Procurement & Tendering Flashcards

Question

WHAT ARE THE DIFFERENCES IN COMPILING TENDER DOCUMENTS FOR DIFFERENT CONTRACTS?

Answer 1

Traditional: - Design information - Schedule of works / bill of quantities - Scheudle of rates - Preliminaries issued D&B: - Employer Requirements which the contractor responds to with Contractor Proposals

Answer 2

RICS Code of Measuring Practice

Answer 3

Traditional - BoQ (depending on contract) or pricing document, prelims and design info. Traditional w. CDP - As above, plus Employers Requirements for CDP. D&B - Employer's Requirements Management contract - BoQ or pricing doc, prelims and design info. NEC contract - Depends on option used, but generally works information, site information and contract data part 1

Answer 4

The letter formalises the contractor being invited to tender, describes the project, confirms the return date and contact details for queries raised.

Answer 5

Form the contractor signs and returns with their proposed tender, with price and programme. Some include 'alternative proposals' for use if a contractor is able to achieve a reduced programme or alternative design solution).

Answer 6

Sets out what is expected to be returned by the contractor and by what date. Also includes proposed scoring mechanism, applicable questionnaires, details for site access and tender submission. Also notes how errors should be dealt with in line with the JCT Tendering Practice Note.

Answer 7

Includes commentary on proposed contract type and conditions which may be dictated by bodies other than the client (e.g. funders lawyer). Also worth mentioning proposed contract amendments, if any.

Answer 8

Differs depending on contract, but the Preliminaries / Works Information / Employers Requirements include: - Base date - Fluctuation procedures - Completion strategies (Partial / sectional / practical completion) - Liquidated damages - Payment strategy - Guarantees strategy - Insurance strategy - Period of suspension - Dispute resolution - Collateral warranty requirements - Joint Fire Code application For D&B, also includes level of design responsibility required. NEC version is known as Works Information, which sets the chosen procurement strategy.

Answer 9

This is the key cosultants design and spec, collated from the architect, MEP, structural engineer, as well as specialist design if necessary, i.e. acoustician/lighting specialist. Should also include a drawing issue sheet so the tenderers have all info and revision of drawings/specs.

Answer 10

Depends on the form of contract. Traditional - BoQ (in line with RICS NRM) or specification and drawings (thereby putting responsibilty on contractor to produce the quantities). D&B - Employer's Requirements, contractor returns a contract sum analysis. Term / Framework contracts - Schedule of rates to draw down work as required. Provisional sums - Included where necessary and defined as 'defined' or 'undefined'. Two stage - Format for pricing prelims in first stage based on RICS NRM 1 for cost estimating for capital building works, or NRM 2 for detailed measurement for building works.

Answer 11

A set of standard measurement rules and guidance for cost management and maintenance works. NRM 1 - Guidance for cost estimating to inform cost plans for budgets, including prelims, OHP, risk, inflation. NRM 2- Guidance for detailed measurement for building works, including preparation of BoQ, SoW and SoR to obtain tender prices. NRM 3 - Quantification and description of maintenance works, including cost estimates, plans, and procurement guidance.

Answer 12

Concise information relating to the project only, if too much is appended, this may discourage accurate and thorough costing if submitted. Including: - H&S info - Key survey info - Planning permission info - Building control documentation - Proposed warranty / parent guarantee / performance bond writing - Design responsibilty matrix - Party wall agreements - Building condition survey - Risk register

Answer 13

Examples: 1. Does the client have internal procedures to be followed in the tender docs? 2. Any land ownership issues? 3. Non-working times / noisy works restrictions? 4. Third party agreements to be aware of? 5. Any concurrent activities on site that may affect the contractor's programme?

Answer 14

Traditional issue: Identical tenders posted at the same time, with contractors required to confirm receipt. Expensive option due to level of printing and posting. Online e-tendering: Ability to issue, track, query and return online. RICS guidance note E-tendering.

Answer 15

Tender queries - relay all questions answered to all contractors for parity with a tender query document. Tender addenda - Not desirable as it seems disorganised, may be due to new information though. Mid-tender interviews - Opportunity to meet, raise queries, visit site together, assess progress of contractors, and reaffirm commitment to the project. Tender withdrawals - Other work commitments, consider they will not be competitive or too risky. If more than one withdraws, you may introduce new tenderers, allow the tender to complete, or cancel and re-tender.

Answer 16

Opening tenders - Submission method, time and date should have been clearly set out. Any late would be dismissed (public), or advise the client if they want to include (private). Tender opening form used with a witness to review the price, programme, key comments, exclusions. Signed and dated by those present thereafter. Reviewing tenders - Check for errors in line with JCT Tendering Practice Note 2012, either allow contractor to correct or stand by their error (dependant on contract). Raise tender queries, gain clarification where necessary, i.e. cost considered too high/low against cost plan allowance, inc. work items/prelims/OHP (refer to NRM 1/2). Review Provisional Sums allowed for. Review risks noted for the project. D&B contractors will include risk allowance, this should reflect the design completeness and residual risks. One contractor may have included a cost for a risk that no others have, which raises their submission, however, proves their diligence. Post tender interview - Following queries/equalisation process, each contractor given same outline queries, discuss construction detailing, programme logic, method statements, costs understanding, and meet the project team. Agreements made in the interview are to be confirmed in writing. FINALLY - Post tender review equalising cost sections/items, recommending a preferred contractor, then notify all tenderers of the outcome.

Answer 17

The aim of a successful procurement strategy is achieving optimum balance of risk, control and project funding. The choice of strategy depends on a clients required balance of cost, quality and time risks. Remember - Construction is a small stage of the building life cycle, procurement accounts for the wider picture, i.e. Sustainability is important in Public sector works.

Answer 18

Identify the importance of the clients primary objectives and their attitude towards associated risk, broken down as: - Available budget - Quality expectations - Timeline expectations Every project has a business case to justify it, various factors may include: - Funding - Availabilty of funding with regard to contractual obligations to make payments - Time - Required completion or important milestones - Performance - Functional performance of the product and standards of quality - Capital vs Operational costs - Risk - Inherent time, cost, quality risks (dependent on client's experience in the industry) - Legislative / Environmental factors - Type of project The extent of weighting of each is the clients preference based on their business case. Public projects require value for money above anything else, unlike Private projects commonly. 'Playing back' the client requirements is important to ensure the project team understands what they are trying to achieve, including the stated cost, the certain size, shape, appearance and performance, and defined timescale. This is then transformed into a spec for pricing.

Answer 19

Commonly: - Clients exposure to financial uncertainty - Cleints degree of control over the design and construction process - Extent of design information at the time of tender - Information required at construction works commencement - Extent of contractor and supply chain invovlement at design stage - Organisational arrangements distributing risk, responsibility and accountability Often, the completion date is of great importance, which can dictate procurement route due to constrained time rather than best choice. Cost, though, is paramount in order to provide a return on the clients investment leading to reduced project costs via VE or otherwise.

Answer 20

Seen as least risk due to certainty level of design, cost and duration, however, sequential nature assures low risk but means slow phases pre-construction. Design - Completed before competitive tenders by a client appointed design team based on experience / fees. Cost - Contractor generally selected on best value (does not always mean lowest price). If there are no changes, cost certainty is reasonable, attracting clients with limited/restricted budgets for return investment. Client is responsible for accurate quantities (BoQ) however can be transferred to contractor by contract. Risk - Contractor assumes responsiblity and financial risk for the construction of clients design, for agreed contract sum and programme. Client takes design responsibility and design team performance. Reduced timescale can be achieved via advance works contract, i.e. ground works, then tendering above ground works seperately but reduces cost certainty.

Answer 21

Advantages: - Compeitive fairness - Design-led process, client influence facilitates high quality - Reasonable cost certainty (subject to design changes) - Transparent process (benefit for public) - Changes are easy to arrange and value, i.e. client demand or technology changes (limits cost certainty) Disadvantages: - If usual procurement programme is reduced, i.e. incomplete design, limits cost and time certainty and may cause disputes - Longer than other procurement due to sequential design/construction (no parallel working) - No contractor design input - High risk projects, i.e. city centre refurb, can include high-risk premium on costs - Designers and contractors have little incentive to advise on beneficial factors for operational costs

Answer 22

Occasionally used, based on principle that works undertaken are measured and valued for each type of work, cost certainty only gained at works completion. Not a lump sum agreement, but managed by a BoQ effectively acts as a SoR for each unit/item. Effective use of measurement contract - where works are substaintially designed but final detail is not yet completed, tendered via drawings and a bill of approximate quantities is satisfactory. Time - Reduced programme for design, tendering & construction, but little cost certainty as approximate quantities reflect absence of information. The scope of works, approximate price and prgoamme should be clear at contract stage, creating more client risk than traditional lump sum contracts but offer programme advantages. Organisational structure is alike lump sum approach, but without the lump sum contract sum figure.

Answer 23

Advantages: - Time savings pre-construction, later design aspects ongoing - Competitve prices as works are tendered via approximate quantities / SoR used to value at completion - Well known procedures, particularly civil projects - Changes made easily, even at latter stages of design - Parallel working possible as contractor is selected before design is complete - May prevent client paying high-risk premium as unknowns are not within a lump sum Disadvantages: - Poor cost certainty, only known at completion. Value for money depends on a watertight SoR drafted at the start of the project - No contractor / supply chain involvement early in planning & design (most expensive decisions often) - Adversial relationships, as with all strategies that are price dependent - Programme uncertainty as works are not fully designed

Answer 24

A single contractor assumes risk and responsibility for designing & building in return for a fixed lump sum. This integrates design, allowing construction to commence before a detailed design is completed, reducing programme. Client employs a design team to create Employer Requirements to outline key objectives and significant critera for a successful outcome. Alternatively, the successful contractor will have the design team novated to them to complete the design together. Within traditional procurement, the requirement of product is to be completed with 'reasonable skill and care', but D&B may exclude this. Clients preference is to include a fitness for purpose obligation, stating where there is a discrepancy between the Employer Requirements and Contractor Proposals, the ER's prevail, so long as they are clean, complete and unambiguous. The clients design team, therefore, are to ensure the ER's are of high standard. Higher insurances are required by the contractor in the event they do not meet fitness for purpose.

Answer 25

Advantages: - Client deals with only one firm, single point responsibility, reducing resources dealing with designers/contractors seperately - Cleitn risk is reduced due to single point responsibility - Contractor controls design and planning responsibility - Price certainty generally before construction starts, providing client requirements are adequately specified and changes not introduced - Parallel working, reduced programme Disadvantages: - Difficulty in preparing adequate ER's with precise requirements - Client must commit to a concept design at an early stage, prior to detailed design - Bids are difficult to compare, different designs, prices and programme to consider - No design evaluation unless seperate consultants are appointed by client - Client changes to scope can be expensive - Design liabiltiy is limited by standard contracts available - Quality may be compromised as client relinquishes control of design and build

Answer 26

Should be developed from an assessment of the client's needs and the project characteristics, think objectives, risks, and design responsibility. Two components of selection - Analysis and Choice. Analysis - Identify relative importance of objectives and clients attitude towards risk (Developing a Construction Procurement Strategey RICS Appendix for guidance) Choice - Considered reasoning for possible procurement options, evaluation of what is / is not appropriate, and selection of best fit. Beneficial to review best fit at milestones, i.e. planning approval, taking account of whether the design is on programme or circumstances have changed. Alternative may be a better fit at that stage. Client may wish to Partner with the contractor, usually only when multiple projects are expected.

Procurement & Tendering Flashcards

(54 cards)