Tender Process Article
Tender Process Article
The following is a broad description of how we carry out the Tender Process. Why we think this system is better and how it helps to form a cohesive team in the construction phase. Again though, it is pretty tedious so best read at bedtime!
We would carry out the whole tender process for you. The choice of the right suppliers and workforce are crucial to the success of any project. The correct development schedules of work and contract terms can make a huge difference to the end result.
It could be a perfectly planned scheme, with everything in place and ready to go. Just one mistake in a schedule or contract; or maybe a single unscrupulous contractor and the whole thing could be wrecked.
The tender process is a delicate balance between creating technical and legal requirements and gaining trust and respect. This mindset is important to the future management of the project and its successful conclusion.
Workforce
Very little has been done to regulate the competence of labour skills in the domestic construction arena. Electric, Gas, Oil and Solid Fuel installers are very well regulated. However, pretty much everything else is a case of buyer beware!
Local Authority Building Control Officers are responsible for ensuring that new building work conforms to Building Regulations. Their workload is immense and they cannot be relied on to examine every aspect.
Also, they are human and not infallible. Building Inspectors are not responsible for quality, only Building Regulations. The difference is not immediately obvious, but the two are not interchangeable.
Quality control requires competence and experience to produce good workmanship. The British Standards for workmanship BS-8000 is a range of documents dedicated to promoting good workmanship. It’s divided into trades and disciplines and attempts to create guidelines for anyone working within the construction industry.
We’ve never actually seen a copy owned by a contractor on site; in any format. Maybe they are able to learn and digest these weighty tomes and retain the details by memory… Hmmm…! At the present time there are 15 current copies and at circa £200 per copy, I can see why they are scarce.
Anyone trying to find a decent tradesman today needs to use every tool at their disposal. The market is filled with semi skilled labourers, who have been working on mass housing estates. They just stick a name on a white van and call themselves a builder.
Even if these individuals were fairly competent at what they do, there is a world of difference in skill requirements between mass estate-built houses and bespoke self-built homes. To make sure a project gets the best construction team available it is essential to carry out a full professional tender process.
Materials
About 40% of the cost of any construction project are the basic materials used. These are obtained from many different sources and the integrity of these suppliers representatives is sometimes suspect. Usually the first contact is with a company rep whose task is in meeting their own sales targets and are often paid on commission. Expecting these individuals to tell you the absolute truth, is akin to expecting the same from a politician! It ain’t going to happen.
Discounts from these companies are dependent on bulk purchasing and their prices can usually be negotiated to a reasonable level. Some of the materials used in modern construction are repetitious, such as sheet materials, plasterboard and plaster etc. If there is adequate storage space available then this is the best method of purchase. However, care must be taken with storage as damage can occur which would quite quickly negate any savings made from bulk purchases.
Another source is from Builders Merchants. These are extremely useful, especially if the project is quite small. Their business model is based on bulk purchases from manufacturers with added profit margins. these margins are flexible dependent on the quantity of product you are purchasing. Also each branch has a sliding scale of potential discounts the highest concessions being from the branch manager. This travels all the way down to the lowly counter staff, who are tied to not much better than list price.
The Tender Package
The main attributes of the tender process are clarity, accuracy, and integrity. There is no point in having three quotes from different builders or tradesmen, if they are all written by themselves. Each of them using their own interpretation of the Architect’s and Engineer’s designs and specifications. All this will provide is three quotes, which will differ from each other in the all important details.
Clarity is best achieved by producing one set of trade based Schedules of Work based on the Architects and Engineers drawings and specifications. These should be produced by one person or working group, thereby making them easily comparable. Even if something has been accidentally overlooked; all the tenders would be sent out containing identical information. If you take a look at our Schedule of Works Slide Show, you will see how this is achieved.
The Schedules of Work should be generated containing all the necessary information required by the contractor to price the works. They should provide sufficient details to allow the contractor to properly calculate their time on site for each job. It should also include accurately calculated quantities and areas, so that the contractor can be confident that his quote will be correct.
This whole process should be carried out with provable integrity, so that the contractor is assured that they are not wasting their time, and that they have an even chance of being awarded the contract. It should be noted that although the Construction Manager works solely for the Client, he has a professional duty to treat contractors in a fair and equitable manner.
The work schedules should be detailed enough for the contractor to be able to interpret the work and should provide enough detail to allow for quality checking against the specification later. It should also enable the measurement of how much work has been completed at any given time, which comes later when the build is in progress.
The Tender Package should include:
A full set of the Architects Drawings with any detail drawings.
A complete set of the Engineers drawings and detail notes.
The Schedules of Work (Unpriced, but Quantified).
Any relevant specifications linked to the design.
Any preferred material-specific specifications.
A copy of the Programme of Works as a Gantt Chart.
A site-specific set of Terms & Conditions.
A copy, or link to a copy of the relevant Trade Contract.
A copy of the site HSE Construction Phase Plan.
The site-specific terms and conditions should contain details of all the do’s and don’ts, of working on the project and how the contractor is expected to behave. It might for instance forbid the workforce from using site radios. The use of these can be almost guaranteed to cause problems with neighbours.
It will also lay out who is responsible for doing what and when. And It will tie the contractor firmly to the project programme. Moreover, It will outline what will or will not be supplied in the way of welfare facilities and plant hire items etc.
In addition, lt will contain details of how and when completed work will be quantified. Under what terms and rates those works, and any variations to the design, are measured. We prefer to use the percentage method of assessing completed works. It is always a negotiation, but it is the simplest and fairest method to all concerned. This allows for any variations to become a simple agreed calculation, rather than fisticuffs at dawn….
The terms further draw attention to the separate contractor’s responsibilities under the Health & Safety Regulations and will detail what the client’s responsibilities, are and how they will be implemented.
Once the tender documents are returned, a short list would be produced, placing the contractors in order of preference. Definitely not always the cheapest…. for very good reasons, but certainly the best value for money should be a high priority.
The returned tenders should be scrutinised for evidence of those who have an put effort into pricing the schedule properly. It should also be scrutinised for those who show a good understanding of the job in hand. It has been known for tendering contractors to offer cost saving suggestions when tendering for work. This can be a useful indicator of their awareness and probity.
Sometimes contractors make errors in their calculations. They normally carry out their paperwork and quotations in the evening or at weekends after a week of hard work. It is always a very good idea to give a contractor, who has made such a mistake the opportunity to re-quote or correct the error. Apart from anything else, this informs them of our integrity in our dealings.
There is absolutely no point in covering up mistakes by contractors in their calculations in the hope of getting a cheaper price. This will almost certainly lead to a dispute later. It is at this stage that a level of trust between Client, Construction Manager and Contractor begins to form. Any underhand treatment at this stage would surely sour that relationship and negatively effect the formation of the team. This will always be more costly in the long run than a policy of honesty and clarity.
In choosing the right build team, it is extremely important to take up references for previous work carried out for others. This is a significant indicator and should be given a high priority. A quick chat on the phone to previous customers can give a reasonable picture of the character. However, an eyes-on look at the work will always give a better idea of competence. Most prior customers of tradesmen are usually willing to allow you access to view work. They are usually happy to discuss the competence issue, as they do understand how important it is. In addition, if they found the work to be of poor quality, it’s a very good time to find that out.
Making Choices
The next stage is to interview the likely contractors, preferably at their place of work if at all possible. Your project can sometimes take a while to complete and forming a rapport with the contractor is very important. This rapport can lead to getting the best from them, and to gain their loyalty and trust. There must be perceivable trust between Construction Manager, Client and Contractor. The level of trust will eventually show itself in the quality and cost of the build.
A hard-nosed approach to this could easily be taken, and realistically in commercial building; this trust probably doesn’t exist. Unfortunately, the commercial client pays a price for this lack of rapport, that the domestic client cannot afford
It is important to protect your project by using a building contract and eminently sensible to use a JCT Contract. These contracts have been developed by JCT (Joint Contracts Tribunal) since 1931. There are many standard building contracts produced by them covering a large range of eventualities and updated periodically.
If you have decided to make use of a Construction Manager to administer your project, you would be best advised to appoint them under a JCT CMA (Contract Manager Appointment) Contract. This has been specifically designed for this purpose and deals with all eventualities.
This contract between Client and Construction Manager gives the powers to administer the project to the CM save that of design. Design is the sole responsibility of the Architect and Engineer and any other specialist consultant who may be required. This might be an Electro Mechanical Engineer or Lighting Designer.
The works would then be carried out by the various work package contractors under a JCT CMTC (Construction Management Trade Contract.
This contract has been designed to work specifically with a project administered by a Construction Manager. The Contractor would be granted a copy of the contract and given the ability to read the main copy. They would then apply their signature to the main copy to agree they had read all the terms and conditions. The terms within this contract would then apply to any contractor who signs it.
Having said all that, we have never in all our time in Construction Management had to make use of the contract in the legal sense. Usually the very existence of the contract works to reinforce the authority of the Construction Manager and the Client in matters of administration.
