Tendering Strategies Flashcards
Three main tendering strategies?
Single Stage Tender
Two Stage Tender
Negotiated Tender
What is single stage tendering?
Tender documents are issued to several competing contractors, who are all given the chance to bid for a project based on identical tender documentation
What are the advantages of single stage tendering?
Employer benefits from a competitive tender process, which can lead to more competitive pricing
Employer benefits from a fiixed price lump sum using this strategy
What are the disadvantages of single stage tendering?
At the point of tender, theres no build-ability input from the contractor
Price is only as good as the design info
Contractor may not be willing to tender if theres a lot of competition
What is two stage tendering?
Stage 1 - Empolyer provides an outline project design and contractors then compete for preferred contractor status. This is usually chosen by the quality of the bid in terms of management team, OHP, and preliminaries, the preferred contractor then joins the design team on a consulting basis using a pre-construction services agreemnt (PCSA)
What are the advantages of two stage tendering?
Early appointment of contractor to work in parallel with the design team
earlier start on site is possible
Employer involvement in subcontractor selection
Increased opportunity to VE with contractors input
What are the disadvantages of two stage tendering?
Contractor may has less incentive to price the second stage competitively, as they are already preferred
Additional cost of the Contractors pre construction services agreement fee
Potential for contract sum not to get agreed (failure in negotiations)
What is negotiated tendering?
Effectively a single stage tender carried out between the employer and one contractor. Negotiated tenders are obtained by client, inviting one contractor of their choice to submit a tender response for their project.
Key advantages of negotiated tendering?
Simplicity
Speed, can have advantages if done in good faith
Allows early contractor involvement
Key disadvantages of negotiated tendering?
Possible delay if negotiations are extended
cost premium possible due to lack of competition
heavy reliance on trust between parties
How did you justify value for money using a negotiated tender for whbg?
Relied on an open book approach when agreeing subcontract packages and a minimum of 3 quotes to be provided for each element of works
What do tenderers return as part of the first stage of a two stage tender?
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
