Procurement & Tendering Flashcards
(137 cards)
1
Q
What is your definition of procurement?
A
The overall process of acquiring construction work or services.
In every project the concerns of the client will focus on time, cost, and performance or quality, in relation both to design and to construction of the building.
2
Q
What is your definition of tendering?
A
Tendering – An important phase in the procurement strategy but procurement involves much more than simply obtaining a price. Tendering is:
o The bidding process to obtain a price; and
o How a contractor is actually appointed
3
Q
QS Role / Minimum level of Service
A
The QS is expected to fulfil the following duties, notwithstanding the details terms of any appointment or contractual obligation:
- Take initial brief from the employer in order to understand their requirements for tendering
- Choose a suitable tendering strategy with the project team
- Collate and produce the invitation to tender documents and issue them in an appropriate manner
- Deal with tender queries and ensure they are answered in a timely manner
- Open and analyse tender returns, collate tender queries from the design team and produce a tender report, which should include recommendations of preferred contractor status, agreed by the whole project team
- Advise the client on more complex tendering issues, as appropriate
To review the trade packages and ensure they align with the client’s budget. As there are many trade packages the QS’s day-to-day involvement can be quite lengthy.
4
Q
Types of Procurement
A
- Traditional o Lump sum o Re-measurement - Design & Build - Construction Management - Management Contracting - Measured Term - Serial Contracting - Private Financial Initiative (PFI)
5
Q
What is a tender?
A
A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services.
6
Q
What is a procurement strategy?
A
Identifying a procurement route and contract strategy that will best meet the client’s needs taking into account project risks, and any constraints (fundamental implementation of the project – defines the interfaces and relationships between parties – key ingredient to a successful project).
7
Q
What is a procurement route?
A
The procurement route delivers the procurement strategy. It includes the contract strategy that will best meet the client’s needs.
Strategy – links the project to the client business. Reflects client objectives and available resources (T,C,Q)
The Route – Delivers the project, selects & provides structure to the project team, allocates risk and responsibilities.
8
Q
What do you need to consider before choosing a procurement route?
A
Dependent on a number of criteria: the project type and size, the time available, the cost certainty required Responsibility for design. Experience of Client These criteria will often be in conflict with one another, and the most suitable procurement strategy will therefore represent a balance between them.
9
Q
How do you select a procurement route?
A
Formulate a procurement strategy (optimum balance of risk, control and funding for a project)
- Business case
- Define objectives and measures for success (what the client needs)
- Procurement priorities (T,C,Q,R)
- Project characteristics
- Identifying the apportionment of risk
- Overlap of design to be considered?
- Any EU Rules – OJEU?
Key drivers : Cost, programme, Quality, Risk, Ability to change
Size, location, complexity, any novel obligations
To finalise the procurement route I would arrange a procurement workshop with the key parties having gathered relevant information on possible procurement routes beforehand: examples, references, guides etc.
The workshop would focus on Client’s key drivers and matching a procurement route to these criteria.
10
Q
What type of procurement routes do you know of?
A
- Traditional
- Design and Build
- Construction management
- Management contracting
11
Q
Traditional (design / bid / build)
A
- Design and Construction completed separately
- Client has high input into the design (control over design)
- Design risk lies with Client ; Construction risk lies with Contractor
- Can be done with or without quantities
- Completed design = cost certainty
- Appropriate for complex bespoke projects
- Suitable for both experiences and inexperienced Clients
- Full drawings and specification
12
Q
What is the difference between a JCT Framework Contract and a standard one?
A
- It has a ‘call off’ provision that is the act of awarding a contract under a framework agreement; it does not need to be advertised and tendered.
13
Q
Differences between MC and CM?
A
- In legal terms the management contractor is acting as a principal whereas the construction manager is acting as an agent.
- MC – Client only has to administer one contract
- MC – Client may want warranties from works contractors so they can make a direct claim against them (e.g. if the MC becomes insolvent).
14
Q
How does D&B differ from Traditional Two Stage Tender?
A
- Similar concept in terms of appointing the Contractor at an earlier stage resulting in the Contractor being able to contribute to the design & input on buildability & quicker start on site.
- However they are different in terms of the 1st stage of the 2 stage tender appointing the Contractor on limited information therefore there is limited cost certainty with 2 stage.
- The second stage of 2-stage tendering is based on negotiation with the contractor.
15
Q
What can you tell me about partnering?
A
What can you tell me about partnering?
- Partnering is a structured management process to facilitate the whole team working across contractual boundaries.
- It can be one of two types:
o ‘Strategic’ partnering which is a long-term relationship developed between any or all of a main contractor, client, designer/consultant or subcontractors to the benefit of each of the parties over the course of a series of projects. These parties will then work together to meet agreed targets which will have been formalised in a binding or nonbinding partnering agreement. There will not necessarily be a guarantee of specific work.
o ‘Project’ partnering, in contrast, comprises free-standing binding or non-binding ‘partnering charters’ for single projects.
- Latham & Egan reports promoted its use.
- It’s fundamental characteristics are:
o Mutual Objectives.
o Continuous Improvements.
o Common Approach to Problem Solving.
- Advantages:
o Increased cost effectiveness.
o Shorter timescales.
o Increased stability / structured / well managed.
- Disadvantages:
o Amount of upfront time / money / commitment.
o Minimal / sketchy history in terms of track record, client use, and legal cases.
o Can be overly bureaucratic.
- Contracts include:
o ACA’s (Association of Consultant Architects) PPC 2000 – the key stakeholders of the project – client, contractor, consultants – sign one single, integrated contract.
o NEC 3 Option X12 – partnering contract BUT does not create a multi-party contract.
o JCT Constructing Excellence 2011 – partnering contract.
o NEC 3 Framework Contract – strategic partnering contract.
16
Q
PPP – Public Private Partnerships
A
- Umbrella term. Board range of partnerships and business structures involving both public and private sectors.
- Joint venture: where the public and private sectors collaborate for some form of mutual benefit.
- PPP schemes seek to transfer much of the development and financing risk on the private sector.
- PFI is the most common form of PPP. Education, housing, waste, street lighting and hospital PFI schemes.
- 3 categories: PFI, Concession Contracts, Institutional PPP
17
Q
What are the advantages & disadvantages of Traditional?
A
Advantages:
- Appointment of a contractor is commonly by competitive tender.
- The client has control over design, specified quality and standards etc through his appointed consultants. Generally there is no design responsibility on the contractor.
- There is for the client reasonable certainty on construction costs, because a contract figure is usually known at the outset, although this may need to be adjusted later
- Administrative matters relating to valuations and payments are in the hands of the client’s consultants. Some element of financial control.
- Completion within the contract period is an obligation, although the contract administrator may need to revise the date for completion to take account of delays due to reasons listed in the contract
- Speculative risks are balanced as between the parties, more in the client’s favour on a lump sum contract, but less so with a measurement contract. The traditional lump sum approach in terms of cost, design and quality is a relatively low risk procurement option for the client, but the time needed for the project overall is likely to be relatively longer than that of other procurement methods
- Traditional procurement, however, can be used in a wide range of situations, whether the basis for pricing results in a lump sum contract, a measurement contract or a cost plus contract, and whether the project is a single one-off project, or part of a programme under a specific term or other form of serial or continuity contract.
Disadvantages:
- Because design and construction are separate sequential processes, the overall programme for the project tends to be relatively long
- Design changes are possible during construction of the work, but usually at a price in terms of direct and related costs and extra time. Changes can be costly.
18
Q
What are the advantages & disadvantages of Design & Build?
A
Advantages:
- Quick start on site – overlap with design & construction
- Single point of contract for design & construction stage
- Buildability input from Contractor
- Design risk lies with Contractor (for CDP)
- Lump sum contract – cost certainty
Disadvantages:
- Low quality risk – Compliance Monitoring Team can be appointed to overcome this.
- Client changes can be expensive to implement
- Little client involvement in design development
19
Q
What are the advantages & disadvantages of Construction Management? Advantages:
A
Advantages:
- Greater control for the client in terms of appointments and is involved in directing the project.
- High degree of input, can lead to project success depending on experience.
- Can lead to reduced costs by appointing individual contractors if managed well.
Disadvantages:
- Greater risk for the client than management contracting due to the reduced risk undertaken by the contractor.
- A lack of experience by client can lead to project problems.
20
Q
What are the advantages & disadvantages of Management Contracting?
A
Advantages:
- Reduced risk than construction management because contractor assumes greater responsibility.
Disadvantages:
- Reduced control over works appointments and directing of project.
21
Q
What are the advantages and disadvantages of a Framework?
A
Advantages:
- Pre-agreed terms & conditions, prices & quality levels with framework suppliers.
- Enables long term relationship between Client & Contractor/Consultant.
- Allows the use of KPIs and continuous improvements of delivery & efficiency.
- Captures knowledge, experience & best practice.
- Allows integration of supply chains.
- Cash savings: simplified procurement, greater efficiency & VE.
- Open book approach to cost management.
- Reduced overall procurement costs.
- Contractors can retain project teams with a secure workload.
- Prices can adjust to supply & demand.
- Gives clients in the public sector a means of fulfilling OJEU requirements by using existing frameworks without running their own selection process: Buying Solutions. No need for PQQs.
Disadvantages:
- Appointing on basis of capability & capacity often seen to overlook smaller firms.
- Client needs to have credible & accurate workload forecasts.
- Takes significant time & resources to establish.
- Over-onerous T&Cs and prices won’t get the level of interest needed.
- Having too many participants can induce price competition.
- New suppliers can’t be added once it is in progress.
22
Q
What are the ways in which a Contractor can form a tender price?
A
BQ / SPEC / DWGS - Production Cost = High. - But If No BQs. Contractor can obtain from BCIS. APPROX BQ / SPEC / DWGS - Where Exact Quantities Not Known. - Fully Re-Measurable. CONTRACT SUM ANALYSIS / SPEC / DRAWINGS - CSA, Not a Contract Document. - Used To Price Variations / Valuations. - Indicative Quantities Usually Required. SPEC / DWGS - Onus Completely On Contractor. - Longer Tender Period. - Difficult To Price Variations, Carry Out Valuations.
23
Q
What are the main methods of choosing a contractor?
A
- Open tendering
- Selective tendering – single or two stage
- Nomination / negotiation
- Serial
- Joint ventures
24
Q
What is open tendering?
A
- Indiscriminate request for tenders
- Allows anyone to submit a tender to supply the goods or services that are required.
- Generally an advert will be placed giving notice that the contract is being tendered, offering an equal opportunity to any organisation to submit a tender.
- Can either be used single / two stage.
- Deposit required to discourage frivolous applications
Adv/ Disadv
No favoritism
Give opportunity to capable firms not usually invited
Maximum benefit from competition
Lowest tender could be inexperienced or made errors
No guarantee lowest is capable or financially stable
Total cost of tendering is increased
25
Selective tendering
- Allows only suppliers to submit tenders by invitation.
| - Client will pre-select list of possible Contractors.
26
Serial tendering
- Involves the preparation of tenders based on a typical notional (approx.) bill of quantities or schedule of works.
- The rates can be used to value works over a series of similar projects, often for a fixed period of time.
- Used where a client has a regular programme of works (likely to be undertaken by a single contractor, minor works, repetitive works – housing / maintenance works)
- Tender documents: will define the buildings covered by the works, period of when works will be required, estimate of the likely total value of the works likely to be required.
- Appointment based on a schedule of rate – related to categories of works likely to be required.
Can reduce tender costs
May encourage suppliers to submit low rates to secure ongoing programme of works
May be seen as anti-competitive
27
JV – Joint Venture
Commercial alliance between two or more separate entities that enables them to share risk and reward. A new business is created to which each party contributes resources such as land, capital, intellectual property, skills, credentials or equipment.
Commonly used:
- Gain local knowledge in overseas markets.
- To share risks and costs
- Enable a larger company to acquire new resources or expertise from a smaller company.
- Enable a smaller company to benefit from the credibility and financial stability of a larger company.
28
Continuity tendering
Continuity tendering is a variation on selective tendering, where subsequent work is negotiated following successful completion of a preliminary contract.
29
Negotiated Tendering
Negotiated tendering occurs when the client approaches a single supplier based on their track-record or a previous relationship and the terms of the contract are then negotiated.
May be a limited number of potential suppliers/ extending the scope of an existing contract.
Can reduce tender costs
Can reduce programme time
Can allow early involvement
anti-competitive
adversarial – carrying out the negotiation in the absence of competition, so that both parties think it is fair can be complex and time consuming.
There is a lack of accountability
30
When is 2-stage appropriate?
- When cost is not the key driver
- When tight programme of works
- Adequate info at 1st stage to allow prelims / programme / MS to be produced by the contractor
- Client has adequate resources to engage in negotiations during 2nd stage
31
How does each stage of a 2 stage tender conclude?
- 1st stage: Appointment of the preferred contractor – a pre-construction service agreement (JCT)
- 2nd stage: Agreement of a contract lump sum
- The client may have the right to withdraw from the 2nd stage and revert back to single stage.
32
E-tendering
- Web based tendering
- Improves efficiencies and eliminates waste
- Audit trail of communication
- Simple, user friendly
- Quicker than posting documents
- Option to evaluate tenders on screen
- Reduced tendering costs
33
What’s included in a request for proposal?
- Project description & background – location, client, vision, sustainability statement, procurement route, other consultants
- Brief
- Budget
- Scope of services
- T&C of appointment
- Evaluation criteria – scoring matrix
- Instructions
34
How did you evaluate tender returns?
Tenders checked for compliance with the ITT
Arithmetical checks carried out
Any non-compliant tenders treated in accordance with the ITT (specs / technical info)
- Fees
- Proposed team
- Experience
- Resource schedule/commitment
- PI cover
- Financial standing
- Reputation/References
- Understanding of project brief
- Understanding of client brief
- Qualifications, exclusions & assumptions
- Attitude to sustainability/waste management
35
How do you make a tender recommendation?
- Report: Tender history
- Summary of tender returns
- Aligned tenders
- Scoring of tenders against technical and commercial criteria
- Recommendation on what tender represents overall best value for money
36
How would you evaluate tender returns and make recommendation to the client?
Tender Evaluation:
- Tender returns checked for compliance with the invitation to tender.
- Arithmetical checks carried out on cost components.
- Any non-compliant tenders treated in accordance with the conditions outlined in the Invitation to Tender.
- All tenders aligned on a like for like basis and compared with each other and the pre-tender estimate.
- Analysis undertaken of resource levels committed by each contractor and on the merits of the team proposed.
- Post-tender interviews carried out with short listed tenderers.
- Tenders scored against the pre-determined selection criteria.
Tender Recommendation Report prepared and presented to client, including:
- Tender history.
- Summary of tender returns.
- Aligned tenders.
- Scoring of tenders against technical and commercial criteria.
- Recommendation on what tender represents overall best value for money.
- Outline of future actions and contracting approach.
37
What are the different requirements and deliverables of the PQQ & ITT stages?
The aim of the PQQ is to select a shortlist of firms who are equally capable of delivering the project using only minimal project information. Key criteria include:
- Legal capability:
o Insurances – PII, EL & PL.
- Financial capability;
o Insurances they have in place and their liability limits;
o Confirm they’ve met all obligations to pay creditors and staff during the last year;
o Do they have any claims pending against them from within the last 3 years;
o To sign a permission form to ask their bank for a reference.
o Due diligence – e.g. credit check (Dun & Bradstreet)
- Technical capability:
o Past experience – size / type;
o Project Team;
o H&S competence.
The aim of the ITT is to select the Principal Contractor who offers the lowest price or the most economically advantageous tender and that the Client can be certain the firm are capable of delivering the full technical & contractual requirements. Bids based on full tender documentation, key criteria include:
- Form of Tender
- Technical responses:
o delivery,
o programme,
o logistics,
o quality management,
o resources,
o proposed team,
o health & safety, competence assessed by CDM Advisor.
- Commercial response:
o Contract Sum Analysis (D&B) / schedule of rates / bill of quantities.
- An understanding of the brief and scope of the project.
- Focused more on firm & individual’s future performance on the project and how this will be achieved.
38
How can you review the commercial element of tenders?
- Lowest price gets awarded the contract.
- Scoring - Lowest price gets highest score, the others get a lower score.
- Establish an ‘exceed budget’ showstopper mechanism.
39
How would you decide on a procurement route?
- I would formulate a Procurement Strategy to achieve optimum balance of risk, control and funding for a project. This would address:
o The business case
o Define objectives & measures for success
o Determine procurement priorities
o Identify main risks and who is best placed to manage them
o Any EU rules
- Key drivers of the procurement route are the Client’s requirements for:
o Cost
o Programme
o Quality
o Risk
o Ability to change
- To finalise a procurement route, I would arrange a procurement workshop with the key parties having gathered relevant information on possible procurement routes beforehand: examples, references, guides etc.
- The workshop would focus on deciphering the Client’s key drivers and matching a procurement route to these criteria.
40
What was contained within the PQQ?
- Project description
- Client objectives
- Description of PQQ process
- Project team details
- Cost range of project
- Scope of works
- Contract details
- Tender details
- Some basic drawing information.
- General questions for contractor details
- Confirmation of contractor’s insurances
- Selection criteria
41
What are the principles of the Employer’s Requirements?
- They provide a description of the client's requirements, including; the specification for the building, the scope of services required from the contractor and an allocation of risk for unknown items.
- Contractor's proposals are then prepared in response to the ERs. These present the contractor's suggested approach for designing and constructing the building, along with their price.
- The Employer has control over any design elements of the project that are included in their requirements.
- Once the contract is let responsibility over design passes to the contractor; the employer has no direct control over the contractor’s detailed design.
Typically used on Design and Build projects (such as JCT D&B 05 or on a traditional contract where the contractor has to design discrete parts of the works).
Description of the Client’s requirements
- specification for the building,
- the scope of services required from the Contractor
- allocation of risk for unknown items.
Once the Contract is let the responsibility over design passes over to the contractor (the employer has no control over the contractors detailed design)
Contractors Proposals are prepared in response to the ER’S. Contractors suggested approach for designing and constructing the building, along with their price.
- The brief
- Specification
- Drawings
- Surveys
- Site constraints document
- Design report that provides the essence of the ‘design intent’
42
What level of information / detail would you expect to see in the Employer’s Requirements?
- Can vary depending on:
o Level of client experience
o The extent of the contractor’s design responsibility and how much initial design is included in the employer’s requirements.
- Can range from a very simple specification to a fully developed performance specification and design.
- The level of design responsibility and input from the contractor is much greater on design and build projects than a traditional contract with a contractor’s designed portion.
- Adequate time must be allowed to prepare the employer’s requirements, as well as time for the contractor to prepare their proposal and tender price.
43
What happens when you have a discrepancy between the ERs & the CPs?
Procedure to outline discrepancies outlined in clause 2.14 in JCT D&B.
- Within CPs: Contractor must give notice to the Employer along with proposed amendment to remove it; Employer can choose between options at no additional cost.
- Within ERs: The CPs prevail without adjustment of the Contract Sum. Contractor proposes amendment to remove it which shall be treated as a variation.
44
What takes precedence; the ERs or CPs?
The Employer’s Requirements.
45
Are Contractor’s Proposals necessary for design & build projects?
- No; if the ERs are sufficiently detailed then the Contractor may provide a statement saying it intends to fully comply with the ERs rather than submit a full Contractor’s Proposals package.
- Conversely, the Contractor may wish to provide a list of derogations where it intends from the ERs, possibly due to a better product or method of working.
46
Does D&B lead to lower quality?
- Not necessarily but it is more likely due to the client have less involvement in design.
- Compiling a comprehensive set of ERs and selecting the right contractor who is fully entwined with the Client’s objectives is much more important.
- Other safeguards such as
o novating the design team,
o employing a CMT and
o requiring samples and benchmarks of key materials/areas, Specifying suppliers / materials can also help deliver quality.
47
How is the Contractor’s Design monitored?
- Procedure for Contractor’s Design Submission outlined in Schedule 1 of JCT D+B.
- Contractor submits Contractor’s Design docs to Employer in required format & in sufficient time for comments to be made prior to being used for procurement / carrying out the works.
- Employer has 14 days to review – marks as:
A. Approved (default if no response received from Employer)
B. Continue in line with Employer’s comments
C. Incorporate comments & resubmit
- If contractor disagrees with the Employer’s comments:
A. Contractor must notify Employer within 7 days that compliance would give rise to a change.
B. Employer then has 7 days to confirm / withdraw comments.
Schedule 1 of Standard Building Contract XQ -
Contractor submits design to Architect / CA (by the format stated in the ER’s or CP’s) in sufficient time to allow any comments on the document prior to procurement or and/or carrying out of the CDP works.
Within 14 days, the Architect / CA must return the drawings to the contactor marked Status A, B or C.
(B&C are where the Architect/CA does not believe the drawing is in accordance with the Contract).
48
What is a procurement strategy?
1. Links the project back to the business.
2. Outlines strategic goals – identifies best way of achieving objectives for best Value for Money
3. Considers constraints, risks, funding into account.
4. Is delivered by the selected procurement route.
49
What is a contract strategy?
1. Determines relationship / integration of client / contractor + design, construction & maintenance
2. Supports the project objectives – time, cost, quality
3. Define form of contract to be entered
4. Defines roles & responsibilities
50
What are the differences between a Procurement Strategy and a Procurement Route?
- The procurement route sits within the overall procurement strategy which also addresses the Client’s business needs.
- The Strategy:
o Links the project to the client business.
o Balances client risk with control.
o Reflects client’s objectives & available resources (T/C/Q).
- The Route:
o Delivers the project.
o Selects & provides structure to the project team i.e. who will be involved & how will they work together.
o Allocates risk & responsibilities.
o Determines the form of contract – acts as a legal mechanism for assigning risk.
51
What was the function of the Preliminary Invitation to Tender?
Ultimately to shortlist two panel members to proceed to the ITT stage. To assist selection, panel members were required to provide:
- confirmation of its supply chain members and their availability and capacity to deliver the project.
- how each Panel Member intends to approach the Scheme and develop the designs;
- the Panel Members’ understanding of the key local issues to be addressed;
- the Panel Members’ ability to deal with local interface issues, for example working with an existing ICT partner or integrating with an existing ICT procurement and interface with FM providers such as catering providers.
- Outline proposals for taking forward future schemes (the details of the supply chain are not required at this stage)
52
What is contractor design portion?
Associated with JCT contracts.
CDP is an agreement for the Contractor to design specific parts of the works.
The contractor appoints their own consultants to design; they could also novate over the client teams.
53
What is novation?
- Process whereby contractual rights and obligations are transferred from one party to another.
- Where a contract is transferred from one party to another.
- Via a Novation Agreement (An agreement that has the effect of substituting one party for another party without changing the rights and obligations under the original agreement is called a novation).
- Design consultants are initially contracted to the client, but are then 'novated' to the contractor. This is common on design and build projects where the design team are appointed by a client to carry out initial studies or prepare a concept or detailed design, but then when a contractor is appointed to carry out or complete the design and construct the works, the design team (or part of it) is novated to work for them.
- It is important that any novation documentation is properly drawn up and that it makes clear which services consultants performed for the client and which they will now perform for the contractor
- Client may require collateral warranties from novated designers.
Maintains continuity of design pre and post tender
54
What do you see as the key issues when a design team is novated?
- Whether the new party has the right to take action against the novated party for breaches that occurred before novation.
- Ensuring that the design team responsibilities are adequately transferred to the Contractor in order to establish a duty of care through novation agreements.
- Obtain all relevant collateral warranties
- Ensure that the Contract is signed before the design is continued as precedents suggested LOI cannot be relied on to establish the Contractor’s responsibility for design.
- Employ a CMT to monitor and review quality – if none can be arranged seek agreement from Contractor to self-certify.
55
What is assignment?
The transfer of rights only – No Obligations!
- An agreement that transfers one party’s rights in a contract but not its obligations or liabilities to a third party is called an assignment.
56
What are collateral warranties?
- Creates a contractual link where there otherwise wasn’t one. – usually to a primary agreement.
- Contractor with design responsibility, in the form of a contractor collateral warranty; - Sub-contractors with design responsibility, in the form of a sub-contractor collateral warranty; - Consultants in respect of professional appointments, in the form of a consultant collateral warranty.
57
What process have you used to appoint consultants?
RFP process:
1. Agree shortlist with Client
2. Issue Request for Proposal
3. RfP return evaluation
4. Make recommendation to Client
5. Appoint successful Consultant
6. Feedback to unsuccessful applications
58
What is the difference between procurement and tendering?
a. Procurement is the whole process, tendering is just a part of it
59
Where would you find guidance on procurement and tendering of construction projects?
a. RICS Guidance Note on developing a construction procurement strategy and selecting and
appropriate route – 1st edition 2013
b. Has a checklist for strategy
60
What factors determine the procurement strategy?
a. Time:
i. Does it need to be completed by a certain date?
ii. Is the client willing to pay more for an earlier completion?
b. Design;
i. Does the client want control over the design?
c. Cost:
i. What is the budget and how much of a priority is this?
61
What are the advantages and disadvantages of a traditional procurement route?
a. Advantages:
i. Competitive and fair – all tenderers are bidding on the same information
ii. On bespoke schemes, the client has full control over the design quality of the scheme
iii. Reasonable price certainty (pending client variations)
iv. Tried and tested method
v. Changes are reasonably easy to arrange and value
b. Disadvantages:
i. If the design documents are rushed and inaccurate, there can be less time and cost certainty
and also can lead to disputes
ii. Total project may be longer as a result of a separate design and construction process – no
concurrent works
iii. There is no input at the design stage from the contractor – something that may be beneficial if
they have expertise in the project type
iv. If the full scope cannot be defined before tender, there is a premium of risk to be paid by the
client
v. The designers and contractor have little incentive to advise the client on savings
62
9) What are the advantages and disadvantages of a design and build procurement route?
a. Advantages:
i. Client only has to deal with one firm – easier for communication and disputes
ii. Client risk is reduced to that single point of contact
iii. Integrated construction approach where the contractor contributes to design and construction
iv. Price certainty can be obtained before construction starts, so long as the ER’s are adequate
and there are no changes
v. Total project time may be reduced due to concurrent works of design and building
b. Disadvantages:
i. The success of the project relies heavily on a robust set of ER’s
ii. Client is required to commit to a concept design at an early stage
iii. Bids are difficult to compare – each design will differ slightly
iv. Changes to the scope can be expensive
v. Quality may be compromised as the client has relinquished control
vi. Less aesthetic appeal
63
What are the advantages and disadvantages of a construction management route?
a. Advantages:
i. Potential time savings due to overlapping of design and construction
ii. Trade contractors and the CM are able to contribute to design and project planning
iii. Roles, risks and relationships for all participants are clear
iv. Changes in design can be accommodated later than with some other routes, so long as the
trade packages haven’t been let
v. Client has direct contracts and pays the trade contractors – improved cashflow certainty
b. Disadvantages:
i. Price or time certainty is not achieved until the last trade package has been let
ii. Budget depends heavily on estimates and cost plans
iii. Requires an experienced, proactive client
iv. Client must provide a good quality brief
v. The design is not complete until significant resources have already been committed to the
project
vi. The route relies heavily on the client selecting a skilful and committed team
vii. Close information and time control is required
viii. Relies on a proficient and committed construction manager
ix. Design team also has to be controlled
64
What are the advantages and disadvantages of a management-contracting route?
a. Advantages:
i. Programme benefits due to concurrent design and construction
ii. Management contractor and works contractors can contribute to project
iii. Changes can be accommodated so long as all packages haven’t been let
iv. Packages are competitively let at prices that are current at the time that work is let
b. Disadvantages:
i. Client must provide a good brief
ii. Poor certainty of price at an early stage
iii. Heavy reliance on design team estimates
iv. Relies on a good MC
v. Route reduces resistance to works contractors claims as they are passed to the client from
the MC
vi. Design has to be closely managed
vii. May be gaps in the works contractor packages that would have been picked up traditionally
65
Where would you find guidance on tendering?
a. RICS guidance note on tendering strategies
66
What are the different types of tendering?
a. Open
i. Allows anyone to express an interest to tender
ii. Usually advertised in journals or websites (OJEU for public procurement)
b. Selected (competitive)
i. Shortlist drawn up by the client and design team or may be a pre arranged framework
c. Negotiated
i. Single stage tender with a single contractor who returns with an initial price
ii. This is then negotiated by the PQS
iii. Competition is compromised and as such, is rarely used/sometimes disallowed by public
bodies
d. Single stage
i. Most common type
ii. Obtaining a price for the whole of the construction works
iii. Tender documents are issued to the competing contractors, allowing them to bid based on
identical information
iv. Generally done at RIBA Stage 4
e. Two stage
i. Become more common in recent years
ii. Used when time is constrained (design and tendering can overlap)
iii. Can be used to allow technical expertise of the contractor to be used
iv. Frist Stage:
1. Sent out at RIBA stages 2/3
2. Preferred contractor is chosen on the quality of their bid
3. Quality of their team
4. Preliminary price
5. Programme
6. OH&P allowances
v. Preferred contractor then joins the design team on a consultancy basis under a PCSA
vi. Works with the team to complete the design, generally to Stage 4
vii. They then present a bid at this stage
67
16) How do you equalise tender returns?
a. The average of returned costs
b. The highest of returned costs
c. The cost plan allowance
68
How would you deal with errors in a tender return?
a. Using the JCT Tendering Practice Note 2012
b. Following 2 options are given for dealing with errors within tender returns, this is specified within the
tender documents
c. Alternative 1:
i. Confirm or withdraw
d. Alternative 2:
i. Confirm, amend or withdraw
69
What was included in the tender documents for the Georgian Terraces?
a. Form of tender
b. Certificate of bona fide tender
c. Schedule of amendments to JCT IW contract
d. Schedule of works
e. Design information
f. Instruction to tenders
g. Preliminaries
h. Programme
i. Reports and appendices
j. Contents list
70
What does bona fide mean?
a. In good faith
| b. It is the tenderer confirming that they have not colluded and that their return is true and honest
71
How do tender documents become contract documents?
a. If there are no addenda etc, there is no reason why the tender documents cannot be simply appended
to the form of contract as contract documents
b. Tracker of tender and queries should be kept
72
What is the main risk of a two stage strategy?
a. The inherent risk that the returned price for the second stage is too high and cannot be negotiated
down
b. The client is then in a situation where they have paid a large sum of money to a contractor, wasted
time and potentially need to re tender the project
73
Why is a robust tendering strategy needed?
a. Helps to ensure positive tender returns through:
i. Accountability
ii. Auditability
iii. Ensuring everything has been captured
iv. Parity
v. Help reduce claims of corruption
vi. Ensure the correct price is paid for the work
74
What information would you expect to receive from a tenderer at each stage?
a. Programme
b. Prelims
c. Overheads and profit
d. Team
75
What are the risks of a Client procuring a package directly?
a. Client holds risk on the package
b. Main contractor may have issues with sub contractor
c. Potential coordination issues – frame by client façade by contractor
d. May require the early free issue of certain materials
76
What are the contents of a tender recommendation report?
a. Executive summary
i. Process
ii. Pre Tender Estimate
iii. Returns
iv. Next steps
b. Introduction
c. Tender returns
d. Tender data
e. Examination of tender
f. Tender scope development
g. Budget analysis
h. Recommendation
i. Tender opening form
j. Contractor comparison
77
Describe the procurement process
a. Select a list of potential contractors
b. PQQ
i. Used to ensure that the contractors have the relevant experience, financial standing and
health and safety record
ii. Government standard form of PQQ is PAS 91 2013 (mandatory for central government
projects)
iii. JCT tendering practice note 2012 gives guidance on contractor selection
c. Set a suitable tender period:
i. Depends on the complexity, size, time of year and market conditions
ii. Advisable to gain an understanding of the contractors opinions during the PQQ stage
d. Compile the tender documents:
i. Choice of route and strategy has impact on the tender documents produced
ii. Contents:
1. Invitation to tender letter:
a. Formally inviting the contractor to tender
b. Describes the project
c. Confirms the return date
d. Contact details of the QS
2. Form of tender:
a. Form that the contractor signs and returns with the proposed tender
3. Contract conditions:
a. Proposed contract conditions
b. Contract amendments
4. Instructions to tenders documents:
a. Sets out what is to be returned and by when from the contractors
b. Proposed scoring mechanisms and details for arranging site visits
c. Sets out tender query techniques
5. Project information:
a. Base date
b. Fluctuation procedures
c. Completion strategies (section completion)
d. Levels of LDs
e. Dispute resolution
78
Differences between Construction Management and Management Contracting
CM – The client is in direct contractual relationships with each of the trade contractors and the construction manager isn’t.
MC – The client is only in contract with the MC and the MC is in contract with all the trade contractors
79
Cost Plus Contracts
Cost Plus Contracts reimburse the contractor’s actual costs, together with an addition (%) for OH&P. This form of procurement can be competitively tendered, with the OH&P addition being the competitive element, together with any lump sum items required at tender stage (such as site management costs).
This method of procurement is not normally a very economical way to procure a project, as there is likely to be a lack of competitive tendering on some elements, and no incentive for the contractor to reduce cost. However, it has the particular advantage that the works can start very promptly, with minimal tender documentation.
This form of procurement would usually only be advisable if the work content was small and the level of complexity low.
80
Assessing a suitable tender period
- The complexity of the project
- The size of the project
- Time of year (e.g. Christmas period)
- Market conditions
81
Benefits of E-Tendering
- Ability to track the time of tender opening
| - Collation of tender queries in one place
82
Tender Checklist
- Insurances are like-for0like (in the aggregate policies or each and every claim basis)
- The insurance certificates are provided for all insurance requested and are to the levels included in the tender.
- All qualifications and assumptions have been carefully reviewed. These have been issued to the design team, project manager and client for comment.
- Tender returns have been issued to all members of the design for comment
- Proposed sub-contractors / suppliers have been checked for and comments retrieved from the design team (if necessary request financial checks for any key subcontractors)
- Priced risk registers included in the tender have been reviewed and have been appropriately costed
83
Tender Scoring Technique
It is imperative that the proposed scoring mechanism is disclosed in the instructions to tenderers document and that the process is adhered to. The split between quality vs price will be dictated by a number of factors which could include:
1) Whether the tender is a single, two-stage or negotiated tender
2) The complexities of the project
3) The chosen procurement route
84
What forms of tendering are there?
- Open
- Selective
o Single stage
o Two stage
- Negotiated
- Competitive
85
Errors in tender return
Alternative 1: Confirm or withdraw
| Alternative 2: Confirm, amend or withdraw
86
What information is obtained during the first stage?
Prelims and OH&P, programme of works, facilitating works and enabling works possibly.
87
How would you check a tender return?
Tender opening form in the presence of two independent parties and ensure the tender returns are in line with the tender instructions
How do you carry out a tender analysis?
- An arithmetic check to check for errors
- Check tenders against the PTE and the current budget
- Look for missing scope and/or exclusions / provisional sums
- Resolves errors against the tendering cost; Practice Note 6 details how errors in tenders are to be dealt with
- Conclusion forms the basis of recommendation to Clie
88
Best Value Assessment
Best value procurement (BVP) is a procurement system that looks at factors other than only price, such as quality and expertise, when selecting vendors or contractors
For any comparison over a given period of time there are only two outcomes.
Strictly speaking, the net present value (NPV) calculation should be included as a best value measure, although experience suggests that the NPV calculation often reflects the outcome from the cumulative cost comparison
89
Whole Life Costing
The cost measures used in the whole life cost assessment are defined as follows.
Capital costs - the cost of components and their installation.
Operational and replacement costs - operational costs include planned and responsive maintenance costs (as well as component replacement where necessary) that occur in the period of the analysis.
Disposal costs - disposal costs occur when components are replaced and at the system's end-of-life. Costs may include for dismantling and removal and the cost of disposal in landfill or a positive adjustment where materials can be recycled.
Generally in pure financial terms the best value option would be the one with the lowest cumulative cost. However, cumulative costs do not provide a level playing field when comparing future costs. For example, £10,000 spent in 10 years' time does not have the same value as £10,000 spent in 20 years' time.
90
Key Performance Indicators (KPI’s)
A KPI is a measure of performance of an activity that is critical to the success of an organisation.
91
What is an ITT?
Gives overview of project, outlines key dates, instructions to tenderers, contract used, general conditions
92
What is a Form of Tender?
A document to be signed by bidder stating they will carry out works should they win the Contract. Declaration there will be no bribery, they will abide to rules of tendering etc.
93
What is a preliminaries document?
Describes the works as a whole, specifies general conditions and requirements, including things such as sub-contracting, testing, completion etc. The costs associated with preliminaries (general costs to deliver the project such as power, site huts, site staff etc) are submitted by the Contractor as part of their Contract Sum.
94
What is a tender return slip?
Included in the tender submission, this slip stipulates the content is not to be opened before a set time/date, includes the title of the contract, return address and tender check list.
95
What is best value?
refers to the most advantageous combination of the whole-life cost, quality (fitness for purpose) and sustainability (in terms of the economic, social and environmental benefits) available to meet client requirements.
- CABE value handbook defines different types of value
96
Tender Analysis - What criteria would you assess the tenders against?
- Quality (experience, understanding of requirements, past performance, technical skills, resource availability, methodology, management skills and systems)
- Compliance with ITT requirements
97
What would you include in a tender report?
- Scoring matrix (e.g. 1 - 5, 5 being perfect answer)
- Weighting of each category (e.g. methodology may be 10% of total score)
- Results (score in each category, multiplied by category weighting %age, all added up to give total score)
- Show tender queries and responses
- Show prices submitted and prices after normalisation
98
What are the requirements for public sector procurement?
- Contracts above EU threshold must comply with the Public Contracts Regulations 2015
- Notice must be published on OJEU
99
What is the Public Contracts Regulations 2015?
- Apply to public projects above a certain threshold (£4.7m for works contracts)
- Aggregation rules apply so project cannot be divided into smaller projects sub-threshold
- Private projects included if publicly subsidised
- Projects must be advertised on OJEU. Tender period lasts over 30 days,. Can be reduced to 15 in some circumstances (PIN, prior information notice give).
100
What are the OJEU tender procedures?
- Open procedure; anybody can bid, no PQQ or shortlisting. Anyone interested sent tender information.
- Restricted procedure; PQQ to shortlist candidates. Only successful candidates invited to tender.
- Competitive dialogue; begins with PQQ. Shortlisted bidders enter into dialogue to discuss project, develop solutions. Following this, successful tenderers are invited to bid.
- Competitive negotiation procedure; begins with PQQ. Tenderers are invited to negotiate. No formal rules or ending. Negotiation can continue on after preferred bidder is selected.
101
How long are projects generally advertised for in the private sector?
- 14-21 days adequate for single stage tender
| - longer if period coincides with a holiday
102
How long would you expect the tender period to be?
- varies based on tender procedure
| - 3-4 months where Contractor's design portion required e.g. design and build projects, two-stage tendering.
103
What are the key methods used to pay Contractors?
- Re-measurement
- Reimbursable
- Target Cost
- Guaranteed Maximum Price
- Periodic payment
- Milestone payment
- Staged payment
- Activity Schedule
--
53
What is the LDP2?
- A construction framework for residential-led development to support the mayor's ambition to accelerate housing development
- 29 panel members pre-selected through a rigorous procurement process
- Applicable to Greater London
104
What set of rules does public sector procurement adhere to?
The Public Contracts Regulations 2015 (PC Regulations)
105
Why were PC regulations implemented?
EU Directive 2014/24/EU
106
When do PC regulations apply?
When the Employer is a 'Contracting Authority' and the contract awarded a 'public contract'
107
Why may post contract changes cost more in a D&B project?
Higher mark up. Contractor takes on more risk as they own design.
108
When reviewing tenderers, how would you review a companies financial standing?
We don’t do it, reviewed by Dunne&Bradstreet
109
What tender documents would be sent out for a D&B project?
```
ITT
Form of tender
Declaration of non collusion
EMPLOYER’S REQUIREMENTS
Draft Contract
Preliminaries and general conditions
Tender pricing schedule
Pre cons H&S Pack
Working practice: contractors working guide
Tender query schedule
Provisional programm
```
110
What would the difference be between the tender documents for D&B and a traditionally procured project?
Instead of employers requirements, you would have architects drawings, MEP drawings etc
111
Who is responsible for a mistake in a tender submission?
Depends on which alternative (1 or 2)is stipulated in the form of tender.
As per JCT PN2017, I have used alternative 2 on my projects. This is where the contractor is given the opportunity to confirm his offer or amend it, followed by an endorsement that this is there final offer.
FYI - alternative 1 stipulates the contractor must confirm or withdraw, followed by letter of endorsement.
PUBLIC - public sector employers will have developed their own procedure for handling these issues
112
What documents should be sent out in a PQQ?
Enquiry letter
Project information schedule
Pre qualification questionnaire
JCTTPN17 gives model forms of the above
113
What is the minimum period for response to public project PQQs?
30 days from OJEU notice
15 in urgent cases
114
What should a project information schedule include?
```
Project estimated value
Employer, professional team, point of contact
Tender procedure to be used
Programme
Contractors design requirements
BIN requirements if applicable
Contract used and any amendments
Contract particulars including requirements for collateral warranties, third party rights, bonds, insurances
```
115
What are the four categories of a questionnaire in a PQQ?
The basic factual particulars
Questions relating to financial matters and good standing
Regulatory and compliance matters
Technical capacity (capabilities, skills, past performance)
116
How many tenderers should be shortlisted in a DB scheme?
No more than 4
117
Generally how many tenderers should be shortlisted through a PQQ process or otherwise, excluding DB schemes?
3-6
118
How long do you expect the tender period for a single stage tender to last, private and public?
Minimum 28 days for private
Minimum 35 days for projects subject to PC regulations
For design and build projects, this may be extended to 3-4 months, but this entirely depends on the complexity and development of the design
119
What is the best value criteria?
```
Quality
Price
Technical merit
Aesthetic
Functional and environmental characteristics
Running costs
Cost effectiveness
Lifecycle costs
Period required for completion
```
The criteria and respective weighting’s relative to price must be set out, identified and confirmed in the ITT
120
What would happen if the employer does not stick to the scoring criteria set in the tender docs?
Result open to challenge by unsuccessful tenderers
121
Once the tender evaluation is complete, what is the difference in notification between public and private projects?
In cases where PC regulations apply, there is a 10 day standstill period for any challenges following notification of intended award.
122
When would you use a framework contract, and why?
For a client that is continuously commissioning works, because:
- it reduces procurement timescales
- reduces learning curves/risks
123
What are the different types of planning apps?
Outline planning app - to understand whether a development is likely to be approved before significant cost commitment
Detailed planning app - full set of info submitted to LA
124
Who applies for planning?
Lead designer / client / PM
125
What's the procedure for securing planning permission?
Contact local planning authority to understand procedure
Generally - planning meetings, submit drawings, issue notices, public consultations, published on planning portal, pay fee
126
What is a party wall award?
Sometimes Party Wall Agreement, it's document produced by the two party wall surveyors (or the “agreed surveyor”) which resolves the dispute that was triggered when the party wall notice was not consented to
127
What are Party Wall Notices?
Notifying a party tenant/neighbour of works to be carried out to an adjacent property
128
What's the difference between an Invitation to Tender and Instructions to Tenderers?
Invitation to Tender - a formal invitation to make an offer for the supply of goods or services. Includes Letter of Invitation to Tender + tender docs
Instructions to Tenderers - Instructions regarding tender procedures
129
In the construction phase of a D&B contract, who is responsible for: ERs, CPs
- ERs = client, unless contract is amended
| - CPs = contractor
130
Are there provisions for a QS in JCT DB 16?
No.
131
What happens to the final date for payment in a JCT IC if a payment certificate is not issued, but a payment notice is issued 3 days later?
The final date for payment is pushed back 3 days (the nr of days between the "final date for payment" and the issue of the payment notice).
132
JCT IC - What's an interim certificate?
Certificate of what the CA is telling the client they should pay the contractor
133
What provisions for dispute resolutions are there in JCT IC/DB?
Adjudication, arbitration, legal proceedings (litigation)
134
What is an OJEU PIN
A PIN, or Prior Information Notice, is a notice published in the OJEU which sets out a contracting authority's purchasing intentions.
It does not oblige the contracting authority to proceed with a procurement process, but informs the market that they should expect a procurement to be commenced within the next 12 months.
Publishing a PIN is not mandatory unless the contracting authority is seeking to use a PIN to reduce procurement timescales.
135
What are the OJEU Thresholds
Supply, Service and Design contracts
Works contracts
Social and other specific services
Central Government
£122,976
£4,733,252
£663,540
Other Contracting Authorities
£189,330
£4,733,252
£663,540
Small Lots
£70,778
£884,720
N/A
136
Structure of Tender Assessment/Report?
- Arithmetic check/corrections in line with ITT
- Tender Procedure
- Quality Assessment
- Price Assessment
- Combined Price/Quality Assessment
- Examination of Winning contractor rates
- Recomendation
137
What is the aim of a procurement strategy?
The aim of a procurement strategy is to
identify the best way of achieving the
objectives of the client.
