through competitive open book tender.
5. Client reimburses the cost of packages to the MC plus management fee.

Question 19

When might management contracting be appropriate?

Answer 19

1. Client does not want cost certainty before commencement.
2. Early start on site is priority.

Question 20

What are the benefits and drawbacks of management contracts?

Answer 20

1. Benefits
   a. Overlap of design/construction so shorter programme
   b. Contractor contribution to design and planning process
   c. Changes can be accommodated if package not yet let
   d. Works let competitively at current market prices on firm price basis
2. Drawbacks
   a. Price of project not received until last package is let
   b. Late changes may affect packages already let
   c. Little incentive for MC to reduce costs
   d. MC has little legal responsibility for defaults on subbies

Question 21

What is construction management?

Answer 21

1. 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.
2. CM supervises the construction process and coordinates the design team.
3. CM has no contractual links with subbies or design team.
4. Role includes preparation of programme, preliminaries, deciding the works packages, obtaining and evaluation tenders, co-ordinating and supervising the works.
5. Client holds contractual relationship with subbies directly.

Question 22

When might CM be appropriate?

Answer 22

1. Large, complex projects where CM buildability knowledge can be used early, including specialist input from trade contractors.
2. Early SoS is key.
3. Flexibility in design is needed.
4. Price certainty before commencement not key.
5. Client is experienced in construction.

Question 23

What are the benefits and drawbacks of construction management?

Answer 23

1. Benefits
   a. Project duration reduced from overlapping design and construction
   b. CM can contribute to design and planning process
   c. Role, risks and relationships for all parties are clear
   d. Changes in design can be accommodated without a premium
   e. Prices may be lower due to direct contracts between client and subby
   f. Client has means of redress to trade contractors through direct contract links
2. Drawbacks
   a. Price certainty not until last sub package is let
   b. Changes may affect packages already let
   c. Client must be proactive and hands on
   d. Client has a lot of consultants and contractors to deal with

Question 24

Difference between MC and CM?

Answer 24

1. CM = Client is in direct contractual relationships with subbies.
2. MC = MC is in direct contractual relationships with subbies. Client with MC only.

Question 25

What is a framework agreement?

Answer 25

A long-term agreement between a buyer and multiple contractors that establishes terms for contracts that may be awarded during the agreement’s lifetime. Framework agreements are used to streamline the procurement and delivery of construction projects and can help to reduce costs and speed up the process. Mainly used in public procurement.

Question 26

Can you provide examples of framework agreements you are aware of?

Answer 26

1. SCAPE (A public sector framework for consultancy, civil engineering, construction, and utilities works).
2. Fusion21 (A social enterprise framework in public sector procurement through social value).
3. Pagabo (Pagabo act as an agent and manage Framework Agreements on behalf of public sector Contracting Authorities).

Question 27

What are the benefits and drawbacks of using a framework agreement?

Answer 27

1. Efficiency – reduces PQQ time and tendering costs.
2. Consistency – utilising the same contractors.
3. Transparency – potential to use agreed rates etc.

Question 28

What is a PQQ?

Answer 28

A pre-qualification questionnaire is a pre-tender document, and broadly a PQQ is a list of questions for a potential supplier whose core aim is to assess compliance, suitability and ability to deliver the works tendered for.

Question 29

What would you expect to see on a PQQ?

Answer 29

1. Capabilities – technical, professional and financial (turnover, accounts etc)
2. Compliance – meet minimum standards and regulations
3. Experience – relevant experience on projects
4. H&S – use the right materials, dispose of waste correctly, no accidents etc
5. CVs and management structure
6. Comments on amendments / bonds etc

Question 30

Benefits of using a PQQ?

Answer 30

PQQs help streamline the procurement process by eliminating unqualified candidates early on. This saves time and resources for both the contractor and the suppliers.

Question 31

What tendering strategy would you typically use a PQQ?

Answer 31

Single or two stage tendering.

Question 32

What is the JCT tendering practice note 2017?

Answer 32

1. A general guidance document.
2. Provides an informative and practical tool for employers, contractors, and professional advisers involved in private or public sector procurement for the letting of construction contracts in the UK.

Question 33

Summarise the contents of the JCT tendering practice note 2017.

Answer 33

1. Reviews each tendering procedure, then breaks the note down into 3 sections:
   a. Preliminary enquiry (project information + PQQ)
   b. ITT and Tender (documents involved, criteria and compliance)
   c. Assessment and award (assessment, examination, notification)

Question 34

What was the tendering practice note updated for in 2017?

Answer 34

1. Updated to reflect best practice in public and private sectors.
2. Guidance on pricing errors (by providing the tenderer with the detail of error).
3. Model forms (pre-selection and tender phase of private sector tenders only).
4. Guidance on new regs/refers to GOV.UK for public tendering.

Question 35

What projects have you prepared a suite of tender documents for?

Answer 35

I have prepared a suite of tender documents for Logicor park, MTC Cell 4 and the Molson Coors Cold Room project, as well as various UCB projects.

Question 36

What would you expect to see in a suite of tender documents?

Answer 36

In accordance with the JCT practice note 2017, I would include the following:
1. ITT
2. Instructions including:
a. Date/time for return, to who, site visits, programme, error procedures and scoring matrix
b. Proposed contract amendments
c. Pricing document
d. Specification and drawings
e. Employer’s requirements
f. PCI
g. Form of tender

Question 37

What is the form of tender?

Answer 37

A pre-printed formal statement in which the tenderer fills in the blanks. Tenderer provides their name, address, and the sum of money for which they offer to carry out the works.

Question 38

What are the ERs?

Answer 38

1. Set out the clients requirements for the project (size, function, etc).
2. Level of details depends on design completed to date.
3. Includes status of planning permission if applicable.
4. Outline design, structure and spec of info provided.

Question 39

What are the CPs?

Answer 39

1. Contractors’ response to ERs.
2. Key documents for the client to consider at tender review stage.
3. Include plans, elevations, sections etc
4. Materials and workmanship details are often provided.

Question 40

You mention there were errors within a tender return on a UCB project, can you summarise the process you went through to conclude?

Answer 40

1. Within the tender preliminaries, it confirmed errors will be priced in accordance with Alternative 2, therefore the tenderer was given the opportunity to either confirm their offer or amending it to correct genuine errors.
2. Should the contractor not have amended their offer, an endorsement signed by both parties would be required.
3. However, the contractor did amend their offer and returned an updated return clearly highlighting where changes had been made.

Question 41

Are you aware of Alternative 1? Have you ever used this?

Answer 41

I am aware of Alternative 1 (accept or withdraw tender), however I have not used this.

Question 42

You mention you prepared a tender report for Logicor Park, please explain what process you went through to conclude this report?

Answer 42

1. Following receipt of the tender returns, all returns were checked for items such as arithmetical checks, compliant programmes, and assumptions and exclusions. Any queries that arose were dealt with via the clarification registers.
2. Following conclusion of the clarification registers, a tender report was generated which covered the following items:
   a. Introduction (purpose / overview of procurement route – single stage D&B).
   b. Financial commentary (PTE, ROTR, tender adjustments).
   c. Post Tender Interviews.
   d. Clarification registers updates.
   e. Compliance / risks / OH&P etc.
   f. Conclusion and next steps.

Question 43

First stage tender on MTC for a PCSA. What would you typically expect to see on a PCSA agreement?

Answer 43

1. Definition of the services required by the contractor.
2. Timescales for PCSA period.
3. Any contractor design liability.
4. PCSA fee and method of payment.

Question 44

What are the pros and cons of using a PCSA?

Answer 44

1. Pros
   a. Creates better project relationships.
   b. Better relationships are likely to lead to less disputes.
   c. Final account tends to include fewer variations and claims.
   d. Competition can be introduced through open-book approach in 2nd stage.
   e. Gain early involvement from the contractor improving buildability and cost-certainty of the design.
2. Cons
   a. Client loses leverage in the 2nd stage due to lack of competition.
   b. Difficult to gain interest from other contractors should not be successful.

Question 45

Octagon Amenity fit out procurement report, what options did you include?

Answer 45

1. Main Contract was in place and Provisional Sum was entered into the contract for the amenity scope of works.
2. Report considers delivering best value, cost certainty, programme, fulfilling best quality and workmanship, and a strategy that can incorporate some change during the works.
3. The options reviewed were:

a. Midgard (continue with the main contractor).
i. Traditional = client completes design up to RIBA Stage 4.
ii. Contractors Design (D&B) = Client up to Stage 3, Contractor Stage 4 +.

b. Alternative Contractor
i. Traditional = client completes design up to RIBA Stage 4 (out to tender).
ii. Alternative Contractors Design (D&B) = Client up to Stage 3, Contractor Stage 4 +.

4. Recommendation = Midgard – contractors detailed design Client up to Stage 3, Contractor Stage 4 +.
   a. Knowledge of the site, contract matters agreed, single point of responsibility etc.