PROCUREMENT & TENDERING JC

Question 1

What would you take into consideration when looking at Time?

Answer 1

• How much time is there to prepare a complete design
• When is the site available
• When is the work required to be completed
• What are the phasing or sectional requirements
• The financial effect of a delayed completion

Question 2

What would you take into consideration when looking at Cost?

Answer 2

• Is a Lump Sum, Target Cost or Re-measurement option required when the contractor is appointed
• The impact of inflation over a lengthy contract period
• The time of fixing the price of the works and certainty of out-turn costs
• What level of risk is acceptable to the client
• What level of risk is acceptable to the contractor

Question 3

What would you take into consideration when looking at Quality / Performance?

Answer 3

• Is retention of design control and important issue
• Will the nature of the works require stringent supervision
• Is the building listed or in a conservation area

Question 4

What are the components of a tender report?

Answer 4

• Executive Summary and Recommendation
• Introduction
• Tender Procedure
• Tender Pricing
• Programme
• Qualifications
• Detailing of any errors found
• Remaining risks
• Other information Submitted
• Recommendation to the client
• Next Steps

Question 5

What is Traditional Procurement?

Answer 5

The design is completed by the clients design team before competitive tenders are invited and a main contractor employed to build what the designers have specified.

Question 6

How does traditional procurement work?

Answer 6

• The contractor takes responsibility and financial risk for the construction of the works to the design produced by the clients design team for the contract sum within the contract period
• The client takes the responsibility and risk for the design and performance of the design team
• Speculative risks are balanced as between the parties, more in the client’s favour on a lump sum contract but less so with a measurement contract

Question 7

What are the advantages and disadvantages of Traditional Procurement?

Answer 7

Advantages
High cost certainty at point of contract
Full ability to control design & specification can ensure quality
Competitive fairness and transparent process increases value for money (Value for money is not about achieving the lowest initial price: it is defined as the optimum combination of whole life costs and quality.)
Disadvantages
Full design pre-tender is slow
Competition or tendering cannot be commenced until the design is complete reduction in cost & time certainty
Overall project duration may be longer than others – sequential process
No input into design or planning by the contractor

Question 8

What is Design and Build Procurement?

Answer 8

• Design and Build is more accurately a type of contract, however, it is commonly referred to as a procurement route and, therefore, needs to be considered here.
• Where the contractor is responsible for the design, planning, organisation, control and construction of the works to the employers requirements
• A single or two stage approach may be adopted. It is more common for the single stage method to be restricted to buildings of a reasonably simple nature where the risks to the contractor can be easily defined.

Question 9

How does design and build work?

Answer 9

• In its simplest form the employer gives tenders the Employers Requirements and the contractors respond with the Contractors Proposals, which includes a price for the works
• A method where the contractor is responsible for undertaking both design and the construction of the work in return for a lump sum price. There are variants on this option depending on the degree to which initial design is included in the clients requirements.

Question 10

What are the advantages and disadvantages of Design and Build Procurement?

Answer 10

Advantages
Single point of responsibility
Inherent buildability input contractors experienced harnessed during design
High cost certainty at point of contract
More efficient design/construction overlap
Disadvantages
Low client ability to control design and specification
Harder to compare tenders design proposals need to be balanced against price, and it is vital to check that the proposals satisfy the clients requirements
Ease of fabrication may be prioritised above aesthetic quality
Cost control more difficult due to less detailed pricing. Variations tend to cost more due to the lack of a detailed pricing structure.

Question 11

What is Novation?

Answer 11

A new contract that transfers the rights and obligations of one contractual party to a new third party i.e. design rights and obligations of the architect transferred to the contractor

Question 12

What is the difference between novation and assignment?

Answer 12

A novation agreement transfers both the benefits and the obligations of a contract to a third party. In contrast an assignment does not transfer the burden of a contract. This means the outgoing party remains liable for any past liabilities incurred before the assignment.

Question 13

If the design team is novated, what should the client put in place?

Answer 13

A collateral warranty to the design team. Creates a contractual relationship between parties where there would otherwise not have been any.

Question 14

What is Management Contracting?

Answer 14

• A management contractor is employed to contribute their expertise to the design and to manage the construction and is paid a fee for doing so
• A method where overall design is the responsibility of the clients consultants, and the contractor is responsible for defining packages of work and then for managing the carrying out of this work through separate trades or works packages

Question 15

How does Management Contracting work?

Answer 15

• Appointment of the contractor is usually by negotiation or tender, and interview. He is paid a management fee. The work packages are let by competitive tender.
• The management contractor has direct contractual links with all of the works contractors
• The have the responsibility for the construction works without actually carrying them out
• Not all of the design need to be completed before the first works contractors start work
• The client retains overall design control through the professional team
• There is no certainty of over costs at the outset and work proceeds on the basis of the contract cost plan. Final costs will not be known until the last work package is let. However, the costs can be monitored by the clients QS

Question 16

What are the three main types of tendering?

Answer 16

Single Stage
Two Stage
Negotiated

Question 17

What are the methods of selecting tenderers?

Answer 17

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Question 18

What is the effect of OJEU on tendering?

Answer 18

OJEU publishes tendering opportunities subject to public procurement rules set out by the EU. The threshold which dictate the rules change every 2 years. This is £4.7m for 2020/2021.

Question 19

What are the advantages/disadvantages of negotiated tender on DandB?

Answer 19

Advantages
- Most contractor involvement in design process
- No programme implications of tendering
Disadvantage
- Lack of competitiveness
- May not be suitable for public procurement contracts

Question 20

What are the advantages/disadvantages of negotiated tender on traditional?

Answer 20

Advantages
- Contractor involvement throughout process will enable more effective mitigation of risk throughout the design process by the contractor
-No tendering period required on programme
Disadvantages
- No competition may result in high contractor offers
- May not be suitable for public procurement contracts

Question 21

What are the advantages/disadvantages of negotiated tender on MC/CM contracts?

Answer 21

Advantages
- No tendering required in programme
Disadvantages
- No competition at all on Prleims and OHP and programme

Question 22

What are the advantages/disadvantages of single stage tender on DandB contracts?

Answer 22

Advantage
- Most competitive price
Disadvantage
- Contractor not fully understanding may lead to a ‘higher risk allowance’
- Programme implication to include tender period

Question 23

What are the advantages/disadvantages of single stage tender on traditional contracts?

Answer 23

Advantages
- Most competitive price
- The most linear form of tendering
Disadvantage
- No contractor involvement
- May lead to high levels of provisional sums and risk items on the client side
- Programme implication to include tender period

Question 24

What are the advantages/disadvantages of 2 stage tender on MC/CM contracts?

Answer 24

Advantages
- Increased contractor involvement in design
- Some degree of competition
- Ability to overlap design and tendering
Disadvantages
- Lack of competitiveness during 2nd stage
- Programme implication to include a tender period

Question 25

What are the advantages/disadvantages of 2 stage tender on DandB contracts?

Answer 25

Advantages

• Contractor involvement may reduce outstanding design/ construction risk
• Ability to overlap tendering and design

Question 26

On Tolworth, what other procurement options could have been chosen if the client wanted an early start on site date?

Answer 26

Construction management/ Management contracting. 2 stage tender.

Question 27

What is procurement?

Answer 27

The process of purchasing goods or services. Many different routes by which design and construction of a building can be procured. Selected route should follow a strategy which fits the long term objectives of the client’s business plan.

Question 28

What is tendering?

Answer 28

The selection of the contractor that will construct the works. However, depending on the procurement route, this could be for a wider range of goods and services.

Question 29

You state that you are fully aware of main procurement routes so what are the advantages and disadvantages of traditional procurement?

Answer 29

Advantages of traditional:
- Client has full control of design
- Competitive tender done single stage
-Cost certainty
- Less risk priced in by contractor as full design is complete
Disadvantages of traditional:
-Typically take longer as full design is needed before tender takes place
-May lead to higher level of prov sums and risk items
-No contractor involvement for design

Question 30

How would you go about advising a client on the appropriate procurement route to follow?

Answer 30

I would organise a procurement workshop with the client. I first understood the client brief and built on from this at the meeting. This would involve asking key questions related to the clients drivers relating to time, cost, quality and risk and then looking at the level of priority of each. Other key considerations would be the project type (size of project, complex design with specialist input needed?), market condition, statutory regulations (OJEU).

Question 31

You have read the RICS guidance note on tendering and understand the types of procedures, what is the difference between single and two stage tendering?

Answer 31

Single stage tendering is when the contractor bids for the works with a complete design and this would be for the full amount of the works and will achieve cost certainty. A 2 stage tender is when the 1st stage is under a pre-construction services agreement, whereby the contractor will take part in the design and selection of subcontractors. There is less cost certainty as the cost could go up/down for the main contract works.

Question 32

Why would you advise a client to adopt one over the other?

Answer 32

I would advise a client to select a 2 stage where specialist design input is needed more than cost certainty. If the works is of a simpler nature then a single stage can achieve cost certainty.

Question 33

When would you advise a client to follow a negotiated tender path?

Answer 33

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Question 34

What are the advantages and disadvantages of construction management?

Answer 34

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Question 35

When would you suggest this method of procurement be adopted (CM)?

Answer 35

-When projects need to have a quick completion date.
-When works are of complex nature and contractor will not take on liabilities
-

Question 36

How does CM differ from Management Contracting?

Answer 36

In MC the contractor will have contracts with subcontractos whereas in CM it is the client.

Question 37

How would you deal with errors and omissions in a tender?

Answer 37

Firstly, I would advise to the client that the correcting of errors should always be at the discretion of the client. Then, following the JCT Tendering practice note I would advise:
Alternative 1- Give details of error and afford opportunity to confirm or withdraw. Where tenderer has accepted error, all rates and prices in the document should be reduced or increased at the same proportion as the corrected total of priced items.
Alternative 2 - The tenderer should be given an opportunity of confirming his offer or of amending it to correct genuine errors. If the tenderer does amend his tender figure, and possibly certain of the rates in his documents, he should either be allowed access to his original tender to insert and initial the correct details or be required to confirm all the alterations in a letter.

Question 38

You normalised the tenders, did this have an impact on the outcome.
What is normalisation, why do it, what do you do at the end?

Answer 38

Normalisation is a process of tender evaluation whereby I would make sure all tenders are like for like. For example, if there is an item in the tender which has been added for one tender, if the item is relevant, this item would be added to all tenders. I would state that the normalised price is not a contractual figure and this would still need to be confirmed with the tenderer.
Ways of normalising:
1 use an average of the submitted costs
2 use the highest price from the tender returns; or
3 use the cost plan allowance for that particular
element.

Question 39

If you discovered an arithmetical error in a tender what would you do? Assuming the lowest tenderer wished to amend his total and in doing so was no longer the lowest, but the Client wished to still proceed with him what advice would you give?

Answer 39

I would need to follow the correcting errors procedure set out in the ITT. This would be alternative A (correct amount and adjust all rates) or alternative B (correct rate that is wrong and clearly state). As the tenderer has changed their proposed amount, it is not a contractual figure and I would advise the client to finalise the figure with the contractor or go to another tenderer.

Question 40

You state in your Summary of Experience that on the King George’s Gate project you undertook an assessment of the suitable procurement route, this involved a workshop. How did this work?

Answer 40

I set up a workshop with the client and key stakeholders after understanding the client brief.

At the workshop, I discussed key client drivers including the type of project, time, cost, quality, control of design and risk and was able to present a procurement matrix.
I also advised on market conditions and public sector regulations.
After the meeting I was able to write a procurement report explaining the different procurement options available and what I think it the most suitable

Question 41

You also state you were involved in the tendering process for the same project (King George’s Gate), what did this entail?

Answer 41

I sent out expressions of interest to enabling work contractors suitable for the project. Once they confirmed their interest i let them know when they would be sent an ITT and tender information. Once this was sent, i conducted a site visit with them and gathered questions which i answered as an addendum. When tenders were submitted, i recorded them on a tender opening record and then conducted the tender analysis and recommendation.

Question 42

What was included in the ITT documents?What documents were issued? (Same question, different way of asking it)

Answer 42

The ITT included details of dates and tender returns, the scope of the works, the location of the works, who to return tenders to and any other necessary detail. Other tender documents will include the form of tender, preliminaries, form of contract and amendments, drawings, pricing document.

Question 43

How were tender queries dealt with?

Answer 43

I assembled a query sheet which i sent to each contractor. I then compiled all of the queries and answered them which was sent back to all contractors.

Question 44

How did the scoring matrix you suggested to your client work? Was it just based on cost?

Answer 44

The scoring matrix was 80% cost and this was recommended because the works was of such a simple nature. The qualitative scoring element was split into 3 parts, with programme, engagement with neighbours and health and safety/previous experience forming the other part.

Question 45

Now that it has been decided to leave the EU what impact, if any, will this have on tendering procedures?

Answer 45

This year is the transition period, so there will be no change, however EU processes like OJEU still remain uncertain and depend on the UKs deal with the EU.

Question 46

What do you understand by OJEU?What are the regulations and do what do they apply?

Answer 46

Official journal of the European Union. Public projects must comply with the regulations if the value of contracts is above specified thresholds. Aggregation rules apply to projects tendered in parts to prevent clients from avoiding the requirements of the regulations by simply dividing projects up into contracts that are below the threshold.

Question 47

If a tenderer is late in submitting his bid, what would you advise the tenderer?

Answer 47

That the tender being accepted would be at the client’s discretion, however it is likely they would not be accepted to avoid fraud, collusion or bid-rigging.

Question 48

What advice would you give your client if a tenderer is late in submitting?

Answer 48

Safest Option is not to consider- (Fraud, Collusion, Bid-rigging)
If private client it is at their discretion (Advise of dangers though)
Public client: Late cannot be accepted, few minutes late judgement call needed, to accept need authorization in writing from council/ LA
Advise accepting late tenders sets standard, contractors may in future also not keep to deadline

Question 49

Would your advice be different if the tender was the lowest?

Answer 49

My advice would be impartial regardless of the tender amounts.

Question 50

How do you know who to choose in your tender list?

Answer 50

A pre-qualification questionnaire (PQQ) sets out a series of questions for potential tenderers to answer regarding their level of experience, capacity and financial standing.

Question 51

Why did you recommend a 2 stage tender on Tolworth?

Answer 51

There were multiple complicated design elements where the project could have benefited from a contractor’s input. This included:

• Bathroom pods
• Facade
• MEPH

Question 52

Why would having enabling works as a separate package de-risk the site for Tolworth?

Answer 52

This was because the main contractor may price an element of risk into the enabling works. Going directly in a separate contract with an enabling works contractor meant that this risk was evaded before the main construction works would begin.

Question 53

How did you score the 20% quality aspect for Tolworth?

Answer 53

This was scored based on the quality of the submission; criteria included their approach, programme, co-operation with neighbours, health and safety and resource.

Question 54

What was discussed at the procurement workshop for Tolworth?

Answer 54

At the procurement workshop, I discussed with the client what their key drivers were. The main three were time, cost and quality. The design team also recommended that some elements such as facade and MEPH would benefit from a subcontractor specialist input. The client also wanted to transfer risk to the contractor and wanted an early start date. As a result, I recommended the 2 stage design and build approach.

Question 55

How did you explain all the main procurement routes to your client for Tolworth?

Answer 55

I presented a matrix whereby I input a set of criteria with scores 1-10 and the matrix pointed towards the design and build route. I then explained the benefits of all 3 with pros and cons listed on my presentation. Furthermore, I created a procurement recommendation report.

Question 56

What did you ask in the post tender interviews for UCLH?

Answer 56

This post tender interview, was effectively a tender settlement interview with the preferred contractor where I was able to clarify on the prices they submitted which seemed ambiguous. Questions I asked included: will you agree to the cost of the FFE item which is priced as per the pre-tender estimate?

Question 57

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

Answer 57

Through detailed discussions with the client and design team to identify thier priorities in terms of cost, time, quality, risk, control requirements and experience.

Question 58

What did the client brief contain on Tolworth?

Answer 58

The client brief

Question 59

What are the different types of partnering contracts?

Answer 59

Partnering agreements include the project partnering contract PPC2000, the term partnering contract TPC2005, the NEC partnering agreement and the ICE Partnering Addendum. There is also JCT Constructing excellence.

Question 60

What are term contracts?

Answer 60

Used for FM.

Question 61

What happens in the 1st stage of a 2 stage tender?

Answer 61

The contractor will appoint a design team, the design will commence. Once designs are complete, there must be a conversation between the design team, if KPIs are ticked, the designs will be passed to the contractor’s commercial team who will price the project. The client’s QS team will then advise the client on the prices. QS will monitor all subcontractors prices throughout the subcontractor procurement.

Question 62

Are 2 stage tenders on traditional projects?

Answer 62

Usually only if it is a historic or complicated building where the project would benefit from extra contractor design. Normally always single stage and 2 stage for DB.

Question 63

What is the difference between open tendering and selective tendering?

Answer 63

Open tendering allows anyone to submit a tender to supply the goods or services that are required. Selective tendering only allows suppliers invited from a pre-selected list to take part in the tender process.

Question 64

What is MEAT?

Answer 64

Most economically advantageous tender. A contractor selection process which does not just use price as a means of winning the contract. Contractors must be informed of the criteria as part of the tender document.

Question 65

What was your tender procedure on King George’s Gate?

Answer 65

• Expression of interest for tenderers (based on previous projects and client approval - below OJEU value)
• Once received, informed them of tender docs and ITT release
• Prepared tender doc and issued ITT
• Met on site to answer questions (only gave information away which was in tender doc and rest went in query list issued as addendum).
• Received tender docs and recorded on opening tender record
• Checked for errors and inconsistencies
• Produced tender document (tender analysis, qualitative assessment, qualifications, normalisation, tender procedure, recommendation).

Question 66

What is a bondafide tender?

Answer 66

A Certificate of a Bona Fide Offer is a form that suppliers are required to sign to show the offer they are putting forward to tender and is the true offer that will be available if the tender is won by the supplier.

Question 67

What is e-tendering?

Answer 67

Any information to be exchanged can be
transmitted using electronic media such as:
+ physical media (any physical platform for
holding the platform for holding the data,
including CD, DVD and memory sticks);
+ email; and
+ web-based technology.

Question 68

Explain the OJEU process

Answer 68

• Where a project is over a certain value it must be advertised in the OJEU:
• There are 4 procedures under OJEU:-
o 1) Open - any contractor allowed to tender for the work
o 2) Restricted - carried out in 2 stages 1st stage - open, 2nd stage - only contractors are invited that meet specific criteria
o 3) Negotiated - where competition is inappropriate, a single contractor is approached to negotiate a price.
o 4) Competitive Dialogue - Provides alternative to open and Restricted Procedures under OJEU. Similar to ECI process except that all contractors are involved
• A PIN is placed in OJEU at start of year to indicate what projects coming up.
• Once the project is let a Contract Notice is placed in OJEU providing further details of procedure to be followed.
• Once the contract has been awarded a Contract Award Notice must be published in the OJEU within 48 days of award.

Question 69

What regulation does OJEU fall under?

Answer 69

Public procurement contracts 2015.

Question 70

What will happen with OJEU after Brexit?

Answer 70

Still up in the air until Brexit negotiations.

Question 71

What is serial tendering?

Answer 71

• Effectively strategic partnering
• Contractors are asked to bid for a project on the basis that if they build this one satisfactorily, others of a similar type will follow and the same bill rates will be used

Question 72

What are qualifications?

Answer 72

Tenders may contain a number of comments or technical qualifications, which may include proposals for alternative similar approved materials. It is essential that the surveyor seeks clarification and recommendation from the relevant surveyor on these matters, for clarification within the tender analysis report, if necessary.
The surveyor should assess the financial implications of each and every proposal.
In order for the client to be able to make an informed decision as to which contractor to appoint, it is normal practice for the surveyor to issue a detailed tender analysis report.

Question 73

If there was a value engineering proposal suggested by a losing tenderer, which would benefit your project, would you utilise this opportunity?

Answer 73

Depends on how generic the VE option is. If a bespoke option I would seek legal advice.

Question 74

What did you look at when assessing the procurement route for Tolworth?

Answer 74

-the stage at which design certainty is assured;
risk allocation;
-the stage at which cost certainty is achieved;
-the point of financial commitment by the client;
-the experience required by the client;
-the input required by the client; and
-the overlapping of the stages, e.g. design and construction.

Question 75

How does a 2 stage tender work?

Answer 75

• Competition to work on the 1st stage
• 1st stage will include basis of fixed lump sums for management and supervision staff and preliminaries; approximate quantities and firm works tenders for the major sections of work that have been designed (if any), and provisional sums for the remaining work.
• Cost certainty is achieved at the 2nd stage with the main contractor working as an intermediary between the design team and subcontractors.

Question 76

What are the main benefits of a 2 stage tender?

Answer 76

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Question 77

What are the disadvantages of a 2 stage tender?

Answer 77

• There can be problems with the CDPS design not meeting the employer’s requirements; this can be addressed by early contractor involvement.
• Needs the careful control of the interface between one CDPS and another, or between the CDPS- and consultant-designed elements. This introduces an element of cost and programme risk.
• There will be a programme and cost penalty if the scope and value of the provisional sum works change significantly.
• Requires the adaptation of standard contracts.

Question 78

What can a client do in order to retain the design if the 1st stage contractor is not retained?

Answer 78

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