Last edited 13 Dec 2015

Management contract: tender works contracts

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The tender stage is the process of selecting and appointing works contractors. Tendering involves a number of works contracts, contracted by the management contractor. Works contracts may not all be tendered at the same stage, and so this process might be repeated a number of times during the project.

Contents

[edit] Starting the work stage.

If they have not already done so, the client may wish to appoint a contract administrator to administer the management contractor's contract. Go to work stage: Management contract: appointment.

The management contractor prepares selection criteria for works contractors and if appropriate pre-qualification questionnaires.

The management contractor and client consider the preferred form of contract, contract conditions and the allocation of risks for works contracts. They then co-ordinate a stage start-up meeting with the consultant team and the client to agree the programme and procedures that will be adopted for tendering.

The client takes advice from the management contractor and decides whether to appoint, or arrange for the appointment of site inspectors.

[edit] Preparing the tender documentation.

NB Throughout this stage, The lead designer co-ordinates completion of statutory approvals and other approvals and negotiations.

The management contractor obtains from the consultant team information for the preparation of the tender documentation, pre-tender estimate, cash flow projection and tender pricing document and prepares the pre-tender estimate, cash flow projection and tender pricing document.

If tendered packages include design by the works contractor, the management contractor prepares 'management contractor's requirements', describing the design services required.

The management contractor co-ordinates a review of the tender documents for the works contracts and issues instructions to make amendments if necessary.

The client reviews the tender documents (including assessment of the pre-tender estimate in relation to the budget) and issues instructions to make further amendments if necessary. The management contractor instigates change control procedures for the tender documents.

[edit] Identifying potential tenderers.

The management contractor prepares a long list of suitable works contractors and issues pre-qualification questionnaires. The management contractor receives completed pre-qualification questionnaires from the long list of potential tenderers and carries out financial checks on potential tenderers (ideally the contract should not be more than 20% of the annual turnover of the potential tenderers).

The management contractor co-ordinates advice on prospective tenderers and prepares a short list of tenderers to present for client comment or approval. The client accepts or alters the initial short list of tenderers and where appropriate the management contractor arranges pre-tender interviews with the initial short list of tenderers.

Following the pre-tender interviews, the management contractor co-ordinates any amendments to the initial short list of tenderers and instructs any amendments to the tender documentation.

[edit] Identifying the preferred tenderer(s).

The management contractor collates tender documents for each of the works contracts and arranges dispatch and return to and from the tenderers.

The management contractor compiles queries from tenderers and co-ordinates responses which should be issued to all tenderers. If necessary, the management contractor arranges mid-tender interviews and/or site visits for the tenderers. If queries from the tenderers or discussions during the mid-tender interviews result in significant clarification of, or changes to, the tender documentation, the management contractor may recommend to the client that the tender period is extended.

The management contractor receives the tenders. They may follow a formal procedure for opening and recording tenders. The management contractor co-ordinates the assessment of the tenders. This may include further interviews.

The management contractor prepares a tender appraisal for the client. NB If the lead consultant disagrees with the management contractor's appraisal, they may submit their own tender appraisal.

The client receives the tender appraisal from the management contractor, and instructs the management contractor to enter into negotiations with the preferred tenderer(s). A reserve tenderer may be retained in the event that negotiations with the preferred tenderer are unsuccessful.

[edit] Entering into negotiations with the preferred tenderer(s).

The management contractor co-ordinates negotiations with the preferred tenderer(s). It is paramount in any negotiation that the individuals at the negotiating table either have authority to fully negotiate terms or make it clear from the start the limits of their authority. This may mean re-convening with the right people empowered to make decisions.

The management contractor co-ordinates the preparation of a tender report. The client considers the tender report and instructs the management contractor if any changes are required to the tender documents. If instructed, the management contractor co-ordinates adjustments to tender documents and requests a revised tender from the preferred tenderer(s).

[edit] Issuing the notice to proceed.

At this stage, the client may negotiate the second stage of the management contractors appointment. This may result in 'definitive particulars' being inserted into the management contract. Any changes to the definitive particulars in the management contract may also require changes to the works contracts.

The client issues a 'notice to proceed' allowing the management contractor to appoint works contractors (as there is more than one works contract, this may already have been done).

[edit] Appointing the works contractor.

The management contractor collates the contract documents and arranges for the printing (engrossment) and execution of two copies, one for themselves and one for the works contractor. This can take place at a specially convened signing meeting. Alternatively, the management contractor might retain one executed contract, with certified copies being issued to the works contractor, this can avoid potential errors in preparing two contracts for execution. The works contractor may be required to provide: a performance bond, warranties, evidence of insurance cover and so on.

The management contractor arranges for copies of the contract documentation (or relevant parts) to be issued to the client and consultant team.

The management contractor informs other tenderers that they have been unsuccessful.

NB. Works contracts may not all be tendered at the same stage, and so this process might be repeated a number of times during the project.


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