The assessment of tenders was carried out in two stages. The first stage involved a coarse assessment of all tenders to identify the tenders to be considered in depth. The second stage involved a detailed appraisal and examination of the most favoured tenders together with negotiation with tenderers, as appropriate, leading to final recommendation.
The tender assessments were carried out by groups reporting to the Chairman and Executive. The activities involved included:
Finance department
Examine financial package; check front loading; bring all tenders back to net present value utilizing the Interim Payment Schedule included in the tender; arithmetical check of BofQs; check alternative offers; identify most favourable in financial terms.
Contracts/legal department
Examine the covering letter and all qualifying statements; indicate cost and time implications of qualifications.
Programming department
Check that the tenderer’s programme adheres to schedules of milestones and critical dates identified in the contract documentation.
Consultants/civil engineering department
Examine alternative design offers and recommend any which warrant further consideration and advise on any planning implication; examine method statement to highlight any anomalies and areas of non-acceptance; prepare detailed cost comparison to enable cost centres and activity bills to be compared with employer’s estimate.
Utilities and civil planning
Evaluate the implications of the tenderer’s submission on traffic, land access and utility diversions.
At the second-stage assessment a detailed study would be undertaken and questions of clarification would be developed. Following the issue of the questions to the tenderers and receipt of the answers all outstanding matters would be clarified. The confirmation wrap-up letters would be incorporated into the contract.
in standard UK contracts. This powerful tool enables an equitable comparison to be made of all the tenderers’ forecasted project cash flows on a present-day cost basis. The challenge for the client’s commercial advisers is devising a tendering system that allows an NPV comparison to be made.
3.8 Conclusions
We have now examined the procedures for selection of both consultants and contractors in the UK and overseas. In the UK, as part of the VFM process demanded by the Government, there has been a shift by public sector clients to selection based not only on lowest price but also embracing quality issues.
Over the past decade many significant guides have been published by the Construction Industry Council and CIRIA in order to assist clients and their consultants in developing best practice. However, the Baywatch hypothetical case study and the Stoke-on-Trent Cultural Quarter case study demonstrate that, even when quality issues are incorporated into the selection process, major problems can still arise.
3.9 Questions Question 1
The University of Metropolis wishes to appoint the client’s project manager with full responsibility for controlling and managing the time, cost and quality on the new £25 million Learning Centre and Teaching facility.
The Executive of the University understands that the construction industry is now committed to providing best value for its clients and is keen that this philosophy is adopted by all its consultants.
Describe the pre-qualification selection process and identify the criteria for the shortlist to tender.
Question 2
Access the OJEC website (www.ojec.com) and answer the following: 1 What does OJEU mean?
2 Which projects are covered by its regulations? 3 What are the public procurement thresholds? 4 What criteria are used to evaluate tenders? 5 What process is followed?
Question 3
In June 1998 the Foreign and Commonwealth Office (FCO) signed a contract for the construction, operation and financing of a new Embassy in Berlin with a German supplier called Arteos which had been formed by a consortium comprising Bilfinger + Berger, one of the three biggest German construction companies, and Johnson Controls, a large American-based facilities management provider. The construction was completed in 2000.
Review the techniques used in the selection of Arteos on this PFI project.
Source: www.nao.org.uk/idoc.ashx?docId=922F1C63-85E2-40B9-B194-4541EEF1ECCD& version=-1 – accessed 12 September 2012.
3.10 References/further reading
Auditor General for Scotland (2004) Management of the Holyrood Building Project, Audit Scotland. Chartered Institute of Loss Adjusters: www.cila.co.uk/files/tendercodes.doc – cited 17 April 2009. CIB (1997) Code of Practice for the Selection of Main Contractors, Working Group 3.
CIRIA (1998) Selecting Contractors by Value, Construction Industry Research & Information Association. Construction Industry Board (1996) Selecting Consultants for the Team: Balancing quality and price, CIB. Construction Industry Council (1994) Procurement of Professional Services. Guidelines for the value assessment
of competitive tenders, CIC.
Construction Industry Council (2002) A Guide to Project Team Partnering, CIC Construction Industry Council (2005) Selecting the Team, CIC.
Construction Industry Council (2005) A Guide to Partnering Workshops, CIC
Davis, C. and Dornan, P. (2008) ‘The rise of two-stage tendering’, The International Construction Law Review, Pt 4, pp. 511–517.
Fordham, P. (2007) ‘Economics: market forecast’, Building, 2 February, pp. 64–65. FIDIC (1994) Tendering Procedure, 2nd edition, FIDIC, Switzerland.
Holt, G.D., Olomolaiye, P.O. and Harris, F.C. (1995) ‘A review of contractor selection practice in the UK construction industry’, Building and Environment, Vol. 30, No. 4, pp. 553–561.
Holt, G.D. (1998) ‘Which contractor selection methodology’, International Journal of Project Management, Vol. 16, No. 3, pp. 153–164.
ICC Credit: www-icc-credit.co.uk – accessed January 2007.
Jackson-Robbins, A. (1998) Selecting Contractors by Value, Construction Industry Research and Information Association.
Mosey, D. (2008) ‘It’s just too sad to be single’, Building, 12 December, p. 47.
NAO (2000) Report by the Comptroller and Auditor General: The Foreign and Commonwealth Office, The New British Embassy in Berlin, HC 585 Session 1999–2000, The Stationery Office, London. NJCC (1994) Codes of Procedure for Single Stage Selective Tendering, National Joint Consultative Committee. OGC (2005) Successful Delivery Toolkit, Office of Government Commerce, Available at: http://webarchive. nationalarchives.gov.uk/20100503135839/http:/www.ogc.gov.uk/documents/cp0043.pdf (cited 23 May 2013)
Rawlinson, S. (2006) ‘Two-stage tendering’, Building, 12 May, pp. 62–65.