Procurement & Tendering Flashcards
(40 cards)
What are the key advantages (Traditional Procurement)?
- Employer retains control of the design
- The design is largely finalised before contractors tender for the build, which means the employer knows exactly what they are getting
- All tenders produce a submission based on the same information
- Assuming the design is robust, reasonable price certainty is achieved at contract award
- Minimal built in contractor risk premium
What are the key disadvantages (Traditional Procurement)?
- The overall project duration may be longer than design and build procurement
- Zero or limited contractor build ability input
- Design risk is retained by the employer, any changes post contract will be a variation or CE
- Dual point of responsibility
What are the key disadvantages (D&B)?
- The design is only as good as the ER
- More complex to compare tender returns
- Employer changes can be difficult to value and expensive
- The employer may have less control over aesthetics and quality
- The contractor will build risk premiums into their tenders
When might D&B be appropriate?
- Where there is a need to make an early start on site
- Where the employer wishes to minimise their risk profile
- For technically complex projects, the design will benefit from the contractor’s build ability input
- Where retaining control of the design is not a priority
What additional insurance might be required under a D&B contract?
The contractor and their design team will have design responsibility; therefore it is likely that additional professional indemnity insurance will be required.
What are Employers Requirements
Is used to describe the document produced by the employer to set out its requirements in relation to the project and this is what the design and construction of the works will be based on.
What are contractor’s proposals?
CP’s are prepared by the contractor which respond to the employers requirements.
In this document the contractor will produce detailed design information which will require further development throughout the course of the project.
What are the key advantages (construction management)?
- Speed
- Overall project duration could be reduced by overlapping design and construction
- The construction manager can contribute to the design and project planning processes
- Changes in design can be accommodated without paying a premium
- Prices may be lower due to direct contracts
- Employer has a means of redress with trade contractors through direct contractual links.
What are the key disadvantages? (Construction management)
- Price certainty not achieved until the last trade package is let
- The procurement route requires an informed, experienced and proactive employer/client to function.
- The employer has a lot of consultants and contractors to manage.
When might construction management be appropriate?
- The employer is experienced in construction and has suitable resources to manage the project.
- The employer wants to achieve an early start on site.
- The employer wants the flexibility to make minor changes to the design/spec through the process with minimal impact on time or finances
- The project is technically complex and requires detailed engagement of specialist consultants and trade contractors.
What are the key advantages? (Management Contracting)
• Overall project duration can be reduced by overlapping design and construction.
• The management contractor will provide buildability input.
• Single point of responsibility (management contractor).
• Trade packages are let competitively and transparently.
• There can be considerable flexibility in the design, with changes being made throughout the construction process
What are the key disadvantages? (Management contracting)
• Price certainty is not achieved until the last trade package is let.
• Requires an informed and proactive employer to be successful.
• Depending on how the construction manager is remunerated, there may be a built-in disincentive for the construction manager to minimise costs
When might management contracting be appropriate?
• When an early start on site is a priority.
• Flexibility in design is required.
• Buildability input from the management contractor is required.
• Where cost certainty is not a priority for the employer
What is a framework agreement?
• A framework agreement is an umbrella agreement that a party enters with one or more suppliers (who may be contractors, subcontractors, suppliers, or consultants) to establish governing terms.
• A framework usually establishes a strategic partnership for the procurement of goods, works, or services.
How long can a framework be?
• Typically, a framework agreement lasts for 4 years. However, this is determined by the buyer. They can range between 2-10 years
What are the key advantages? (Framework)
• Framework agreements can help to develop stronger relationships between the parties involved and encourage long-term collaboration and cooperation.
• Time-saving (can speed up the procurement of goods and services).
• Repeat work and continuity of delivery.
• Rates and prices are usually agreed upon upfront
What are the key disadvantages? (Framework)
• Contractors, suppliers, or consultants can become complacent.
• Bidders will invest time and money to be awarded a framework and then potentially not receive any work through it.
• May be restrictive to new suppliers who offer innovative, new solutions with the changing and evolving nature of technologies, for example
Why might the employer choose a framework agreement to procure goods and services?
• Employers that are continuously commissioning construction work might want to reduce procurement timescales, learning curves, and other risks by using framework agreements.
• A framework allows the employer to invite tenders from suppliers of goods and services on a call-off basis as and when required
What’s the difference between a framework agreement and a contract?
• A framework agreement rarely provides any specific commitment in terms of project or value of work. It is more focused on being an approved supplier.
• A contract is usually a specific fee, with project scope and timelines allowing you to quote and tailor your product or service for the specific job at hand
What is project partnering?
• Partnering is a broad term used to describe a collaborative management approach that encourages openness and trust between the contracting parties.
• There is more opportunity for building working relationships, finding improvements, and planning investments.
• Ownership of the risk is spread between the parties, and a collaborative approach is encouraged to delivering the solution and overcoming problems
What are the key advantages of partnering?
• The overall construction and design programme can be shortened.
• The likelihood of conflict is reduced.
• Improved communication and mutual objectives.
• Improved customer satisfaction.
• Improved value for the employer.
• Improved buildability (early involvement of contractors, for example).
• Better predictability of time and cost
What are the key disadvantages of partnering?
• Less opportunity to understand what other contractors or potential partners have to offer.
• It is difficult to find a strong partner who shares the same objectives, ethics, attitude, etc
What documents would you include within a tender pack?
• Invitation to tender (ITT), including a cover letter with tender return information.
• Form of tender.
• Contract conditions and the employer’s amendments.
• Instructions to bidders, including how errors will be dealt with.
• Tender scoring matrix.
• Project information, drawings, specifications, surveys, planning conditions, etc.
• Pricing document.
• PCI (Pre-construction information).
• Quality questions (such as experience and methodology).
• Receipt of tender
What is a bona fide tender?
• A bid submitted in good faith, complete and in prescribed form that meets the conditions of the bidding requirements.
• Confirmation that the supplier has not colluded with another party when compiling the tender
