15. PT

Question 1

Tell us about the single-sourcing and why it was adopted?

Answer 1

Utilities have single sourced works due to:

Limited supply chain specialists to tender per package.
Complexity.
Track record / previous working knowledge.
Interface may have been an issue with multiple subbies.
Outlined in Utilities procurement strategy.

The client was in agreement with this from the get-go.

Question 2

What types of procurement strategies are you aware of?

Answer 2

D&B
Traditional
Construction management
Management contracting
Public-private partnership (PPP)
Partnering
Frameworks

Question 3

What does PPP stand for and what is it?

Answer 3

Public-private partnership

Long-term arrangement between a government and private sector institutions to provide a service/asset. Revenues are then drawn from taxpayers over the course of the contract.

Question 4

What is the procurement strategy/process at SCSJV?

Answer 4

MWCC & Utilities - Two-stage Design & Build

Utilities scope is single-sourced, but we must show VfM.

Question 5

What is design & build procurement?

Answer 5

1 single Contractor assumes the risk and responsibility for D&B the project.
Design and construction are integrated, reducing the overall duration.
Cost and duration are established at the beginning.

Extras:
Typically, Client will appoint consultants to produce concept designs and create the Employers requirements. Client will then give these Concept designs and the employers requirements to the contractor, who will price to design and build the job based off these designs and requirements.
Typically, the Clients design team will be novated to the Contractor, to help keep design continuity within the project.

Question 6

What is a framework agreement?

Answer 6

Is a contract agreed for a series of projects.

A client who has regular & similar work may join a framework with Contractors.

Repeat business.

Just need to procure once so saves time, however may not be VfM or the most competitive.

Question 7

Briefly explain traditional procurement.

Answer 7

The least risk procurement method as there is a level of certainty about design, cost and duration. Design is complete before the main construction is let & begins.

Question 8

Briefly explain Management Contracting procurement.

Answer 8

MC is involved at an early stage and is the main point of contact for the Client.

They programme, split the packages and obtain the tenders for the works from contractors, which are let on a competitive basis.

Management Contractor paid a management fee (usually a percentage on the cost of the project). The cost is only derived after let of the final package.

Question 9

Briefly explain Construction Management procurement.

Answer 9

Similar to Management Contracting.

Split into packages and the client enters into separate contracts, however Construction manager is a consultant and is expected to monitor design and construction.

The Client has direct contractual relationships to the contractors.

Question 10

What is the difference between Construction Management & Management Contracting?

Answer 10

The main difference is the contractual relationship links.

MC - The MC has the contractual relationship with the contractors, so the Client only has 1 relationship to the MC.
CM - Does not have the contractual relationship with the contractors. Client has the contractual relationship to the contractors.

Question 11

In relation to procurement, what is partnering?

Answer 11

Isn’t a procurement route, more so a behaviour. It is based on trust, openness and co-operation between client and contractor. Partnering promotes value rather than lowest cost.

Question 12

What is a PQQ? What is it for? Examples of what it can contain?

Answer 12

Pre-Qualification Questionnaires.

Questionnaire filled out by Contractors bidding for a contract.

Financial Information, H&S, Experience.

It informs the client of Contractor competence.

Question 13

Name the main types of tendering procedures/options.

Answer 13

single stage tendering
two-stage tendering
negotiated tender

Question 14

Briefly describe single stage tendering.

Answer 14

Single-stage tendering – ITT documents are issued to a number of competing contractors who are all given the chance to bid for the project based on identical tender documentation.

Question 15

Briefly describe two-stage tendering.

Answer 15

Two-stage tendering

First stage is tender documentation being issued to the bidding contractors at RIBA Stage 2 or 3. The preferred contractor is chosen on a basis of quality of their bid, prelims etc. (Minimum details).

Second stage is the contractor then joins the design team on a consultancy basis. They work together to complete the design at RIBA Stage 4, before presenting a bid for the works.

p.s. the big difference is that the design is not fully complete, and so the Contractor has input into it, as opposed to the single-stage tendering.

Question 16

Briefly describe negotiated tender.

Answer 16

Negotiated tender – It is like single-stage tender but with a single contractor, who return with a price, and the price is then negotiated with the client’s team. Difficult to prove VfM because no competitive bidding process.

Question 17

Explain the SCSJV Hold Points.

Answer 17

These are a series of gateways and approvals (at the pre-construction stage) which must be signed off before continuing to the next stage.

Procurement strategy.
Invitation to Tender (ITT).
Recommendation.
Contract execution.

Question 18

What factors can influence the chosen procurement route?

Answer 18

Clients requirements (Time. Budget. Risk). Traditional for example is less risky as design is complete, so more certainty for the client. Also more client risk for CM over MC due to client having direct contractual relationships to the contractors.

Type of project (Level of design / stage of design).

Complexity (May have multiple contractors so get someone to manage).

Question 19

How have you selected a suitable contract based on the procurement route?

Answer 19

The procurement route on HS2 is D&B, the ECC/ECS/ECSC/ECSS are all well suited as they have an element of design. The ECC was used due to high project complexity / design. The short forms would be used where the project complexity and design is lower, e.g. WP26.1A Trial Holes.

WP26.1B - I selected a ECS for this package.

This Q is repeated in CP.

Question 20

What is ‘two stage single source procurement’?

Answer 20

The two-stage relates to stage 1 design, and stage 2 construction.

The single source relates to single sourcing to one subcontractor. This was due to complexity, limited supply chain specialists, and previous track record.

Question 21

Your case study mentions ‘HS2 awarded the contract to SCSJV on a two-stage procurement model’. Describe this.

Answer 21

Stage 1 was ECI where the contractor designed the work based on WI and client requirements, then prepared a target cost and programme for Stage 2. (Minimum details).

Stage 2 is the completion of detailed design and the delivery of the works.

Question 22

What is procurement? What is tendering?

Answer 22

Obtaining goods or services. Procurement is the act of obtaining goods and services from external sources. It includes deciding the strategy on how they are acquired by reviewing client’s requirements (i.e. time, cost, quality, risk). These all affect the choice of procurement.

Tendering relates to how the successful contractor is selected.

Question 23

You sent an ITT. What did this include?

Answer 23

Description of the project
Contract conditions (inc NEC Option)
Works Information
Code of Conduct
Health and safety procedures
Tender return date & contact details

Question 24

What do you know about benchmarking?

Answer 24

The use of historical data from projects of a similar nature as a cost comparison check for a project.

Question 25

Why did you need to create single sourcing documents?

Answer 25

To obtain client approval where we had proposed additional scope with a nature that deviated from the nature of the scope in the Works Information (WI). VfM was to be shown. Not following procurement procedure stated in the WI is a Disallowed Cost in Clause 11.

Question 26

Why was benchmarking vital due to the nature of the procurement strategy?

Answer 26

Undertaking benchmarking was outlined in the procurement strategy. It was vital to show VfM.

Question 27

How was benchmarking conducted / how did you review the Subcontractor's tender?

Answer 27

Price: Comparing rates against available cost data e.g. from the Rate Card. This shows rates for staff, supervision, labour, plant, materials, previously used and agreed with the client on earlier & similarly natured works. Programme: Due diligence on programme review to ensure allowances are reasonable. I liaised with the planners and the delivery team. I ensured all constraints had been considered.

Question 28

You mention you compiled reports on the tenders to help advise VfM to the client. What report?

Answer 28

I had a price and programme comments sheet. I had a narrative section for each. I created a document which compared all the price and programme submissions and their development which also had narrative.

Question 29

Why did you advise other asset teams to instruct their scope elsewhere? What were the other procurement options?

Answer 29

The scope deviated from the scope outlined in the WI. If we carried out a nature of scope that was not included in the WI, we would not be compliant with the package WI. Not following procurement procedure stated in the WI is a Disallowed Cost in Clause 11. Also deviating from the procurement process would breach contractual obligations which could be seen as unfair and unethical. Instructing elsewhere on a package on similarly natured works. Or even sending ITTs to Subcontractor's and creating new subcontracts with separate WI's.

Question 30

Have you dealt with liquidated damages / delay damages on your contracts?

Answer 30

No, but... X7 is used on WP26.1B (just say some). X7 is used on the MWCC. If no X7 in the contract, Unliquidated damages can still apply.

Question 31

How would you review/assess multiple tenders fairly? What would you do if one was late? What would you do if one was missing information / had errors?

Answer 31

Review fairly - normalised prices across all elements (some prices may need adjusting) so that all bids are comparable and are reviewed on a like-for-like basis. A way of doing this is using averages of the submitted costs. E.g. if a particular rate looks extremely high and out of place. I would then use a balance score card to score the tenders. Late - generally not accepted unless it can be shown they themselves didn't submit it late. Or, you can grant an extension, but it must be given to all tenderers. Missing - method of dealing with errors will be outlined in the ITT. Essentially you would normalise the tender so that it is comparable to the other tenders. You must inform the subcontractor of the mistake. You can also give them the chance to amend in the next submission review, as long as all tenderers are given that opportunity.

Question 32

Can a client reject a Subcontractor?

Answer 32

Yes. Clause 26.3 - if they will not allow the Contractor to Provide the Works - or if the parties have not mentioned that they will act in the spirit of mutual trust and co-operation.

Question 33

If a tenderer asks to change something in their tender after submitting, what happens?

Answer 33

I'd tell them them can't as the deadline has passed. Only way fair way would be if you gave all tenderers an extension of time or gave them all a second round.

Question 34

If the balance score card is done, and you select a firm, what would you do then?

Answer 34

I would go through the process of the negotiation with the Contractor. i.e. price, programme, terms & conditions etc. However, I would then need to check the outcome against the balance score card again to see if it is still competitive.

Question 35

With single sourcing, in which case would you not be able to single source?

Answer 35

If it deviates from the scope in the WI, and you don't have client approval. Not following procurement procedure stated in the WI is a Disallowed Cost in Clause 11. Extra if needed (Misty) - Value can be taken into account. If it's more than, say, 50% of the value of the works e.g. £2m package, the change is over £1m, then this could be seen as not being competitive.

Question 36

What is risk contingency during the procurement process?

Answer 36

Monetary sum added to base cost to account for uncertain events (risks).

Question 37

Why did HS2 adopt two-stage procurement over single stage? Why would you adopt two-stage tendering over single stage?

Answer 37

Procurement: - A two-stage design and build approach allows for the contractor to be appointed earlier in the process, than in a single stage which means that the contractor’s buildability advice can be built into the scheme, reducing time. Tendering: - Where design is not fully complete, so the Subcontractor has input into it.

Question 38

CPD - What did you learn from GN on Tendering Strategies, 1st edition?

Answer 38

Learnt about tenders being: Late - generally not accepted unless it can be shown they themselves didn't submit it late. Or, you can grant an extension, but it must be given to all tenderers. Missing - method of dealing with errors will be outlined in the ITT. Essentially you would normalise the tender so that it is comparable to the other tenders. You must inform the subcontractor of the mistake. You can also give them the chance to amend in the next submission review, as long as all tenderers are given that opportunity.