LO4 Flashcards
(20 cards)
Describe how Traditional procurement functions, and what the benefits and drawbacks of it are.
- Client appoints designer to complete design before tendering to contractors
- Benefits: Clear cost certainty and is a commonly used practice which ensures clarity and understanding for client, designer and contractor
- Drawbacks: Longer timelines and the contractor has limited input during the design which can decrease buildability
What are the main risks associated with a Design and Build procurement route?
Issues with design:
- Lack of client input
- Cost driven choices
- Lack of innovation
Limit flexibility
Increased risk for the contractor
Limits bidding pool
Describe a situation where a design and build procurement route may be more appropriate than traditional
- When speed is key to the project
- Client wants to minimise risk exposure
- Easy to manage contract through single point of responsibility
- Project involved complex and technical design elements
What are the risks associated with the construction management procurement route?
What:
- Client obtains all necessary goods and services for a project typically through a construction manager
Risks:
- Client bears more risk
- Cost uncertainty
- Requires experienced and knowledgeable client team
- Less applicable when dealing with complex or technical projects
What is the difference between management contracting and construction management?
- Management contractor is appointed by client to oversee the project construction.
- Construction management is where a construction manager acts as a consultant to the client overseeing the project and managing the trade contractors who are contracted by the client
You are advising a developer interested in fast-tracking a project. What are the benefits of using management contracting in this scenario?
- Allows for the overlap of design and construction
- Allows for an earlier start on sight
- Increase flexibility in the design
Explain what negotiated tendering is and the benefits of this tendering method
What:
- A single (or very few) supplier/s are pre-selected and the contract terms are negotiated after
- Commonly used for specialist projects or when client wants to work with contractor due to their past performance/their relationship
Benefits:
- Faster decision making
- Can utilize relationships
- More flexible by allowing for tailored solutions
What are the benefits of two-stage tendering?
- Early contractor involvement
- Cost certainty through more accurate pricing
- Design certainty
- Creates a collaborative working environment
- Reduce risk of delay
What are the drawbacks of two-stage tendering?
- Longer procurement process
- Potential for higher consultancy costs
- Risk of limited competition in stage two
- Risk of contractor insolvency
Does two-stage tendering offer value for money?
Pros:
- Reduced variations due to early design input and increased understanding
- Cost certainty due to knowledge of design
- Increase efficiency due to early involvement - less time on site reduces costs for welfare, foreman, etc.
Cons:
- Extended procurement lead time which can cause delays to programme
- Increased initial cost due to contractor engagement and consulting on design
- Second stage negotiations can be length, contractor can also increase price at this point should the have a strong position for negotiation
Describe the process of undertaking a two-stage design and build tender.
Stage 1:
- Client invites contractors to bid based on basic design
- Contractor is selected based on experience, compatibility with employers requirements and costs
- Client and contractor work together to refine design and address any issues with buildability
Stage 2:
- Design is completely agreed, costs are then agreed
- contractor involvement leads to better scope understanding and build ability input
- Construction takes place
What are the risks associated with electing to go about an open tendering process?
- Open tendering allows anyone to bid which can attract many unsuitable bidders who may be inexperienced or unqualified
- Large number of bids can make evaluating time consuming which can cause delays
- Often leads to cost only focus which can decrease quality
- Can lead to disputes through perceived wasting of bidders’ time and bias accusations
- Doesn’t allow for the long term building of working relationships
How do you source Contractors to Bid on a project?
- open or closed tender
- Frameworks
- For specialised works - source suitable contractors
- Small jobs - direct award based on previous experience
What is the purpose of Pre-Qualification Questionnaire?
- Document used by clients to assess suitability of contractors before they submit a full tender to ensure they will be a good fit for the project.
What information should you seek to obtain from contractors in a Pre-Qualification Questionnaire?
- Financial statements
- Experience and accreditation
- References
- Case studies
- Technical expertise
- Equipment
- Resources
- Declaration of compliance
Your client wishes to have as little risk exposure as possible on a project. What procurement routes would be suitable?
Traditional
- Places risk of cost overruns on the contractor
- Sets out clear responsibilities
Design and build
- Outsources risk to contractor for both design and construction
- Can still be quick as can allow for design and construction overlap
- Relinquishes level of control over design for decreased risk
If a client wants cost Certainty above all other criteria, what procurement method would you suggest?
- Traditional procurement
- Explicitly outlines responsibility for cost overrun to fall on the shoulders of the contractor and outsources risk onto them
Explain the process of novation and its benefits
- Novation is the transfer of the obligations or roles between parties
- Commonly used for the design team in design and build contracts where the client’s design consultants are transferred from the client to the contractor to become responsible for the design of the project
At what stage should the procurement method be determined?
- During the feasibility or early design stage as it influences the design, cost and the project programme
How does the procurement methodology selected influence the overall project programme?
- Decides when construction can start through period of tendering and negotiating prior
- Decides if design and construction can overlap
