Designing Buildings - User contributions [en]

Tender evaluation

2017-08-07T07:33:21Z

Construction Link Ltd:

A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services. An invitation to tender might be issued for a range of contracts, including; equipment supply, the main construction contract (perhaps including design by the contractor), demolition, enabling works etc.

An invitation to tender may follow the completion of a pre-qualification questionnaire (PQQ) in response to an advert posted by the client and perhaps a pre-tender interview. The purpose of a pre-qualification questionnaire and pre-tender interview is to enable the client to produce a short list of suppliers that are likely to be most appropriate for their particular project who will then be invited to tender. This helps reduce inefficiency and wasted effort in the tender process.

In response to an invitation to tender, invited tenderers will submit a tender, which will include their price for supplying the goods or services along with proposals for how the clients requirements will be satisfied if these have been requested. Mid-tender interviews may be held to allow for clarification of matters that might otherwise lead to an inaccurate tender being submitted. They can also give the client insights into potential problems or opportunities in the project as it is described by the tender documentation.

Once tenders have been received, a careful process of assessment must be undertaken to identify the preferred tenderer. This is known as tender evaluation (or sometimes, tender adjudication).

Historically, assessment of tenders might simply have identified the lowest-price compliant bid. This may still be appropriate for very simple supply contracts, however, for construction contracts, it may not result in the best value tender being selected. There is a tendency under such systems for tenderers to submit low prices and then to find ways to charge more once the contract has been secured.

Assessments that identify the tender that best meets the client’s needs and offers the best value for money can be more beneficial in the long run. This is sometimes referred to as the ‘most economically advantageous tender’ (MEAT) approach as opposed to the lowest-price approach.

The client's needs, priorities and definition of value will be unique for each project, and so assessment criteria will differ from project to project. During the pre-qualification process, assessment criteria are referred to as ‘selection criteria’ whereas during the tender process they are referred to as ‘award criteria’.

Typically, assessments might consider some of the following criteria:

* Price.
* Relevant experience.
* Understanding of the requirements.
* Past performance.
* Technical skills.
* Resource availability.
* Management skills and systems.
* Proposed methodology (this might include mobilisation plans, design proposals, and non-compliant proposals if these have been allowed).
* Compliance with the requirements set out in the invitation to tender.

NB it may be appropriate for some of these criteria to be assessed at pre-qualification stage, rather than at tender assessment.

It is usual to select no more than five criteria. It is important that careful thought is given to the criteria selected, that they are relevant to the priorities of the project and that it is possible to assess them properly from the information that has been provided in tenders. If interviews are to be held and assessed alongside the tender submission, then this must be built into the award criteria.

The criteria are then weighted to reflect how important they are to the client. It is normal to give price a weighting of at least 60%, with the remaining percentage allocated to the other criteria, giving a total of 100%. It is good practice to make the criteria and weightings known to tenderers in the invitation to tender.

Each tender is then given a score against each criteria, often with 0 being the lowest score and 10 the best possible score. Tenders might be scored by a number of assessors, or different assessor might score different criteria.

Scores can be allocated to tender prices by a number of methods, but one common method is:

Score = 10 x lowest compliant price / tenderers price

This gives a score out of 10.

In the most straight-forward assessments, the overall score for a tender can be calculated by multiplying the score for each criteria by its weighting and then adding together or averaging the results for each assessor. Where there are very different scores between assessors, a meeting might be held to identify the reasons.

More complex assessments might include additional benchmarks. For example, there may be certain criteria that are a straight-forward pass / fail issue. For example failure to comply with a particular aspect of the invitation to tender. There may also be criteria for which a very low rating is unacceptable (for example a score of less than 3 out of ten on methodology) irrespective of scores for other criteria. See also: Due diligence when selecting contractors or subcontractors.

Once the client has identified the preferred tenderer they may enter into negotiations with them. These negotiations are an opportunity to agree or clarify any matters regarding the pricing and quality of the proposed works, conditions of contract and programme and may result in further adjustment of the tender documents and the submission of a revised tender. This is the last chance the client and consultant team will have to negotiate with tenderers while they are still subject to the pressures of competition. The client might enter into tender negotiations with two preferred tenderers prior to selection of the successful bid.

Generally, the contract administrator co-ordinates negotiations with the tenderers, but negotiations may be led at different stages by the cost consultant, contract administrator, lead designer or architect, or by a client representative such as a project manager.

It is important that a full audit trail of the entire tender process is maintained. See tender report for more information. Any agreements reached should be carefully drafted and signed by both parties as these will form part of the contract documents.

NB Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures. This requires that contracts must be advertised in the Official Journal of the EU (OJEU), and tendering must be by either an open procedure, restricted procedure, competitive dialogue procedure or competitive negotiation procedure. See OJEU for more information.

NB Two-stage tendering is used to allow early appointment of a contractor, prior to the completion of all the information required to enable them to offer a fixed price. In the first stage, a limited appointment is agreed allowing the contractor to begin work and in the second stage a fixed price is negotiated for the contract. It can be used to appoint the main contractor early or as a mechanism for early appointment of a specialist contractor such as a cladding contractor.

A two-stage tender process may also be adopted on a design and build project where the employer's requirements are not sufficiently well developed for the contractor to be able to calculate a realistic price. In this case, the contractor will tender a fee for designing the building along with a schedule of rates that can be used to establish the construction price for the second stage tender..

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Auction theory.
* Best value.
* Bid evaluation.
* Contract conditions.
* Due diligence when selecting contractors or subcontractors
* Invitation to tender.
* OJEU
* Mid tender interview.
* Negotiated contract.
* Pre contract meeting.
* Pre tender interview.
* Pre qualification questionnaire.
* Public procurement.
* Procurement route.
* Selection criteria.
* Tender.
* Tender documents.
* Tender report.
* Tender negotiation.
* Tender settlement meetings.
* The benefits of e-procurement in construction.

[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Tender documentation for construction projects

2017-08-07T07:33:00Z

Construction Link Ltd:

A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services. Tender documents are prepared to seek tenders (offers).

Generally, tendering refers to the suppliers required to complete construction works, rather than the process of selecting consultancy services which is commonly referred to as [[Appointing_consultants_for_building_design_and_construction|appointment]].

Tender documents may be prepared for a range of contracts, such as equipment supply, the main construction contract (including design by the contractor), demolition, enabling works etc.

Ideally, tender documents should be broken down into a series of packages (even if there will only be one main contract) each with its own design drawings and specifications suitable to be issued by the main contractor to potential sub-contractors. This makes the tender easier for the contractor to price and easier for the client to compare with other tenderers.

It is important, when this is done, to ensure that the interfaces between packages are properly identified and clearly allocated to one package or another. Having too many packages increases the number of interfaces and so the potential problems. The cost plan (pre-tender estimate) should also be re-assembled package by package to allow easy appraisal of tenders received.

Tenders documents may include:

* A letter of invitation to tender.
* The form of tender.
* Preliminaries: including pre-construction information and site waste management plan (if required).
* The [[Construction_contracts|form of contract]], contract conditions and amendments. This might include a model enabling amendment for building information modelling (BIM), making a BIM protocol a contractual document.
* A tender pricing document (or contract sum analysis on design and build projects).
* Employer's information requirements for BIM.
* Design drawings, and perhaps an existing building information model.
* Specifications.

Copies of the tender documentation should be kept for records.

It is good practice to send relevant documents direct to sub-contractors named in bills of quantities and to tell tendering contractors that this has been done, so they know they do not have to.

NB. On construction management contracts, tender documentation for trade contracts might include the construction manager's master programme.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Best value.
* Bid writer.
* Constructionline.
* Construction contract.
* Contract conditions.
* Due diligence when selecting contractors or subcontractors.
* E-tendering.
* Form of tender.
* Mid-tender Interviews.
* OJEU procurement rules.
* Pre-qualification questionnaire.
* Pre-tender estimate.
* Pre-tender interviews.
* Private Finance Initiative.
* Tender.
* Tender negotiations.
* Tender preparation programme.
* Tender processes.
* Tender settlement meetings.
* Tender works programme.
* The benefits of e-procurement in construction.
* Two stage tender.

=== External references ===

* [http://www.cpic.org.uk/ CPIC] the Construction Project Information Committee, responsible for providing best practice guidance on the content, form and preparation of construction production information.

[[Category:Construction_management]] [[Category:Procurement]]

Supply chains in construction

2017-08-07T07:32:33Z

Construction Link Ltd:

'Supply chain' is the term used to describe the interconnected hierarchy of supply contracts necessary to procure a built asset. Managing the supply chain involves understanding the breakdown and traceability of products and services, organisations, logistics, people, activities, information and resources that transform raw materials into a finished product that is fit for its purpose.

Unlike the automotive industry, the construction industry has the particular difficulty that every building is different, a unique prototype, developed by a team of consultants, contractors and other suppliers that may never have worked together before and may never work together again.

To add to the complexity, different procurement systems place elements of supply chain management with varying disciplines and organisations.

On a 'traditional' building project, design consultants are first tier suppliers, working for the client, and the contractor has a supply chain of sub-contractors and specialist suppliers. On PFI or design and build projects however, there may be just one first tier supplier (sometimes the contractor) and design consultants will work for them as part of their supply chain.

On large or complex projects, responsibility and performance generally cascades down the supply chain to a plethora of suppliers sometimes unknown to management at the top of the chain.

One of the problems in the construction industry is that the first and second tier of the supply chain sign up to fairly onerous agreements but as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all.

The key to supply chain management is to provide a strategy that aligns it with the project programme. This starts at the design stage, scoping the work into packages. Early evaluation based on feedback from the supply chain can produce enormous cost benefits and value. Capacity and production capability in a market controlled by supply and demand are particularly significant if programme bottlenecks are to be avoided.

In recent years larger companies offering continuity in construction have taken an increasing interest in establishing relationships beyond direct, first tier suppliers. Framework contracts and partnering agreements have pioneered this approach, encouraging the involvement of selected suppliers at relatively early stages of projects while offering continuity of work. This has led to greater collaboration between lead designers and product designers to the advantage of all parties.

'Integrated supply team' is a term used by the government to describe the integration of the complete supply chain involved in the delivery of a project. This may include the main contractor, designers, sub-contractors, suppliers, facilities mangers and so on. The integrated supply team is particularly relevant on public projects as the recommended procurement routes proposed by the government are private finance initiative (PFI), prime contracting and design and build. Under these routes, the entire supply team are appointed after the project brief has been prepared, often under just one contract rather than separate contracts with each individual company.

For more information see: Supplier.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Building Information Modelling
* Collaborative practices.
* Collateral warranties.
* Contractor.
* Contractor vs supplier.
* Fair payment practices.
* Framework agreement.
* Green supply chain management.
* Integrated supply team.
* Logistics management.
* Named supplier.
* Off-site materials.
* Partnering.
* Products v goods v materials.
* Subcontractor.
* Subcontractor vs supplier.
* Supplier.
* Supplier selection.
* Supply chain management.
* The benefits of e-procurement in construction.

[[Category:Procurement]] [[Category:Roles_/_services]]

Supply chain management in construction

2017-08-07T07:32:15Z

Construction Link Ltd:

= Introduction =

The origins of supply chain management (SCM) lie in the manufacturing industries. The armoury practices of the late 19th century, and later the production methods of Henry Ford in the 1920s, created the SCM system that remains largely unchanged today. The central focus is on the production process of goods through the control of material flows.

Large efficiency gains can be achieved through managing the interfaces between organisations. Latham and Egan recognised this as being relevant to construction in their respective reports.

SCM exists alongside and overlaps with many other management approaches including:

* Lean thinking.
* Business process re-engineering (BPR).
* Mass customisation.

= What is supply chain management? =

‘Supply’ is the flow of resources used to satisfy a demand, such as materials, labour, information, skills, and so on. It can also refer to competencies, and represent combinations of resources. Commodity suppliers tend to be more price focused, whilst strategic suppliers are more quality/delivery focused.

‘Chains’ represents the notion of links within and between both resources and competencies. They are based upon relationships between people and organisations, and processes within and between organisations.

‘Management’ is the exercise of formal authority within a structured organisational setting that is directed towards aims and objectives through the efforts of other people using systems and procedures.

Supply chain management requires a holistic perspective and a view of organisations as parts of a process. It requires the ability to look beyond organisational boundaries, and a recognition of the interdependence of organisations.

Most definitions of supply chain management share generic characteristics:

* Holistic.
* Networks.
* Relationship-focused.
* Attitudinal.
* Responsibility of managing chain.
* Necessity for change of culture.

= The need for SCM in construction =

Managing the supply chain involves understanding the breakdown and traceability of products and services, organisations, logistics, people, activities, information and resources that transform raw materials into a finished product that is fit for its purpose.

Buildings are becoming increasingly complex, and require more design input by specialist suppliers. At the same there is increasing fragmentation of the industry as can be seen from the growth of specialist suppliers/contractors, the proliferation of products and the fragmentation of design and control activities.

The supply chain is relatively unstable, and the industry is project-based with defined start and end points, and a traditional separation between design and construction. Demand is treated as a series of competitively tendered prototypes constructed by temporary coalitions. This all has an impact on organisational relationships.

Project relationships are short term and have defined start and end points, they are usually informal/ad-hoc and focused on the project not the business. Relationships between competencies vary from project to project. The resulting lack of continuity prevents the innovation and improvement of process as well as the development of more complex relationships. The client may also have an impact on the procurement route and choice of strategic suppliers.

On large or complex projects, responsibility and performance generally cascades down the supply chain to a plethora of suppliers sometimes unknown at the top of the chain. The first and second tier of the supply chain may sign up to fairly onerous agreements but as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all.

Changing the perspective from delivery of a ‘project’ to the process of ‘project delivery’ requires the building of long-term relationships (formal and informal), partnering, and alliancing.

Companies offering continuity in construction have taken an increasing interest in establishing relationships beyond direct, first tier suppliers. Framework contracts and partnering agreements have pioneered this approach, encouraging the involvement of selected suppliers at relatively early stages of projects while offering continuity of work. This has led to greater collaboration between lead designers and product designers to the advantage of all parties.

The Government Construction Strategy, recommended three different procurement routes that aimed to improve the SCM process; private finance initiative (PFI), prime contracting and design and build. With each of these, the client enters into a relationship with a single integrated supply team, which may include the main contractor, designers, sub-contractors, suppliers, facilities mangers and so on.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Collaborative practices.
* Contract conditions.
* Contractor vs supplier.
* Cost led procurement.
* Egan Report.
* Framework agreements.
* Government Construction Strategy.
* Green supply chain management.
* Integrated supply team.
* Latham Report.
* Logistics management.
* Partnering.
* Prime contract.
* Products v goods v materials.
* Subcontractor vs supplier.
* Supplier.
* Supplier selection.
* Supply chains in construction.
* The benefits of e-procurement in construction.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]]

Selection criteria

2017-08-07T07:31:59Z

Construction Link Ltd:

Selection criteria (sometimes referred to as award criteria or evaluation criteria) are lists of items against which a prospective supplier can be assessed before a selection is made and a contract awarded. They might also be used to help identify suitable individuals when seeking new employees.

Defining specific selection criteria can help an employer agree amongst themselves the characteristics that they value. This helps ensure they identify the best value submission, rather than simply the lowest price submission. When the employer is evaluating submissions, referring to the selection criteria, or perhaps even giving marks against each criteria can help focus the assessment and prevent it being dominated by personal preferences or by forceful individuals.

Informing applicants what the selection criteria are can create a fairer process, enabling applicants to consider in advance whether they are suitable, and helping them tailor their submissions. It also makes the application process more transparent and so less open to challenge.

Assessment criteria will vary significantly depending on the nature of the role; whether it is for a consultant, contractor, other supplier or employee, however, some typical criteria might include:

* Price.
* Relevant experience.
* Understanding of the requirements.
* Past performance.
* Technical skills.
* Availability.
* Management skills.
* Proposed methodology.
* Compliance with the requirements of the submission process.
* Financial standing.

The criteria may be weighted to reflect how important they are to the client. Each submission is then given a score against each criteria. Submissions might be scored by a number of assessors, or different assessor might score different criteria.

The overall score for a submission can be calculated by multiplying the score for each criteria by its weighting and then adding together or averaging the results for each assessor. Where there are very different scores between assessors, a meeting might be held to discuss the reasons.

More complex assessments might include additional benchmarks. For example, there may be certain criteria that are straight-forward pass / fail issues. There may also be criteria for which a very low rating is unacceptable irrespective of scores for other criteria.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Appointing consultants.
* Auction theory.
* Best value.
* Bid evaluation.
* Due diligence when selecting contractors or subcontractors
* Invitation to tender.
* Pre qualification questionnaire.
* Procurement route.
* Tender evaluation.
* The benefits of e-procurement in construction.

[[Category:Appointments]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Construction 2025

2017-08-07T07:31:44Z

Construction Link Ltd:

In July 2013, the Government published: [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210099/bis-13-955-construction-2025-industrial-strategy.pdf Construction 2025, Industrial Strategy: government and industry in partnership], setting out its long-term vision for ‘…how industry and Government will work together to put Britain at the forefront of global construction…’

[[File:Construction_2025_front_cover.jpg|182px|link=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210099/bis-13-955-construction-2025-industrial-strategy.pdf]]

The construction industry is seen as crucial to the long-term success of the UK economy as it includes more than 280,000 businesses and accounts for 3 million jobs (10% of total UK employment), (ref BIS analysis of Labour Force Survey micro-data).

The report builds on some of the themes raised in the Latham report and Egan report, and the strategies set out the in the 2011 Government Construction Strategy, which called for ‘...a profound change in the relationship between public authorities and the construction industry to ensure the Government consistently gets a good deal and the country gets the social and economic infrastructure it needs for the long-term…'

Construction 2025 is described by Sir David Higgins, Chief Executive, Network Rail as ‘the first step in putting UK construction at the forefront of the global market.’

It rather ambitiously proposes:

* 33% reduction in the initial cost of construction and the whole-life costs of built assets.
* 50% reduction in the overall time, from inception to completion, for newbuild and refurbished assets.
* 50% reduction in greenhouse gas emissions in the built environment.
* 50% reduction in the trade gap between total exports and total imports for construction products and materials.

NB In 2011, the Government Construction Strategy stated an intention to reduce costs by 20% by the end of the parliament (subsequently rephrased as 15-20%).

Construction 2025 sets out five key components to the long-term vision for the industry:

* PEOPLE: An industry that is known for its talented and diverse workforce.
* SMART: An industry that is efficient and technologically advanced.
* SUSTAINABLE: An industry that leads the world in low-carbon and green construction exports.
* GROWTH: An industry that drives growth across the entire economy.
* LEADERSHIP: An industry with clear leadership from a Construction Leadership Council.

It then makes the following commitments:

* Build the UK’s competitive advantage in smart construction and digital design through the Digital Built Britain agenda.
* Develop market and technology based plans to secure the jobs and growth opportunities from driving carbon out of the built environment, led by the Green Construction Board.
* Identify global trade opportunities for UK professional services, contracting and product manufacturing, develop partnerships and promote UK construction through the GREAT brand.
* Improve the image of the industry by inspiring young people and through a coordinated approach to health and safety and improving performance in the domestic repair and maintenance market.
* Engage with bodies across the industry to ensure that capability and capacity issues in construction are addressed in a strategic manner.
* Develop and refine the pipeline of future work opportunities and make it more useable for all construction businesses.
* Drive procurement efficiency and explore options for further efficiency gains in the procurement process, led by the Government Construction Board and the IUK (Infrastructure UK, now the Infrastructure and Projects Authority) Client Group.
* Create conditions for construction supply chains to thrive by addressing access to finance and payment practices.
* Work with academic and research communities to bring forward more research, development and demonstration to the wider industry and work to remove barriers to innovation.
* Lead the transformation of the industry through the new Construction Leadership Council, with actions owned and delivered by industry bodies.

An action plan is set out in Annex B of the report that will continue to be updated and supplemented as the strategy is taken forward. However, the plan is a little vague in terms of detail and is described as ‘tactical rather than strategic’.

Coming so soon after the Government Construction Strategy, and proposing such ambitious targets, there is some scepticism that the vision is achievable. There have been a great number of reports about the construction industry, and numerous attempts to improve efficiency. Despite this, the perception persists that the industry is wasteful. It might be inferred from this either that; under the circumstances the industry operates more effectively than it appears from the outside; expectations are unrealistic; or recommendations have been consistently poorly implemented.

The Construction Leadership Council (CLC) was established to oversee implementation of Construction 2025. This is an industry / government council jointly chaired by the Secretary of State for Business, Innovation and Skills (BIS) and an industry representative (at present Sir David Higgins, Chief Executive of Network Rail). See Construction Leadership Council for more information.

It is not entirely clear what the relationship is between the Government Construction Strategy and Construction 2025, or between the Government Construction Board (which oversees the Government Construction Strategy) and the CLC. Construction 2025 simply states that one of its objectives is to “Drive procurement efficiency and explore options for further efficiency gains in the procurement process, led by the Government Construction Board and the IUK Client Group.”

At the September 2015 Construction Industry Summit, Chief construction adviser Peter Hansford, announced that a new government construction strategy for 2015-20 would be published in the following months. [http://www.construction-manager.co.uk/news/business-government-council-launches-six-workstrea/ Construction Manager] suggested that the strategy would map the route to Level 3 BIM and Digital Built Britain, and focus the industry on improving diversity.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Banwell Report.
* Building Information Modelling.
* Building our Industrial Strategy: green paper.
* Chief construction adviser.
* Composition of UK construction industry 2013.
* Construction Industry Council.
* Construction Leadership Council.
* Digital Built Britain.
* Diversity in the construction industry.
* Egan Report.
* Ethics in construction.
* Government Construction and Infrastructure Pipelines.
* Government Construction Strategy.
* Government Construction Board.
* Government departments responsibility for construction.
* Latham Report.
* List of construction industry reports through history.
* Modern Built Environment Knowledge Transfer Network.
* National Infrastructure Plan.
* National Needs Assessment NNA.
* National Platform for the Built Environment.
* Public procurement.
* Smart construction.
* The benefits of e-procurement in construction.

=== External references ===

* [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210099/bis-13-955-construction-2025-industrial-strategy.pdf Construction 2025, Industrial Strategy: government and industry in partnership].
* BIS analysis of Labour Force Survey micro-data.
* Video: [http://www.theb1m.com/video/construction-2025-explained Construction 2025 Explained] by The B1M.

[[Category:Publications_/_reports]] [[Category:Policy]]

The benefits of e-procurement in construction

2017-08-07T07:31:06Z

Construction Link Ltd:

Paul Heming, founder of procurement platform C-Link discusses the benefits of E-procurement.

-----
The term 'E-procurement' refers to tendering processes carried out online and through information and networking systems, and may include; E-tendering, E-auctioning, E-invoicing, E-payment and so on.

The effectiveness of a contractual relationship is typically dictated by how well the initial procurement process has been completed and whether the written agreement fully reflects the intentions of the contracting parties. E-procurement can be an effective way of managing this process, particularly where there are complex, multi-tier supply chains.

E-procurement automates procurement procedures, reducing the need for paper-based and human processes. E-procurement platforms can be customised according to the needs of the user, often with accessibility through mobile devices. This frees up procurement teams from low-value tasks, allowing them to focus on higher-value activities such as contract negotiation.

Relationships and behaviour are strong influences for achieving successful outcomes. Companies who understand and appreciate each other will be more likely to work effectively together and this will apply equally when things are going well or when difficulties arise. E-Procurement allows for early engagement and encourages positive interaction between parties which improves the likelihood of successful project delivery.

Where price competition is the only criteria for procurement, this rarely leads to a harmonious and successful relationship. Rather, for the procuring party, it is much more important to establish whether a specialist has both the capacity and capability in terms of management and resource to deliver and, more importantly, the expertise and skills to undertake the contract works. The most frequent cause of disputes in contracting is the inadequate definition of the scope of works. Time spent properly defining the contract works and compiling documentation pays dividends, enabling businesses to properly price the works and facilitating effective management once the contract is placed.

The UK Government recognises the same. As part of its Construction 2025 report, that the industry could make “[http://www.architecture.com/RIBA/Professionalsupport/Assets/Files/MP3952RIBAConstruction2025SINGLE.pdf [major] efficiency gains from earlier engagement of its supply chain”] and professionals are being encouraged to consider e-procurement to deliver greater productivities.

Benefits that can be achieved through e-procurement include:

* Lower transactional costs.
* Better reporting through automation.
* Automatic pre-qualification submission and evaluation.
* Reduced tender cycle times.
* Automatic scheduling of the tender process, with milestones managed and participants alerted.
* Central storage of contract documents.

Procurement platforms such as [http://www.C-Link.com www.C-Link.com] allow users to manage their project supply chain early and effectively, pre-qualify specialists and score them using a variety of construction specific criteria so that everyone knows exactly what they’re getting at the outset.

--[[User:Construction_Link_Ltd|Construction Link Ltd]]

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Auction theory.
* Best value.
* Bid evaluation.
* Computers in construction tendering.
* Construction 2025.
* Cost led procurement.
* Due diligence when selecting contractors or subcontractors
* E-procurement.
* Invitation to tender.
* Managing the procurement process.
* Pre qualification questionnaire.
* Procurement route.
* Selection criteria.
* Supply chain management.
* Supply chains in construction.
* Tender documentation.
* Tender evaluation.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Procurement route

2017-08-07T07:30:20Z

Construction Link Ltd:

= Introduction =

Procurement is the process of purchasing goods or services. There are many different routes by which the design and construction of a building can be procured. The selected procurement route should follow a strategy which fits the long-term objectives of the client's business plan. Considerations are likely to include:

* Speed.
* Cost.
* Quality.
* Specific project constraints.
* Risk.
* Asset ownership.
* Financing.

In 2012, an [http://www.ribaplanofwork.com/About/Introduction.aspx RIBA member's survey] suggested that procurement routes commonly used by respondents were:

* Traditional contract 86%
* Single-stage design and build 41%
* Two-stage design and build 39%
* Management contract 18%
* PFI 10%

= Admeasurement contract =

Admeasurement contracts are commonly used on civil engineering projects. Rates are provided in the contractor’s tender, either as part of the priced bill of quantities, or within a schedule of rates. Then the actual quantities of work carried out are measured and the rates applied to those quantities. As a result, the quantities paid for may vary from the original estimate.

See Admeasurement contract for more information.

= Construction management =

Construction management is a procurement route in which the works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager. The construction manager, acts as an agent for the client, administering and co-ordinating the works contracts.

The construction manager is generally appointed early in the design process so their experience can be used to improve the buildability and packaging of proposals as they develop.

For more information see: Construction management.

= Custom build =

Custom-build homes are a less 'hands-on' variation of self building in which the prospective home owner works with a developer that can take on the design and construction of the home on their behalf and may help find and acquire a site and arrange finance.

See Custom-build home for more information.

= Design and build =

Design and build is a procurement route in which the main contractor is appointed to design and construct the works. Design and build can be attractive to clients as it gives a single point of responsibility for delivering the project.

Design and build projects can follow either a single-stage or two-stage tender processes.

For more information see: Design and build.

'Develop and construct' is a variation on design and build, in which most of the design is completed before the contractor is appointed. The avoids some of the potential problems of design and build, but also misses some of the opportunities.

= Design build finance and operate (PPP / PFI / DBO / BOOT) =

A single contractor (perhaps a special purpose vehicle (SPV), with design, construction and facilities management expertise as well as funding capability) is appointed to design and build the project and then to operate it for a period of time. The contractor finances the project and leases it to the client for an agreed period (perhaps 30 years) after which the development reverts to the client.

Variations include: Design Build Operate (DBO) and Build Own Operate Transfer ( BOOT).

An example of a design build finance and operate procurement route is Public Private Partnership (PPP), the most common form of which is the Private Finance Initiative (PFI).

For more information see: Design Build Finance and Operate, PFI and PPP.

= Emerging cost contracts =

An emerging cost (Time and Materials or T&M) contract is a management contract for works and services where the management contractor is paid direct costs identified in an 'estimate of project costs'. It is often applied over a certain period of time. This means that design and workmanship should give greater consideration to long-term performance issues. Emerging cost contracts are often used on projects such as railway infrastructure contracts. They provide for sophisticated management services along with sub-contracting the construction of the works.

For more information see: Emerging cost contract.

= Engineering procurement and construction contract (EPC) / turnkey contract =

EPC contracts, sometimes called turnkey contracts are similar to design and build contracts, in that there is a single contract for the design and construction of the project, but generally with an EPC contract, the client has less say over the design of the project and the contractor takes more risk. Generally, EPC contracts are used on engineering and infrastructure projects, where the aesthetics of design might be considered less important than performance and cost certainty.

For more information see: Engineering procurement and construction contract.

= Engineering procurement and construction management contract (EPCM) =

EPCM contracts are similar to EPC contracts (see above), but the client employs the necessary trade contractors to construct the works. The 'contractor' acts as a construction manager, managing the trade contractors. Effectively they are performing the roll of a consultant during the construction phase.

For more information see: Engineering procurement and construction management contract.

= Fast-track construction =

Typically associated with construction management and management contract projects, fast-track construction overlaps project tasks (such as design and construction) to reduce the overall project duration.

For more information see: Fast-track construction.

= Furniture, fixtures and equipment (FF&E) =

FF&E refers to the procurement of Furniture, Fixtures and Equipment. This might be procured separately to the main construction contract, particularly by clients that may already have systems in place for procuring fixed and loose furniture, fittings and equipment, for example schools or hospitals. It is very important under such circumstances to define which contract every element of FF&E is within. It is also important to ensure that any building work required for installation is identified and procured, that any services required are identified and that installation is properly integrated into the main contract.

For additional information see: Furniture Fixtures and Equipment.

= Framework agreements =

Clients that are continuously commissioning construction work might want to reduce timescales, learning curves and other risks by using framework agreements. Such arrangements allow the client to invite tenders from contracts to be carried out over a period of time on a call off basis as and when required.

For more information see: Framework contract.

= Guaranteed maximum price =

A guaranteed maximum price (GMP) is a form of agreement with a contractor in which it is agreed that the contract sum will not exceed an specified maximum. Typically this is a mechanism used on design and build contracts where the contractor has responsibility for completing the client’s design and for carrying out the construction works, so they are in a good position to control costs.

For more information see: Guaranteed maximum price.

= Lump sum contract =

A lump sum contract is the traditional means of procuring construction, and still the most common form of construction contract. Under a lump sum contract, a single ‘lump sum’ price for all of the works is agreed before the works begin. It is generally appropriate where the project is already well defined when tenders are sought and changes are unlikely. A lump sum contract is not a fixed price. There is more certainty over the final cost, but there are still mechanisms that allow the contract sum to change.

For more information see: Lump sum contract.

= Management contract. =

A management contract is one where the works are constructed by a number of different works contractors who are contracted to and managed by a management contractor. A management contract structure is similar to a traditional contract, however, instead of taking the risk associated with a fixed price, the management contractor is reimbursed the amounts paid to works contractors, and is paid a fee usually in the form of a percentage.

For more information see: Management contractor.

= Measured term contracts =

Measured term contracts are used where the client has a regular programme of works that they would like to be undertaken by a single contractor. They are generally used for minor works or for maintenance work.

For more information see: Measured term contract.

= Measurement contract (re-measurement or measure and value contract) =

Measurement contracts (sometimes called 're-measurement' or 'measure and value' contracts) can be used where the design, or type of works can be described in reasonable detail, but the amount cannot. For example, excavation, where the quantity required is difficult to assess until after the works have begun. The contract sum cannot be determined when the contract is entered into, but instead is calculated on completion based on ‘re-measurement’ of the work carried out.

For more information see: Measurement contract.

= Partnering =

Partnering arrangements are intended to enable full integration of design, construction and operation. Partnering arrangements are linked by bi-party contracts and can include contractors, suppliers and specialist designers. Collective and individual incentive schemes for delivery can be included in cost reimbursement and fee payments. Partnering requires heavy involvement from the client acting as employer and adjudicator of disputes.

For more information see: Partnering.

= Prime cost contract / cost plus contract / cost reimbursable contract =

Prime cost contracts are sometimes called cost plus contracts or cost reimbursable contracts. They might be used where the nature or scope of the work to be carried out cannot be properly defined at the outset, and the risks associated with the works are high. They are often used where an immediate start on site is required, for example for urgent alteration or repair work. Tendering proceeds based on an outline specification, any drawings and an estimate of costs. The Contractor is paid the prime cost (the actual cost of labour, plant and materials) and a fee for overheads and profit.

For more information see: Prime cost contract and Cost reimbursable contract.

= Prime contracting / prime-type contracting =

Prime contracting is a form of procurement in which the client enters into a long-term relationship with a contractor who provides a single point of contact (prime contract) for a supply chain to deliver one or more projects. This is one of the three procurement routes recommended by Government Construction Strategy for publicly-funded projects (where it is described as prime-type contracting).

For more information see: Prime contract.

= Public procurement =

The Common Minimum Standards, referred to in the Government Construction Strategy, state that '... Procurement routes should be limited to those which support integrated team working (PPP/PFI, Design & Build, the Prime-type Contracting approach and framework arrangements...).' Under each of these, the client appoints a single integrated supply team (including designers, contractors, suppliers and perhaps facilities managers) based on an output-based specification before design commences.

Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures.

For more information see: Public procurement, OJEU, PFI, Private developer scheme and Crown build.

= Schedule of rates term contract =

This form of contract is normally used when the nature of work is known but cannot be quantified, or if continuity of programme cannot be determined. In the absence of an estimate, tenderers quote unit rates against a document that is intended to cover all likely activities that might form part of the works. Indicative quantities may or may not be given to tenderers but do not form part of the contract.

For more information see: Schedule of rates term contract.

= Self-build =

Self building is an alternative to the traditional model of house building in the UK. Traditionally, houses are built speculatively by a developer, and then people buy them and move in. With self building, the prospective home owner instigates the development of the home themselves, whether by purchasing a kit house, employing a design and build contractor, employing consultants (such as an architect) and a contractor, or managing the entire process and ordering all the goods and services required themselves.

See Self-build home for more information.

= Single-stage tender =

Single-stage tendering is the traditional route for procuring in the construction industry. It is used when all the information necessary to calculate a realistic price is available when tendering commences and so the complete contract can be awarded based on tenders received.

For more information see: Single-stage tender and Two-stage tender.

= Traditional contract (Design-Bid-Build) =

The 'traditional' procurement route (sometimes referred to as design-bid-build) is a single-stage, fully designed project where the design is developed in detail by a consultant team working for the client and a contractor is then appointed under a lump-sum construction contract which includes penalties for late completion. The contractor may have no responsibility for any design other than temporary works.

For more information see Traditional contract.

= Two-stage tender =

Two-stage tendering is used to allow early appointment of a contractor, prior to the completion of all the information required to enable them to offer a fixed price. In the first stage, a limited appointment is agreed allowing the contractor to begin work and in the second stage, when more detail is available, a fixed price is negotiated for the rest of the contract.

It can be used to appoint the main contractor early, or more commonly as a mechanism for early appointment of a specialist contractor such as a cladding contractor. It may also be adopted on a design and build project.

For more information see: Two-stage tender.

= Others =

Other variations include:

* Build, Operate, Transfer (BOT).
* Design, Build, Finanace, Transfer (DBFT).
* Design, Build, Finanace, Operate (DBFO).
* Design, Build, Operate, Transfer (DBOT).
* Design, Build, Operate, Maintain (DBOT).
* Design, Build, Finance, Maintain (DBFT).
* Design, Construct, Manage, Finance (DCMF).

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Construction management.
* Construction contract.
* Cost led procurement.
* Crown build.
* Custom-build home.
* Design and build.
* E-procurement.
* Fast-track construction.
* Guaranteed maximum price.
* Lump sum contract.
* Managing the procurement process.
* OJEU rules.
* Private developer scheme.
* Public procurement.
* Selection criteria.
* Sustainable procurement.
* The benefits of e-procurement in construction.
* Two-stage tendering.

[[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]] [[Category:Public_procedures]]

Pre-qualification questionnaire PQQ for construction contracts

2017-08-07T07:30:06Z

Construction Link Ltd:

A pre-qualification questionnaire (PQQ) sets out a series of questions for potential tenderers to answer regarding their level of experience, capacity and financial standing. The answers to these questions enable the client to produce a short list of suppliers that are likely to be most appropriate for their particular project. Short-listed suppliers may then be invited to tender for the contract.

The pre-qualification questionnaire has the effect of reducing the number of potential tenders to those that are genuinely appropriate for the project, thus saving a great deal of wasted time for potential tenderers who would not have any realistic chance of winning the contract. It also saves time for the client processing and assessing inappropriate tenders.

Pre-qualification questionnaires should be focused and simple to complete, (perhaps with limits to the number of words that can be submitted in response to each question) otherwise they may just replicate the tender process itself. They should also make it very clear what the tender process is for, so that potential tenderers can properly assess whether they have the appropriate experience, capacity and financial standing.

Where possible a scoring and weighting system should be prepared for rating submitted information and potential tenderers should be informed of the details of the system that will be used.

The information requested should be straight-forward, relevant and proportionate to the size of the contract. It might request:

* Company details (including legal status).
* Details of insurance cover.
* Financial information (such as recent accounts).
* Relevant experience.
* Information about technical and professional ability.
* Information about capability and capacity.
* Health and safety policy.
* Quality assurance policy.
* Environmental management policy.
* Equal opportunities policy.
* Relevant references.
* A BIM assessment to determine BIM capability, gaps in skills and training needs.

Systems such as [http://www.constructionline.co.uk/static/ Construction Line] go some way to standardising and simplifying the tender process by allowing tenderers to provide pre-qualification information just once that can then be presented to multiple potential clients.

The government requires public clients to use PAS 91, a standardised wording for pre-qualification questionnaires.

NB In December 2013, Enterprise Minister Matthew Hancock set out how a range of measures intended to make it easier for small businesses to grow in [https://www.gov.uk/government/publications/small-business-commitment Small Business: GREAT Ambition]. Measures were announced to tackle late payment and to remove the barriers to public contracts by abolishing pre-qualification questionnaires (PQQs) for low-value contracts and mandating the use of core PQQs for high value contracts.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Appointing consultants.
* Bid writer.
* Constructionline.
* Construction contract.
* Expression of interest.
* Invitation to tender.
* Mid tender interview.
* OJEU.
* PAS 91.
* Pre tender interview.
* Procurement route.
* Selection criteria.
* Small and medium-sized enterprises.
* Tender.
* Tender documentation.
* Tender evaluation.
* Tender processes.
* The benefits of e-procurement in construction.

=== External references ===

* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/templates,_tools_and_model_documentation_pre-qualification_questionnaire_for_tender_evaluation.asp OGC Pre-Qualification Questionnaire for selecting suppliers].
* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/process_ojeu_-_pqq.asp OGC PQQ].
* [http://www.constructionline.co.uk/static/ Construction Line].
* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/creating_opportunities_for_smes_and_third_sector_organisations_supplier_selection_and_pre-qualification_guidance,_tools_and_tips.asp OGC Supplier Selection and Pre-Qualification: Guidance, tools and tips].
* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/supplier_selection_and_award_pre-qualification_questionnaire.asp OGC Pre-Qualification Questionnaire].
* [http://www.cabinetoffice.gov.uk/sites/default/files/resources/Government-Construction-Strategy.pdf Pre-qualification - PAS 91: the use of this standardised wording for PQQ's has been mandated within Government].
* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Constractors and Consultants] P480 Pre Selection Procedures.
* [http://www.constructionline.co.uk/static/ Construction Line].
* [http://www.cabinetoffice.gov.uk/sites/default/files/resources/Government-Construction-Strategy.pdf PAS 91]

[[Category:Appointments]] [[Category:Procurement]] [[Category:Public_procedures]]

Managing the procurement process

2017-08-07T07:29:52Z

Construction Link Ltd:

= Introduction =

The procurement process is the method used to purchase goods or services. The process must be carefully managed to ensure good value is obtained, the correct goods or services are purchased, a high level of quality is received, timescales are met and good relationships are maintained between the procurer and the supplier. Establishing a procurement strategy at the outset is key to a successful outcome.

The strategy is likely to focus on issues such as:

* Speed.
* Cost.
* Quality.
* Specific project constraints.
* Risk.
* Asset ownership.
* Financing.
* Programme.

In the construction industry, the term 'procurement' is often used to refer to the selection of the main contractor for the construction of the works. The procurement routes most commonly followed in the UK for the selection of the main contractor are:

* Traditional contract.
* Single-stage design and build.
* Two-stage design and build.
* Management contract.
* PFI.

See Procurement route for more information.

However, procurement can also refer to any supply contract, such as the selection of consultants, sub-contractors, manufacturers and so on. On some projects, all first tier suppliers may be selected under a single contract, as an integrated project team. However, in recent years the supply chain has become increasingly complex, with many tiers, and on large or complex projects, their can be a plethora of suppliers, some of whom may be completely unknown to management at the top of the chain.

This means that the supply chain itself is procuring, not just the main client. Depending on the level of experience of the client, their procurement might be managed by an in-house team, or it might be managed by an external project manager or client representative. However, much of the procurement on a construction project is likely to be managed by the main contractor or sub-contractors. This procurement might be undertaken by specialist construction buyers.

Very broadly, the procurement of projects can be considered as individual projects or as series.

= Individual projects =

There are a number of advantages to managing the procurement process on individual projects that involve a fresh assembly of teams:

* There is greater competition.
* It gives an opportunity to assess a range of different approaches from different suppliers.
* There is a new and motivated approach to each project.
* There are a wide range of learning and collective experience brought to the project.
* The most appropriate procurement method can be adopted for the project.
* The project can be considered in its own right.
* There may be greater attention-to-detail by the project team.

However, some of the disadvantages may include the following:

* It can be time-consuming and costly both for the client and the suppliers.
* It is more difficult to adopt lessons learned.
* There may be less confidence to innovate.
* Relationships may not be as well developed.
* There are likely to be higher client management costs.
* More bespoke solutions are likely to be developed.
* There are greater uncertainties of workflow for suppliers.
* There may be slower implementation periods.

= Projects in series =

When managing the procurement process on several projects in series, a single agreement can have several advantages:

* Transferred learning from one project to another, resulting in improved overall performance.
* Reduction in inefficient activity, such as re-bidding for tenders.
* Reduced design and construction periods.
* Economies of scale and ordering.
* Continuous workflow.

However, some of the disadvantages may include:

* The range of available options and new ideas is reduced.
* There is less incentive to maintain high standards across all projects.
* Repetitive buildings or structures may be developed.
* There is less opportunity to develop new solutions that better suit particular needs and requirements.

= Procurement process stages =

Typically there are a number of stages that will be followed in most procurement processes, although they are given a wide range of different names.

These processes may be repeated a number of times at different stages of the project as different suppliers are procured.

== Assessing the need for procurement ==

It is very important in the first instance to be sure that there is a need for a project. This may involve preparing a statement of need, and then developing that into a business case through discussions with all stakeholders.

This process should also seek to establish and prioritise the project objectives, define an initial budget and so on.

== Assessing options ==

The business case for the project should then be developed and options assessed. On construction projects this may involve the development of a strategic brief, feasibility studies and options appraisals.

A project execution plan may also be developed setting out the strategy for managing the project, describing who does what and how, and defining the policies, procedures and priorities that will be adopted as well as the contracting and procurement strategy. See project execution plan for more information.

== Defining the solution ==

Concept designs and then detailed designs can then be developed and examined to assess how they will respond to the business needs of the client.

== Developing procurement route ==

A procurement route should be selected that best suits the needs of the project, balancing time, cost and quality. The responsibilities for project delivery and risk lie differently according to the route selected. The construction industry has developed a vast array of different procurement routes for carrying out construction works. For more information on the different types, see Procurement route.

== Implementing the strategy ==

The process of arranging the procurement itself is generally referred to as the tender process. Typically this will involve:

* Preparation of tender documentation.
* Invitation to tender.
* Submission of tenders.
* Assessment of tenders.
* Settlement.
* Contract engrossment and execution.

See Tender process for more information.

== Project delivery ==

With the suppliers in place, a process of project management and contract administration will need to be put in place to ensure that the obligations set out in the contract are being met.

This will generally allow for variations to be instructed, retention of funds until the contract is complete and damages for failure to perform. See Contract conditions for more information.

There will also generally be a period following completion of the requirements when the supplier remains responsible for any defects that may become apparent. On the main contract this might be referred to as the defects liability period.

== Post occupancy evaluation ==

The process of post occupancy evaluation can be particularly valuable to repeat developers and may be a requirement of some funding bodies:

* A post project review may be undertaken to evaluate the project delivery process and ensure that lessons learned are captured for the benefit of stakeholders.
* Performance in use may be assessed to determine how successful the completed development is and where there is potential for further improvement.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Business case.
* Commercial management.
* Construction contract.
* Construction buyer.
* Contract conditions.
* E-procurement.
* OJEU rules.
* Optimised contractor involvement.
* Procurement route.
* Project execution plan.
* Project manager.
* Public procurement.
* Scoping project approach in the developing world.
* Statement of need.
* Sustainable procurement.
* Tender documentation.
* The benefits of e-procurement in construction.

=== External resources ===

* Constructing Excellence - [http://constructingexcellence.org.uk/wp-content/uploads/2015/03/procurement.pdf Procurement (PDF)]

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Construction_management]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Invitation to tender for construction contracts

2017-08-07T07:29:39Z

Construction Link Ltd:

= Introduction =

An invitation to tender is a formal invitation to make an offer for the supply of goods or services. An invitation to tender might be issued for a range of contracts, including:

* Equipment supply.
* Design by contractors.
* Trade contractors.
* Works contractors.
* Main construction contractors.
* Demolition or enabling works.

An invitation to tender may follow an assessment of pre-qualification questionnaires (PQQ's) received by the client in response to an advert they posted, and perhaps a pre-tender interview.

The purpose of pre-qualification questionnaires and pre-tender interviews is to produce a short list of suppliers most appropriate for the project who will then be invited to tender. This avoids time being wasted preparing and assessing inappropriate tenders.

= What should an invitation to tender include? =

An invitation to tender will include information describing the goods or services required in sufficient detail to enable the tenderer to prepare an accurate tender that is in a prescribed format so that it is easy to compare with other tenders.

An invitation to tender might include:

* Letter of invitation to tender.
* Form of tender.
* Preliminaries (including pre-construction information and site waste management plan).
* Form of contract, contract conditions and amendments.
* Employer's information requirements and BIM protocol (BIM).
* Tender pricing document (or form of contract sum analysis on design and build projects)
* Drawing schedule.
* Design drawings.
* Prescriptive or performance specifications (on public projects, tender documentation may include an output-based specification rather than prescriptive or performance specifications and drawings).
* Instructions to tenderers explaining the tender process.
* The timescale for the tender process (including the address and time for the return of tenders).
* An explanation of how queries will be dealt with.
* The evaluation process and any evaluation criteria.
* The submission required in response to the invitation to tender.
* Policy in relation to alternative or non-compliant bids.
* Policy for providing feedback to unsuccessful tenderers.

What should be considered is how the tenders that are received will be evaluated. It might be decided to accept the lowest priced tender that meets the requirements, but it is common practice to define a set of criteria by which the most economically advantageous tender can be identified.

= Responding to an invitation to tender =

In response to an invitation to tender, invited tenders will submit their tender, which will include their price for supplying the goods or services along with proposals for how the clients requirements will be satisfied.

An expression of interest (sometimes referred to as request to participate) is a submission made by a prospective tenderer in response to an advert (or contract notice) for the supply of goods or services. For more information, see Expression of interest.

Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures, enacted in the UK by [http://www.legislation.gov.uk/uksi/2006/5/contents/made The Public Contracts Regulations]. The regulations set out rules requiring that contracts must be advertised in the Official Journal of the EU (OJEU) (The requirements for OJEU Contract Notices can be found at [http://simap.europa.eu/index_en.htm simap]). This is of particular importance because the time taken to advertise contracts can be up to 52 days. The regulations also describe allowable procedures for the selection of contractors.

NB for private finance initiative (PFI) projects see: invitation to negotiate.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Best value.
* Bid evaluation.
* Bid writer.
* Contract sum analysis.
* E-procurement.
* Employer's information requirements.
* Invitation to negotiate.
* Mid-tender interviews.
* OJEU procurement rules.
* Output-based specification.
* Pre-qualification questionnaire.
* Pre-tender interviews.
* Procurement route.
* Selection criteria.
* Specification.
* Tender.
* Tender documentation.
* Tender evaluation.
* Tender pricing document.
* Tender settlement meeting.
* The benefits of e-procurement in construction.

=== External references ===

* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/supplier_selection_and_award_invitation_to_tender_itt.asp OGC guidance provides a range of standard documents for obtaining and processing tenders on public projects.] (now archived)
* A description of the contents of an invitation to tender for public projects can be found in [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf PACE Guidance on the Appointment of Consultants and Contracotrs] P486 and 487. (Now archived)
* [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/Introduction_to_the_EU_rules.pdf OGC guide to EU procurement rules.] (now archived)
* [http://www.legislation.gov.uk/uksi/2006/5/contents/made The Public Contracts Regulations].
* The requirements for OJEU Contract Notices can be found at [http://simap.europa.eu/index_en.htm simap]

[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]] [[Category:Public_procedures]]

E-procurement

2017-08-07T07:29:13Z

Construction Link Ltd:

The term 'E-procurement' refers to tendering processes carried out online and through information and networking systems. It can be a highly-effective way of managing complex supply chains with multiple tiers of suppliers.

Very broadly, e-procurement might include:

* E-informing: The process of gathering and distributing procurement information both from and to internal and external parties.
* E-tendering: The process of tendering using online technology.
* E-auctioning: Web-based software that allows potential suppliers to compete online, in real time, to provide prices for the goods/services under auction.
* Vendor management: Application that acts as a mechanism for business to manage and procure staffing services.
* Catalogue management: The process of suppliers enabling product content to be made available to buying organisations in order for them to procure goods electronically.
* Order status: The ability to track orders online until delivery.
* Advance ship notice: Notification of pending deliveries.
* E-invoicing: Exchange of the income document between a supplier and a buyer in an integrated electronic format.
* E-payment: Payment system facilitates the acceptance of electronic payment for online transactions.

E-procurement software automates procurement-related functions, procedures and processes, reducing the need for paper-based and human processes. E-procurement platforms can usually be customised according to the needs of the user, often with accessibility through smartphones and tablet devices. It frees up an organisation’s procurement teams from low-value tasks, allowing them to focus on higher-value activities such as contract negotiation.

There are several potential challenges for an organisation implementing e-procurement. These involve the installation and integration of software with other enterprise systems, training requirements, liaising with suppliers to ensure a successful transition to the new system, and so on. However, there are some significant benefits that can be achieved. These include:

* Lower transactional costs.
* Better reporting through automation.
* Pre-qualification questionnaires (PQQ) can be dispatched and responses automatically evaluated.
* Tender cycle times can be reduced.
* The whole tender process can be scheduled, with milestones automatically managed and participants alerted.
* E-evaluation can appraise and give different weightings to bids automatically.
* The system can be extended to handle routine clerical procedures after contract award, such as e-invoicing and making e-payments.
* There can be simpler contract management as all documents can be stored centrally.
* Because of the ease of contacting, more suppliers can be invited to tender, meaning there is greater competition.
* Integrated data solutions allow for accurate cost estimates, and a source of accurate costing data in a direct feedback loop from the tender process.
* Substantial reductions can be made in paper and energy use.
* It can lead to closer, more structured communication and cooperation with supply chain partners.
* It streamlines change management as requirements are properly documented.
* It increases accountability by formalising and documenting the tender process, and creating audit trails.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Commercial management.
* Computers in construction tendering.
* Invitation to tender.
* Managing the procurement process.
* Procurement route.
* Supply chain management.
* Supply chains in construction.
* The benefits of e-procurement in construction.
* Tender documentation.

[[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Due diligence when selecting contractors or subcontractors

2017-08-07T07:28:58Z

Construction Link Ltd:

= Introduction =

The financial failure of a contractor or key supplier can be catastrophic to a project.

To reduce exposure to risks it is important to have a thorough grasp of both the capability and financial status of a prospective organisation before appointing them.

Reliance on credit checks involving accounts filed at Companies House can be useful, as can assessments of past track record, but they have their limitations. It is important to understand where the organisation might be exposed to risks through commitments to, or reliance on, third parties, and how secure and well resourced they are given the size of the proposed contract and their other commitments.

The following issues should be evaluated against the proposed scope of works to be undertaken:

== History ==

* Track record and appropriate references.
* Audited accounts.
* Tax returns.

== Current position ==

* Main customers (each expressed as a percentage of total turnover to reveal where there may be significant dependencies).
* Current contracts in progress including project programmes and values (to assess where there may be significant overlaps that would put the organisation under pressure).
* Staff resources and CV’S of senior management.
* Organisation chart.
* Current debt position with debt expiry dates.
* Current direct labour resource, including comparisons with previous years.
* Current subcontractors and suppliers.
* Details of current warrantees, guarantees, encumbrances, liens, performance or on-demand bonds or charges held by third parties.

== Future position ==

* Pipeline work under tender or negotiation.
* Current unaudited annual accounts in progress.
* Proposed subcontractors and suppliers.

== Legal position ==

* Litigation, claims and other disputes in progress.
* Ownership of intellectual property, patents, licenses and certification required to carry out the work.
* Insurances in place.
* Partnerships or joint ventures with other organisations.
* Ownership of machinery and facilities required to execute the work.

== Technical capability ==

* Examination of past or current similar work.
* Competency, qualifications and certificates.
* Subcontractor and supplier capability.
* Building Information Modelling (BIM) capability.
* Overall capacity to undertake the work.
* Disaster planning in the event of a catastrophic occurrence such as fire.

== Other indicators ==

* The cost of performance bonds.
* Reputation in the insurance market.
* Time taken to pay subcontractors and suppliers.

= Find out more =

=== Step-by-step guidance on appointing a contractor: ===

* Traditional contract: tender.
* Design and build: tender.
* Construction management: tender.
* Management contract: tender.
* Public project: tender.

=== Related articles on Designing Buildings Wiki ===

* Due diligence.
* Mid-tender interview.
* Pre-tender interview.
* Pre-qualification questionnaire.
* Procurement route.
* Selection criteria.
* The benefits of e-procurement in construction.
* Technical due diligence.
* Tender.
* Tender documentation.
* Tender evaluation.

[[Category:Client_procedures]] [[Category:Procurement]]

Cost led procurement

2017-08-07T07:28:39Z

Construction Link Ltd:

= Introduction =

The main aims of the Government Construction Strategy were to ‘change the relationship between Clients and Industry’ and achieve a 15-20% reduction in public sector construction costs by 2015. The [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/61157/Procurement-and-Lean-Client-Group-Final-Report-v2.pdf Government Construction Task Group report 2012] developed three potential new strategies to help achieve these aims:

* Cost Led Procurement (CLP).
* Integrated Project Insurance (IPI).
* Two Stage Open Book.

All three involve early contractor involvement, transparency and integration. Along with a reduction in costs, they are expected to contribute to a reduction in project risk, improved programme accuracy and an enhanced working relationship between client and the supply chain.

= Background =

The Cost Led Procurement method is ‘...intended to allow industry to use its experience and knowledge to develop innovative solutions through leveraging design, materials, subcontracting, direct labour and experience to the advantage of the Public Sector Client...focused on achieving target costs whilst maintaining, if not improving value’ ([https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325012/Cost_Led_Procurement_Guidance.pdf Cabinet Office, 2014]).

In Cost Led Procurement, the project details are clearly identified and a ceiling cost calculated. Typically, an integrated supply team (one or more) is identified through a framework agreement and the team work together to complete the project at below the ceiling cost. In subsequent similar projects within a framework, Cost Led Procurement offers the opportunity for further reduction of costs.

The project is offered to suppliers outside the framework if none of the existing teams are able to deliver the project below the ceiling cost.

= Structure =

The CLP plan involves five phases:

* Inception.
* Selection of contractor.
* Design and cost development.
* Construction.
* Operation

The flow chart from the 2014 Cabinet Office publication, [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325012/Cost_Led_Procurement_Guidance.pdf Cost Led Procurement Guidance] outlines the process.

[[File:Cost_let_procurement.png|link=File:Cost_let_procurement.png]]

= Trial projects =

Two trial projects were run using the CLP method: [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/253693/Procurement_Trial_Project_Short_Form_Case_Study_Environment_Agency_Upper_Mole_Project.pdf Upper Mole] and [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/248614/Procurement_Trial_Project_Case_Study_EA_Rye_Harbour_0_2.pdf Rye Harbour]. The Rye Harbour scheme was successful in achieving a 6% saving through reducing the project programme.

-----
This article contains public sector information licensed under the [https://www.nationalarchives.gov.uk/doc/open-government-licence/version/2/ Open Government Licence v2.0] ref Cabinet Office, [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325012/Cost_Led_Procurement_Guidance.pdf Cost Led Procurement Guidance 2014].

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Framework agreement.
* Government construction strategy.
* Integrated project insurance.
* Integrated supply team.
* Managing the procurement process.
* Optimised contractor involvement.
* Procurement route.
* Supply chain.
* Supply chain management.
* Sustainable procurement.
* The benefits of e-procurement in construction.
* Two stage open book.
* Value for money.

=== External references ===

* [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325012/Cost_Led_Procurement_Guidance.pdf Cost Led Procurement Guidance]
* [https://www.gov.uk/government/publications/government-construction-strategy Government Construction Strategy]
* [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/61157/Procurement-and-Lean-Client-Group-Final-Report-v2.pdf Government Construction Task Group Report]
* [https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325011/New_Models_of_Construction_Procurement_-_Introduction_to_the_Guidance_-_2_July_2014.pdf New Models of Construction Procurement]

[[Category:Policy]] [[Category:DCN_Policy]] [[Category:Procurement]] [[Category:Public_procedures]]

Computers in construction tendering

2017-08-07T07:28:24Z

Construction Link Ltd:

Traditionally, invitations to tender, specifications, bills of quantities and other contract documents have been drawn up independently and exchanged in paper form. Today, collaborative and comprehensive software tools can support the complete process of tendering, communication is almost exclusively electronic and documents are exchanged on web sites, by email and on portable data storage devices, such as DVDs, CD-ROMs and memory cards.

The first comprehensive software tools that supported tendering procedures were introduced as early as the 1970's. Starting with punch card systems, the development of these tools led to new forms of data exchange. Since then, with the possibilities provided by the internet, spatial barriers have also been broken down. Computers can exchange tender information anywhere worldwide in real-time and digital signatures can ensure that the are binding.

[[File:Computers_in_tendering.png|link=File:Computers_in_tendering.png]]

Software tools support this process from the beginning with the preparation of the bill of quantities. Since databases will already store design information from a building model on the one hand, and predefined specifications on the other, quantities can be calculated and tender documents generated.

During the construction process new measurements can be filed and included, with the result that every item, as well as the total volume, is updated automatically.

Digitally transferring the bill of quantities in a structured form to the tenderers' calculation software saves time and money. On the basis of this information, the tenderer is able to calculate a price. Their tender is passed back to the client, again digitally, and all the tenders received can be compared electronically. As a result, a schedule of prices can be created by the client’s software allowing bids to be evaluated against a range of criteria. Before the contract is awarded, modifications resulting from tender negotiations or changes in conditions, contingency items, cancelled items or price changes can all be included in the final contract documents.

A digital version of the bill of quantities can also support the calculation and agreement of variations during the construction phase.

Websites have gained importance as a result of the electronic tendering (e-tender) process. There are several platforms which specialise in the tendering of private and public construction contracts. Similar to offline tools, these websites support the whole procurement process, starting with the download of an invitation to tender through to the legally binding acceptance of a tender. Public administrations and large-scale enterprises increasingly use e-tender platforms, to save cost and time (for example, the European “[http://ted.europa.eu/TED/main/HomePage.do Tenders Electronic Daily]” (TED)).

The main types of software used for the tendering process are listed below:

* Preparation of specifications and bills of quantities:

Software tools for the preparation of specifications and bills of quantities automatically relate measurement data to the corresponding specification texts according to a given item structure. The specifications are based on technical norms and can usually be inserted as standard text blocks.

* Costing and accounting:

Software tools for costing and accounting support cost estimation and analysis. These applications are used by tenderers as well as clients. Costs can be estimated and controlled on the basis of data from the bill of quantities.

* Comparative analysis of unit prices:

Software tools for the comparative analysis of unit prices are used by clients to choose between several tenderers. Predefined evaluation criteria highlight differences between tenders and support the decision-making process.

* Web-based e-tendering:

Web-based e-tendering supports the tendering process in various ways. Websites can supply data for tender inquiries and enable tender documents to be requested and dispatched. The scope varies greatly depending on the provider.

-----
The text in this article is based on an extract from COMPUTER METHODS IN CONSTRUCTION, by Christoph Motzko, Florian Binder, Matthias Bergmann, Bogdan Zieliski, Mariusz Zabielski and Robert Gajewski. Darmstadt, Warsaw 2011. The original manual was developed within the scope of the LdV program, project number: 2009-1-PL1-LEO05-05016 entitled “Common Learning Outcomes for European Managers in Construction”. It is reproduced here in a slightly modified form with the kind permission of the Chartered Institute of Building.

--[[User:CIOB|CIOB]]

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Bid strategies.
* Bill of quantities.
* Building information modelling.
* Computers in building design.
* Computers in the management of construction.
* Contract documents.
* E-procurement.
* How to take off construction works.
* Invitation to tender.
* Specification.
* The benefits of e-procurement in construction.
* Tender.
* Tender documentation.
* Tender processes.

[[Category:Design]] [[Category:Procurement]]

Bid evaluation

2017-08-07T07:28:03Z

Construction Link Ltd:

This article should be read alongside Tender evaluation.

-----
A tender, or 'bid' is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods, and / or services.

Bid evaluation is the process that takes place after the tender submission deadline. It involves the opening and examining of the bids to identify the preferred supplier(s) for the project. Negotiations may then be entered into with one or more suppliers, and the successful supplier awarded the contract.

NB There may have been a pre-qualification process before bids were invited to reduce the number of potential tenders to those that are genuinely appropriate for the project,

Generally, bid evaluation will be carried out in accordance with evaluation criteria or a selection methodology specified in the invitation to tender. Criteria or other factors that were not included in the invitation to tender should not be used to evaluate bids, and ideally, the same evaluators should evaluate all bids.

Bidding parties should submit clear and well-organised bids, but nonetheless, a great deal of thoroughness is required in the bid evaluation process, to ensure that proposals are properly understood, bids are compliant with invitation to tender, no information is overlooked and that correct conclusions are reached.

An initial review of the offers received is generally undertaken to determine their responsiveness and conformity to the conditions in the invitation to tender documents. Non-compliant bids may be rejected (unless a compliant bid has also been submitted).

A more detailed evaluation of compliant bids may then be undertaken against a number of pass/fail criteria. A technical determination should be made to ascertain whether the bidder’s technical solution is feasible, appropriate and deliverable within certain requirements, i.e. safety and costs. If it is a consortium that has submitted a bid, the proposed project management should be assessed to determine how cohesive it will in terms of delivering the project, and so on.

See Tender evaluation for more information.

There are a number of bases upon which a preferred bidder can be identified:

* Lowest price.
* Most economically advantageous tender (MEAT).
* Mean value.
* Exclusion of the extremes.

See Contract award for more information.

While it is common for the lowest priced tender to be awarded the contract, other factors such as relevant experience and the perceived quality of the solution should also be taken into consideration, as the lowest price does not always result in the best long-term value.

It may be the case that after the initial review only one bid will be sufficiently compliant. The lack of compliance or lack of interest may be because of deficiencies in the tender documents. If this is the case, then the tender documents could be rectified and the tender procedure begun again.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Best value.
* Bid writer.
* Construction contract.
* Contract award.
* Contract conditions.
* Contract documents.
* Due diligence when selecting contractors or subcontractors.
* Invitation to tender.
* Mid-tender interview.
* Pre-tender interview.
* Procurement route.
* Selection criteria.
* The benefits of e-procurement in construction.
* Tender documentation.
* Tender evaluation.
* Tender processes.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Best value

2017-08-07T07:27:28Z

Construction Link Ltd:

The term ‘value’ relates to the benefits brought by something in relation to the resources needed to achieve it. Value for money (VfM), relates to the optimum balance between the benefits expected from something and the resources expended in its delivery. Value for money is sometimes expressed as a ratio between a function and the whole life cost for that function.

The similar term ‘best value’ refers to the most advantageous combination of the whole-life cost, quality (fitness for purpose) and sustainability (in terms of the economic, social and environmental benefits) available to meet client requirements.

Best value is often referred to in relation to the procurement system introduced in the UK by the Local Government Act 1999, which charged local and national government with a general duty of obtaining best value by ‘…securing continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.’

The Act was introduced as a manifesto commitment of the Labour government following years of compulsory competitive tendering under the previous Conservative government, and was intended to improve the quality and delivery of public services by preventing local and national government clients simply opting for the lowest cost options, as this did not always provide the optimum long-term solution.

An important aspect of best value procurement is the examination of prospective suppliers against arrange of pre-defined criteria. Values can be assigned to factors such as price, past performance, relevant experience, technical ability, sustainability, health and safety, innovation, resource availability, management skills and systems, proposed methodology and so on. The bid evaluation criteria and their respective weightings give expression to the perception of what represents the best value to the client. The supplier achieving the highest score may then be appointed.

However, the best value approach was seen by some to increase bureaucracy, and in 2011, the coalition government introduced guidance that went some way to watering down the requirements of the Act.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Appointing consultants.
* Auction theory.
* Balanced scorecard.
* Bid strategies.
* Budget.
* Construction contract.
* Expression of interest.
* Invitation to tender.
* Key performance indicators.
* Mid tender interview.
* OJEU.
* Overcoming difficulties in value management.
* PAS 91.
* Pre tender interview.
* Procurement route.
* Public procurement.
* Selection criteria.
* The benefits of e-procurement in construction.
* Tender documentation.
* Tender evaluation.
* Tender processes.
* Tender.
* Value engineering.
* Value management techniques.
* Value management.
* Whole life costs.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Procurement]]

Auction theory

2017-08-07T07:27:12Z

Construction Link Ltd:

= Introduction =

Auction theory relates to the design of auctions and how this influences the bidding strategies of the parties taking part in the auction. Auctions take place in which different parties bid for the right to purchase goods or, in the construction industry, to win tender contracts for project work.

The four traditional types of auction are as follows:

=== First-price sealed-bid ===

Bidders hand bids to the auctioneer. Upon opening, the most suitable bid (highest or lowest) wins.

=== Second-price sealed-bid ===

Bidders hand bids to the auctioneer. Upon opening, the most suitable bid wins, paying equal to the bid which is judged second-most suitable.

=== Open ascending-bid (English auctions) ===

Bidders make increasingly high bids until no one is prepared to make a higher bid and one remains.

=== Open descending-bid (Dutch auctions) ===

An inflated price is set and is progressively lowered until the first bidder is prepared to buy.

Generally, the tendering process within the construction industry is the first of these – a first-price sealed-bid auction with multiple stages.

= ‘Winner’s curse’ =

An element of auction theory, which can impact upon the construction industry, is the ‘winner’s curse’. This is when a bidding contractor wins the auction with a bid that is too low for them to make a satisfactory profit, if any at all.

However, while it is common for tendering processes to favour lowest bids, the construction industry does not operate on a strictly first-price sealed-bid basis, as other factors also come into play. An existing working relationship between employer and tenderer might give the latter an advantage over tenderers who are unfamiliar to the employer.

The employer might also be prepared to select a higher bid because there is an expectation of higher quality and reliability. It is just as important for the employer that the tenderer does not suffer the ‘winner’s curse’, since the project will be likely to be impacted negatively as a result of the tenderer trying to rush, cut costs or becoming insolvent.

= ‘Bid shopping’ =

The construction industry has obtained something of a bad reputation in the past for corrupting the first-price sealed-bid auction design. This is known as ‘bid shopping’.

A sealed-bid auction is intended to proceed with tenderers only knowing their bid and not those of their rivals. However, what can happen is that the employer reveals the bids of tenderers to their rivals in an attempt to drive bids down lower. This turns the design of the auction into more of an English auction, and puts tenderers at a disadvantage compared to the employer. One way of avoiding this in construction is for tenderers to withhold their bid submission until right before the deadline, in the hope that this will prevent their bid becoming common knowledge to rivals.

= Other forms of corruption =

Two other forms of corruption can arise in construction when it comes to sealed-bid auctions.

=== Bid rotation ===

This occurs when a number of tenderers are involved in the auction process but only one of them places a bid, inevitably making them the winner. The tenderers collude together to rotate the title of ‘winner’ among themselves, meaning they are each assured of winning unrivalled a certain amount of work.

=== Phantom bidding ===

This is more common and involves all bar one of the tenderers submitting artificially high bids, while the one tenderer submits a lower bid which is still sufficiently high to ensure they make a profit. This is designed to give the impression of competition.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Best value.
* Bid strategies.
* Bid writer.
* Bidding for renovation works.
* Contract award.
* Game theory.
* Invitation to tender.
* Negotiated tendering.
* OJEU procurement rules.
* Open tendering.
* Procurement route.
* Selection criteria.
* Selective tendering.
* The benefits of e-procurement in construction.
* Tender.
* Tender evaluation.

[[Category:Theory]] [[Category:Appointments]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

The benefits of e-procurement in construction

2017-08-07T07:26:06Z

Construction Link Ltd: Created page with "Paul Heming, founder of procurement platform C-Link discusses the benefits of E-procurement. ----- The term 'E-procurement' refers to tendering processes carried out online and ..."

Paul Heming, founder of procurement platform C-Link discusses the benefits of E-procurement.

-----
The term 'E-procurement' refers to tendering processes carried out online and through information and networking systems, and may include; E-tendering, E-auctioning, E-invoicing, E-payment and so on.

The effectiveness of a contractual relationship is typically dictated by how well the initial procurement process has been completed and whether the written agreement fully reflects the intentions of the contracting parties. E-procurement can be an effective way of managing this process, particularly where there are complex, multi-tier supply chains.

E-procurement automates procurement procedures, reducing the need for paper-based and human processes. E-procurement platforms can be customised according to the needs of the user, often with accessibility through mobile devices. This frees up procurement teams from low-value tasks, allowing them to focus on higher-value activities such as contract negotiation.

Relationships and behaviour are strong influences for achieving successful outcomes. Companies who understand and appreciate each other will be more likely to work effectively together and this will apply equally when things are going well or when difficulties arise. E-Procurement allows for early engagement and encourages positive interaction between parties which improves the likelihood of successful project delivery.

Where price competition is the only criteria for procurement, this rarely leads to a harmonious and successful relationship. Rather, for the procuring party, it is much more important to establish whether a specialist has both the capacity and capability in terms of management and resource to deliver and, more importantly, the expertise and skills to undertake the contract works. The most frequent cause of disputes in contracting is the inadequate definition of the scope of works. Time spent properly defining the contract works and compiling documentation pays dividends, enabling businesses to properly price the works and facilitating effective management once the contract is placed.

The UK Government recognises the same. As part of its Construction 2025 report, that the industry could make “[http://www.architecture.com/RIBA/Professionalsupport/Assets/Files/MP3952RIBAConstruction2025SINGLE.pdf [major] efficiency gains from earlier engagement of its supply chain”] and professionals are being encouraged to consider e-procurement to deliver greater productivities.

Benefits that can be achieved through e-procurement include:

* Lower transactional costs.
* Better reporting through automation.
* Automatic pre-qualification submission and evaluation.
* Reduced tender cycle times.
* Automatic scheduling of the tender process, with milestones managed and participants alerted.
* Central storage of contract documents.

Procurement platforms such as [http://www.C-Link.com www.C-Link.com] allow users to manage their project supply chain early and effectively, pre-qualify specialists and score them using a variety of construction specific criteria so that everyone knows exactly what they’re getting at the outset.

--[[User:Construction_Link_Ltd|Construction Link Ltd]]

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Auction theory.
* Best value.
* Bid evaluation.
* Computers in construction tendering.
* Cost led procurement.
* Due diligence when selecting contractors or subcontractors
* E-procurement.
* Invitation to tender.
* Managing the procurement process.
* Pre qualification questionnaire.
* Procurement route.
* Selection criteria.
* Supply chain management.
* Supply chains in construction.
* Tender documentation.
* Tender evaluation.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

User:Construction Link Ltd

2017-08-07T07:20:12Z

Construction Link Ltd:

A new and exclusive construction community home to projects and tenders across the UK.

-----
Born in late 2015, following years of frustration with the time-consuming processes involved in sourcing, selecting and procuring Specialist services in the construction industry, C-Link is designed to make construction sourcing easy. Our aim is to promote a culture of openness and positive interaction between industry stakeholders. We want to stimulate innovation in our notoriously slow-paced sector and improve relationships between Professionals and Specialists across the industry.

Our mission is to:

* Provide a low cost, high quality, lead generation service to Specialist Contractors, Suppliers and Consultants.
* Allow Developers and Main Contractors to make quality procurement decisions and deliver projects on time and budget.
* Inspire more positive relationships across the industry.