Procurement & Tendering L3 - SoE Q’s Flashcards
What is procurement?
The overall act of obtaining goods and services for a construction project.
What factors affect the procurement route of a specific project?
- Cost
- Time
- Control
- Quality
- Risk
Can you please define tendering?
How a contractor is actually appointed, and as such obtaining a price for the works.
What happens if the tender prices are higher than the pretender estimate?
Tenders should be reconciled against the PTE to identify where major differences are
The project team could value engineer the project if prices are over budget
Can you name the four different procurement routes for me?
• Design & Build
• Traditional
• Construction Management
• Management Contracting
When would you use Design & Build over Traditional?
You would use design and build in a situation where the client wishes for an earlier start on site. This would allow for the overlap of design and construction. With traditional, the design is typically complete prior to tendering.
An alternative reason may be that the client wishes to relinquish design risk.
With design & build, the contractor accepts design and construction risk, whilst with traditional they only accept the construction risk, with the employer maintaining the design risk.
What are the advantages and disadvantages of Design & Build?
Advantages of D&B are that there is a single point of responsibility, buildability input of the contractor, earlier commencement on site and the client relinquishes design risk.
Disadvantages of D&B are that the design is only as good as the ER’s, the client also needs to commit to a concept design early on. The contractor will factor in risk premiums and the client loses control over the design.
What are the advantages and disadvantages of Traditional procurement?
Advantages of traditional are that tender analysis is made easier, the client retains control over the design, there is reasonable cost certainty at contract award and there is limited built in contractor risk premium.
Disadvantages of traditional are that there is no buildability input of the contractor, the overall process is longer as there is no overlap of design and construction. Design risk is also retained by the client, and there is a dual point of responsibility.
What is the difference between management contracting and construction management?
With construction management the employer has direct trade contracts with trade suppliers and employs a construction manager to oversee the works.
With management contracting the employer employs the management contractor to oversee the project and they have the direct contractual relationships with the trade contractors.
What are the advantages and disadvantages of construction management?
Advantages of construction management are that there is potential for an earlier start on site, due to overlap of design and construction. There is also potential for buildability input of the construction manager and design changes can be made without paying a premium. There is also potential for lower costs due to direct trade contracts.
Disadvantages are that there is no single point of responsibility, there is no cost certainty until the last package is let and the employer must be experienced in construction.
What are the advantages and disadvantages of management contracting?
Advantages of management contracting are that there is potential for an earlier start on site, due to overlap of design and construction. There is also potential for buildability input of the construction manager, there is a single point of responsibility and design changes can be made without paying a premium.
Disadvantages are that there is no cost certainty until the last package is let, the employer must be experienced in construction and there is no incentive for the MC to reduce costs.
What is included within the guidance note on Tendering Strategies?
The guidance note provides information on single, two stage and negotiated tendering.
It also provides guidance on producing PTE’s, selecting the appropriate tendering strategy, the RIBA plan of Work, selection of contractors, tender period, tender documents, issuing of tenders, and tender queries.
There is detail on receiving tenders, and in particular opening, reviewing of tender documents, including checking for errors and normalisation. There is further advice on tender interviews and tender
What is the ditterence between single and two stage tendering?
Single Stage Tendering is typically undertaken at RIBA Stage 4 and is based on detailed design information. All contractors return a price based on the identical tender information and provide a price for the construction of the works.
Two Stage Tendering is typically undertaken at RIBA Stage 2 or 3. Used where there is a time constraint, with first stage documentation submitted to contractors and them being assessed on the quality of their bid, quality of their team, prelims price, OH&P allowance and PCSA fee. The successful bidder is appointed under a PCSA to provide buildability and programme input, before submitting a cost for the works at RIBA
Stage 4.
Do you know any further tendering methods?
•Serial Tendering
•Negotiated Tendering
• Open Tendering
What are the advantages and disadvantages of a single stage tender?
Advantages of single stage tendering are that it is the most competitive process and therefore likely to receive the most competitive price. Employer can benefit from a fixed price.
Disadvantages are that the price is only as good as the design information. As contractors aim to provide a competitive price, this may be at the cost of quality. Longer process due to tender period.
