Certificate in Quantity Surveying and Construction: Procurement and tendering
1. Identify the advantages and disadvantages of the main methods of procurement. (Word guidance 1000 words)
There are several main methods of procurement, each with its own advantages and disadvantages. These include:
- Open tendering: Advantages: Open tendering is the most transparent method of procurement as it allows for competition from multiple suppliers. It also ensures that the best value for money is achieved as suppliers must compete on price and quality. Disadvantages: Open tendering can be time-consuming and costly, as multiple suppliers must be contacted and the tendering process must be managed. It can also lead to increased risk as contracts are awarded to suppliers who may not have the necessary experience or resources to deliver on their commitments.
- Closed tendering: Advantages: Closed tendering is a more efficient method of procurement as it reduces the number of suppliers that need to be contacted. It also allows for a more focused evaluation of the suppliers’ capabilities, which can lead to better quality and value for money. Disadvantages: Closed tendering can be less transparent as it is limited to a select group of suppliers and does not allow for competition. It can also lead to reduced innovation and higher prices as suppliers are not incentivized to compete on price or quality.
- Direct award: Advantages: Direct award is the quickest and most straightforward method of procurement as it does not require a tendering process. It can also be used to award contracts to suppliers with specific expertise, who would not be found through a tendering process. Disadvantages: Direct awards can be less transparent and can lead to reduced competition and higher prices. It also carries a higher risk as suppliers may not have the necessary experience or resources to deliver on their commitments.
- Framework agreement: Advantages: Framework agreements allow for the selection of pre-approved suppliers, which can speed up the procurement process and reduce costs. It also allows for the development of long-term relationships with suppliers, which can lead to better quality and value for money. Disadvantages: Framework agreements can limit competition and reduce innovation as suppliers are not incentivized to compete on price or quality. It also can lead to reduced transparency as the process for selecting suppliers may not be open to the public.
- Strategic sourcing: Advantages: Strategic sourcing is a more holistic method of procurement that considers the overall needs of the organization, rather than just the immediate needs of a specific project. This can lead to better value for money, as well as reduced costs through the consolidation of purchasing. Disadvantages: Strategic sourcing can be time-consuming and requires a significant investment in resources and expertise. It also can be less transparent as it is focused on long-term goals rather than immediate needs.
In summary, there are several main methods of procurement, each with its own advantages and disadvantages. The best method will depend on the specific needs of the organization and the type of goods or services that are being procured. It is important to consider the advantages and disadvantages of each method before making a decision, to ensure that the best value for money is achieved.
2 . A client proposes to build a £9m single-storey factory of 8,000 m2 to manufacture precast concrete railway sleepers and has asked for a brief report that considers the alternative methods of procurement and compares the sequences of procurement and tendering periods required for commencement on site. (Word guidance 500 words)
There are several alternative methods of procurement that can be considered for the construction of a single-storey factory to manufacture precast concrete railway sleepers. These include traditional procurement, design and build procurement, and management procurement.
- Traditional procurement: This method of procurement involves the client appointing a design team, such as an architect and structural engineer, to prepare detailed design drawings and specifications. Once the design is complete, the client will then invite tenders from a number of contractors to construct the factory. This method of procurement is typically used when the client has a clear idea of what they want to achieve and can be used when there is a high degree of certainty about the design and construction requirements. The tendering period for traditional procurement can take around 8-12 weeks and the construction period can take around 18-24 months.
- Design and Build procurement: Under this method, the client appoints a single contractor to design and construct the factory, who will be responsible for both the design and construction phases. This method of procurement is typically used when the client has a general idea of what they want to achieve, but is less certain about the design and construction requirements. The tendering period for design and build procurement can take around 4-8 weeks and the construction period can take around 12-18 months.
- Management procurement: Under this method, the client appoints a project manager to manage the design and construction phases of the project. The project manager will then appoint the design team and the contractor to construct the factory. This method of procurement is typically used when the client has limited knowledge of the design and construction requirements. The tendering period for management procurement can take around 6-10 weeks and the construction period can take around 14-20 months.
In conclusion, the traditional procurement method provides the client with a high degree of certainty about the design and construction requirements, with a longer tendering period of 8-12 weeks and a longer construction period of 18-24 months. The Design and build procurement method provides the client with a more flexible approach, with a shorter tendering period of 4-8 weeks and a shorter construction period of 12-18 months. And the management procurement method is used when the client has limited knowledge of the design and construction requirements, with a tendering period of 6-10 weeks and a construction period of 14-20 months. It is important for the client to carefully consider their needs, budget, and timeline before deciding which procurement method to use.
3 . Based on the proposed factory the client has obtained a large contribution of government funding for the scheme. As the contract will subsequently be audited by the funder prepare a report for the client which considers the options and makes a recommendation on the best method of securing a contractor for the most competitive price. Identify the tender documents to be produced and identify the contents of each document. (Word guidance 750 – 1000 words)
The proposed factory project has obtained a large contribution of government funding, which means that the contract will subsequently be audited by the funder. Therefore, it is important to choose a method of procurement that will provide the most competitive price while also meeting the requirements of the funding agency. After considering the options, the recommendation is to use the open tendering method.
Open tendering is the most transparent method of procurement as it allows for competition from multiple suppliers. It also ensures that the best value for money is achieved as suppliers must compete on price and quality. It will be beneficial for the client in this case as it will help to demonstrate to the funding agency that the project has been procured in a fair and competitive manner.
The tender documents that will need to be produced for this project include:
- Invitation to Tender (ITT): This document provides an overview of the project, the scope of work, and the requirements for the submission of tenders. It will also include details of the tender process, including the closing date and time for the submission of tenders, the evaluation criteria, and the contact details of the person responsible for the tendering process.
- Instruction to Tenderers (ITT): This document provides detailed information about the project and the scope of work, including any design specifications, drawings, and other relevant documents. It will also include details of the contract conditions, payment terms, and performance requirements.
- Tender Form: This document will provide a template for suppliers to submit their tenders, including details of their proposed price, their proposed method of construction, and their proposed schedule for the completion of the project.
- Evaluation Criteria: This document will set out the criteria that will be used to evaluate the tenders, including price, quality, and the supplier’s experience and qualifications.
- Contract Documents: This document will set out the terms and conditions of the contract, including details of the payment schedule, the performance requirements, and the rights and responsibilities of the client and the contractor.
In conclusion, the open tendering method is the best option for securing a contractor for this project at the most competitive price. The tender documents that will need to be produced include the Invitation to Tender, Instruction to Tenderers, Tender Form, Evaluation Criteria, and Contract Documents. These documents will provide the necessary information for suppliers to submit their tenders and for the client to evaluate and select the most suitable contractor. It is important to ensure that all of the tender documents are complete and accurate, as they will be reviewed by the funding agency during the audit process.