T062 Procurment And Tendering Rics Apc

Front 1

What is tendering?

Back 1

Tendering is a method of obtaining the resources necessary to carry out the required work

Front 2

What are the main methods of choosing a contractor?

Back 2

Open tendering
Selective tendering – single or two stage
Nomination / negotiation
Serial
Joint ventures

Front 3

What is open tendering?

Back 3

Indiscriminate request for tenders
Advert placed in local paper/technical press inviting contractors to apply for tender docs
Gives characteristics of the work
Deposit usually required to discourage frivolous applications

Front 4

What are the advantages of open tendering?

Back 4

No charge of favouritism

Gives opportunities for capable firms you might not have put on a list

Should secure max benefit from competition

Front 5

What are the disadvantages of open tendering?

Back 5

Danger lowest tender is inexperienced or has made lots of errors

No guarantee the lowest is capable or financially stable

Total cost of tendering is increased

Front 6

What is selective tendering?

Back 6

Restricts the number of tenderers by pre-selecting a limited number of contractors to tender for the work

Front 7

What are the two types of selective tendering?

Back 7

Single stage

Two stage

Front 8

What is single stage tendering?

Back 8

A structured process of receiving competitive tenders from a number of pre selected capable contractors, who provide a lump sum for the works
Contractors pre-selected on say NJCC basis:
Established skill
Integrity
Responsibility
Proven competence and character
Size of work
No more than 6 on list. If pre-selection is done beforehand then tenders can be selected on price alone.
Good contractors have the following: Recent experience, necessary skills, good management and organisational structure, spare capacity, good financial standing.

Front 9

What are the advantages of single stage tendering?

Back 9

Ensures only capable and approved firms submit tenders

Tends to reduce the aggregate cost of tendering

Client gets a lump sum for the whole works

Front 10

What is two stage tendering?

Back 10

Separates the processes involved with selecting a contractor from the processes for determining the price for the works

Used when it is desired to obtain the benefits of competition and have the advantage of bringing a contractor into the planning of the project and gain an earlier commencement

Front 11

What is two stage tendering: what is the purpose of the first stage and second stages?

Back 11

1) To select a suitable contractor by means of limited competition

2) A negotiation process with the selected contractor on the basis of the first stage

Front 12

What do tenderers return as part of the first stage?

Back 12

Detailed build up of prices for the preliminaries items

Percentage additions for profit and overheads
A construction programme
Proposed sub letting of the works

Front 13

Are there any precautions you should take before entering the 2nd stage process?

Back 13

Define procedure for either party to withdraw should 2nd stage negotiations prove abortive, what payments become due.

Front 14

What are the advantages of two stage tendering?

Back 14

Early involvement of the contractor
Encourages collaborative working
Potential for earlier start on site
Greater client involvement in selecting the supply chain
Contractor can help identify and manage risk

Front 15

What are the disadvantages of two stage tendering?

Back 15

Cost certainty may not be achieved before construction starts
Additional pre-construction fees for the contractor
Contractor could take advantage of second stage negotiation – increase costs
Potential for parties to not agree contract sum – risk – cost of retendering

Front 16

Why should you use 2 stage tendering?

Back 16

Building is complex
Magnitude of work is unknown at time of contractor selection
Early completion is required
Design team would like to make use of contractors expertise on buildability issues.

Front 17

What is negotiation / nomination?

When might this be used?

Back 17

Where the client has a preference for a particular firm.

Possibly when the contractor has done satisfactory work for him before.

Front 18

How does negotiation / nomination work?

Back 18

There is no competition – likely to lead to a higher price
BUT client may think it is worth it for a quicker or better quality job
The contract sum is arrived at by a process of negotiation
One party usually prices a schedule of rates / bill which is used as a basis

Front 19

What is serial tendering?

Back 19

Effectively strategic partnering

Contractors are asked to bid for a project on the basis that if they build this one satisfactorily, others of a similar type will follow and the same bill rates will be used

Front 20

What is a framework agreement?

Back 20

A list of contractors selected by the client after a formal tendering procedure to work over a long period of time

The contractor may have to wait his turn for a contract or tender repeatedly with the same group of contractors

Front 21

What is a joint venture?

Back 21

Used on large complex projects when 2 or more companies take on a joint and several liability for design and execution of the project.
Would normally be backed up with PCG, Performance Bonds.

Front 22

What is OJEU?

Back 22

Official Journal of the European Union

Front 23

What is OJEU for?

Back 23

Public sector tendering:
All contracts from the public sector above a certain financial threshold have to be advertised across the EU
Also contracts that are say 49% private funded and 51% public must be published.
Use Open, Restricted and Negotiated, (Open, Selective and Nomination)

Front 24

What are the OJEU thresholds?

Back 24

Works - £4,322,012

Services - £111,676 or

£172,514 (depending on gov body)

Source: Cabinet Office Procurement Policy Note - New Threshold Levels for 2014

Front 25

What could selecting the wrong contractor lead to?

Back 25

A bad client / contractor relationship

A dissatisfied client

An insolvent contractor

Front 26

What is NJCC?

Back 26

National Joint Consultative Council for Building
They published highly regarded codes of procedures relating to tendering practices
Disbanded and taken over by the Construction Industry Board (CIB)
BUT many clients still adhere to the original codes and JCT’s practice note includes a substantial amount of their material

Front 27

How would you put together a set of tender documents?

Back 27

In accordance with JCT practice note 6. Include:
ITT (Invitation to tender letter)
Instruction to tenderers: Date and time for return, to whom, site visits, programme, visit to architect to see drawings, errors, discrepancies, NJCC alternative 1,2. Scoring matrix (quality/ price), confirmation of receipt
Conditions of proposed contract
Prelims, Pricing doc (SOR, BOQ)
Specification
Drawings
Employer's Requirements
Contractor's Proposals
Pre-construction H&S information
Form of tender
Submission of bona fide tender
Return envelope

Front 28

What information would the instructions to tenders contain?

Back 28

Date for return
Address to return to
Site visit details
Programme length
Confirmation of receipt of documents
How tender should be submitted

Front 29

What is the form of tender?

Back 29

A pre printed formal statement in which the tenderer fills in the blank spaces.

He provides his name, address and the sum of money for which he offers to carry out the works

Front 30

What are the employer’s requirements?

Back 30

Sets out the client’s requirements e.g. function, size, accommodation, quality
Level of detail depends on how much design has been done prior to tender
Normally includes current state of planning permission
Should detail the level of design, structure and spec info to be provided by the tenderers

Front 31

What are the contractor’s proposals?

Back 31

The contractor’s response to the ERs
They are the key document for the client to consider at the tender review
Often includes plans, elevations, sections and typical details
Layout drawings and specification for materials and workmanship

Front 32

How did you decide which contractors to go out to?

Back 32

Preliminary inquiries based on design team recommendations.
Issue a pre-qualification questionnaire to interested and suitable contractors.
Based on responses, a decision can be made to go out to a reasonable number of tenderers, taking into account financial situation, relevant experience, health and safety records.

Front 33

What is a preliminary enquiry letter and what would you include?

Back 33

1 month before tendering, send out tender enquiry letter to ascertain whether firms are willing to submit a bona fida tender. (avoids contractor submitting cover price)
Sufficient info given to contractor should allow them to make a decision.
Inform of any other requirements: CWs, Bonds, PCG.

Front 34

What would you include in the pre-qualification questionnaire?

Back 34

Details of contract particulars, in accordance with practice note 6
Turnover
Previous relevant experience and references
Company accounts
Personnel
Management and organizational structure
Health and safety records
Quality systems and environmental policy
Provision of bonds / warranties / PCG
This is done through questionnaire and interview process with scoring matrix.

Front 35

What is electronic tendering?

Back 35

All the forms, documents and drawings are uploaded onto a server
Tenderers are provided with all the info necessary to access and download
Safeguards have to be built in to prevent unauthorised amendment of the data
There must be a clear system of notifying parties of changes

Front 36

Do you know of any e-tendering services?

Back 36

The RICS has an e-tendering service

The cost is £500 to register each tender uploaded onto it

Front 37

What are the advantages of e-tendering?

Back 37

May be possible to reduce the tender period – rapid transmittal of docs
Reduced copying and mailing costs
Can respond faster to email queries
More efficient estimating process – easier to break down and transmit to SCs
Software can be used to quickly analyse the bids
Maintains an audit trail of all communication

Front 38

What is on line bidding?

Back 38

Tenderers can view and download the tender info online
The bidding process commences at a specific time
The client sets on opening price and tenderers compete by underbidding
Tenderers can submit as many bids as they like until the closing time
It is common that if a new bid is submitted within 30 mins of the closing time it is extended to allow other tenderers to respond
If the tender is awarded on price alone the lowest tenderer will get immediate feedback

Front 39

How many contractors would you include on a tender list?

Back 39

Refer to the Code of Procedure
Depends on the size of the project
BUT as the cost of tendering is high it is common to limit the lists to 4-6
This provides cover if one drops out
It provides better relationships with contractors and improves the likelihood of competitive tenders – know they stand a reasonable chance of getting the job from the outset

Front 40

How would you determine the duration of the tender period?

Back 40

Depends on the procurement process and size of the project
If traditional with a BQ usually about a month to obtain info from sub contractors
BUT large complex schemes would be longer
If first stage of a two stage may be a short as 2-3 weeks as only prelims
If D&B likely to be 6-8 weeks due to the amount of design work needed
Better to give enough time to ensure contractors can price it correctly rather than rush it and encourage contractors to price a high risk element into the tender

Front 41

When seeking tenders for construction work, in addition to the actual fee bid, what information would clients typically expect to be submitted?

Back 41

Track record of previous experience
Proposed team
CVs or team profiles
Methodology or approach
References
Programme

Front 42

How did you decide the number of tenderers for the project?

Back 42

If D&B, have less tenderers (say 2 or 3) due to cost and time implications; contractors would like to think they had a good chance in return for their capital outlay.

For other contracts 5 or 6 tenderers is sufficient as a balance between competition and contractor care with pricing as a result of a belief that they can compete.

Front 43

How does a contractor price day works in their tenders?

Back 43

The QS will have included a lump sum for the particular daywork item

The contractor adds a % uplift and gives a total for the section

Competition is therefore based on the % uplift

Front 44

Why should you as a surveyor examine tenders?

Back 44

Check tenderer has included everything, if not to ascertain whether they are still the lowest.

Component parts of tender will be used subsequently e.g. valuing variations.

Errors in SOR, BOQ need to be identified and dealt with.

Front 45

What should be examined, looked for in a tender?

Back 45

Arithmetical errors (comp checking)

Pricing errors (Items not priced, or same item but different prices in diff sections)

Pricing methods (front, back loading)

Qualifications

Front 46

What is the procedure after the submission date and time has passed for tender returns?

Back 46

Formal procedure: eliminate suspicion of irregularities
No tender opened before submission deadline. Tenders are supplied with return envelope to prevent accidental opening. Tenders should be opened relatively soon after deadline has passed.
Other parties present: PM/ architect/ client esp with public bodies.

Front 47

What happens if a tender is late?

Back 47

Safest Option is not to consider- (Fraud, Collusion, Bid-rigging)
If private client it is at their discretion (Advise of dangers though)
Public client: Late cannot be accepted, few minutes late…judgement call needed, to accept need authorisation in writing from council/ LA
Advise accepting late tenders sets standard, contractors may in future also not keep to deadlines.

Front 48

How do you evaluate the Contractor’s proposal for D&B?

Back 48

Not solely on price!
Programme, design, contractor’s proposals, materials, and method statements, employees all have to be assessed.
Checking for discrepancies from the ERs
Easier if the design has already been progressed by the client prior to tender

Front 49

What criteria should be considered if not on price alone?

Back 49

Approach (method statement and programme)
Customer care (liaison with employer)
Environmental (noise/ nuisance reduction proposals)
Management (H&S)
Resources
Supply chain
Technical
D&D (aesthetics, LCC, flexibility in use)
What would you do if the lowest tender also has the lowest quality spec?
The implications should be spelled out to the client e.g. higher maintenance costs
It is the client’s decision ultimately

Front 50

What is the danger of accepting a very low tender?

Back 50

They may have missed some of the works
The quality may be lower than some of the other tenders had allowed
Once on site they may try and recover their costs by a large no of variations / claims for EOTs and loss and expense
This could lead to adversarial relationships

Front 51

What happens if tenders are returned and are higher than cost plan, pre-tender estimate?

Back 51

Could be market problems, need to reconcile to identify major differences, VE process could take place on those elements.

Front 52

How would you deal with errors in tender returns?

Back 52

Depends on which alternative chosen on instructions to tenders
Alternative 1 – the QS should NOT amend errors.
Alternative 2 - QS should amend computing errors arriving at a new tender sum.

They should inform the contractor who can choose to confirm, amend or withdraw.

NB See JCT Tendering Practice Note

Front 53

What would you do in a traditional procurement route, if the tenderer returned an alternative tender with a different method of construction?

Back 53

Assuming you had asked them to supply an alternative tender you would assess it along with other returns and liaise with client.
If not asked, ask for compliant tender

Front 54

How do you deal with qualifications within the tender?

Back 54

Procedure should be outlined when you go out to tender – in the instructions
If they are unauthorised it might invalidate the tender – leading to disqualification
Possible to be authorised – if the tenderer raised a query with the QS – in which case all other tenderers should have been notified and instructions on what to do issued

Front 55

What would you do if the lowest tenderer had submitting no pricing of the preliminaries, would you recommend he was accepted?

Back 55

Depends on the form that the tender was sent out in and instructions to tenderers
Usual to have prelims split into method and time related items
If they did not break them down as required then it is officially a non-compliant tender
BUT in practice the contractor is usually provided the opportunities to provide a full breakdown within a couple of days and this would be regarded as valid
They are not allowed to change the figures – not allowed to gain an advantage
This should be noted in the tender report

Front 56

What would you do if you considered a contractor submitting the lowest tender to be in financial difficulty?

Back 56

As part of the evaluation of tenders you would look at the company accounts (if not at PQ)
Also request references from previous employers for work recently done
See if you can find out if subcontractors were paid on time
Ensure the contractor can provide a bond and that it is in place before commencement

Front 57

On what grounds would you advise the client to re-tender?

Back 57

Not enough tenderers returned tenders
The tendering procedure is believed to have been compromised for some reason
If tenders were not at the cost level required and it was believed that re-tendering to different tenderers would provide a different result
Design changes or VE has been carried out that has significantly changed the design that was originally tendered on

Front 58

How would you deal with a front loaded BQ?

Back 58

This is not a pricing error – removing the front loading would not reduce tender price
You can ask the contractor to adjust his pricing to remove it during the analysis
QS should ensure that all items are consistently priced throughout the document
It has implications on valuing variations later and may be a sign that the contractor has financial difficulties

Front 59

How do you carry out a tender evaluation?

Back 59

Need a breakdown of the tenders, check them to ensure they have been priced in accordance, that there are no errors, qualifications or exclusions
Follow NJCC procedure if errors are found
Compare against the pre-tender estimate to check rates are not unusually high/low
Ensure all amendments made during the tender period have been incorporated
Prepare the tender report giving a summary of the actions, costs and recommendation

Front 60

What is included within a tender report?

Back 60

List of tenders received
Initial tender return totals
Any qualifications identified
Post-tender adjustments
Revised tender sum
Issues to be resolved
Comparison of tender returns
Comparison with pre-tender estimate
Recommendation