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APC > Tendering > Flashcards

Tendering Flashcards

1
Q
  1. What is tendering?
A
  • Tendering is a method of obtaining the resources necessary to carry out the required work
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2
Q
  1. What are the main tendering options?
A

a) Open tendering
b) Selective tendering – single or two stage
c) Nomination / negotiation
d) Serial
e) Joint ventures

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3
Q
  1. What is open tendering?
A
  • Indiscriminate request for tenders
  • Advert placed in local paper/technical press inviting contractors to apply for tender docs
  • Gives characteristics of the work
  • Deposit usually required to discourage frivolous applications
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4
Q
  1. What are the advantages of open tendering?
A

a) No charge of favouritism
b) Gives opportunities for capable firms you might not have put on a list
c) Should secure max benefit from competition

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5
Q
  1. What are the disadvantages of open tendering?
A

a) Danger lowest tender is inexperienced or has made lots of errors
b) No guarantee the lowest is capable or financially stable
c) Total cost of tendering is increased

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6
Q
  1. What is selective tendering?
A
  • Restricts the number of tenderers by pre-selecting a limited number of contractors to tender for the work
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7
Q
  1. What are the two types of selective tendering?
A
  • Single stage

- Two stage

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8
Q
  1. What is single stage tendering? And what should be provided by the Contractor during pre-selection (PQQ)?
A
  • A structured process of receiving competitive tenders from a number of pre selected capable contractors, who provide a lump sum for the works
  • Contractors pre-selected on say NJCC basis:
    1. Established skill
    2. Integrity
    3. Responsibility
    4. Proven competence and character
    5. Size of work
  • No more than 6 on list. If pre-selection is done beforehand then tenders can be selected on price alone.
  • Good contractors have the following: Recent experience, necessary skills, good management and organisational structure, spare capacity, good financial standing.
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9
Q
  1. What are the advantages of single stage tendering?
A
  • Ensures only capable and approved firms submit tenders
  • Tends to reduce the aggregate cost of tendering
  • Client gets a lump sum for the whole works
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10
Q

What is two stage tendering?

A
  • Separates the processes involved with selecting a contractor from the processes for determining the price for the works
  • Used when it is desired to obtain the benefits of competition and have the advantage of bringing a contractor into the planning of the project and gain an earlier commencement
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11
Q
  1. What is the purpose of the first stage (two stage)
A
  • To select a suitable contractor by means of limited competition
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12
Q
  1. What is the purpose of the second stage (two stage)?
A

A negotiation process with the selected contractor on the basis of the first stage

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13
Q
  1. What do tenderers return as part of the first stage?
A

a) Detailed build up of prices for the preliminaries items
b) Percentage additions for profit and overheads
c) A construction programme
d) Proposed sub letting of the works

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14
Q
  1. Are there any precautions you should take before entering the 2nd stage process?
A
  • Define procedure for either party to withdraw should 2nd stage negotiations prove abortive, what payments become due.
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15
Q
  1. Are there any precautions you should take before entering the 2nd stage process?
A
  • Define procedure for either party to withdraw should 2nd stage negotiations prove abortive, what payments become due.
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16
Q
  1. What are the advantages of two stage tendering?
A

a) Early involvement of the contractor
b) Encourages collaborative working
c) Potential for earlier start on site
d) Greater client involvement in selecting the supply chain
e) Contractor can help identify and manage risk

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17
Q
  1. What are the disadvantages of two stage tendering?
A

a) Cost certainty may not be achieved before construction starts
b) Additional pre-construction fees for the contractor
c) Contractor could take advantage of second stage negotiation – increase costs
d) Potential for parties to not agree contract sum – risk – cost of retendering

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18
Q
  1. Why should you use 2 stage tendering?
A
  • Building is complex
  • Magnitude of work is unknown at time of contractor selection
  • Early completion is required
  • Design team would like to make use of contractors expertise on buildability issues.
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19
Q
  1. What is negotiation / nomination?
A
  • Where the client has a preference for a particular firm
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20
Q
  1. When might negotiation/nominaion be used?
A
  • Possibly when the contractor has done satisfactory work for him before
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21
Q
  1. How does negotiation/nomination work?
A
  • There is no competition – likely to lead to a higher price
  • BUT client may think it is worth it for a quicker or better quality job
  • The contract sum is arrived at by a process of negotiation
  • One party usually prices a schedule of rates / bill which is used as a basis
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22
Q
  1. What is serial tendering
A
  • 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
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23
Q
  1. What is a framework agreement?
A
  • A list of contractors selected by the client after a formal tendering procedure to work over a long period of time
  • The contractor may have to wait his turn for a contract or tender repeatedly with the same group of contractors
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24
Q
  1. What is a joint venture?
A
  • Used on large complex projects when 2 or more companies take on a joint and several liability for design and execution of the project.
  • Would normally be backed up with PCG, Performance Bonds.
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25
Q
  1. What is OJEU?
A
  • Official Journal of the European Union
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26
Q
  1. What is OJEU for?
A
  • Public sector tendering

- All contracts from the public sector above a certain financial threshold have to be advertised on OJEU

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27
Q
  1. What could selecting the wrong contractor lead to?
A

a) A bad client / contractor relationship
b) A dissatisfied client
c) An insolvent contractor

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28
Q
  1. What is NJCC?
A
  • National Joint Consultative Council for Building
  • They published highly regarded codes of procedures relating to tendering practices
  • Disbanded and taken over by the Construction Industry Board (CIB)
  • BUT many clients still adhere to the original codes and JCT’s practice note includes a substantial amount of their material
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29
Q
  1. How would you put together a set of tender documents?
A
  • In accordance with JCT practice note 6. Include:
    i. ITT (Invitation to tender letter)
    ii. Instruction to tenderers: Date and time for return, to whom, site visits, programme, visit to architect to see drawings, errors, discrepancies, NJCC alternative 1,2. Scoring matrix (quality/ price), confirmation of receipt
    iii. Conditions of proposed contract
    iv. Prelims, Pricing doc (SOR, BOQ)
    v. Specification
    vi. Drawings
    vii. ERs
    viii. CPs
    ix. Pre-construction H&S information
    x. Form of tender
    xi. Submission of bona fide tender
    xii. Return envelope
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30
Q
  1. What information would the instructions to tenders contain?
A

a) Date for return
b) Address to return to
c) Site visit details
d) Programme length
e) Confirmation of receipt of documents
f) How tender should be submitted

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31
Q
  1. What is the form of tender?
A
  • A pre printed formal statement in which the tenderer fills in the blank spaces
  • He provides his name, address and the sum of money for which he offers to carry out the works
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32
Q
  1. What are the employer’s requirements?
A
  • Sets out the client’s requirements e.g. function, size, accommodation, quality
  • Level of detail depends on how much design has been done prior to tender
  • Normally includes current state of planning permission
  • Should detail the level of design, structure and spec info to be provided by the tenderers
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33
Q
  1. What are the contractor’s proposals?
A
  • The contractor’s response to the ERs
  • They are the key document for the client to consider at the tender review
  • Often includes plans, elevations, sections and typical details
  • Layout drawings and specification for materials and workmanship
34
Q
  1. How did you decide which contractors to go out to?
A
  • Preliminary inquiries based on design team recommendations.
  • Issue a pre-qualification questionnaire to interested and suitable contractors.
  • Based on responses, a decision can be made to go out to a reasonable number of tenderers, taking into account financial situation, relevant experience, health and safety records.
35
Q
  1. What is a preliminary enquiry letter and what would you include?
A
  • 1 month before tendering, send out tender enquiry letter to ascertain whether firms are willing to submit a bona fida tender. (avoids contractor submitting cover price)
  • Sufficient info given to contractor should allow them to make a decision.
  • Inform of any other requirements: CWs, Bonds, PCG.
36
Q
  1. What would you include in the pre-qualification questionnaire?
A

a) Details of contract particulars, in accordance with practice note 6
b) Turnover
c) Previous relevant experience and references
d) Company accounts
e) Personel
f) Management and organizational structure
g) Health and safety records
h) Quality systems and environmental policy
i) Provision of bonds / warranties / PCG
- This is done through questionnaire and interview process with scoring matrix.

37
Q
  1. What is on line bidding?
A
  • Tenderers can view and download the tender info online
  • The bidding process commences at a specific time
  • The client sets on opening price and tenderers compete by underbidding
  • Tenderers can submit as many bids as they like until the closing time
  • It is common that if a new bid is submitted within 30 mins of the closing time it is extended to allow other tenderers to respond
  • If the tender is awarded on price alone the lowest tenderer will get immediate feedback
38
Q
  1. How many contractors would you include on a tender list?
A
  • Refer to the Code of Procedure
  • Depends on the size of the project
  • BUT as the cost of tendering is high it is common to limit the lists to 4-6
  • This provides cover if one drops out
  • It provides better relationships with contractors and improves the likelihood of competitive tenders – know they stand a reasonable chance of getting the job from the outset
39
Q
  1. How would you determine the duration of the tender period?
A
  • Depends on the procurement process and size of the project
  • If traditional with a BQ usually about a month to obtain info from sub contractors
  • BUT large complex schemes would be longer
  • If first stage of a two stage may be a short as 2-3 weeks as only prelims
  • If D&B likely to be 6-8 weeks due to the amount of design work needed
  • Better to give enough time to ensure contractors can price it correctly rather than rush it and encourage contractors to price a high risk element into the tender
40
Q
  1. When seeking tenders for construction work, in addition to the actual fee bid, what information would clients typically expect to be submitted?
A

a) Track record of previous experience
b) Proposed team
c) CVs or team profiles
d) Methodology or approach
e) References
f) Programme

41
Q
  1. How did you decide the number of tenderers for the project?
A
  • If D&B, have less tenderers (say 2 or 3) due to cost and time implications; contractors would like to think they had a good chance in return for their capital outlay.
  • For other contracts 5 or 6 tenderers is sufficient as a balance between competition and contractor care with pricing as a result of a belief that they can compete.
42
Q
  1. How does a contractor price day works in their tenders?
A
  • The QS will have included a lump sum for the particular daywork item
  • The contractor adds a % uplift and gives a total for the section
  • Competition is therefore based on the % uplift
43
Q
  1. Why should you as a surveyor examine tenders?
A
  • Check tenderer has included everything, if not to ascertain whether they are still the lowest.
  • Component parts of tender will be used subsequently e.g. valuing variations
  • Errors in SOR, BOQ need to be identified and dealt with.
44
Q
  1. What should be examined, looked for in a tender?
A
  • Arithmetical errors (comp checking)
  • Pricing errors (Items not priced, or same item but different prices in diff sections)
  • Pricing methods (front, back loading)
  • Qualifications
45
Q
  1. What is the procedure after the submission date and time has passed for tender returns?
A
  • Formal procedure: eliminate suspicion of irregularities
  • No tender opened before submission deadline. Tenders are supplied with return envelope to prevent accidental opening. Tenders should be opened relatively soon after deadline has passed.
  • Other parties present: PM/ architect/ client esp with public bodies.
46
Q
  1. What happens if a tender is late?
A
  • 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 authorisation in writing from council/ LA
  • Advise accepting late tenders sets standard, contractors may in future also not keep to deadlines.
47
Q
  1. How do you evaluate the Contractor’s proposal for D&B?
A
  • Not solely on price!
  • Programme, design, contractor’s proposals, materials, and method statements, employees all have to be assessed.
  • Checking for discrepancies from the ERs
  • Easier if the design has already been progressed by the client prior to tender
48
Q
  1. What criteria should be considered if not on price alone?
A
  • Approach (method statement and programme)
  • Customer care (liaison with employer)
  • Environmental (noise/ nuisance reduction proposals)
  • Management (H&S)
  • Resources
  • Supply chain
  • Technical
  • D&D (aesthetics, LCC, flexibility in use)
49
Q
  1. What would you do if the lowest tender also has the lowest quality spec?
A
  • The implications should be spelled out to the client e.g. higher maintenance costs
  • It is the client’s decision ultimately
50
Q
  1. What is the danger of accepting a very low tender?
A
  • They may have missed some of the works
  • The quality may be lower than some of the other tenders had allowed
  • Once on site they may try and recover their costs by a large no of variations / claims for EOTs and loss and expense
  • This could lead to adversarial relationships
51
Q
  1. What happens if tenders are returned and are higher than cost plan, pre-tender estimate?
A
  • Could be market problems, need to reconcile to identify major differences, VE process could take place on those elements.
52
Q
  1. How would you deal with errors in tender returns?
A
  • Depends on which alternative chosen on instructions to tenders
  • Alternative 1 – the QS should amend computing errors arriving at a new tender sum. They should inform the contractor who can choose to either confirm or withdraw
  • Alternative 2 - QS should amend computing errors arriving at a new tender sum. They should inform the contractor who can choose to confirm, amend or withdraw.
53
Q
  1. What would you do in a traditional procurement route, if the tenderer returned an alternative tender with a different method of construction?
A
  • Assuming you had asked them to supply an alternative tender you would assess it along with other returns and liaise with client.
  • If not asked, ask for compliant tender
54
Q
  1. How do you deal with qualifications within the tender?
A
  • Procedure should be outlined when you go out to tender – in the instructions
  • If they are unauthorised it might invalidate the tender – leading to disqualification
  • Possible to be authorised – if the tenderer raised a query with the QS – in which case all other tenderers should have been notified and instructions on what to do issued
55
Q
  1. What would you do if the lowest tenderer had submitting no pricing of the preliminaries, would you recommend he was accepted?
A
  • Depends on the form that the tender was sent out in and instructions to tenderers
  • Usual to have prelims split into method and time related items
  • If they did not break them down as required then it is officially a non-compliant tender
  • BUT in practice the contractor is usually provided the opportunities to provide a full breakdown within a couple of days and this would be regarded as valid
  • They are not allowed to change the figures – not allowed to gain an advantage
  • The fact that this was done should be noted in the tender report
56
Q
  1. What would you do if you considered a contractor submitting the lowest tender to be in financial difficulty?
A
  • As part of the evaluation of tenders you would look at the company accounts (if not at PQ)
  • Also request references from previous employers for work recently done
  • See if you can find out if subcontractors were paid on time
  • Ensure the contractor can provide a bond and that it is in place before commencing
57
Q
  1. On what grounds would you advise the client to re-tender?
A

a) Not enough tenderers returned tenders
b) The tendering procedure is believed to have been compromised for some reason
c) If tenders were not at the cost level required and it was believed that re-tendering to different tenderers would provide a different result
d) Design changes or VE has been carried out that has significantly changed the design that was originally tendered on

58
Q
  1. How would you deal with a front loaded BQ?
A
  • This is not a pricing error – removing the front loading would not reduce tender price
  • You can ask the contractor to adjust his pricing to remove it during the analysis
  • QS should ensure that all items are consistently priced throughout the document
  • It has implications on valuing variations later and may be a sign that the contractor has financial difficulties
59
Q
  1. How do you carry out a tender evaluation?
A
  • Need a breakdown of the tenders, check them to ensure they have been priced in accordance, that there are no errors, qualifications or exclusions
  • Follow NJCC procedure if errors are found
  • Compare against the pre-tender estimate to check rates are not unusually high/low
  • Ensure all amendments made during the tender period have been incorporated
  • Prepare the tender report giving a summary of the actions, costs and recommendation
60
Q
  1. What is included within a tender report?
A

a) List of tenders received
b) Initial tender return totals
c) Any qualifications identified
d) Post-tender adjustments
e) Revised tender sum
f) Issues to be resolved
g) Comparison of tender returns
h) Comparison with pre-tender estimate
i) Recommendation

61
Q

What does a Tender Process usually consist of?

A 
Advertising for bids, letters of enquiry
Receipt of interest
PQQ (Optional)
Selection of Preferred Bidders
Pre Tender Interview
ITT
Mid Tender Interview
Tender Returns
Tender Analysis
62
Q

What is the PQQ?

A 
Pre Qualification Questionnaire 
Can be interview or questionnaire and is used to asses:
Level of Experience
Financial Standing
Suitable H&S Record
Availability of Work
63
Q

What information is usually required in the PQQ from the Contractor?

A

Company Details
Financial details (Turnover, profit, loss, cashflow etc)
Project Experience & technical capability
H&S policies and records
Quality Assurance
Insurance
Equal Opportunities

64
Q

What should be included in the Tender Docs?

A

o Invitation to Tender
o Form of tender
o Preliminaries (Employers Requirements if DB)
where the contractual obligations that the contractor is being asked to undertake are outlined
o Form of contract/conditions
o Tender pricing document
 Bill of Quants (NRM 2 Detailed Measurement)
 Contract Sum Analysis (NRM1 Order of Cost Estimating, Elemental breakdown, DB)
o Design information
o Instructions to tender
o Contract Sum Analysis instead of BoQ
o Employers Requirements or outline Performance Specification
o Contractors Proposals (returned)

65
Q

What Pricing Document would you use for DB and a Traditional respectively?

A

DB- NRM1 Order of Cost Estimating. Elemental Breakdown

Traditional- BoQ NRM 2 Detailed Measurement

66
Q

What is included in the Tender Analysis?

A

o Executive Summary
o Contractors invited to tender
o Comparison of Tender returns
o Evaluation of each submission
o Comp/arithmetical checking
o Identify length of Programme
o Identification of prelims and OH&P
o Any exclusions/clarifications
o Identification of any provisional sums (defined and undefined)
o Identification of any risk being priced
o Comparison to PTE or cost plan and deviance as a %
o Price and submission compliance with specification and drawings
o ‘Equalised’ tender summary
o Recommendations

67
Q

Best practice notes?

A

JCT Practice Notes 6 (replaced the NJCC Codes of Procedure on Tendering)

68
Q

What are the Rules of Tendering?

A

Late tenders not considered
Any non-compliant tenders may be dismissed
Abortive costs are not recoverable
Tender enquiry should state how long tender remain open for
OJEU rules apply

69
Q

Tell me about your involvement in tendering one of your projects?

A

Preparation of the PQQ process and evaluation submissions
Preparing tender documentation including pricing documents
Mid Tender Interviews

70
Q

How do you normalise tender returns?

A

I would refer to the RICS Tendering Strategies Guidance Note and refer to normalisation/equalisation

71
Q

Difference between Alternative 1 & 2

A

Alternative 1 - The contractor will either be invited to stand by the tender price or to withdraw
Alternative 2- The contractor should be given the opportunity of confirming their offer or amending it to correct genuine errors

72
Q

How has a tender list been compiled on one of your projects?

A

….

73
Q

How can you analyse and score tenders?

A

This is typically done following the clients guidance on their own priorities. But this would typically include qualitative and cost sections

74
Q

What would you do if a client asked you to change a tender score?

A

I would request the basis of this request as my recommendation should be a true reflection on my evaluation of the tender submissions.

If I do not feel the request is justifiable I would refer the client to my TRR

75
Q

Tell me about a time you have conducted post tender interviews

A

…

76
Q

If the client isn’t happy with your recommendation on the TRR would you change it?

A

Still make the same recommendation and make it clear why the other Contractors were not selected

77
Q

What was included in your ITT for the cost criteria?

A

65% for cost

78
Q

What does your ITT look like and include?

A 
Instruction to Tender
Form of Tender
Project Overview
Contractual and Procurement Arrangements
Key Dates
Tender Evaluation
79
Q

Issues with an unsuitable tender period?

A

Unsuitable tenders and returns
Disputes
Prolonged tender period
Withdrawn tenders

80
Q

How to decide tender period?

A

Ask in PQQ process
PTE can advise
Benchmarking

81
Q

Factors affecting tender period?

A

Design quality and stage

Complexity of project

82
Q

What is included within the first stage of a two stage?

A

Preliminaries
Programme
OH&P
Price for designed packages

APC (3 decks)

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