TENDERING #2cons6811.weebly.com/uploads/4/2/6/3/42631959/s02_ppts.pdf · Tendering (CONS6811) Lara Tookey 2. Prepare tender documentation (non finite) • Letter of invitation •

Tendering (CONS6811) Lara Tookey

TENDERING #2

Introduction to the course

Overview of the tendering process

The Clients’ perspective

Ben Hamilton – Fletchers Cadet opportunities (CMs only)


Session TWO

Face 2 Face (4 hours)

• Introduction & overview of the course

• Links to procurement

• The Clients’ perspective

Self-directed (6 hours)

• Read before the session: • Supplying the NZ

Government

• BRANZ project procurement process

• Weebly


Quick Recap on Procurement

Why are there different procurement options?

What impact do you think this will have on tendering?


Traditional DBB (Linear model)

Design and build Management model

Alliance / P

Longer timeframes due to linear steps

Can reduce timeframes as not sequential


Flexible process to suit different projects

Tender completed after project design

Tender covers design and build

Can be multiple tendering processes for various aspects of the work

Contracts negotiated rather than tendered

Greater control over design stage

Less control over detailed design as this can take place during construction

Good control over design phase as well as some ability to overlap design and construction

All parties can influence design and construction process

Contract sum largely determined before full construction starts

Contract sum more definitely determined before full construction starts

No certainty over costs at outset, and risk in terms of time

Cost reductions can be achieved by principals accepting greater share of risks, “open book” approach to cost disclosure


Why???

• Design responsibility;

• Co-ordination of design & construction process;

• Assessment of reward (cost vs. price); &

• Appointment of risk between parties.


WHAT DO YOU KNOW ABOUT TENDERING?

Process, objectives, requirements. Do you already do it, or is this something you have only heard of?


Estimating vs Tendering


ACTIVITY (10 min) Working on your own

Calculate the cost of building this simple structure.

Please do not share your tender amounts, you will be colluding or even responsible for bid rigging!!!!


Tender Data

Dimension A 10.000

Dimension B 5.000

Dimension C 3.000

Substructure & floor $200 /m2

Roof $100/m2

Walls $200/m2

Subcontractor 1 $1,000



Preliminaries $5,000

Margin 10%


Feedback on tender amounts?


What have we just discovered?


Reasons for variability……

• Measurement / Quantities

• Labour / Plant and Material Costs

• Method of construction

• Items of responsibility

• Site conditions

• Location

• Escalation factors

• Contract time

• Overheads and profit

• Contingency

• Cash flow & financing

• Errors

• Preliminaries

• Procurement option

Most importantly,

the nature of the

information

received from the

Client….


ACTIVITY (20 min) Working with your peers

You are thinking about building a house…. It is a pretty involved and

complicated process under the most ideal of circumstances.

Outline the principles activities that you

will need to undertake as a CLIENT.


Principal Activities

1. Select procurement method

2. Prepare tender documentation

3a. Invite / call for tenderers

3b. Develop a tender list

4. Receive & open tenders

5. Evaluate tenders

6. Accept & award tender


1. Select procurement method.

• Traditional contract procurement route • Longer time – lead to critical work scheduling

• Less errors – more precise

• Fast-track contract procurement route • Shorter time

• Consequences – may be lead to critical error, variation.


2. Prepare tender documentation (non finite)

• Letter of invitation

• Checklist for submission of tender

• Articles of agreement

• Conditions of contract

• Form of tender

• Tender specifications

• Schedule of quantities

• Tender drawings

• Schedule of day work rates

• Sample copy of letter of acceptance

• Sample copy of bank guarantee for performance bond

• Sample copy bank guarantee for advance payment

• Insurance……. etc.


3a. Invite / call for tenderers

• Depends on the selection of tendering method chosen • Open / competitive / bid tender – produce tender notice

• Selective – shot listed contractors will be invited to tender if they wish

• Negotiated – only one contractor is approached- direct entry to project


Open Tendering (no pre selection undertaken)

• Seeking open tenders is an important way of obtaining best value for money, particularly in the absence of accurate market price knowledge or clear knowledge of all the competent potential tenderers available.


Multi-stage tendering (Pre, pre/post or post selection)

• May be used to cull a large number of respondents and identify the best service providers in a particular well-supplied market.

• It also limits the number of tenderers to those that can demonstrate the requisite capacity in the first place.


Negotiated tendering

• Not covered in this course


3b. Develop a tender list

• Potential tenderers can apply directly to the client for future works, or

• Client generates list based on previous dealings, or

• The professional team generate their own list and make recommendations to the Client.


4. Receive & open tenders 5. Evaluate tenders

• Received tender submitted by contractor • Is it conforming?

• Tender assessment / evaluation; Arithmetical check; Reasonable tender sum; Reasonable completion time; Capabilities of tenderers; Weighting criteria

• Tender recommendation / report – tender board


Price Quality

• Quality Price Trade Off (QPTO)

• Price Quality Method (PQM)

• Supplier Quality Premium (SQP)

• Alternative Tender Premium (ATP)

Weighted Attributes

• Brook’s Law

Lowest Price

Conforming Tender

• Lowest Price

Eval

uat

ion

met

ho

ds…

.


6. Accept & award tender

• Pre-award meeting with contractors • validation of lowest complying bid

• Pre-contract meeting with contractor for contract signing

• Approval by tender board • an acceptance of tender form is issued to

tenderer , signed by the authorized parties


Traditional DBB (Linear model)

Design and build Management model

Alliance / P

Longer timeframes due to linear steps



Flexible process to suit different projects

Tender completed after project design

Tender covers design and build

Can be multiple tendering processes for various aspects of the work

Contracts negotiated rather than tendered

Greater control over design stage

Less control over detailed design as this can take place during construction

Good control over design phase as well as some ability to overlap design and construction

All parties can influence design and construction process

Contract sum largely determined before full construction starts

Contract sum more definitely determined before full construction starts

No certainty over costs at outset, and risk in terms of time

Cost reductions can be achieved by principals accepting greater share of risks, “open book” approach to cost disclosure


ACTIVITY (20 min) Working with your peers

With reference to DBB, DB and the Management models, create an outline

diagram detailing how, and for what, the Client would award tender(s) in

each case.

This does not include the work the Contractor would need to do to submit

the tender.


YOUR ASSESSMENTS

Documents

TENDERING #2cons6811.weebly.com/uploads/4/2/6/3/42631959/s02_ppts.pdf · Tendering (CONS6811) Lara Tookey 2. Prepare tender documentation (non finite) • Letter of invitation •