Procurement & Tendering

Question 1

Tell me the difference between Management Contracting and Construction Management.

Answer 1

Management contracts – where the management contractor undertakes to manage the carrying out of the work through works contractors, who are contractually accountable to him.

Construction Management – where the construction manager undertakes to manage the carrying out of the work through trade contractors but the client is involved in the directing of the project, and the contracts with the trade contractors are directly with him

Question 2

What would be an appropriate route if time was the driving factor of the client?

Answer 2

Negotiation

Question 3

What do you consider to be the key documents to be issued during the tender process?

Answer 3

Contract documents
Employers Requirements

Question 4

Why did you recommend a Minor Works Contract?

Answer 4

I recommended a Minor works Contract as the strip out works were simple in character, there was minimal design for the contractor, the drawings for the strip out were well defined and presented. There was unlikely to be any unforeseen site constraints or discoverables. It was a relatively small strip out of a vacant building.

Question 5

Why not D&B or Intermediate?

Answer 5

D&B – no design for contractor – more risk – employer experienced.
Intermediate – advance payment not required – no testing or opening up required – does not meet recommended value for using a IC

Question 6

Why would using a Minor Works contract attract more tenderers

Answer 6

Reduced risk on contractors side
Possession of the site remains with the employer – less cost and complication on contractors side for insurance/security etc

Question 7

Where is the advice in this statement?

Answer 7

Once I had produced my report and analysed all the tender returns, I informed the client that the prices provided by the steel window contractors were exceptionally high and that I would advise reducing the scope, complexity and quantity of the steel windows/doors to the design team as a VE option to be progressed. This would reduce the overall cost of the steel windows and doors package.

Question 8

On 4more london - how did you come to a preferred tenderer? How did you go about informing tenderers?

Question 9

What was the process you took to make sure all tenders were equal?

Answer 9

Sideby side comparison which included normalising the tenders to exclude any abnormalaities or include costs where a contractor had not included for an item.

Question 10

What would have been the negatives of procuring the enabling works early on 71 hopton?

Question 11

What was in your ITT for 4more?

Question 12

What is procurement?

Answer 12

The overall process of acquiring construction work or services.

Question 13

What should be considered when selecting a procurement route?

Answer 13

• the specifics of the project
• the client objectives regarding:
• Cost
• Time
• Control
• Quality
• Risk

Question 14

What are the main procurement methods?

Answer 14

• Traditional and General Contracting
• Design and Build
• Management Contracting
• Construction Management

Question 15

What is traditional procurement?

Answer 15

The design is completed by the clients design team before competitive tenders are invited and a main contractor is employed to build what the designers have specified.

Question 16

How does traditional procurement work?

Answer 16

• The contractor takes responsibility and financial risk for the construction of the works to the design produced by the clients team for the contract sum within the contract period
• the client takes responsibility and risk for the design and design team performance.
• the client retains design responsibility and holds the direct contractual relationship with the architect

Question 17

When might traditional procurement be appropriate?

Answer 17

• If the employer has had the design prepared
• If the design is substantially completed at time of contractor selection
• The client wishes to retain control over the design and specification
• If cost certainty at start on site is improtant
• The shortest overall program is not the clients main priority

Question 18

What are the advantages of traditional procurement?

Answer 18

Retaining control over the deisng can lead to higher quality
It offers increased levels of cost certainty before commencement
DEsign changes are reasonably easy to arrange and value

Question 19

What are the disadvantages of traditional procurement?

Answer 19

• the overall project duration may be longer than others due to lack of overlap between design and construction
• There is no input into design and planning by the contractor
• a strategy based on price competition can lead to adversarial relations
• there is a dual point of responsibility with the design team controlling the design and the contractor retaining responsibility for the construction

Question 20

What is design and build?

Answer 20

Where the contractor is responsible for the design, planning, organisation, control and construction of the works to the employers requirements.

Question 21

How does D&B work?

Answer 21

The employer gives the tenderers the “employers requirements” and the contractor responds with the “contractors proposals”, which include the price for the works.
- The client transfers design responsibility to the main contractor who holds the direct contractual relationship with the architect.

Question 22

When might D&B be appropriate?

Answer 22

Where there is a need to make an early start on site as there can be overlap between design and build and construction.
Where the client wishes to minimise their risk as they transfer design responsibility to the Main Contractor
For technically complex projects requiring the contractors expertise
Where the employer does not want to retain control over design development.

Question 23

What are the advantages of D&B?

Answer 23

There is a single point of responsibility for the design and construction
There is earlier commencement on site
Early price certainty is increased
The client can benefit from the contractors experience harnessed during the design

Question 24

What are the disadvantages of D&B?

Answer 24

• Clients may find it hard to prepare a sufficiently comprehensive brief
• The client has to commit to a concept design early
• variations from the original brief are difficult to arrange and are often expensive
• It is harder to compare tenders and harder to determine whether value for money is being achieved.

Question 25

How much design input will the contractor have in D&B?

Answer 25

• This depends on the amount of design work the employer has already had completed at the time of tender.
• This can range from full design to production information and coordination only.

Question 26

Who carries out the design for the contractor in D&B?

Answer 26

It may be outsourced to a seperate design company (contractor retains responsiblity)
They may have in house design capabilities or the clients team may be novated.

Question 27

What is management contracting?

Answer 27

A management contractor is employed to contribute thier expertise to the design and to manage construction with a management fee being paid to them for doing so.

Question 28

How does management contracting work?

Answer 28

• The management contractor has direct contractual links with all of the works contractors
• They have the responsibility for the construction works without actually carrying them out
• Not all of the design need be completed before the first works contractors start work
• The MC selects the works contractors through competitive open book tender
• The client reimburses the cost of these packages to the MC plus their management fee
• The management contractor holds the contractual relationship with the works package contractors

Question 29

When might management contracting be appropriate?

Answer 29

Where the client foes not want cost certainty before commencement
where an early start on site is a priority

Question 30

What are the advantages of management contracting?

Answer 30

• Overall project duration is shorter due to overlapping design and construction
• there is contractor contribution to the design and planning process
• Changes can be accommodated in packages not yet let if they have no further impact
• the works are let competitively at current market prices on a firm price basis

Question 31

What are the disadvantages of management contracting?

Answer 31

• The price for the works is not recieved until the last package has been let
• Changes to the design of later packages may affect packages already let
• There is little incentive for the management contractor to reduce costs
• In practice the MC has little legal responsibility for the defaults of the works contractors

Question 32

What is construction management?

Answer 32

The employer places a direct contract with each of the trade contractors and utilises the expertise of a construction manager who acts as a consultant to coordinate the contractsH

Question 33

How does construction management work?

Answer 33

• The trade contracts carry out the work
• The construction managers supervise the construction process and coordinates the design team
• the construction manager has no contractual links with the trade contractors or members of the design team
• Thier role includes preperation of the programme, determining requirements for site facilities, breaking down the project into suitable works packages, obtaining and evaluating tenders, co ordinating and supervising the works.
• the client holds the contractual relationship directly with the trade package contractors

Question 34

When might construction management be appropriate?

Answer 34

• On large, complex projects where the advantages of Construction Management can be utilised for example using upfront buildability knowledge of the Construction Manager and thier programme advice including specialist input from trade contractors
• where an early start on site date is key
• Maintenance of flexibility in design and construction strategy
• where price certainty before commencement is not considered a key driver
• where the client is experienced in construction

Question 35

What are the advantages of construction management?

Answer 35

• The overall project duration is reduced by overlapping design and construction
• the construction manager can contribute to the design and project planning processes
• Roles, risks and relationships for all parties are clear
• Changes in design can be accommodated without paying a premium
• Prices may be lower due to direct contracts with the trade contractors
• The client has a means of redress to trade contractors through direct contractual links

Question 36

What are the disadvantages of construction management?

Answer 36

• Price certainty is not achieved until the last trade package is let
• Changes to packages may adversely affect packages that are already let
• THe client must be proactive and hands on
• The client has a lot of consultants and contractors to deal with

Question 37

What is the difference between management contracting and construction management?

Answer 37

• Under construction management the client is in direct ocntractual relationships with each of the trade contractors and the construction manager isnt
• Under management contracting the Main Contractor is in direct contractual relationships with the trade contractors and the client is in contract with the MC only.