Client’s Processes & Procedures
Client’s Processes & Procedures
Bidding and Bid
Bidding and Bid
Evaluation
“… for every contract there is the optimum bidder who is not “… for every contract there is the optimum bidder who is not onlyonly capable of fullling the Clients’ reuirements in terms of time! capable of fullling the Clients’ reuirements in terms of time! uality and ris" but also in
uality and ris" but also in respect of cost is also willing and ablerespect of cost is also willing and able to submit a bid lower
to submit a bid lower than any competitorthan any competitor# $ fundamental goal of# $ fundamental goal of any competitive bidding system is to
any competitive bidding system is to reveal the identity of thisreveal the identity of this optimum bidder and determine the bid price#
optimum bidder and determine the bid price#
“… too many clients are undiscriminating and still euate price “… too many clients are undiscriminating and still euate price with cost! selecting designers
with cost! selecting designers and constructors almost e%clusivelyand constructors almost e%clusively on the basis of tendered price# his tendency is widely seen as on the basis of tendered price# his tendency is widely seen as one of the greatest barriers to i
one of the greatest barriers to improvement# he public sector!mprovement# he public sector! because of its need to
because of its need to interpret accountability in a rather narrowinterpret accountability in a rather narrow sense! is often viewed as a ma'or culprit i
“… for every contract there is the optimum bidder who is not “… for every contract there is the optimum bidder who is not onlyonly capable of fullling the Clients’ reuirements in terms of time! capable of fullling the Clients’ reuirements in terms of time! uality and ris" but also in
uality and ris" but also in respect of cost is also willing and ablerespect of cost is also willing and able to submit a bid lower
to submit a bid lower than any competitorthan any competitor# $ fundamental goal of# $ fundamental goal of any competitive bidding system is to
any competitive bidding system is to reveal the identity of thisreveal the identity of this optimum bidder and determine the bid price#
optimum bidder and determine the bid price#
“… too many clients are undiscriminating and still euate price “… too many clients are undiscriminating and still euate price with cost! selecting designers
with cost! selecting designers and constructors almost e%clusivelyand constructors almost e%clusively on the basis of tendered price# his tendency is widely seen as on the basis of tendered price# his tendency is widely seen as one of the greatest barriers to i
one of the greatest barriers to improvement# he public sector!mprovement# he public sector! because of its need to
because of its need to interpret accountability in a rather narrowinterpret accountability in a rather narrow sense! is often viewed as a ma'or culprit i
Procurement )b'ectives
he introduction of leading edge concepts! for e%ample! best practice
benchmar"ing! total uality management and supply chain concepts etc#*
echnological comple%ity resulting in specialisation reuiring organi+ation to
purchase goods from those with specialist e%pertise*
Central & ,tate government policies & legislations*
-ncreasing recognition of the nite nature of resources*
-ncreasing proportion of revenue spent e%ternally*
.ewer but larger suppliers* and
-ncreasing environmental awareness#
Purpose of procurement 0 meet the user1s reuirement
2euirement 0 specic level of uality or standard of
service 3need! cost0e4ectiveness and a4ordability5
E%pressed in terms of output and performance 3to avoid
favouritism5
,pecied by reference to recogni+ed standards! where
relevant! ma"ing provision for euivalents
To purchase the right quality of material, at the right time,
in the right quantity, from the right source, at the right
price
-s defect free on delivery6completion
7as a reasonably e8cient running cost
7as satisfactory durability
-s aesthetically pleasing
7as undergone value analysis6engineering
-s innovative / that is! it incorporates original design uality
-s sub'ect to satisfactory guarantees and after sale service
imely delivery6completion
Certainty of completion date and other time related
estimates
Early commencement of wor"6fabrication6manufacture
:esign proposals to be submitted e%peditiously
2apid rectication of defects
Certainty of cost estimates
;alue for money
Ease of accountability
Competition / lowest possible tender
)btaining cost certainty or reduction in ris" of cost
overrun
2ealistic maintenance and running costs
he desire to be actively involved and informed during
the life of a pro'ect
$ clear allocation of responsibilities6single0point
responsibility
.le%ibility to change design during production
he need for positive and constructive advice from
consultants6 Contractors
.ully motivated and co0operative pro'ect team / no
con<ict#
o supply the organi+ation with a steady <ow of materials and services to meet its needs# o ensure continuity of supply by maintaining e4ective relationships with e%isting
sources and by developing other sources of supply either as alternatives or to meet emerging or planned needs#
o buy eciently and wisely! obtaining by an ethical means the best value for every
pound spent#
o manage inventory so as to give the best possible service to users at lowest cost# o maintain sound co-operative relationships with other departments! providing
information and advice as necessary to ensure the e4ective operation of the organi+ation as a whole
o develop sta, policies, procedures and organization to ensure the achievement of
the foregoing ob'ectives
o select the best suppliers in the mar"et#
o help generate the e4ective development of new products# o protect the company's cost structure #
o maintain the correct quality/value balance# o monitor supply market trends #
o negotiate eectively in order to wor" with suppliers who will see"
mutual benet through economically superior performance
Competition
Best value6value for money
;alue analysis6engineering
>egal obligations
?a"e or buy decision ma"ing
,ubcontracting 0 ability to do a 'ob* capacity! e%pertise! time!
speciali+ation
Buying commodities Capital goods
Purchasing for resale Buying services
)utsourcing / core6 non0core activities Buying internationally
-n0house pro'ect
– Be available full0time
– Be the single0point contact for the organi+ation
– $t the very least be able to answer all incoming uestions fully and promptly
– @nderstand and organi+e the internal decision0ma"ing processes reuired for the pro'ect A – 7ave the power to spea" and act for the organi+ation
– $ct in support of any e%ternal pro'ect leadership appointment
Pro'ect management Consultant advisers
– Complementing s"ills available within the client organi+ation
– ,upplying impartial advice on the need 3or not as the case may be5 to build and how to go
about building
:esign and Construct
– esign and build
irect
!ompetitive
evelop and construct/manufacture " # stage
– $ackage deal " standardised/ semi standardised product – %urnkey " single administrative entity
– $rivate &inance nitiative ($&) - he promoter designs! builds! nances and operates
the facility on behalf of the 3public5 client
– *uild-+wn-+perate-%ransfer (*++%) - private client provides and operates a facility on
behalf of a 3usually5 public client for a %ed term & then transfers 3B))! :B.)5
– esign and manage " reuires specialist contractors 3Contractor! Consultant5
– ?aintenance & )peration / special cases
raditional .orm / ?easurement Criteria 3-tem 2ates6
>umpsum5
–
,euential :esign
–
$ccelerated :esign
?anagement methods
–
?anagement contracting
–
Construction management
Prime cost contracting 0
single point of responsibility 3the
Prime Contractor5 between the client and his sourced supply chain
$artnering
– )rgani+ations agree to wor" together for a period of time! perhaps unspecied! on a basis of m utual trust and with common ob'ectives thereby optimising each partner1s strengths
– partners still maintain a sense of independence with their own contractual arrangement and a tendering process that may or may not be based on a competitive6cost structure#
– involves a client buyi ng a product 3the pro'ect5 through a procurement process that may involve any one of many forms 3traditional! negotiated price! design and build! management contracting etc#5# Partnering! and its
advantages! lies in attitudes and behaviours governing a commercial process#
lliancing
– ?ore all encompassing – ;irtual company merger
– trustworthy! committed and world0class professional and competent rms 'oin with the owner6client to develop the pro'ect
– 2is" and reward sharing
&ramework agreements
%erm contracting - e%ecuted over a given time period 3generally for repair and maintenance5 e-$rocurement
Procurement $ssessment Cr ter a!
$ssessment ?odels
$requalifying proposals -
reuests for information! ualifying
statements and capacity statements
nsolicited proposals -
preliminary proposals! feasibility studies and
design studies
nformal proposals -
o4er letters and presentations
&ormal tenders -
sealed bids! budgetary proposals! negotiated
tenders! open tenders! selective tendering and single action tenders
$chieve a better idea of the right price from a range of
suppliers and are better able to ma"e an informed
'udgement upon which to select#
,pecify closely what they need from the product and
allow the manufacturers to interpret those needs and
put a price against them#
=ains an ob'ective assessment! which they can review
and audit#
=ain an understanding of the uality that the supplier
can achieve and within what time0scale#
he cost and involvement of the client are high in producing the specication and tender
documents#
.ully specied tender documents restricts value engineering6 innovation#
>oosely specied tender documents may result in diverse solutions varying in price and content# ,uppliers could uote too high! too low leading to dispute or failure of supply 3performance!
support or maintenance5! supplier defunt#
he procedures for tendering are often slow# $cceleration results in low! poor or no responses >owest price0 lac" of performance and uality of supply#
endering procedures may be e%pensive to set up / tender charges
endering can be unsuitable for some types of contract6low value# .or e%ample! single supplier
of the product or service reuired
Contractors declining tender to avoid alienating a client or consultant 0 through articially high
price#
)pen
Closed
Degotiated
-dentify the problem area and the possible reuirement :evelop plans to provide the solution
$ssess potential solution providers 0 Preualication :ecide upon the tendering method
Prepare tender documents! technical and commercial specications -nvite suppliers to tender and issue tender documents
2eceive suppliers1 tenders and proposals Evaluate the responses
Degotiate with the preferred supplier3s5 $ward the contract to the winning bidder
.inancial standing and record
2ecent similar building e%perience / speed! costs! time
=eneral e%perience! s"ill and reputation in the area
$deuacy of technical and management structure for contract
type
Competence and resources wrt E7,
$pproach to uality assurance systems
$deuate capacity at the relevant time
,ingle stage tenders
wo stage tenders
.ormal presentations
$ward criteria
!ommitment Clients’ initiate pro'ects! set the style and tone and are essential team members#
.ole denition clients need to dene their own role and euip them to carry it out# .or e%ample!
client involvement in the design and management of pro'ects reuires appropriate resourcing and e%pertise#
.ealism priorities and e%pectations! for e%ample! time frame and price! should be realistic and
fair#
*rieng a clear brief is essential to establish e%actly what is reuired! including the level of
service! specication or product#
0egotiate a willingness to negotiate with consultants! contractors and suppliers#
1ariations2 restrict variations in design! specication or product to the essential# -f
changes are necessary a systematic approach is crucial#
!ommunication communicate e%pectations both internally and e%ternally# Ensure there is
a clear chain of communication and decision0ma"ing / avoid confusion by communicating via a single voice
,elect advisers and consultants after careful consideration#
,elect an appropriate procurement methodology that b est ts the pro'ect’s priorities# $dopt and adhere to fair tendering procedures that include
he publication of procurement contact points! ma"ing available as much information as tenders
need to respond to the bidding process*
– he preparation of appropriate tender documentation*
– he identication and selection of an appropriate number of suitable tenders* – $n appropriate period of time for the preparation of tenders*
– $ method of dealing with errors within the tender documentation* – $ consistent procedure for the submission and inspection of tenders* – $ method for dealing with errors within tenders*
– he provision of feedbac" to all tenders on the outcome of bids promptly and! within the bounds of commercial condentiality! to debrief winners and losers on reuest on the outcome of the bidding process to facilitate better performance on future occasions*
– he application of the highest professional standards in the management of contracts* and – Procedures to respond to suggestions! enuiries and complaints* and
– Prompt payment procedures#
denition of the technical requirements2 product characteristics!
cost tolerances! ma"e or buy decisions! the demand for the company1s own products! the competitive environment in which the organisation operates#
assessment of potential suppliers2 technical support6bac" up! the
availability of nancial credit services! geographical pro%imity! the competence of the supplier in purchasing! manufacturing and
distribution! the supplier1s delivery record and the past uality of the rm1s performance
bidding negotiations2 the characteristics of each individual o4er
including the price! delivery! uality and the vendor rating reached during the assessment of the supplier
34eighted point plan5
!ategorical approach
5.isks, 1alue and 6ecurity7
–
1alue
–
6ecurity - .outine order products, $rocedural problem
products, $erformance problem products, $olitical
problem products
8eight2 the number of levels in the organisation 3its hierarchy5 that e%ert an
in<uence on the buying centre#
4idth2 the number of functional areas or departments that are involved in the
buying decision#
epth2 the total number of people involved in the buying decision &actors
– F# @nderstanding the business environment in which customers operate – G# @nderstanding each customer1s mission! ob'ectives and mar"ets
– H# @nderstanding the decision0ma"ing process each customer ma"es when purchasing a product6service
– I# @nderstanding the factors the customer considers when purchasing a product6service – J# @nderstanding the roles played by those individuals involved in ma"ing the purchase – K# @nderstanding the customer1s communication networ"
echnical
Commercial
.inancial
Generally, in two/three envelope bids, Contractors who pass the technical evaluation only, shall become eligible for Commercial/ and or Financial Bid Opening
performance and productivity standards
uality
inspection reuirements
operational and maintenance costs
professional competence
technical6professional support
standardisation
after0sales service
cost and availability of spares and6or consumables
provision of manuals and training
sample testing
warranties
compliance with the invitation to tender including
– acceptance by the tenderer of the purchaser’s terms and conditions of
contract
– compliance with delivery reuirements
– compliance with tender validity period
– acceptance of payment arrangements
ownership e#g# in the case of a training course
length of time that product range6design will be on the mar"et
life cycle costing comparisons 3where appropriate5
uantiable nancial ris"s6 benets from technical evaluation
%ed or variable pricing
cost of components! spare parts! consumables and servicing
nancial ualications to full the contract
$d'ustment for foreign currency and e%change ris"s
ris" analysis and nancial appraisal
