PROCUREMENT & TENDERING

Question 1

What are the advantages and disadvantages of single stage tendering?

Answer 1

Advantages:
- Maintains competition throughout the process.
- Can reduce the cost of the overall construction.
Disadvantages:
- Doesn’t enable early contractor involvement.
- Dependent on the market – contractors may be more keen on two stages.

Question 2

What are the advantages and disadvantages of two stage tendering?

Answer 2

Advantages:
- Enables early contractor involvement.
- Encourages collaboration.
- Contractor can help identify and manage risks.
Disadvantages:
- Additional fees involved with the PCSA.
- Contractor gains leverage as they continue to second stage – reduced competitiveness.
- Potential that parties may not agree to contract sum – leads to additional costs to retender.

Question 3

How do you evaluate tender returns and how do you then make your recommendation to the client?

Answer 3

• Tender Evaluation:
  o Tender opening.
  o Tender returns checked for compliance with the invitation to tender.
  o Arithmetical checks carried out on cost components.
  o Any non-compliant tenders treated in accordance with the conditions outlined in the
  Invitation to Tender.
  o All tenders aligned on a like for like basis and compared with each other and the pre-tender estimate.
  o Analysis undertaken of resource levels committed by each contractor and on the merits of the team proposed.
  o Post-tender interviews carried out with short listed tenderers.
  o Tenders scored against the pre-determined selection criteria.
• Tender Recommendation Report:
  Prepared and presented to client, including:
  o Tender history.
  o Summary of tender returns.
  o Aligned tenders.
  o Scoring of tenders against technical and commercial criteria.
  o Recommendation on what tender represents overall best value for money.
  o Outline of future actions and contracting approach.

Question 4

What is a letter of intent?

Answer 4

• Expression of intention to enter into a contract at a future date.
• Does not create a contractual relationship (it is not an agreement to agree).

Question 5

What are the dangers of using an LOI?

Answer 5

• They do not cover all eventualities set out in a buildings contract (e.g. Ampleforth v T&T – Client not entitled to LDs and T&T found negligent for failing to warn them of the risks of not getting into contract).
• Allow the contractor a position of back negotiation from a position of strength.
• May act as a disincentive to execute the formal contract.

Question 6

Benefits of Traditional Route?

Answer 6

1. Control of design
2. Cost certainty at point of tender
3. Competitively Tendered
4. Priced BoQ allows for easy assessment of interim valuations & variations

Question 7

Disadvantages of Traditional Route?

Answer 7

1. No Contractor engagement in Design
2. Separation of Design team and Contractor can lead to adversarial atmosphere
3. Client bares risk of design not being completed
4. Client must finish the technical design before tender

Question 8

Advantages of D&B?

Answer 8

1. Contractor’s input on Design and Buildability
2. Overlap of Design & Construction phase (Early mobilisation)
3. Single point responsibility - risk allocation on the Contractor

Question 9

Disadvantages of D&B?

Answer 9

1. Client does not have control of Design
2. Client’s ERs need to be defined earlier
3. CPs must be reviewed and agreed (CPs have precedence over ERs

Question 10

Cost implications of two stage tendering?

Answer 10

1. Can be more expensive with the additional PCSA costs & Design fees
   (Contractor’s buildability input can reduce likelihood of post-contract change)

Question 11

Name a key risk on a D&B project?

Answer 11

CP’s take precedence to ER’s

Question 12

How do you ensure quality on a D&B project?

Answer 12

1. Detailed ER’s
2. Novated Design team
3. Take the level of design by Design team to adequate level before entering into D&B Contract
4. Key Performance Indicators

Question 13

What do the ER’s usually include?

Answer 13

1. Site Details
2. Project Info / Design Info
3. Specifications
4. Design Submission Requirements
5. Prov sums
6. Planning restraints
7. Form of contract
8. Method of presentation of CP’s

Question 14

What are the different types of LOI?

Answer 14

1. Comfort - Intention to act in a certain way (No contractual obligation)
2. Consent to Spent - Works to proceed up to a certain value (Legally binding)
3. Recognition of contract

Question 15

What do you need in place for a Letter of Intent?

Answer 15

Parties Agreement
Contract form / amendments
Intended Contract sum
Limitation of Liability
Procedures (refer to Contract - Payment , dispute, termination)
Confirmation that LOI will terminate on execution of Main Contract

Question 16

What are the risks of a LOI?

Answer 16

Less robust than a Contract
Less incentive for Contractor to enter contract
eg. Ampleforth Abbey vs T&T
- Series of LOI instead of Main Contract
- Kier not liable to pay LDs as no Contract
- T&T sues for not “exercising reasonable care”
- T&t Liable to pay damages

Question 17

What is tendering?

Answer 17

Method of obtaining the resources required to carry out the required work.

Question 18

When is single and two stage tendering appropriate?

Answer 18

Single - ER’s sufficiently defined

Two Stage - Complex projects where ER’s are not defined enough and require contractor input

Question 19

Can you explain the Initial tender process?

Answer 19

• Compile tender list
• Issue PQQ (guages interest, experience, capacity and financial standing)
• Analysis of PQQ
• Issue the Tender Documents to the potential contractors

Question 20

What tender documents are included?

Answer 20

ITT
Form of tender 
Tender pricing documents 
ER's
Specifications 
Drawings 
Pre-Construction Information

Question 21

What would happen if there was a mistake in the tender information and it was highlighted by one of the tenderers?

Answer 21

Review of the info by the EA and Design team
Amend the issue
Issue an addendum to all tenderers
(There could be the potential of an extension if the missing/incorrect info is significant)

Question 22

Once tenderers are received what process do you go about?

Answer 22

1. Comp check their returns
2. Tender Opening Sheet
3. in depth assessment of tenderers
4. Clarifications
5. Post Tender Interviews
6. tender recommendation

Question 23

What would happen if a tenderer submitted late?

Answer 23

Public Sector - non-compliant therefore remove

Private Sector - Notify client, it is under their discretion to allow or remove.

Question 24

What is the tender award process?

Answer 24

1. Tender review period stated in the ITT
2. All tenderers must be informed immediately of result
3. Unsuccessful tenderers are given their tender score and score of successful tenderer

Question 25

In two-stage tendering what do the tenderers return?

Answer 25

Price for Prelims, OH&P and Risk 
Programme 
Method statement 
Procurement proposals
Demonstration of Capability
Experience 
References

Question 26

What is a PCSA and when is it used?

Answer 26

It is a services agreement with a contractor

Under a PCSA the contractor is to develop design, advise on buildability and begin procurement

Question 27

What are the Public Contracts Regulations 2015?

Answer 27

Sets out mandatory requirements for public tendering such as:

1. Grounds for excl. tenderers
2. Timescales
3. tenders to be priced on best value basis
4. 10 day standstill period after notification of results for any challenges

Question 28

What is the best value basis?

Answer 28

Price 
Quality
Design 
Sustainability 
Programme 
LCC

Question 29

What are the 4 main procurement routes?

Answer 29

D&B
Traditional
Management Contracting
Construction Management