TENDERING & PROCUREMENT Flashcards
Two Main Methods Used to Select Contractors
- Competitive Tender
- Negotiated Contract
(Typically a combo of both)
Benefits of a Negotiated Contract
- Possible without complete documentation
- Collaboration, Optimization and ECI opportunities
Types of Competitive Tenders
- Public / Open
- Selected / Invited
- Public EOI w/ pre-qualification
Competitive Tendering Strategy in a Tough Market
- Offer a Tender Preparation Fee
Key Parameters of a Fair Tender
- Genuine intention by client
- Genuine intention by tenderer
- Equal & True Competition (fair w/o anti-competitive conduct)
- Architect to act under client authority
Late Tender Acceptance
- Only if the tenderer has valid reason that was beyond their control
- Specify late submission policy in conditions
Key Details to Include in a Tender Package
- Order of Precedence
- Timeframe info
- Special conditions / non-std clauses
- Details of security (bank g vs retention)
- Required Insurances
- Prime or provisional costs
- Client supplied items
- Selected suppliers/contractors
Competitive Tender Clarification/Amendment Process
- Info should be shared with all tenderers
- Major clarifications may require formal addendum
- If provided in last week, provide time extension
Dangers of Providing Misleading Info or Withholding Info In Tenders
Misleading or incomplete information can lead to claims for damages in tort or action with the Fair Trading Commission.
Legislation & Codes Governing Tendering
Legislation: The Competition and Consumer Act 2010 (the Act)
Codes of Conduct: (not Statutory but falls Under Architects Professional Duty): Code of Tendering
- Since the Code of Tendering is not law, client is not legally required to adhere to it
Info provided by Tenderers that will form part of the contract
Price & Completion Date. Nothing else is contractual.
When can a non-conforming tender be considered
- If the tenderer agrees to make the tender conforming while standing by their initial price
- If included as a alternative option to a conforming tender
Alternative Options in Tendering (Key Considerations)
- Consideration of alt. options should be made clear in tender conditions
- Must be provided with a conforming tender
- Alt. option is the IP of the tenderer, principle cannot ask other to price for the alt. option
- Principle can ask the other tenderers to re-price with their own alt. option if the tenderer consents
Fair Justification for Tender Selection
- If an invited tender - selection based on price is expected if all other conditions are met
Procedure when scope is adjusted after tender
Minor Scope Change - Negotiate
Major Scope Change - Re-call
Procedure when no tenders are acceptable
- Negotiate w/ lowest price
- Re-call with varied scope or after a reasonable amount of time (6 months +)
Architect Code of Conduct During Tender Selection
- Stick to facts & evidence to avoid liability
- Client has final call
- Do not recommend non-conforming
Procedure for Accepting a Tender
- Issue a Letter of Acceptance
- Clearly include any conditions
- Avoid a Letter of Intent (not legally binding)
Procedure for Post-Tender Negotiation
- Issue a statement that tenderer is the preferred tenderer
- Only negotiate with one tenderer at a time
Procedure for Informing Unsuccessful Tenderers
- Agree with client on level of disclosure
- Common approach is to disclosure list of prices & completion dates
Cost Plus Contract + Time/Quality/Cost Risk Allocation
- Contractor is paid for actual cost of work as it progresses + an agreed margin to cover profit/overhead/prelims
Time : Owner
Cost : Owner
Quality : Owner
Appropriate use case for Cost-Plus
- High End Resi w/ undefined Scope
- Heritage Renovations
- Simple fitouts
Traditional Fixed Price Lump Sum + Time/Quality/Cost Risk Allocation
Contractor provides fixed fee for construction only services w/ 100% completed design provided
Time : Contractor
Cost : Contractor
Quality : Owner
(Best way to allocate risk)
Design & Construct + Time/Quality/Cost Risk Allocation
Contractor provides GMP or Fixed Fee to provide design and construction
Time : Contractor
Cost : Contractor
Quality : Contractor
