Procurement & Tendering Flashcards
(157 cards)
1
Q
What is procurement?
A
The overall process of delivering the design and construction of a project
2
Q
What is it important to consider when procuring a project on behalf of a client?
A
Clients attitude to: Time Quality Cost Risk
3
Q
What is the traditional procurement route?
A
Fully developing the design prior to tendering to a main contractor.
Client retains design team as well as the risk of the design.
4
Q
What is the traditional procurement route?
A
Fully developing the design prior to tendering to a main contractor.
Client retains design team as well as the risk of the design.
5
Q
Why might the client wish to procure the works traditionally?
A
Retain control of the design
Most economic price as design is fully developed
e.g. D&B can be tendered at stage 2/3 where contractor takes risk in completing design
6
Q
Advantages of traditional?
A
- Retains control of the design/quality
- Most economical at tender stage (contractor is provided with full outline of client requirements)
- Quicker than D&B for tender review as scope of work is clear and can easily be compared.
7
Q
Disadvantages of traditional?
A
- Long program duration (long pre-contract period)
- No engagement with contractor on the design (design and construction are separate)
- Dual point of contact for the client; contractor and design team
- Client retain risk for the design (cost certainty depends on design adequacy)
8
Q
Contracts for traditional procurement?
A
JCT minor building contract
Intermediate BC
Standard BC with / without Quantities
9
Q
What is D&B?
A
Client Develops Design typically to Stage 3
Employer’s Requirements details how remaining aspects of design should be developed.
The Contractor takes over the design (remaining) and build it with their own (or novated) design team.
10
Q
Who carries out the design for the contractor?
A
Typically the Architect and Structural Engineer would be novated to the Contractor.
The Contractor would appoint remaining consultants e.g. M&E engineer
11
Q
What are advantages of D&B?
A
- Cost certainty – design risk is passed to the Contractor
- Single point responsibility for design and construction
- Quicker start on site than traditional (design doesn’t have to be fully developed for tender)
12
Q
What is novation?
A
A contract which transfers the rights and obligations of one contractual party to a new third party
i.e. design rights and obligations of architect transferred from the client to the contractor.
13
Q
What are disadvantages of D&B?
A
- Slower tender analysis compared to traditional
- Harder to compare tender’s dependent on the degree to which the design has been developed
- Contractor is prone to look at ways to reduce costs for the ER proposals – issues with quality dependent on design and ER’s
- Less competition at tender so higher pricing (compared to traditional where the design is fully developed). (Typical number of contractors at tender -Traditional; 5/6, D&B 3/4)
14
Q
What is management contracting?
A
- Management Contractor appointed on a fixed management fee (usually a percentage based of the prime cost of the project)
- Early to advise on design, programming & buildability.
- Programme, package and obtain tenders for the works.
- Trade Contractors are in Contract with the Management Contractor.
- Typically associated with complex (untested design) and/or high value projects that may be perceived as too risky for a sole main contractor
15
Q
Advantages of MC?
A
- Quick program as design and construction overlaps
- MC technical input alongside design
- Flexibility in making changes to the design before trade packages are let (unlike a lump sum contract)
16
Q
Disadvantages of MC?
A
- High level of cost uncertainty until all the packages are let
- Little incentive for MC to reduce costs
17
Q
How does the MC process work?
A
- Client appoints MC
- MC develops programme
- MC directs design
- MC selects the trade contractors through competitive tender (direct contractual relationship).
18
Q
What contract could be used for MC and Trade Contractors?
A
JCT Management Contract
JCT Trade Contract agreements
19
Q
What is construction management?
A
- Similar to MC but key difference is the Client will enter into Contracts with trade Contractors directly
- Client coordinates trades with their own in-house team - e.g. House builders undertaking similar type of works (i.e. repetitive with low risk designs)
20
Q
What does the CM do?
A
- Client takes full responsibility for trade contractors (i.e. no third party MC to manage on their behalf)
- Prepare the programme, tender the works packages co-ordinate/supervise the works.
21
Q
Why might an employer use CM? Ads? Disadvantages?
A
- Economic (existing trade contract relationships)
- Control program
Dis:
Risk of trade performance
Hold programme risk
22
Q
What is partnering / framework agreements?
A
Partnering is a general term covering practices that are designed to promote greater co-operation between all project team participants.
- Collaborative relationships to minimize conflict and promote open communication
-That contract could be between the main contractor and employer, or it could be a multiparty contract embracing the design team and key members of the supply chain.
JCT Constructing Excellence; all parties to encourage collaborative working; risk registers, risk allocation and KPIs
23
Q
Why might you use a framework agreement?
A
E.g. Council who need to undertake development works but who do not benefit from in-house teams.
Various consulting parties are qualified to submit a bid which reduces repetition of tendering processes and also facilitates competition e.g. multiple parties can bid which will likely result in overall value to the client
24
Q
What is a lump sum contract?
A
Lump sum, fixed priced based on fixed period and fully detailed design.
25
Why might a lump sum contract final account vary from the contract figure?
Lump Sum pricing can be achieved through having a clear set of information that allows in theory the agreed price subsequently also be the final account figure although in practice this is rarely the case.
26
What is a re-measurement contract?
Defined works / specification & design / agreed schedules of rates – works re-measurable during the Contract.
27
Where would a re-measurement contract be used?
E.g. Infrastructure works such as roads where quantities are agreed upon interim measurement of works
28
Why would a re-measurment contract be adopted?
Should only be used where it is not possible to identify quantities pre contract. Approximate quantities should provide some cost assurance but ultimately the cost is subject to re-measurement so is dependent on the quality of design information.
29
What is a cost re-reimbursable contract?
Contract sum on basis of prime cost of labour/plant/ materials with additional amount for overheads and profit)
- Prime Cost Building Contract (PCC)
30
Why would you use a cost reimbursable contract?
- Urgent works such as fire damage, water/flood damage whereby the building and/or area in question must continue to be used.
- Highly trafficked spaces whereby the commercial loss of closure would far outweigh the cost of the construction works.
- e.g. airports, hotels.
31
What is a target cost contract?
Contractor commits to GMP for project as long as no variations instructed. Can utilise “pain & gain” shares.
32
Where might a target cost contract be used?
Cost saving/expenditure can be shared between client and contractor. Promotes collaboration.
33
What are the pros and cons of target cost contracts?
- Can promote transparency and collaboration
approach however success hinges on the starting point. i.e. is the target cost realistic relative to the project risk. If the target cost was never going to be achieved then the entire process is undermined.
34
What is a management contract?
Large scale projects that are often too high value and/or complex for a single contractor to accept the risk. The benefit of an MC tends to ve that works can commence early and the employer gains additional advice on how the design should be developed.
JCT Construction management agreement (CM/A) contract and construction management trade contract (CM/TC).
JCT Management Contract
35
When would an MC be used?
Typically used on bespoke projects whereby the design is unique/untested, the environment is very challenging or the value of works is so high that a single contractor would be reluctant to commit to it.
E.g. the shard (high value, challenging site) or grand central birmingham (live train station)
36
MC Pros and Cons?
ADS - Quick to start, benefit from technical input, design change flexibility
DIS - Low cost certainty, no incentive for MC to reduce cost as fee based on % of works.
37
What are the standard rules of tendering – codes of practice?
Tender Queries - Should be welcomed as shows contractor engagement and can pick up aspects that weren't clear. Responses should be made to all contractors to ensure same information is provided to all.
Errors - allow the contractors to correct their error or for the contractors to stand by their price.
Equalisation - Average/Highest Price/Cost Plan to identify disrepancies/potential errors.
Risk - Contractor should include allowance as necessary and include a risk register identifying any client retained risks.
38
How would you open a tender?
```
Confirm
Price
OHP
Programme
Exclusions
Alternative tenders conf. all documents have been submitted
```
39
Why are tender rules important for the client?
Tender Opening - Clear audit trail of process. Protection from claim of mispractice.
Late submission - Potential collusion.
OJEU - Open process not subject to bias. Strict process to promote tenders on their own merits, unethical means of wining work.
40
What is Single/two-stage tendering – competitive/negotiated?
Single:
Cost is agreed prior to entering into contract
Two Stage:
Separates process of selecting a contractor and determining a price for works. First stage; quality of team, prelims price, OHP. Second stage; PCSA to complete design as consultant. Trade contractors make up contract price
Negotiated – Suitable contractor is identified and negotiated with directly.
Competitive - Multiple parties invited to submit tenders
41
How would you undertake the different types of tendering?
Open - Publicly advertised on OJEU website.
Selective - Selected by project team.
Negotiated - Shortlist of one.
Two stage - Selective or negotiated
42
What are the pros and cons of the different types of tendering?
Open - Complies with public/OJEU requirements
Selective - Most competitive
Negotiated - Existing relationship. QS is able to demonstrate tender return is good value.
Two Stage - Contract input on design and design/construction overlap
43
What is electronic tendering?
a. Information all online (no post or printing)
b. Secure logins
c. Changes are made clear (old info removed and clear where new info is)
d. Be notified when each party has opened documents (are they actually interested/do they have capacity)
Advantages
- Reduce time to post documents
- Reduction in administrative costs
- Faster to respond to all parties
- Clear audit trail of parties
44
How would you compile tender documents?
1. Invitation to tender letter - Formal invitation to contractor describing the project, confirms the return date and the contact details for any queries
2. Form of tender - contractor signs and returns with their proposed tender, in terms of both price and programme.
3. Contract conditions - D&B 16 with proposed amendments,
4. Instructions to tenderers - what is expected to be returned by the contractor and by when. Proposed scoring mechanism, any questionnaires, details for site visits and submitting tender queries. How errors are dealt with.
5. Preliminaries / Employers Requirements - LDs, retention, bonds, PCG, draft warranty, completion dates,
6. Design Information - Arch, SE, ME
7. Pricing Document - BoQ, CSA, SoR, SoW
8. Appendices - PCI, Surveys, Planning permission, Warranties
45
What is the purpose of tender documents?
- Provide clarity to prospective contractors of what works are required.
- If the project is clearly detailed it will result in best value for the client as the contractors won't have to price risk into the job.
46
What is a tender list?
- A tender list identifies potentially suitable contractors for the proposed works.
- The list may be compiled in order for a PQQ to be enacted to establish 4 suitable contractors out of an initial tender list of say 10
47
How would you carry out a pre-qualifying tender list?
I would carry out a Prequalification process to ensure the right contractors were selected for the tender list.
The criteria that I would use when assessing the contractors would include:
1) the contractors financial standing (key metrics)
2) experience of similar sector and sized projects
3) H&S record
4) quality assurance procedures
5) current workload & availability of resources.
I would score this information & input into a pre-determined scoring matrix.
48
Why use a PQQ?
Contractors situation can change quickly.
Shows if interested / too busy.
Assess range of contractors.
Aids next stage in avodiing unsuitable contractors
e.g. avoiding only having 1 or 2 contractors to pick from.
49
What is a Pre and Post tender estimate?
The pre-tender estimate (PTE) is the final estimate of the likely cost of the works that are described in completed tender documents prepared to seek tenders (offers) from prospective suppliers.
A post tender estimate is '…a cost estimate carried out after the evaluation of tenders to corroborate the funds required by the employer to complete the building project.
50
How have you evaluated a tender?
Whilst ideally the pre-tender estimate should accurately reflect market prices sometimes there may be a change in the market or other external factors that could sway the tender returns hence why a post tender estimate is often required to reflect actual contractor “offers” for construction of the project.
51
What is a tender analysis?
Identifies how the tender returns have responded to the tender invitation and makes a conclusion on which contractor is preferred.
52
How would you do a tender analysis?
- Reviewing a tender – Most attractively priced tender return may have excluded key work or made incorrect assumptions.
- Checking a tender - Comply with basic instructions. Pricing errors, duplications and omissions. Pricing weights; is it front loaded. Exclusions and assumptions (design changes; price based on a superseded design?)
Dealing with errors and qualifications
53
What is a tender report?
```
Confirmed tender returns inc SUM
Any qualifications identified
Post-tender adjustments e.g…
Comparison of tender returns
Recon with PTE
Recommendation
```
54
What would you advise the client on in a tender report?
Record of Tender Receipt” template; Contractor name - Price £££ - Programme X weeks - Exclusion, Omissions, Assumptions - Rank (1/2/3) - Alternative Tender (Revised Programme (quicker/slower with revised cost))
- Signed by 2 attendees (ideally at least one Chartered)
- Late tenders are excluded (public), however private procedure will be to the Clients decision if they wish to include
- Ask if the client and lead designer would like to accompany
55
What is a framework agreement?
- Framework Agreement – Select group of contractors/consultants must qualify through initial process.
- Used by clients such as local council/government who need ongoing work but typically don’t benefit from in-house development teams so don’t want constantly re-tender for work.
E.g. Perfect Circle; AECOM, Gleeds, - Nuneaton
Benefits of serial tendering and competition and avoid repeat of OJEU admin
56
What tender queries did you get on the Derby Demo project?
If a live cable is encountered would this constitute a variation?
All services are to be disconnected by the client prior to the commencement of the works. Should unknown services be identified then this would constitute a
57
What is tendering?
Tendering is the process in which a contractor is appointed to deliver the construction works.
58
What are the main methods?
a. Open
b. Selective
c. Negotiated
d. Serial
59
What is open tendering?
a. Typically advertised online by public bodies
| b. Enables any contractor to potentially apply although typically there is an initial PQQ process to filter applications
60
What are the advantages of open tendering?
a. No bias as contractors apply and are not selected for invitation by the QS or any other consultant party to the works
b. Can encourage parties who may be very capable but might not have been considered otherwise
61
What are the disadvantages of open tendering?
a. Likely to receive applications that are simply unsuitable
b. Time and cost of tendering process is very high
c. The “open” nature may discourage contractors from seriously engaging in the process due to high number of applications
62
What is two stage tendering?
a. Separates process of selecting a contractor and determining a price for works.
b. First stage; quality of team, prelims price, OHP
c. Second stage; PCSA to lead design development as consultant. Trade contractors make up contract price
63
Advantages of 2 stage tendering
a. Early contractor involvement; buildability, program
b. Start on site early and design overlap
c. Client input on trade contractors
64
Disadvantages of 2 stage tendering
a. Little cost certainty until trade packages have been let in 2nd stage
b. Additional preconstruction fees with contractor engagement
c. Contractor is in strong position as benefits from no competition and therefore can manipulate price
d. Should parties not enter into contract in second stage the whole process becomes a waste of time and cost
65
Why would you use 2 stage tendering?
a. Complex building; Buildability, program
| b. Quick program required when latter design is not complete but quick start is required
66
What should you ensure is agreed before entering the second stage?
Define the process for either party withdrawing should negotiations lead to abortment. It should be agreed what payments should become due
67
What is a negotiated tender?
a. Negotiation is where a suitable contractor is identified, and the contract sum is negotiated directly
68
When would you use a negotiated tender?
a. If client has previously engaged with a contractor and believes they are suited to the project, subject to price. For example, they may have recently completed a very similar project with the client and a good relationship has been established.
b. Client trusts contractor also trusts that QS can provide assessment on costs with no other contractors to review against.
69
What is Serial tendering?
a. Similar work that is required on an ongoing basis such as re-surfacing road or large estates (e.g. universities) that require ongoing maintenance and repairs
70
What is a framework agreement?
This is when a select group of contractors/consultants become eligible (following an initial tendering process) to tender for work that is ongoing. An example may be for a local council who regularly require work of a varying nature and wish to benefit from the ease of serial tendering but also the competitive element that framework agreements can bring.
71
What is the invitation to tender?
An invitation to tender (ITT) is a formal invitation to make an offer for the supply of goods or services.
72
How would you describe the demolition works?
Pennine Hotel (including fire escape and chimney)
Brannigan’s Night Club.
Syn Nightclub, Multi-Storey Car Park,
73
What were the demolition constraints?
```
City Centre location,
old petrol tanks,
adjoining buildings (to be retained),
floor by floor demo (chimney),
asbestos,
structure of adjacent MSCP (beam and block) in poor condition required monitoring,
traffic management Inc. delivery and waste,
heavy duty battery removal,
underground water course protection,
Pidgeon guano,
human waste,
road closure (hotel overhand),
working hours,
dust & noise & vibration.
```
74
What were the programme constraints?
Site possession (end of lease),
completion (development deal),
contractor programme,
outline demolition sequence
75
What were the Client pre-commencement activities?
Disconnection of utility services
Remove parking meters
Remove public litter bins
76
What information was included within drawings/specs?
```
Structural information
Demolition Plan
Specification
M&E – Building services
Preconstruction information
```
77
What is the pre-construction information?
Details the proposed works and what the associated healthy and safety risks are likely to be.
For example, asbestos, material contamination, existing services.
Also Design and Construction hazards are outlined for example where the common walls are isolated to remove the risk of demolition causing damage to adjacent building as well as installing crash decks to protect adjacent buildings.
78
What was in the appendices?
The preliminaries document
| Asbestos survey
79
Give three examples of what would be included in the preliminaries?
Where the site cabin should be located
The site working hours
Noise
De-watering (dust)
80
What is the site information?
The site information describes all available information to the client of the site and any relevant information to adjacent/adjoining buildings/land.
For example it was noted that there were found historical petrol tanks to the site but this could not be confirmed.
It was also noted that the client would disconnect all existing utilities.
Asbestos report was also included and existing site plans.
81
What is the pricing document?
The pricing document sets out the all the main components of works for the contractor to provide their price.
At tender stage this provides a consistent basis to compare tenders against.
82
What is the CLOTD?
The consolidated list of tender documents outlines all of the drawings and documents that have been provided as part of the tender pack
83
What was included in the tender documents?
```
Invitation to tender letter
Form of tender
Contract conditions
Instruction to tender
Project information (prelims (& ER's if D&B))
Design info
Pricing document
Appendices - H&S, Surveys, Planning,
```
84
What is the form of tender?
- Required to be signed by all contractors for their bid to be considered
- Keep their bid valid for 90 days
- Client not bound to accept lowest bid nor any expenses will be paid in relation to the tender return
- Responses are correct and true
85
For D&B what are the ER’s?
a. Set out client’s requirements where the contractor is to take on design responsibility e.g. quality, size, function
b. Level of detail depends on how much design work has been carried out as well as clients desire to maintain control of quality
86
What are the contractors proposals?
a. The contractor’s proposals set out their response to the ER’s
b. Should be reviewed at tender stage to understand how each contractor intends to complete the clients design aspirations for the project i.e. are they doing the absolute minimum, or do they intend to clearly achieve the client’s requirements
87
How might you decide on which contractors to invite?
a. QS Previous experience with contractor
b. Client or design team experience
c. Completed similar, local project
d. PQQ to 10 contractors; choosing 4 most suited
88
How would you identify the most suited contractor post tender?
a. Relevant experience
b. Cost and Programme
c. Financial stability and resource i.e. not overleveraged/ too busy
d. Response to ER’s (Contractor proposals)
e. Good health and safety records from previous job
89
What would you include in a PQQ?
a. Turnover
b. Relevant experience and references
c. Company accounts
d. Management personnel
e. Business structure
f. H&S records
g. Bonds provision / warranties / PCQ
90
What is electronic tendering?
a. Information is available online
b. Secure logins are provided
c. Changes are made clear (old info removed and clear where new info is)
d. Be notified when each party has opened documents (are they actually interested?)
91
What are the advantages of Electronic tendering?
a. Reduce time to post documents
b. Reduction in administrative costs
c. Faster to respond to all parties
d. Clear audit trail of parties
92
How many tenders would you include on a traditional contract?
5/6
93
What about design and build and why different?
a. 4
b. As the contractor is expected to take on the design their tender return is more involved which means they have a greater initial outlay
c. Therefore, if too many contractors are invited then there will be a diminished desire to attract serious bidders
94
Why would you want more tenders?
a. More tenders creates higher competition – lower price
95
Why might less tenders be advantageous?
a. Too many tenders creates a mentality that there is a low chance of winning the bid which lowers the engagement prospective tenderers put into the project
b. A select number (3/4 – D&B) shows the contractor you are seriously interested in them and greater engagement is likely to be achieved resulting in a more accurately return of tender information to make an informed decision as to which contractor is best
96
Length of tender period?
Depends on size and complexity but generally:
a. Traditional, BQ; 4 weeks (sub contract responses)
b. D&B; 6-8 weeks dependent on design; existing design has to be reviewed and CP need to be completed
c. Two stage; 2 weeks as prelims only
d. Major projects (route dependent) could be much longer
97
Implications of rushing the tender process
Clearly with commercial drivers the programme including tendering is always pushed to be as short as possible but;
a. Unduly pushing the process can lead to a higher degree of risk being priced into the job.
b. If fair time is given to contractors they can accurately price the job and better assess any risks which provides a more attractive price and is more beneficial in the long run
98
Why is it important to review a tender?
- The contractor with the lowest price may have excluded key work or made incorrect assumptions on which their price is based on
- -Therefore, all tenders must be reviewed side by side as opposed to simply looking at the price
99
How would you check a tender?
a. Compliance with instructions (all sections complete and as requested i.e. 1 A4 page)
b. Pricing errors, duplications, contradictions and omissions
c. Pricing weights; is it front loaded or are sections more weighed than others (i.e. areas that could be prone to change – will the contractor benefit (post contract) from artificially high BoQ rates)
d. Exclusions and assumptions (as well as basis particularly if design has changed – has the contractor priced a design that is now superseded?)
100
What would typically be included in the ER’s?
a. Prelims
b. Developers spec
c. Area schedules
d. Drawings & specifications
101
What would you do if a tender is late and why might it be an issue?
- This would be grounds for removing them from the process
- Whilst there might not be any issue the contractor has not complied with clear instructions which is a concern in itself
- Issues such as fraud or collusion could have occurred if a tender has been returned late; particularly if it transpires to be the lowest or most attractive bid.
102
What would you do if the lowest tender had the lowest quality bid?
a. Ultimately the decision is down to the client and so in this respect it is important to be clear what the price is providing i.e. is the client happy with a lower quality for the price or does the quality contravene his minimum requirements?
b. e.g. on Derby demo it was agreed that the tender evaluation process was weighted 70% quality 30% price. In this instance a low tender return would also have to be a good quality return as well in order to be in contention of winning.
103
Are there any issues with accepting low priced tenders?
- It is important that tenders are checked to assess whether all of the works have been included and whether the required quality has been complied with.
104
How would you undergo a tender opening?
Record of Tender Receipt:
- Tenderer (Contractor)
- Price £XXX
- Programme X weeks
- Notes- Key; Exclusion, Omissions, Assumptions
- Price Rank – 1st, 2nd etc
- Alternative – Revised Programme (quicker/slower with revised cost)
- Signed by 2 attendees (ideally at least one Chartered)
- Late tenders are excluded (public), however private procedure will be to the Clients decision if they wish to include (Possible collusion or advantage could be gained from a late tender)
- It is prudent to ask whether the client and lead designer would like to accompany
105
What issues could occur over tendering?
a. Collusion, bribery could occur. For example, a contractor may attempt to influence a consultant or clients judgement which is unethical and means that other parties spending time and money on a legitimate tender could be wasting their time
b. Process is aimed to be transparent and demonstrate that tenderer's have been awarded the contract as a direct consequence of the way they have responded to the instructions of the invitation to tender.
106
What is a tender recommendation report?
a. Recommends which contractor the client should choose based on their requirements
b. Price is a significant factor but this must balance whether the quality of the tender return (particularly D&B) is appropriate to the clients requirements and how they have demonstrated their ability to undertake the project.
107
How would you evaluate the contractor’s proposals for D&B?
1. Complies with quality requirements
2. Can achieve programme
3. Method statements identifying if the contractor has fully considered how the works should be delivered
108
How would you advise the client if the lowest priced tender return also offered the lowest quality spec?
- If fully compliant with the ERs, then in principle there would be no reason not to choose the contractor.
- If the proposed quality of the contractor was questionable then consideration should be given to the potential drawbacks of the solution.
- e.g. a cheaper M&E heating/ventilation system may be proposed but it might have higher maintenance costs.
- Alternatively a cheap cladding option may have been specified but this may need replacing quicker than a more expensive option.
109
What would you do if you received tenders that were higher than the PTE? Why might this occur?
- I would identify the disparity by doing a reconciliation with the PTE.
Following identification of the component that was more expensive than anticipated it may be necessary to VE an element of works OR
- Accept the inflation and proceed assuming it is viable to do so.
- It is possible that a recent change in the market has impacted prices, for example COVID restrictions or subsequent issues in suppliers for a particular element of works.
110
How would you deal with a tender error?
This should be stipulated in the tender instructions.
- JCT alternative 1 allows the contractor either to CONFIRM the error or WITHDRAW their tender.
- JCT Alternative 2 allows the contractor to CONFIRM, AMEND OR WITHDRAW.
111
Why might alternative 1 be chosen over 2?
Alternative 1 does not allow the contractor to amend their submission which could be considered to be inflexible.
An alternative perspective could be that given the formality of the process, an error should not be made given that a significant amount of time should be put into the process including for example, internal reviews of the submission.
112
What would you do if a contractor proposed a different method of construction on a D&B contract?
If the proposal would still be compliant with the ER’s then the proposal should be considered assuming that there is a benefit over the stated method of construction i.e. it is quicker or cheaper to construct or has maintenance/lifecycle benefits.
113
How would you deal with qualifications from a tender return?
If the qualification is legitimate in the respect that a design solution may depend on the outcome of a particular test or factor that is yet to be confirmed, then information in relation to this should be clarified with all contractors.
For example, a foundation type may have been stipulated within the ER’s, but the ground conditions may conflict to this type or could vary if the outcome is unknown.
114
Did you have to do deal with any qualifications on Derby Demolition and give an example?
One tenderer omitted the inclusion of OH&P from their price list return. They were asked to confirm 0 or amend this. They confirmed that the OH&P was included in their prices.
115
Why might you advise a client to re-tender?
- Limited tender returns (e.g. only 2 of 5 returned)
- The procedure was thought to be compromised
- Exceeded budget
116
What is OJEU?
Official Journal of the European Union.
| In essence it is a website which promotes public contracts that have to be tendered through the OJEU process.
117
When does OJEU have to be used?
Public sector tendering - works contracts above £4.8m
118
What are the OJEU thresholds?
Works contracts £4.7m
119
Why might selective tendering be preferred by clients?
- Select contractors from prior experience
- Small, select group maximizing engagement
- Minimal admin (compared to high levels in open tendering)
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Why is it important to have good tender documentation?
- Clear and comprehensive tender documentation maximises the certainty of the tender return prices.
- For example, if a section of works are missed or not clear it maybe mispriced or not included for which may lead to issues post contract.
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What is a PQQ?
Pre-Qualification Questionnaire
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What is typically included in a PQQ?
a. Turnover
b. Relevant experience and references
c. Company accounts
d. Management personnel
e. Business structure
f. H&S records
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Why would you use a PQQ?
A PQQ is an efficient way of identifying if a prospective contractor is likely to be suited to the project at an initial stage
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Why is a contractors turnover important?
- Should be sufficient enough to satisfy that the project will not place significant pressure on their business.
- E.g. a £1m project is unlikely to strain a contractor who is profitably operating with a £20m turnover (5%).
- However if the contractor’s turnover was £2m (50%) then comparatively it would likely place a lot of pressure on the business so probably should be avoided.
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Relevant experience?
- Clearly you want a contractor who has relevant experience for the project that client wishes to undertake.
- For example a demolition contractor may have no experience in building a hospital so it is important to demonstrate recent relevant experience.
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Company accounts?
- Company accounts show the health of a business.
- If the business was showing signs off insolvency then it may not be a good time to appoint them.
- For example they may be highly leveraged
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Management/ site personnel?
- Who will be working on the project?
- Do they have experience or are they fresh from education with no experience?
- Are the same people being lined up as expected?
- For example you may have built up a good relationship with a range of contractor personnel only to find none of them will be working on the project which could contradict the entire purpose of selecting them in the first place.
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Business structure?
- Lean structure where Directors can be called upon for poor performance?
- Large / extended structure that may suit larger projects where a range of expertise is required.
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H&S records
- Health and safety is essential and the Client can be held accountable if steps haven’t been taken to minimise risks.
- A good contractor should be able to demonstrate a history of H&S records.
- Associating with a contractor with a poor h&s record may detrimentally impact a client.
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What is the instructions to tenders?
- What is expected to be returned by the contractor and by what date.
- Scoring mechanism,
- Questionnaires
- Site visit details
- Submitting tender queries.
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When would a PQQ be particularly useful?
- Important if many tenders received (5+).
| e. g. Open tendering.
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What is a tender report?
Identifies how the tender returns have responded to the tender invitation and makes a conclusion on which contractor is preferred.
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Why is this particularly important on a D&B contract?
- The Contractor’s Proposals set out the contractor response to the Employers Requirements
- Responses should be identified and contrasted against one another.
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What is included in a tender analysis?
- Confirmed tender prices
- Any qualifications identified
- Post-tender adjustments
- Comparison of tender returns
- Recon with PTE
- Recommendation
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What is a preliminary enquiry letter?
Follows on from an informal conversation with a contractor to confirm in writing that they are willing to submit a bona fide tender (CONFIRM THEY ARE SERIOUS).
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What is a bona fide tender?
A bona fide tender is in essence;
- Entering into a contractor with good intentions to deliver the works as requested.
- The term is used to contrast from a tender which may be completed with little intention on actually winning the contract
e.g. a large company who can afford to enter many tenders typically submitting high prices in the hope other companies will be discounted
OR conversely a small company who barely have capacity to complete the tender but still need to keep winning work
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Why might contractors not submit a bona fide tender?
- If a contractor is particularly busy, they may realistically believe that they have not got the resources to tender and/or subsequently deliver the works.
- Consequently, they may still submit a tender return but with a very high price that affords them a large profit margin. They may submit this perhaps without diligently reviewing the tender pack and could inadvertently win a bid because they might have underestimated a component of work. In this instance they may upon further review realise that they have miss priced the project and either declare this fact or continue to deliver the job with the intention of gaining profit from post contract variations.
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What is electronic tendering?
In contrast to traditional paper tendering the entire process is done digitally,
- Secure login
- Review tender info
- Submit tender response.
- Tender queries are notified centrally
- Check parties have reviewed info
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Who offers e-tendering?
The RICS offers a service that is £500 per tender
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Why would the client be happy to take risk responsibility on a project rather than passing it onto the contractor?
- Whilst on the CM route there is more risk and responsibility for the Client they hold more control over the trade packages and can commence works quicker.
- The Client is in direct contract with the trade packages and is likely to be able to benefit from more competitive costs.
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What are the project preliminaries?
- Set out the way in which the project should be constructed
- Work that is required that is not covered under the components of measured work (facilitates construction)
Accessibility & storage
Type of project; new build, renovation or tower,
Size of the project; single unit or 100’s,
temporary works,
security,
limitations on methods (proximity of local occupiers may determine limited noise),
working hours,
service availability (diversions, facilitating works, upgrading),
degree of contractor design portion
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What is the CLOTD?
Consolidated list of tender documentation.
| - Outlines all of the tender documents making it easier to identify if anything is missing.
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How did you analyse the tender returns?
70% Quality 30% Price.
The lowest priced tender was given 30 points and subsequent tenders were apportioned points based the how their price fared relative to the lowest.
- All of the questions were reviewed by QS, PM, SE & H&S representatives and a meeting took place whereby a single score was decided upon by discussion of the scoring system and how the relevant contractor had responded
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How would you justify your recommendation in a tender report?
As the works were for a local authority the aforementioned process was followed which meant that a tender report wasn’t required.
If a set scoring criteria is not set then the tender report must outline which contractor is best able to deliver the works as demonstrated from the information provided.
The cheapest contractor may have made exclusions within their price so the contractor who has illustrated that they are able to deliver the scope is likely to be in the best position.
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What is the difference between tender and contract documents?
Tender documentation is sent out to all prospective tenderers but when the contract has been awarded all of the documentation is changed to contract documents.
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Mid tender interview
Main purpose of a MTI is to provide a chance for discussion around possible items that may not be clear in terms of design or otherwis
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Post tender interview
Main purpose of the PTI is that it gives the Contractor chance to outline their bid, discuss key items.
Present programme, logistics and ideas to undertake the works in general
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Tender clarifications
- Identify clarifications, exclusions and omissions
- Produce clarifications register and send to Contractor
- If items have been left blank, included or excluded they should be questioned? Missing information needs to be included so price required.
- Provisional sums not requested should be asked to go firm cost.
- Is the tender submission inclusive of all tender addenda
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Types of pricing documents
- JCT/Q & NEC4 (B & D) – BoQ
- JCT/xQ - BoQ or CSA?
- JCT D&B – CSA
- JCT IC & MW – Schedule of Works
- NEC4 (A&C) – Activity Schedule
- Measured Term – Schedule of Rates
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Which pricing document is easiest to value and why?
BoQ - The more detailed the pricing document, the easier it is to value the works when carrying out a Valuation or when valuing a change on a project.
Allows for better analysis of tender returns and comparison of tender prices.
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How does the activity schedule in NEC work?
A Contractor can only be paid if the activity of the Activity Schedule is 100% complete.
If the split is elemental the Contractor can’t be paid until that element is completed, however if he breaks it down into smaller areas then he will get paid easier.
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What is the scape framework?
Scape Framework is a public sector owned built environment specialist.
- Scape offers a suite of OJEU compliant frameworks available to any public body in the UK.
- The Scape Frameworks provide the following services:
o Major Works – Willmott Dixon – over £2million.
o Minor Works – Kier – up to £4million.
o Project Management and Quantity Surveying – Pick Everard, AECOM & Gleeds
o Asset Management, Surveying and Design Services – Faithful & Gould.
o Facilities Management – Carillion.
- Note: different frameworks expire at different times.
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How could you undertake the Equalization/normalization process?
* Use an average of the submitted costs
* Use the highest price from the tender returns
* Use the cost plan allowance for that particular element
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Raising tender queries and conflicts in information
Tenders should be reviewed in thorough detail by the entire client and design team and a list of post-tender queries sent to each of the tenderers. This is to ensure that prices are reviewed on a like-for-like basis.
- From a qualitative perspective all team members should raise queries where additional clarification is required, where there is a conflict between information within the tender return or where key information seems to be excluded.
- Take care to ensure tenderers are not being given an opportunity to resubmit their tender. The queries must therefore be worded in such a way that the tenderers are restricted in their response.
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Checking for errors and conflicts
All tender returns should be checked for errors before any detailed analysis is undertaken.
- Arithmetical check for the pricing of the tender return
- Clear errors in programme dates
- Qualifications that render the tender null and void
JCT Option 1 or 2
Options are either to:
- Allow the contractors to correct their error
- Allow the contractors to stand by their price
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Give an example of how it can be difficult comparing a D&B tender return?
Performance specification for heating
Contractor A - Traditional gas boiler with radiators
Contractor B - Air Source heat pump with underfloor heating
A - cheaper
B - More expensive but more sustainable and cheaper running costs
Decision may vary based on BREEAM requirements, whether client is selling or holding units
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How did you present a procurement report?
Identifies project requirements when considering a Client’s attitude to cost, time, quality and risk. Includes; Exec summary, Outline of options (D&B, Traditional, MC), Comparison (Pros and Cons), Recommendation
