Procurement & Tendering Flashcards
What are the sections of a procurement report?
Overview of procurement, the works and the client objectives
Procurement routes & forms of contract available and how they link with objectives
Procurement methods
Recommendation
How would you deal with errors in submitted tenders?
The JCT tendering practice note has 2 alternatives:
▪ Alternative 1: Tenderer is notified of errors and given an opportunity to confirm or withdraw
▪ Alternative 2: Tenderer is notified and given opportunity to amend genuine errors. Not an opportunity to reprice the whole works! Confirm / amend the error
Can you give me some advantages & disadvantages of Traditional procurement route?
Advantages
○ Client retains design
○ Tenderers are pricing the same thing
○ Fixed price / price certainty (BoQ. Use rates for changes)
Disadvantages
○ Longer duration
○ No contractor buildability input
○ Dual responsibility (Employer = design, Contractor = construction)
Can also add in Contractor’s Design Portion (CDP)
Construction risk with the contractor
Design risk is with the client
Can you give me some advantages & disadvantages of Design & Build procurement route?
Advantages
○ Start on site quicker - overlap of design & construction
○ Contractor experience - buildability input
○ Risk with contractor
Disadvantages
○ More difficult to assess tender returns
○ Employer changes difficult to value (expensive)
○ Contractor will add risk premiums into tender return
Can you give me some advantages & disadvantages of Construction Management procurement route?
Advantages
○ Speed - start on site earlier and finish quicker due to overlaps
○ Prices may be lower as direct with subcontractor (no uplifts)
○ Changes in design can be accommodated without paying a premium
Disadvantages
○ Price certainty not achieved until the last package is placed
○ Client must be experienced
○ Consultants and contractors to manage
Riskiest for the client
Can you give me some advantages & disadvantages of Management Contracting procurement route?
Employer appoints a managing contractor to manage the whole build process (they appoint subcontractors).
Paid a fee % on construction costs.
Responsible for overall risk.
Advantages
○ Reduced duration - overlap of design & construction
○ MC provides buildability input
○ Single point of responsibility
Disadvantages
○ Price certainty not achieved until the last package is placed
○ Need informed and proactive employer
○ No incentive for CM
What checks would you carry out on a submitted BoQ?
- Arithmetic checks
- Errors
- Items not priced (if blank assume they are included)
What are the key tender documents in a tender pack?
- ITT (Invitation to tender) - contains list of tender pack and return date, scope, how it’s evaluated
- Employer’s requirements - design information, surveys, planning conditions
- Pre-construction information
- Form of Tender
- Pricing document
- Prelims - contract conditions and amendments
- Quality questions
- Certificate of non-collusion
- Evaluation criteria / Scoring matrix (Quality : Price)
What is Form of Tender?
Signs and returns with tender submission.
Includes:
▪ Tender sum
▪ Date price is valid until
▪ Construction period
▪ Tenderer details and signatures
▪ Acceptance of T&Cs
What is the difference between a clarification and a qualification?
▪ Clarification - telling you what’s in there
▪ Qualification - trying to change the terms of the tender / contract
What is the difference between procurement and tendering?
Procurement is the overall act of obtaining goods and services, and the strategy on how these will be acquired.
Tendering is falls within procurement and is the process of inviting tenderers to bid for the works, and then appointing a contractor.
What are the advantages of a two-stage tender?
- Early Involvement and Collaboration
- Improved Cost Certainty
- Risk Sharing
- Time Efficiency (overlap)
- Stronger Relationships
- Reduced Tendering Costs
- Flexibility in Design
What would you include in a tender recommendation report?
- List of tenders received.
- Initial tender return totals.
- Qualifications / clarifications.
- Post tender adjustments / revised tender sum.
- Quality scoring.
- Financial scoring.
- Comparison against other submissions and PTE / normalisation
- Recommendation.
How does the risk profile differ from a single stage D&B to a two stage process?
Single stage D&B can still be tendered competitively, so could be more competitive pricing.
Two Stage you are engaging the contractor based on O+P and Prelims, so the there is a slightly higher risk in regard to cost, as it is not competitive beyond this.
Programme - Single stage can go out at 3/3.5, Tow stage at stage 2 with PCSA
Can you tell me the benefits of using an ePlatform for tendering?
Fairness
Auditability
Transparency
What happens if a tender is submitted late?
Public sector - must be dismissed.
Private sector - need to consult with the client to see if they are willing to open.
What is a Framework Agreement?
Umbrella agreement that a party enters in to with multiple suppliers to establish governing terms.
Usually a strategic relationship for the procurement of services.
What is a PQQ and would be included?
Pre-Qualification Questionnaire.
Aim is to ensure proposed contractors have the relevant experience, financial standing and suitable H&S record.
Normally includes:
- Case studies of relevant projects
- Financial information on the company
- Quality procedures
- Company policies
- Health & safety records
What would you consider using if you believe contractor was in financial difficulty?
▪ Company accounts should be reviewed in evaluation and/or at PQQ stage
▪ Consider a performance bond
▪ Consider a Parent Company Guarantee
▪ Raise the concern with the client
Can you name the procurement options you’re familiar with and provide a brief overview?
Traditional – Separates design from construction, contractors tender on a fully designed scheme and the client manages the risk.
Design & Build – Contractor is responsible for completing the design and build. Risk sits with contractor.
Management contracting – Client appoints a management contractor who directly appoints subcontractors to complete packages. Management contractor fee is then based on overall construction cost. Cost certainty not given until all packages have been received.
Construction management – Construction Manager is appointed to manage subcontractors. However, subcontractors are directly appointed by client. Construction Manager has little risk. Cost certainty not given until all packages have been received.
What are the different types of Traditional contract?
With Quants - quants are included in BoQ.
With Approx Quants - cost certainty isn’t guaranteed until the end when a remeasure is undertaken.
What are the 3 main tendering options?
Single Stage - Tender documents issued to tenderers and it’s a competitive tender process that can lead to more competitive pricing.
Two Stage - Outline project design. Contractors compete to be preferred contractor. Sign a Pre Contract Services Agreement to join the design team. Once design is complete, the contractor and client enter negotiations to agree final price and contract.
Negotiated - Single stage process where the client goes directly to a single contractor and invites them to submit a tender.
Others…Selective Tender (suitable contractors identified and invited to tender) and Open/Public (Advertised, anyone can submit)
You mention that EOI was issued to the list of Contractors on NEPO Framework. What is an EOI and how does it work?
It signals a party’s interest in participating in a project.
The purpose it to gauge interest and capability from potential contractors without any commitment.
Includes information about the issuer’s requirements, the scope of the project or opportunity, and the criteria for selection.
Interested parties submit their EOIs, detailing their qualifications, experience, and how they meet the specified criteria. This helps the issuer assess the pool of potential candidates.
Issue Tender to the shortlisted candidates and invite them to bid for the works.
Have you use eTendering? And what are the benefits?
I haven’t at T&T but when the time comes we have office ‘champions’ that can assist me.
It is being used at Portland Park but using the client’s portal.
Benefits are:
* Reduction in tendering costs (paper & postage)
* Also can track when tenders are opened and ease of collating queries.
* Simplified process - faster
* Fairer assessment between tenders
What the the procurement methods used in the Public Sector?
- Open Tendering (any supplier can bid)
- Restricted Tendering (pre-qualified suppliers invited to bid)
- Competitive Dialogue (complex, discuss requirements)
- Negotiated Procedure (Used in exceptional cases)
Can you name any RICS documents you’ve use in connection with tendering?
RICS Professional Guidance Note - Tendering Strategies and eTendering
What is lean construction?
A project management approach that focuses on maximizing value and minimizing waste throughout the construction process
When are you more likely to advise a client to go down a single stage traditional route over 2-stage route?
When they require
* cheapest price
* they have a developed design
* they wish to remain in charge of the quality / design
How did you go about normalising tender returns that you received?
Cheapest contractor scored highest then others pro-rated against it.
Add score from quality questions to get final score.
How would you reduce the negatives of a 2-stage tender?
- Request at least 3 tender returns for each package
- Build in incentives (pain/gain)
- Insist on open book
Can you give me some key points on the Procurement Act 2023?
1) Simplification and Unification:
The Act consolidates over 350 different procurement regulations into a single, streamlined regime. This aims to make the procurement process quicker, simpler, and more transparent.
2) Value for Money and Public Benefit:
It places a strong emphasis on achieving value for money and delivering public benefits. This includes ensuring that public procurement contributes to social value and economic growth.
3) Transparency and Integrity:
The Act introduces measures to enhance transparency and integrity in the procurement process. This includes tougher rules to exclude suppliers involved in unethical practices, such as modern slavery.
4) Support for SMEs and Social Enterprises:
The Act aims to open up public procurement to small and medium-sized enterprises (SMEs) and social enterprises, making it easier for them to compete for and win public contracts.
5) Central Digital Platform:
A new central digital platform will be created for suppliers to register and store their details, which can be used for multiple bids. This is intended to accelerate spending with SME
Can you advise on the advantages and disadvantages of utilising a framework agreement?
Advantages:
Create relationships - spirit of collaboration, Save time - fast procurement process, Contractors pre-qualified, Rates/prices usually agreed upfront
Disadvantages: Less flexibility, reduced competition, potential for complacency, legal complexity
What are the benefits and limitations of early contractor involvement in the procurement process?
Utilising them for their buildability input to assist with the design, VE input and their links with specialist contractors. Improved cost certainty. Risk management.
Limitations - success of this approach depends on clear communication, trust, and effective management.
