Introduction

In this entry, we will cover tendering and the different stages in tendering. I will try to be as comprehensive as possible to cover the routes, the forms, and tender instructions. I will be breaking this entry into 2–3 parts, as it is somewhat complicated and a lot to take in.
Part 1 will cover the general procedure/sequence from beginning to end and Part 2–3 will include the different tender routes and OJEU tenders.

Note: Tendering goes hand in hand with procurement as they are interlinked so careful consideration must be made when selecting the tendering strategy.

It is important that a Quantity Surveyor fully comprehends tendering to avoid claims, post contract issues, administrative burden, and other legal actions. The tendering process helps take a decision that will determine a contractor on the quality of the business and the price paid for the service.

It is important to comprehend fully why tendering is important at selecting the suitable contractor for your works. You could not expect a large company such as Ferrovial, Balfour Beatty, Bam Nutall or Laing O’Rourke bidding for your house extension in the suburb. Likewise, with a small contractor bidding on a multi-billion pound infrastructure project. There are financial and experience factors in play (You’ll learn that PQQ helps qualify these contractors).

Just so that you are not confused between tendering and procurement, Procurement is the act of obtaining goods and services (a contractor) to undertake the project. Tendering is a phase of the procurement route that simply allows you to get a price and how the contractor is appointed to undertake the works.

Note: this entry is still a work in progress and I will be updating it while I am going through the resources I have.

Tendering Practice Note

Before we can precede with the tendering routes, you need to understand the JCT Tendering Practice Note 2012 (‘Practice Note’) and the RICS Tendering strategies guidance note.

The tendering practice note 2012 outlines a detailed procedure for tendering in construction. The new version, superseding the version released in 2002, includes a detail outline process on two-stage tendering; pre-qualification method and other quality led tendering. It focuses on the selective single-stage, two-stage and competitive dialogue tendering procedures.

The practice note also covers the public procurement rules briefly as there is a requirement for projects falling under the EU public procurement threshold.

The guidance note helps standardise the procedure to ensure a fair tender is undertaken. The practice note includes model forms, which covers Preliminary enquiry, project information schedule, questionnaire, Invitation to tender, and form of tender. This gives you a template to work with. Of course, most businesses have their own templates that align with their company policies and procedures. They are intended for use in public and private sectors for the JCT main contract. However, these can still be used in other forms of contract.

As a side note: The rules first originated from the National Joint Consultative Committee for Building (‘NJCC’) which published many procedures. The NJCC was later disbanded and the procedure was subsequently adopted by the Joint Contracts Tribunal (JCT) Tendering practice note, which included a lot from the NJCC code of procedures for single stage selective tendering.

OJEU Tenders

In addition to the tendering practice notes, you must also be aware of the EU public procurement rules. This is often referred to the OJEU tendering rules.

Where the project that falls under the public and utility works with contract values estimated above the EC Procurement Threshold, then you are required to give a notice of a tender opportunity on the Official Journal of the European Union (OJEU). The OJEU tendering is a classic example of an open tender. (We’ll discuss this in detail throughout this entry)

I will cover this in much more detail in part 2 of this entry.

Tender Stages

To enable you to understand the different Tendering routes I’ve broken the stages in a tender in 3 general stages:

1. Short-listing the Contractors
2. Tender Stage
3. Tender Analysis and Selection

I’ve put them in these 3 general stages so that you can easily understand the sequence and it summarises the detailed outline from the practice note and RICS guidance note on tendering strategies. I will be covering them now and then re-summarise them in the three stages I created. You will also notice that each stage has a time limit that must be adhered to.

Note: I would recommend going through both the practice note and RICS guidance note mentioned at the beginning. They are very technical and not user-friendly but worth a good read.

I have tried to put the two documents in a clear and sequential flow below. If one of the stages is too short, refer back to the practice note and guidance note. The following stages will not be covering the tender routes that will be in the subsequent entries.

The purpose of the outline is so that you understand the full sequence from beginning to end.

Detail tender stages

To allow me to understand the tendering phases correctly, I have broken down the phases into easy portions that can be repeated and taught easily. While studying the stages/phases (let’s call it stages) from different sources (JCT Practice note, RICS Tendering Guidance Note, other books) I found that at each stage a set of document is produced to issue to the contractor or to us (the client).
We also learn that at each stage there is some time factor/limit that needs to be considered.

So lookout for the (1) documents produced (2) time limit at each stage.

The 5 stages are highlighted below:

• Stage 1 – Selection of contractors
• Stage 2 – Preliminary enquiry
• Stage 3 – Issuing the tender
• Stage 4 – Tender process
• Stage 5 – Tender opening, analysing & reporting

Stage 1 – Selection of contractors

There are 3 main ways of selecting contractors (Don’t confuse this with the tendering route, we’ll discuss the different routes in detail later. This is only for gathering a list of contractors for tender):

1. Open Tender

Under the Open tender, it allows for anyone to issue his or her interest for tender. This is usually undertaken via publishing the opportunity in newspapers, or on the web.

Additional note: For public projects that meet the OJEU threshold, you must publish the tender on the Official Journal of the European Union to get the expressed interest of the parties. This list will then be used to for the following stage (preliminary enquiry), to shorten the list to a manageable size.

1. Selective Tender

This a shortlist from the project or client team for the works. This can also be from a pre-agreed framework or in-house approved supplier list. Most companies have a list of pre-approved and pre-qualified vendors who you can use.

1. Single contractor selector

This route is for negotiation tendering route. We’ll cover this in much more detail in the subsequent entries.

Document produced

The document produced here is a list of contractors to issue the PQQ and to eventually invite them to tender.

Document produced:

1. List of Contractors

Time Factor

During this phase, it should not take too long to prepare a list gathered from the business, project team or client team. The list should start as soon as possible.

Time Limit:

1. The time limit here is not set in any rule (except for Open tenders – see note below). But must be done quickly to see who would be interested in the tender.

I personally gather a list of contractors from the team who we have had experience with and are an approved supplier. Then I give them a call to see who are interested and put them on a list for the preliminary enquiry. The aim here is just to get an indicative list to proceed with the tendering stages.

Open tender – For open tenders you should allow a for an extended period for receipt of interest from the market. The period is 35 days. [Pdf] [Archive]

Stage 2 – Preliminary enquiry

After building up a list of contractors through one of the ways discussed above, you now need to short-list the contractors to a manageable size (roughly to 3–6). To do this, you will need to identify who are actually interested in the works and who are capable of undertaking the work. For OJEU notices you already have the interest, now all you need to identify is if they are capable of undertaking the works.

This is achieved with a preliminary enquiry. You will be able to identify the interest and ability to undertake the work. The preliminary enquiry is to ensure that the contractors have the relevant:

• Experience,
• Financial ability,
• Health and safety records, and;
• Interest

Documents produced

The preliminary enquiry includes the following documents:

• Project information Schedule (information about the project, work, etc.)
• Pre-Qualification Questionnaire (A questionnaire to qualify the contractor)

Project Information Schedule

The project information schedule provides the contractors with enough information about the project to allow them to consider whether to provide their interest.

The project information schedule includes the following:

• Project brief scope
• Project’s Estimated value
• Tendering procedure/instructions (The different types of procedures will be covered later in this entry.)
• Method of tendering (if it is electronic or hard copy)
• Dates & deadlines. (Including:)
  • When the preliminary enquiry deadline submission is
  • When the shortlist will be notified
  • When the tender documents will be issued
  • For how long the tender is opened
  • The return dates of the tender
  • The tender award
• Design requirements from the contractor (including if there are novation agreements)
• BIM requirements (where applicable)
• The form of contract to be used (with any amendments for example the NR 12 amends some of the clauses of the ICE Conditions of Contract, Target Cost Version, Frist edition)
• The contract data/particulars & mechanisms (The requirements for:)
  • Collateral Warranties/Third party rights
  • Bonds
  • Contractor’s insurance (Professional indemnity, Public liability etc.
  • Parent company guarantees
  • Performance bonds or other bonds
• Mode of execution (deed or underhand)
• Criteria for short-listing the contractors for tender
• Criteria for contract award
• Method of dealing with bid errors (we’ll cover this in more detail below)

In brief it should provide sufficient detail about the project, contract, and how the tender is going to be dealt with. This is to help avoid contract condition conflicts at a later stage of the tender process.

A template of the project information can be found in the JCT Practice note 2012.

Pre-qualification questionnaire

The pre-qualification questionnaire (‘PQQ’) enables us to assess the ability of the potential tenderers for the project. This can vary depending on the project and you should consider relevant pre-requisite to enable the contractor to work. For example in Rail you will need PTS operative as well as the contractor holding a RISQS certificate.

The aim of a PQQ is to qualify the contractor for the works.

To make the PQQ effective and consistent the questions should have a method of scoring contractors of the requirement of the contract. This allows for consistency and not subjective scoring.

To reduce the preliminary enquiry phase, it is recommended to reduce/cap the word limit on responses and only requires questions, which are relevant for the project.

A template of a PQQ can be found in the JCT Practice note 2012.

Other than the PQQ found in the JCT Practice Note 2012 you could take a look at PAS 91:2013 which is publicly available.

PAS 91 (PQQ)

In the UK there is a free Publicly Available Specifications (PAS 91:2013) that aims to standardise PQQ across the industry to allow for consistency between supply chain databases to easily engage suppliers. This is a preferred & mandatory (by the OGC) question set of the public sector clients.

This allows suppliers to fill one set of questionnaire for any tender PQQ requested by clients. It allows for quicker turn around on Preliminary enquiries, as the answers are pre-written for the tender opportunities. This gives contractors the opportunity to engage with public sector clients easily.

However, the PAS does not provide project specific questions and you will require to add these in to qualify the contractors for the work.

The criteria covered under PAS 91 can be found here. This information required is summarised below:

• Contact details & company information
• Director/partner information
• Business and professional standing
• Financial information
• Insurances
• Licenses & accreditations
• Staffing
• Categories and references
• Areas of Operation
• Health and Safety
• Equality & Diversity
• Environmental

There is also non-compulsory information such as:

• Quality & BIM
• Trace Association/Professional Body membership

You can learn more about the PAS 91 at constructionline.co.uk.

You can get a free copy of the Construction Pre-qualification questionnaires at the BSI shop. You will only need to register to be able to download PAS 91:2013. It will probably take a couple of days to complete; the PAS document is around 56 pages!

Time

You should also be aware that ample time is provided to the contractors to respond to the preliminary enquiry. The preliminary enquiry should include a return date and time, and an indication of how long the tender will be open.

Time limit:

1. Time limit for Preliminary Enquiry is 14 – 21 days for single stage tendering.
2. More complex tenders where design is involved would require a longer period.
3. OJEU – generally within 37 days

Stage 3 – Issuing the tenders

After the PQQ and interest have been received, the project team analysis the information to short-list the contractors. Where contractors have not been shortlisted, they should be informed as soon as possible. It is recommended to have at least 3–6 tenderers for the tender phase and preferably 3 for design and build procurement routes.

Documents produced

For the invitation to tender there are a number of documents that needs to be issued and it can be summarised in 2 broad groups (these two groups are my own and you’d have to refer:

1. Tender information – This is the Invitation to tender letter, form of tender, instructions to tenderers (how you’ll process, assess, communicate, qualify the tender for contract award.)
2. Contract information (This includes the drawings, pricing documents, programme, employer’s requirements, project’s information, etc. Think of this group of documents as to what would be required to put the contract together and would be the basis of the price.) Most importantly the pricing document – This details out how you want the contractor to price the work. It is determined by the level of information you have to allow for pricing. (E.g. BOQ, Approx. BOQ, schedule of rates, activity schedule, etc…. – we’ll discuss this in a lot more detail in another entry)

Tender information

For the tender information we should include the covering letter, which is the invitation to tender itself. I have drafted a list of document for the Tender information below:

• Invitation to tender
• Form of tender – The formal submission front sheet confirming that the contractor has understood the full scope, provided the Tender sum, the instruction to tenderers, and the programme duration (an example of this can be found in the JCT practice note). This should also include the criteria for selection of the contractor.

The invitation to tender letter include the following details:

• A register of documents enclosed
  • This should also include a project information schedule document, which details out the location of the project (Which was previously submitted in the preliminary enquiry). Also including any potential start and completion dates.
• The deadline of the return of the tender
• The return address (and any transmittal instructions)
• The contact details and templates to raise queries regarding the tender.
• The criteria for award (can be: best value, weighting calculation or other criteria)
• The type of pricing document (BOQ, activity schedule, schedule of rates, etc.)
• The deliverables (list of documents) required for the full submission of their tender. (This can include the contractor’s proposal, specifications, or any other criteria required by the project).

Contract information

The contract information includes all the details that the contractor will require assess the scope, risk and extent of the works to allow them to price.

Think of it as all the information/components required in a contract to allow you to base your price on. You would have the form of contract, amendments to the contract, payment procedure, drawings, etc.

A more detail list of the document is listed below:

• Drawings
• Bill of Quantity (or other pricing documents)
• Specifications
• Work schedules/ Programmes
• Employer’s requirements

On submission of a hard copy you should issue the above document:
* Two copies of the BOQ,
* Two envelops (with the return address, unique reference without the name of the contractor bidding for the works.)
* 1) for the form of tender (and where applicable non-price criteria)
* 2) for the pricing documents (optional – this can be submitted on request)

Quality

The reason why the form of tender & the non-price criteria is separated from the pricing documents is so that a review and analysis is based on the criteria for selection. Going outside of the criteria for selection would create unfair and uncontrolled selection. We’ll discuss the analysis of the tender in more detail in the next stage.

For public procurement there is a quality criteria which is detailed in BS 8534:2011, BS ISO 10845–2:2011, BS ISO 10845–1:2010. This quality criterion is based on best value. This includes:

• Quality
• Price
• Technical merit
• Aesthetic
• Functional
• Environmental Characteristics
• Running costs
• Cost effectiveness
• Maintenance
• Technical assistance
• Period required for completion

I’ve discuss the PAS 91 above, you can find more information about this here

Time

During the tender phase you should provide an adequate tender period to allow the contractors enough time to produce the prices (or contractor’s proposal on design & build).

The practice note recommends the following tender period for the different routes:

• Minimum of 28 days for single stage tenders
• Public procurement up to 40 days
• Design and build – 3 to 4 months (may be longer depending on complexity and the amount of work required)

Stage 4 – Tender process

Once the invitation to tender and all the associated documents have been issued to the short listed subcontractors the tender process starts. During this, stage the contractors will analyse the tender document to price and prepare any other deliverables required for the submission.

While going through the tender documents the contractors may have questions or requesting more information regarding the tender. This will need to be dealt with correctly. And as part of your tender information we previously discussed we should have detailed how questions will be dealt with.

The common types of issues that needs to be dealt with are listed below:

• Questions
• Additional information (addendums to the tender)
• Site Visit & Mid-tender interviews
• Tender withdrawals

Questions

For any questions that the contractor issues, to us we would need to respond to all the contractors. This is so that no one has an unfair advantage and they are all working on the same information to allow for a competitive tender. (Note: When responding the contractor’s name is not identified.).

Additional information

It may sometime be apparent that there is a need to issue additional information that was missed out, that was intended to be issued during the tender, or has been requested by one of the contractors. These are called tender addendums.

When issued, it must be issued to all contractors at the same time and you may potentially increase the tender period to account for the additional information.

Site visits & mid tender interviews

On certain types of complex projects, mid tender interviews & site visits would be undertaken by the client and they need to be dealt with correctly and with confidentiality. The mid tender interviewed and site visit must be highlighted in the invitation to tender.

The guidance note doesn’t cover this but on one of my previous projects I invited the contractors for a site visit because the information we had at hand was inadequate to allow them to tender and see the extent of the works. A site visit was required. I provided a list of dates and time for the contractors to attend the site visit, and it was booked on a first come, first served basis.

To keep the site visit fair all questions & answers were written down for issue to all parties.

Tender withdrawal

Sometimes the contractor might wish to withdraw from the tender because of workload or after having reviewed the tender information they believe they might not be suitable for the works.

Document produced

The document issued at this stage comes from the contractor to us before the deadline. The contractor will need to include all the deliverables required as part of the submission which would include the price, the CPD, health and safety records, or any other documents requested as part of the ITT.

An example list of documents issued:

• Priced document
• Proposed programme
• Contractor’s design portion or contractor’s proposal
• Health and safety records
• Drawings/Concept design
• Technical proposal
• Org chart

Time

There are 2 deadlines you will need to be aware in this stage.

1. Questions deadline
   As part of the tender process we allow tenderers to issue questions to us where we will have to respond to. However, it would be recommended to stop all questions a couple of days prior to the submission deadline so that you do not get into a situation where the information/answer you’d respond with will affect the submission.
2. Tender submission deadline
   This is quite obvious; this is the deadline for the submission of the tenders and all required deliverables to you.

Stage 5 – Opening & analysing

Upon receipt of the tender you should place them in a secured place (and do not open them until all tenders are returned). Where the submissions are late you should return them back to tenderer (unopened).

The RICS tendering guidance note advises that late submission for public tenders should not be considered, and for private client we should advise the client of the late submission and if they would like to use them you should seek a written confirmation.

Before opening the tender submission you will need to have a qualified construction professional as a witness and any other members of the team. We should not be opening these without the presence of witnesses.

A tender opening form is filled in when opening the tender. This is a simple tabulated form where you will insert all the contractor’s name, submitted price, programmed completion, and rank. (Basically the general information on the form of tender)

An example of the table can be found in appendix A of the RICS tendering Guidance Note.

Reviewing the tender

All the tenders must be reviewed thoroughly so that you are comparing like for like. The first step is to identify any errors on the pricing document and other deliverables required.

Checks undertaken:

• Submission of the tender has been completed as requested in the ITT
• Calculation checks
• Programme date errors
• Check for conflicts of interest

There are two ways to deal with errors found when undertaking the calculation checks and you must state in your ITT how you are going to deal with errors.

1. Accept error or withdraw
   Where we find an error in their prices we inform the tenderer of the error and give them an option to accept the error (this means not amending the submitted price) or withdraw.

Note: This goes against the partnering procurement route and the GN advises not

1. Accept error or amend
   Where we find an error in their prices we inform the tenderer of the error and give them an option to accept the error (this means not amending the submitted price) or amend the error to then review their prices against the other contractors. In the event that the amendments affects the price that the first tenderer is no longer the most competitive then the second best price is selected to for review.

Clarification

Care must be taken when reviewing the priced document and that all queries are brought to the attention of the tenderer for clarification. This does not mean the tenderer is provided an opportunity to resubmit their tender this is only for clarification.

Equalisation & normalisation process

I will cover this once I get more information from my peers, as the resources I am using are slightly unclear on this.

Tender report

Once the entire tender is analysed you will need to produce a tender report which highlights the selection of the procurement route and tender strategy used for the tender.

You will need to highlight and include the following:

1. Purpose of the tender & work scope
2. Procurement & tender strategy
3. Short listing process & result
4. Tender information & contract information (include form of contract used)
5. Tender timeline (issue of tender, tender return, anticipate tender award)
6. Results from the Tender opening
7. Brief summary of each contractor’s submission and proposal

You then issue the tender report to your client for review and approval. On receipt of the confirmation you will need to notify the decision to all the contractors.

Documents produced

The document produced at this stage is the:

1. Tender opening form
2. Tender report

Time Factor

There are not set deadline that I could find in the RICS tendering strategy GN or the JCT practice note except for how long the tender submission is open for. Some other time consideration needs to be taken during this stage:

1. The more tender received the longer it will take to review and appoint a contractor. Use the recommended 3–6 from the JCT practice note.
2. The actual project start and end date needs to be considered to ensure that adequate tender analysis is undertaken. Therefore, the tender strategy and procurement route must be carefully considered.

Summary

What we have learnt in this entry is the 5 stages/steps of tendering. This will give you a general introduction to tendering and the resources you need to read into. Even though this article is over 4500 words it is still not complete. I have to cover a few more topics and summarise this entry into something that can be easily reviewed for study. If there are any errors I would appreciate if you could reply to this post with the errors.

Additional todo’s for this entry:

• Add more information on normalisation of tender
• complete the different tendering routes
• create a summarised table of the steps (visual)