Procurement and Tendering Level 1

Question 1

What guidance is available relating to procurement and tendering?

Answer 1

RICS professional guidance: Tendering Strategies 1st edition
Developing a construction procurement strategy and selecting an appropriate route 2nd ed
E-tendering

Question 2

What are the differences in procurement between JCT standard and JCT with contractor’s design

Answer 2

In addition to the tender documents for JCT standard (BOQ or other pricing doc, preliminaries, design information)
In addition for the JCT with contractors design (employers requirements for CDP items).

Question 3

What do you understand by pre-qualification

Answer 3

An initial state before an invitation to tender.
Pre-screening potential contractors against criteria to ensure they have capacity and capability.
Often is a pre-qualification questionnaire

Question 4

What types of tendering are you aware of?

Answer 4

• Single stage
• Two stage
• Negotiated

Question 5

What do you understand by serial tendering

Answer 5

In the RICS practice guidance on Tendering Strategies describes serial tendering as:
A hybrid/advanced method of tendering combining normal competitive tender (single or two stage) with negotiation.
Often used for clients who have a number of phases of similar work.

Question 6

What do you understand by single stage tendering

Answer 6

RICS guidance tendering strategies describes single stage tendering as most common type of tendering strategy for obtaining price for whole construction works.
Invitation to tender docs issued to several competing contractors who all have chance to bid for project based on identical tender docs.
Usually done at RIBA stage 4 so contractors receive most detailed information to base their bid on.

Question 7

What do you understand by two stage tendering

Answer 7

RICS guidance tendering strategies describes two stage tendering as being used where time is constrained as it enables design and tendering to overlap or where design process would benefit from technical input of contractor in later design stages.
First stage tender docs issued at RIBA stage 2 or 3. Instead of a bid for constructing the whole project, contractor is selected on basis of quality of their bid, quality of their team and preliminaries price and OHP allowances.
Contractor joins team to complete design to RIBA stage 4.

Question 8

What are the main factors that govern procurement route selection

Answer 8

Choosing most suitable tender strategy:
All three types of tender selection can be used for any procurement route but some more suitable than others.
2 stage useful if quick start on site required as tendering and design can overlap.
Traditional project design more advanced before tendering. Contractor not responsible for design so single stage ok.
D&B projects pass larger proportion of risk and design responsibility to contractor so 2 stage tender can benefit from contractors understanding of the project.

Question 9

How do single and two stage tenders differ?

Answer 9

Design info available (RIBA Stage)
Basis for selection

Question 10

What do you understand by procurement?

Answer 10

Procurement refers to the process of acquiring materials and services for project

Question 11

What is the difference between procurement and tendering

Answer 11

Procurement encompasses the overall process of acquiring goods and services for a project and includes deciding the strategy on how those goods are to be acquired by reviewing clients requirements (time, quality and cost) and their attitude to risk.
Tendering is specifically the process of inviting and evaluating the bids for construction work:
IE - bidding process to obtain a price and
- how contractor is actually appointed.

Question 12

What procurement options are you aware of?

Answer 12

Types of procurement strategy :
- Traditional (lump sum)
- Traditional (remeasurement or measure and value)
- D&B
- Construction management
- Management contracting
- Partnering

Question 13

What are some of the benefits and pitfalls of the procurement options identified?

Answer 13

Traditional:
Pros - competitive fairness
- client control of design quality and performance
- reasonable price certainty at contract award
Disadv - if design not complete when tendered can lead to less certainty and can cause expensive disputes
- overall project duration may be longer as tender takes time
- no input into design or planning by contractor
D&B:
Pros: client risk reduced due to single point responsiblity
- integrated constructor contribution to project planning
- price certainty obtained before project commences
Disadv: - clients may find difficult to prep adequate ERs
- client commits to concept design at early stage
- bids difficult to compare
- no design evaluation

Question 14

Which procurement option carries the most client risk?

Answer 14

Depends what type of risk - RICS practice guidance “Developing construction procurement strategy” refers to the different categories of risk which could include:
- strategic risk (failure to getting planning permission, or funding)
- external risk (changes in environment)
- project risk (overspend or delay to programme)
- discovery risk (poor ground condition etc)

Question 15

When is a contract formed during procurement and tendering?

Answer 15

Contract is formed when offer is accepted and terms agreed - when contract signed

Question 16

Explain the Find a Tender (FTS) e-tendering platform

Answer 16

It is a platform where high value contracts in UK public and utility sectors are advertised.
It replaced the EU Tenders Electronic Daily on 1 Jan 2021.
High value is usually above £139,688 (incl VAT).

Question 17

When do tenders need to be legally posted on FTS

Answer 17

Public Contracts Regs 2015 -
Central Governmt £10,000 net VAT
Sub-central authorities and NHS trust £25k net VAT

Question 18

What is your understanding of the traditional procurement route?

Answer 18

Described in RICS practice guidance: Developing a Construction procurement strategy”
Design is usually completed before competitive tenders invited (RIBA stage 4)
Client will usually select and appoint design team prior to contractor
Contractor usually selected on best value - not always lowest price
Contractor assumes responsibility and financial risk for construction works to design produced by clients design team.
Client take responsibility and risk for design and performance of design team.

Question 19

What are the strengths of the traditional procurement route?

Answer 19

RICS guidance “developing construction procurement strategy”
- competitive fairness (all bids on same basis)
- process is design led and client has direct influence (high quality and design)
- reasonable price certainty
- where public expenditure or audit demands are rigid - satisfactory strategy in terms of public accountability
- well know procedures
- change possible

Question 20

What are the weaknesses of the traditional procurement route?

Answer 20

RICS guidance “developing construction procurement strategy”
- if process is sped up through tender (design not complete) can result in less cost and time certainty and lead to dispute
- overall project duration longer
- little or no input into design or planning by contractor
- strategy based on price competition may lead to adversarial relationship
- designers and contractor have little incentive to advise the client on factors that may benefit operational costs of completed facility.

Question 21

What is your understanding of the design and build procurement route?

Answer 21

• contractor assumes risk and responsibility for designing and building project
• ## client employ design team to carry out preliminary design work and prepare project brief including employers requirements

Question 22

What are the strengths of D&B procurement route?

Answer 22

• client only has to deal with one firm (single point responsibility)
• client risk reduced due to single point responsibility
• integrated constructor contribution to design and project planning
• price certainty generally obtained before construction starts
• total project time may be reduced as design and tender can overlap

Question 23

What are the weaknesses of D&B procurement route?

Answer 23

• difficulties can be experienced in preparing adequate brief or defining exactly what required
• client required to commit to concept design at early stage
• bids are difficult to compare as design may vary
• no design evaluation
• client changes to scope of project can be expensive
• design liability is limited by standard contracts available
• quality may be compromised

Question 24

What is your understanding of the construction management route?

Answer 24

RICS practice guide “Developing a construction procurement strategy”
- client doesn’t allocate risk and responsibility to single main contractor
- client employs design team - construction manager is engaged as a fee-earning professional to manage, programme and co-ordinate the design and construction activities and facilitate collaboration.
Construction work is carried out by individual trade contractors often specialists through direct contacts with client for distinct trade or work packages

Question 25

What are the strengths of the construction management route?

Answer 25

- relative time-saving potential for overall project time (overlapping design and construction process) - trade contractors and construction manager contribute to design and planning project - roles, risks, relationships are clear for all participants - changes in design can be accomodated later than with some other routes, provided design packages not let

Question 26

What are the weaknesses of the construction management route?

Answer 26

- price or time certainty not achieved until last trade packages have been completed - client needs to be informed and proactive - client must provide good quality brief to design team - route relies on client selecting a skillful committed team - close time and information control required - relies on proficient and committed construction manager

Question 27

What is your understanding of the management contracting route?

Answer 27

RICS practice guide "Developing Construction Procurement Strategy" - management contractor engaged by client to manage whole building process. Contractor paid fee on top of construction costs for managing Different to construction management as management contractor has contractual links with works contractors. Employer has no contractual link with works contractor

Question 28

What are the strengths of the management contracting procurement route?

Answer 28

- programme benefits due to overlapping design and construction process - enables management contractor and works contractors to contribute to design and project planning - changes can be accommodated provided the packages affected have not been let

Question 29

What are the weaknesses of the management contracting procurement route?

Answer 29

- the client must provide a good quality brief to the design team; design will not be complete until the client has committed significant resources to project - poor certainty of price if offered at an early stage and potential cost commitment depends on design team estimates - relies on good quality and committed management contractor - route reduces resistance to works contractors claims where such demands are passed on to the client by the management contractor - design must be closely managed -

Question 30

What is your understanding of the public private partnership (PPP) procurement route?

Answer 30

Arrangement where project or service is provided by private sector in partnership with public sector. Long term contractual relationship between public and private sector parties (usually 25 -30 years) Private sector agree to finance and build and operate facility (eg hospital, school, road or prison).

Question 31

What are the strengths of the public private partnership (PPP) procurement route?

Answer 31

- infrastructure project can be obtained without placing a capital burden on public purse - transfer of risk to private sector

Question 32

What are the weaknesses of the public private partnership (PPP) procurement route?

Answer 32

- it may be considered to be relatively expensive approach when compared with other routes - costs of preparing bids can be exceptionally high - government is committed to making payment for the life of concession unless income flow is entirely dependent on cash tolls.

Question 33

Name three of the criteria that need to be considered before selecting a procurement route

Answer 33

performance price time

Question 34

What robust tendering techniques do RICS say can help ensure a positive tender result?

Question 35

Name 3 of the items that RICS say that a robust tendering technique provides?

Answer 35

1. Accountability 2. Auditability 3. Ensuring everything has been picked up 4. Parity 5. Helping to reduce claims of corruption 6. Ensuring correct price has been paid for proposed works

Question 36

Name 3 key steps to good procurement management?

Question 37

What are the 5 major steps in a procurement plan?

Question 38

Explain your understanding of the impact of contractual relationships on the procurement route

Question 39

Explain the roles and relationships of the parties under the various procurement routes.

Question 40

What forms of procurement route are available that allow an early start on site?

Answer 40

"Developing a procurement strategy" suggests any of the routes that allow process of design and tender selection to overlap EG D&B or a management contracting route.

Question 41

How does the procurement route chosen affect cost certainty?

Answer 41

RICS guidance "developing a construction procurement strategy" - traditional should produce cost certainty at end of tender stage provided design was sufficiently complete - D&B also more cost certainty but harder to introduce changes - Management contracting - less certainty until all packages have been let.

Question 42

What methods of procurement are available to reduce confrontation?

Answer 42

Anything that introduces collaboration and removes adversarial nature of tendering - D&B Partnering

Question 43

Explain your understanding of the following terms: time certainty

Answer 43

Time certainty is having an agreed duration for a project. For example JCT intermediate contract includes commencement and completion date and has penalties for contractor if doesn't complete on time

Question 44

Explain your understanding of the following terms: quick start

Answer 44

Quick start means that contractor can commence work on site as soon as possible. Achievable with two stage tendering, particularly if D&B is used so that design can be completed whilst early stages start

Question 45

Explain your understanding of the following terms: earliest finish

Answer 45

The shortest duration of procurement and construction - so any procurement / tendering strategy where there is overlap between processes and where contractor is involved in planning / timing

Question 46

Explain your understanding of the following terms: cost certainty

Answer 46

A route where an agreed fixed price is agreed.

Question 47

Explain your understanding of the following terms: cost control

Answer 47

Cost control means that there is a method of dealing with valuation of changes and risk

Question 48

Explain your understanding of the following terms: competition

Answer 48

In terms of tendering competition means that there is more than one company bidding for the project

Question 49

How can you demonstrate value for money?

Answer 49

By following a competitive tender route, analysing tender returns and reporting to client

Question 50

How do you ensure diligent quality and change management is implemented?

Answer 50

By selecting an appropriate contract that includes procedures for quality and change management

Question 51

How do you allocate risk?

Answer 51

Risk is allocated through the contract selection - which party is financially responsible for dealing with risk occurrences

Question 52

How do you manage risk?

Answer 52

Identify risk - risk register Allocate risk - use of contract

Question 53

What do the following mean; single stage tendering

Answer 53

Tender package is prepared and sent out to list of contractors at the same time. They all receive the same information and are given set period of time to price the pricing document (BQ or schedule or work)

Question 54

What do the following mean; two stage tendering

Answer 54

First stage tender enquiry issued to bidding contractors at RIBA stage 2 or 3. Rather than requesting bid for constructing whole project contractor chosen on basis of quality of bid, quality of team and preliminaries price and OHP allowances. Selected contractor joins design team and assists with completing design to RIBA stage 4 and putting in bid for works at this stage.

Question 55

What do the following mean; negotiated tenders?

Answer 55

effectively single stage tender with single contractor who returns initial price. This is negotiated with clients professional team. Benefit is speed with which price can be obtained, however, competitive advantage of formal bidding process is compromised

Question 56

When and why would you use: - single stage tender - two stage tender - negotiated tender

Answer 56

Single stage - design completed to advanced stage (RIBA 4), most competitive price Two stage - increased contractor involvement with design, reduces timeframe for appointment Negotiated - most contractor involvement in design process, no programme implications. Lack of competitiveness.

Question 57

Explain what tendering means.

Answer 57

It is an important phase in the procurement strategy but involves more than obtaining a price. - it is the bidding process to obtain a price - how a contractor is actually appointed.

Question 58

What rules do you tender under?

Answer 58

JCT tender practice note 2017

Question 59

What processes might this involved?

Answer 59

Procurement Act - advertising contract and following relevant process

Question 60

How do you compile a tender list?

Answer 60

Practice guidance advises: - project teams to start considering suitable contractors as soon as project begins, may be on basis a previous experience, word of mouth or from meetings & presentations from contractors looking to secure new work. - open tendering - allows anyone to express interest - selective tendering - can be shortlist drawn up by project/client team or may be from pre-agreed framework / approved-suppliers list. - single contractor selection - works hand in hand with negotiation as tender technique. Shortlist of one.

Question 61

How do you undertake pre-qualification?

Answer 61

A formal pre-qualification questionnaire (PQQ) depending on size and complexity of project. Work out if project is one that Procurement Act refers to.

Question 62

Explain how you prepare tender documentation.

Answer 62

Choice of procurement route and contract type will have direct effect on how the tender documents are compiled. Under traditional contract - design information - BoQ / schedule of works / schedule of rates and preliminaries In D&B contract will include employers requirements

Question 63

How do you deal with errors in tenders?

Answer 63

RICS guidance : - full arithmetical check for pricing side of tender return - logic check for rest of tender Apart from obvious arithmetical errors key issues to be aware of are: - obvious errors in programme dates - qualifications that render tender null and void - conflicts of interest JCT practice note dictates course of action if arithmetical errors exist.

Question 64

Why is there wording in the tender documents that says the client is not bound to accept the lowest tender?

Answer 64

RICS guidance - lowest tender may not be only consideration.

Question 65

How long would a typical tender period be and why is this the case?

Answer 65

Varies on project by project basis - important to give contractors a suitable period to respond to tender enquiries. Key factors include - - complexity of project - size of project - time of year - market conditions

Question 66

Does a tender always represent actual cost?

Answer 66

No, may be design changes post tender. Client may decide to omit or add to scope of project. Certain aspects of tender may be negotiated.

Question 67

How do you issue tender documents?

Answer 67

Traditional issue: all docs assembled into identical packages and issued by post at same time. Online e-tendering: online tendering portal that issue, track and provide portal for queries and return of tender.

Question 68

Explain your understanding of e-tendering.

Answer 68

RICS guidance - E-tendering - electronic issuing and receipt of any tender documentation in electronic format as part of the procurement process.

Question 69

What RICS guidance are you aware of relating to this?

Answer 69

RICS practice guidance : Etendering 2nd edition

Question 70

Explain how you would manage the tender process.

Answer 70

Follow RICS guidance from Tendering Strategies : Consider how project-specific factors / abnormals influence a tender. 1. Does client have internal procedures to follow that need to be included in tender docs 2. Any land ownership issues that tenderers should be aware of? 3. Any non-working times tenderers should be aware of when producing their programme. 4. Any third party agreements to be aware of 5. Any concurrent activities on site (enabling works, furniture, fitout contracts) that may affect programme? 6. Has phasing of project been properly set out in project information.

Question 71

Explain tender opening procedures you are aware of.

Answer 71

RICS guidance - Tender Strategies "Receiving tenders" - When tender sent out include time, date and location for tenders to be submitted. Should name person to address returns to. - once due date and time elapses no other tender return should be considered as part of opening process. - late tenders not considered on public procurement projects / private clients should give explicit instructions to include late tender returns. - Tender opening form should be used. Have second professional present to witness opening. Each tender opened and general raw info noted on tender opening form. - tender price - proposed programme - key comments/exclusions - alternative tender offers - confirmation that all docs submitted (or not) Tender opening schedule should be signed and dated by all present.

Question 72

How would you evaluate a tender?

Answer 72

RICS guidance on procurement and tendering provides a framework for tender analysis, based on RIBA plan of work stages and RICS Code of Practice for tendering 2012. If public project - follow Procurement Act rules to ensure fair and transparent selection and award of contracts

Question 73

How would you deal with an error?

Answer 73

JCT tendering practice note - sets out process (should also be noted in tender instruction). Basic options - allow contractors to correct their error or for contractors to stand by their price. Any other errors identified should be notified to contractor asap so that they can clarify / resolve issue. If can't then they will be discounted from tender process.

Question 74

How do you deal with qualifications?

Answer 74

Carefully review / consider qualification. These need to be issued to design team, project manager and client for comment.

Question 75

Explain what you would include when compiling a tender report.

Answer 75

Following full analysis and tender interviews produce full post-tender estimate. Take the equalised tender figures from each contractor and add on other cost centres to show full project post tender estimate. The appropriate scoring mechanism should be approled to come up with overall score for pricing element on tender. Qualitative assessment should then be completed in line with agreed scoring mechanism. Before publication draft scoring should be discussed with team and client and any necessary amendments made. Once decision has been reached findings should be included in full tender report with recommendation for award of contract.

Question 76

What are the main methods of choosing a contractor?

Answer 76

Single stage tendering Two stage tendering Negotiated

Question 77

What are the procedures for tendering?

Answer 77

Choose which type & how to identify potential contractors to issue tender to. Assess suitable tender period Produce/compile tender documents Issue documents Review returns Interviews Report & Select

Question 78

On what grounds would you re-tender?

Question 79

Explain the rules of tendering you are aware of. e.g. codes of practice or procedures

Answer 79

Procurement Act RICS guidance on procurement and tendering RICS code of practice for tendering

Question 80

What regulations govern the client during the tender process?

Answer 80

Procurement Regulations 2024

Question 81

What public sector EU or international regulations relate to the tender process?

Answer 81

EU Directives on public procurement

Question 82

Explain your understanding of the Government Construction Playbook in relation to the procurement of public works projects.

Answer 82

Key policies and guidance on how public works projects and programmes are assessed, procured and delivered

Question 83

What is PAS 91 used for?

Answer 83

PAS 91 was a standardised pre-qualification questionnaire which was designed to simplify the bidding process for subcontractors in construction

Question 84

What is electronic tendering?

Answer 84

Definition in RICS guidance Etendering - is that it is the preparation of tender documents in electronic format and introduction of RICS eTendering system. Relates to the management of contractor selection and price setting processes as part of the procurement of construction work.

Question 85

Do you know of any e-tendering services?

Answer 85

RICS Etendering system.

Question 86

What are the advantages of e-tendering?

Answer 86

Reduction of waste particularly in production of multiple copies of paper-based information, leads to less environmentally demanding and more sustainable tender process. Plus: Simplifies the process Reducing costs Avoid need for double / triple entry of same information Enables fairer assessment (avoids post issues and timing)

Question 87

What is online bidding?

Answer 87

Use of an online portal to bid for projects

Question 88

What is the aim of procurement law (in relation to public sector procurement) ?

Answer 88

To ensure fair process for selection and appointment of contractor for public funded projects

Question 89

Explain the key provisions of the Procurement Act 2023 to me.

Answer 89

- Simplified procurement procedures - Enhanced transparency - Greater focus on social value - Prompt payment requirements - Introduces central debarment list

Question 90

What legislation does the 2023 Act repeal?

Answer 90

Public Contracts Regs 2015 Defence and Security Public Contract Regs 2011 Utilities Contracts Regs 2016 Concession Contract Reg 2016

Question 91

What is the purpose of the 2023 Act?

Answer 91

Introduce greater flexibility, transparency and accountability. Replace several piecemeal acts and EU legislation

Question 92

What procurement activities does the 2023 Act cover?

Answer 92

public and utilities procurement in E&W

Question 93

What are the notice requirements under the 2023 Act?

Answer 93

Pipeline notices Pre-market engagement notices Tender notices Transparency notices Contract change notices Performance notices Contract Termination notices Contract Award notices

Question 94

How can a contract be modified under the 2023 Act?

Answer 94

Changes can only be made if they are permitted under various safe harbours. Allows changes that are not substantial or low value New rules allowing for increase / decrease in contract term by up to 10% Changes which result from materialistation of known risk (eg technology changes)

Question 95

What are the main forms of procurement in construction?

Answer 95

Traditional D&B Contract management Management Contracting Partnering Public private partnerships

Question 96

How is procurement impacted by public / private client requirements?

Answer 96

If the project is public funded must follow rules. Private procurement client can set rules to a degree, need to clearly define what project objectives are from outset.

Question 97

How do time, cost, quality and risk impact procurement route selection?

Answer 97

The choice of procurement route is largely dependent on clients required balance of cost quality and time risks for the project. To establish the procurement strategy the team needs to establish what the client's attitudes and key drivers are, and needs to state them in a way and language that is understood by whole project team.

Question 98

How do time, cost, quality and risk impact tender method selection?

Answer 98

The choice of tender method is largely dependent on clients required balance of cost quality and time risks for the project. To establish the procurement strategy the team needs to establish what the client's attitudes and key drivers are, and needs to state them in a way and language that is understood by whole project team.

Question 99

What is a procurement strategy? What is the difference between a procurement and contract strategy?

Answer 99

RICS guidance on developing procurement strategy defines procurement strategy as identifying the best way of achieving the completion of a construction project - often taking into account the best value for money over the entire life cycle of the building or facility. Aim is to achieve optimum balance of risk, control and funding for a project. Choice of procurement strategy largely depends on client's required balance of cost quality and time risks. Contract strategy is about selecting the best and most appropriate contract for the parties - one part of the procurement strategy.