TENDERING & PROCUREMENT

Question 1

Two Main Methods Used to Select Contractors

Answer 1

• Competitive Tender
• Negotiated Contract
  (Typically a combo of both)

Question 2

Benefits of a Negotiated Contract

Answer 2

• Possible without complete documentation
• Collaboration, Optimization and ECI opportunities

Question 3

Types of Competitive Tenders

Answer 3

• Public / Open
• Selected / Invited
• Public EOI w/ pre-qualification

Question 4

Competitive Tendering Strategy in a Tough Market

Answer 4

• Offer a Tender Preparation Fee

Question 5

Key Parameters of a Fair Tender

Answer 5

• Genuine intention by client
• Genuine intention by tenderer
• Equal & True Competition (fair w/o anti-competitive conduct)
• Architect to act under client authority

Question 6

Late Tender Acceptance

Answer 6

• Only if the tenderer has valid reason that was beyond their control
• Specify late submission policy in conditions

Question 7

Key Details to Include in a Tender Package

Answer 7

• Order of Precedence
• Timeframe info
• Special conditions / non-std clauses
• Details of security (bank g vs retention)
• Required Insurances
• Prime or provisional costs
• Client supplied items
• Selected suppliers/contractors

Question 8

Competitive Tender Clarification/Amendment Process

Answer 8

• Info should be shared with all tenderers
• Major clarifications may require formal addendum
• If provided in last week, provide time extension

Question 9

Dangers of Providing Misleading Info or Withholding Info In Tenders

Answer 9

Misleading or incomplete information can lead to claims for damages in tort or action with the Fair Trading Commission.

Question 10

Legislation & Codes Governing Tendering

Answer 10

Legislation: The Competition and Consumer Act 2010 (the Act)

Codes of Conduct: (not Statutory but falls Under Architects Professional Duty): Code of Tendering

• Since the Code of Tendering is not law, client is not legally required to adhere to it

Question 11

Info provided by Tenderers that will form part of the contract

Answer 11

Price & Completion Date. Nothing else is contractual.

Question 12

When can a non-conforming tender be considered

Answer 12

• If the tenderer agrees to make the tender conforming while standing by their initial price
• If included as a alternative option to a conforming tender

Question 13

Alternative Options in Tendering (Key Considerations)

Answer 13

• Consideration of alt. options should be made clear in tender conditions
• Must be provided with a conforming tender
• Alt. option is the IP of the tenderer, principle cannot ask other to price for the alt. option
• Principle can ask the other tenderers to re-price with their own alt. option if the tenderer consents

Question 14

Fair Justification for Tender Selection

Answer 14

• If an invited tender - selection based on price is expected if all other conditions are met

Question 15

Procedure when scope is adjusted after tender

Answer 15

Minor Scope Change - Negotiate
Major Scope Change - Re-call

Question 16

Procedure when no tenders are acceptable

Answer 16

• Negotiate w/ lowest price
• Re-call with varied scope or after a reasonable amount of time (6 months +)

Question 17

Architect Code of Conduct During Tender Selection

Answer 17

• Stick to facts & evidence to avoid liability
• Client has final call
• Do not recommend non-conforming

Question 18

Procedure for Accepting a Tender

Answer 18

• Issue a Letter of Acceptance
• Clearly include any conditions
• Avoid a Letter of Intent (not legally binding)

Question 19

Procedure for Post-Tender Negotiation

Answer 19

• Issue a statement that tenderer is the preferred tenderer
• Only negotiate with one tenderer at a time

Question 20

Procedure for Informing Unsuccessful Tenderers

Answer 20

• Agree with client on level of disclosure
• Common approach is to disclosure list of prices & completion dates

Question 21

Cost Plus Contract + Time/Quality/Cost Risk Allocation

Answer 21

• Contractor is paid for actual cost of work as it progresses + an agreed margin to cover profit/overhead/prelims

Time : Owner
Cost : Owner
Quality : Owner

Question 22

Appropriate use case for Cost-Plus

Answer 22

• High End Resi w/ undefined Scope
• Heritage Renovations
• Simple fitouts

Question 23

Traditional Fixed Price Lump Sum + Time/Quality/Cost Risk Allocation

Answer 23

Contractor provides fixed fee for construction only services w/ 100% completed design provided

Time : Contractor
Cost : Contractor
Quality : Owner

(Best way to allocate risk)

Question 24

Design & Construct + Time/Quality/Cost Risk Allocation

Answer 24

Contractor provides GMP or Fixed Fee to provide design and construction

Time : Contractor
Cost : Contractor
Quality : Contractor

Question 25

Role of the Architect in D&C vs Traditional FPLS

Answer 25

Engaged by the contractor and therefore unable to act as a agent for the client

Question 26

Novated Design & Construct + Time/Quality/Cost Risk Allocation

Answer 26

Contractor provides GMP or Fixed Fee to provide design and construction once design is at 70% completion. Contractor engages architect through Deed of Novation Time : Contractor Cost : Contractor Quality : Design stage - Owner, Construction Stage - Contractor

Question 27

Key Considersations for Architect when being Novated

Answer 27

CAA should be set out to define the following: - point of novation - right to veto contractor - site visit liability - substitution liability - shop drawing review obligations

Question 28

Early Contractor Engagement Pros & Cons

Answer 28

Pros: - Early builder input on constructability & cost - Collaboration Cons: - No opportunity for competitive pricing - Early engagement may incur extra costs to contractor

Question 29

Construction Management + Time/Quality/Cost Risk Allocation

Answer 29

- Construction Manager engaged as a separate consultant coordinate trades. Client engages trades separately and provides trade packages (Architect may prepare these) Time : Owner Cost : Owner Quality : Owner