Procurement + Tendering Flashcards
- What are the most common procurement routes in the UK?
What are the most common procurement routes in the UK?
Traditional
Design and Build
Management Contracting
Construction Management
What is the difference between construction management and management contracting?
Management Contracting - the client does not hold the direct contract with the trade contractors
Construction Management – the client will hold the direct contract between them and the trade contractors
What is the difference between single and two stage tenders?
Single stage – The project is tendered once, and the contractors will provide one lump sum price for the works
Two-stage - Split into two different tenders
First Stage – The contractors will price for their PCSA, Prelims & OH&P
Second Stage – The contractor will provide their sub-contracted packages which will then form the CSA.
How do you maintain competitiveness in a negotiated tender?
Conduct an open book process
Ensure there is 3 sub-contractor returns for each element of the works / packages
What is a framework?
A framework refers to a process where a client will shortlist several contractors if they have a large pipeline of projects coming up. They are then appointed on the framework and can be “called-off” to tender for different projects / complete works.
Can you talk us through the tender documents that you have prepared on one of your projects?
On Quad Three I prepared the Instructions to Tenders, this outlined all the project information including the brief, details on the tenders, scoring information, how long the tender will be open for and when tenders will need to be returned and how.
In addition to this, was also the Employers Requirements which included all the necessary design information, survey information, pre-construction information, prelims etc.
How were the contractors’ tenders to be scored?
The scoring system used was a 30:70% cost: quality.
Where were the details of how they would be scored written / detailed?
This was included in the Instructions to Tenderers that was issued to the contractors.
What do you need to consider on publicly funded projects that you might not need to on private projects?
I’m aware that there are specific timeframes when dealing with publicly procured projects. These would be outlined on the find a tender service website and under the public contracts regulations 2015.
What is the Find a Tender Service?
Find a tender service is used for publicly procured projects that are over a certain value.
In my experience, on GE3b, as the project was over £5.3m it would need to be publicly tendered (although this was on an already agreed framework)
Can you talk us through the procurement route you have used on one of your projects, and why it was suitable for your client / project?
On Quad Three we used the Design and Build Procurement Route
This was used as the client wanted to transfer the design risk to the contractor, gain buildability from them in the design to further limit risk and overlap construction and design to reduce the total programme time.
What is an invitation to tender? What did you include on the Q3 ITT?
An invitation to tender is a document which is sent to the shortlisted contractors for a project
This provides them with all the necessary information to provide their tender:
Design Information
Pre-construction information
Prelims
Surveys
Insurance information
Project details and brief
Form of tender
Pre-construction services
Non-collusion certs
Pricing document
Can you give an example of a tender addendum you issued? Why is it important to issue addendums in a timely manner?
Certain elements of the design information were not issued at the start of the tender process.
For example, the pre-construction information finalised report
It’s integral to the tender process to issue these in a timely manner so as to not cause the contractor any delay in pricing.
Should you share tender queries with all contractors? When might you not do this?
All tender queries should be issued to all contractors UNLESS it will impact the tenders of the other contractors negatively. For example, if it discloses information of another contractor or suggests not-compliant tendering.
What does normalisation mean?
Normalisation refers to the process of “normalising” the tenders. For example, where a contractor has excluded an item of works, we can establish an allowance using the other tenders received and our cost plan allowance.
Can you give me a brief overview of what you included in your tender report?
Executive summary
Record of tender opening and summary
Normalisation and adjustments
Summary of tenders following adjustments and normalisations
Tender queries
Risk items
Scoring process and results
Conclusion and recommendation
How did you apply the first stage tender rates to a worked scenario for your client? Can you run me through this?
These were conducted by applying our cost plan allowance as the baseline for the construction value to all tenders. This allowed us to then see the impact this would have on an “overall” view of the project and the likely outturn cost to be expected.
What is D&B risk? What % did the winning contractor tender for this and OH&P?
D&B risk refers to the design and build risk for a contractor, as they are taking on both the design and construction of the project
3.5% OH&P and 1% DB risk
How do you conduct package reviews? What are you looking for to direct the contractor or client?
These were conducted through an open book process
We were given the tenders “raw” and the “adjusted” tenders
We were looking to see 3nr competitive returns for each package so as to ensure value for money as well as assessing these against our cost plan allowances for each element of works
What was the cost per m2 on GE3B? How did this sit in relation to your internal benchmark data?
Excluding abnormals, the build cost was £3,500/m2
This sat in the upper percentile when benchmarked
However, this scheme did have slightly larger units than we would typically expect which spoke to it sitting within the upper percentile.
On Quad Three, how did you ensure that your two-stage tender process provided value for money for the client?
We ensured that we ran an open book tender process with the contractor
Additionally, a minimum of 3nr returns were received for each sub-contracted package
How did you structure VFM report?
Executive Summary
Details of the 1st stage tender
Review of each of the 2nd stage package returns, normalisation, adjustments and errors commentary and summary
Benchmarking
Conclusion
Tender Queries were also appended to this document
What procurement route was Gascoigne East 3b? What pricing document did you use?
We used a Contract Sum Analysis for this project, as it was D&B.
On Gascoigne East, you mention it is a public sector client. Did you have to comply with public contract regulations? If so, which ones?
Had to comply with Find a Tender Service (Replacement of OJEU) – following Brexit in 2021
£5.3m in value then it will need to be procured in line with the Public Procurement Regulations 2015
Which, in your opinion, is the riskiest procurement route?
The riskiest procurement route in my opinion would be Construction Management
The client is liable for the direct contracts placed with sub-contractors, making them liable to deal with any claims or re-appointed should they go insolvent.
What is the difference between the two alternatives listed in the JCT Tendering Practice Note (2017)?
Alternative 1 outlines that a contractor can either; with stand by their error or withdraw from the process
Alternative 2 outlines that a contractor can either; stand by their error or correct their error
What did you analyse during the first stage tender of Quad 3?
The 1st Stage Tender involved a review of the contractor submitted Prelims, OH&P and DB risk.
How did you normalise the tenders for Quad 3?
Tenders were normalised using the other returns received from the market (providing they were deemed to be accurate) along with our Cost Plan allowances. This allowed us to inform their tender with an average across these three different prices.
What’s an ITT?
An ITT is the instructions to tenderers
This includes all the information that is issued to the tendering contractors.
This will include details of the project, how long the tender period will be, the final date for tender submissions, how the tenders should be submitted, how tender queries will be managed, how errors will be dealt with (alternative 1 or 2)
How have you dealt with errors?
On my projects, GE3b and Harwell Quad Three, alternative 2 has been used. This allows the contractor to either stand by their error or correct it in their tender submission.
Contents of your tender report?
Executive Summary
Record of tendering openings and raw returns summary
Summary of adjustments, normalisation and errors
Summary of normalised and adjusted returns
Comparison of cost plans figures
Tender queries
Scoring
Conclusion
What benefits does a PCSA bring?
Buildability input into the design of the works
Pre-construction activitys
Value Engineering assistance
33
Traditional
Construction Management
Management Contracting
What professional guidance are you aware of in relation to procurement and tendering?
Procurement - RICS Developing a procurement strategy
Tendering - JCT Tendering Practice Note 2017
What form of procurement enables to the client to transfer most risk to the contractor, and vice versa?
Most risk transfer to the contractor = Design and Build
Least Risk transfer to the contractor = Construction Management
When might a negotiated tendering strategy advantageous to your client?
Reduces the period of procurement and tendering, therefore advantageous if an earlier start on-site is a key client requirement - TIME
If the client has a good relationship with a contractor, for example they’ve delivered multiple schemes successfully with a contractor - QUALITY
Could you describe the process of agreeing a second stage tender package?
Receive the sub-contractor returns from the contractor
This will include the “raw” returns, along with any adjustments
This will then be checked by me “the PQS” who will check the return for any arithmetical errors, superfluous costs, scope transfers to other packages and adjustments.
I would then raise formal queries for each package to the contractor for their response.
What happens when you come across an error in the tender you are analysing?
It will depend on the method of dealing with errors as per the JCT Tendering Note and Prelims
If Alternative A is being used, the contractor can either stand by their error or withdraw from the process
If Alternative B is being used, the contractor can either stand by or correct their error
Why has the industry seen increasingly less traditional procurement recommended?
Traditional procurement typically means that the client is liable for design development risk and designing the scheme completely
This has led to design and build being used more as it allows the client to offload this risk to the contractor, whilst also gaining their input to the buildability of the scheme.
Additionally, contractors tend to prefer design and build procurement as they are able to “build in” their design risk premium and also be more aware of the design that they are taking on.
