Construction management: tender trade contracts

Revision as of 12:15, 10 January 2012

The tender stage (equivalent to RIBA stage G: tender documentation and H: tender action) is the process of selecting and appointing the trade contractors. We describe this stage as 'tender' rather than 'tender documentation' and 'tender action' (RIBA plan of work) to avoid the proliferation of work stages. We include the process of executing the contracts within this stage (rather than within mobilisation as in the RIBA Plan of work) because on design and build or public projects, mobilisation does not follow the tender process.

The tasks described below are based on the route taken by a project following a construction management procurement route where a construction manager is appointed early in the project as a consultant, and then takes on a management role for the construction of the project. Tendering involves a number of trade contracts, contracted by the client but managed by the construction manager. Trade contracts may not all be tendered at the same stage, and so this process might be repeated a number of times during the project.

Project plans for other procurement routes are available on the Designing Buildings Wiki home page.

NB This article is locked in order to preserve the logic and continuity of the full work plan. If you would like to propose changes or additions, click on the 'submit comment' link at the bottom of the page.

Construction management: tender trade contracts.

A. Starting the work stage.

1. The construction manager and client prepare selection criteria for trade contractors and if appropriate pre-qualification questionnaires. If it is necessary and has not already been done, OJEU or other adverts are prepared.
2. The construction manager and client consider lists of approved trade contractors, the preferred form of contract, contract conditions and the allocation of risk.
3. The construction manager agrees with the client their delegated limit for issuing instructions in relation to the trade contracts.
4. The construction manager co-ordinates a stage start-up meeting with the consultant team, and the client to agree the programme and procedures that will be adopted for tendering. The construction manager gives any instructions necessary relating to lists of approved trade contractors, any required advertising, the form of contract, contract conditions and other requirements.

B. Preparing the tender documentation.

NB Throughout this stage, The lead designer co-ordinates completion of statutory approvals and other approvals and negotiations (such as negotiations with insurers etc.)

1. The construction manager obtains from the consultant team information for the tender documentation and any other information required for the preparation of the pre-tender estimate, cash flow projection and tender pricing document for the trade contracts.
2. The construction manager (or cost consultant) prepares the pre-tender estimate, cash flow projection and tender pricing document.
3. The CDM co-ordinator co-ordinates the preparation of pre-construction Information.
4. If it has not already been done, the client prepares or arranges for the consultant team or construction manager to prepare a site waste management plan.
5. The construction manager co-ordinates a review of the tender documents and issues instructions to make amendments if necessary.
6. The construction manager produces a risk allocation report which sets out risks in the contract documents which are retained by the client, transferred to contractors or are shared or insured.
7. The client considers the tender documents (including assessment of the pre-tender estimate in relation to the budget) and risk allocation report and issues instructions to make further amendments if necessary.
8. The construction manager instigates change control procedures for the tender documents.
9. The construction manager arranges printing of the tender documents.
10. The client takes advise from the construction manager and decides whether to appoint, or arrange for the appointment of site inspectors (see work stage: Construction management: appointment).

C. Identifying potential tenderers.

1. The construction manager and client prepare a long list of suitable trade contractors.
2. The construction manager issues pre-qualification questionnaires to the long list of potential tenderers.
3. The construction manager receives completed pre-qualification questionnaires from the long list of potential tenderers.
4. The construction manager carries out financial checks on potential tenderers (ideally the contract should not be more than 20% of the annual turnover of the potential tenderers).
5. Where appropriate the CDM co-ordinator advises on potential tenderers competence.
6. The construction manager co-ordinates advice on prospective tenderers and prepares a short list of tenderers to present for client comment or approval.
7. The client accepts or alters the initial short list of tenderers and where appropriate the construction manager arranges pre-tender interviews with the initial short list of tenderers.
8. If necessary, following comments received during the pre-tender interviews, the construction manager instructs amendments to the tender documentation.
9. Following the pre-tender interviews, the construction manager co-ordinates any amendments to the initial short list of tenderers and agrees the final short list of tenderers with the client.

D. Identifying the preferred tenderer(s).

1. The construction manager collates tender documents for each of the trade contracts and arranges dispatch and return to and from the tenderers.
2. The construction manager compiles queries from tenderers and co-ordinates responses which should be issued to all tenderers.
3. If necessary, the construction manager arranges mid-tender interviews and/or site visits for the tenderers.
4. If queries from the tenderers or discussions during the mid-tender interviews result in significant clarification of, or changes to, the tender documentation, the construction manager may recommend to the client that the tender period is extended.
5. The client receives and arranges for the opening of the tenders.
6. The construction manager co-ordinates assessment of the tenders (this may include further interviews).
7. The the lead designer co-ordinates assessment of any trade contractor's proposals submitted by tenderers.
8. The the CDM co-ordinator assesses any initial construction phase plans submitted by the tenders.
9. The client receives the tender appraisals from the construction manager, and instructs the construction manager to enter into negotiations with the preferred tenderer(s). A reserve tenderer may be retained in the event that negotiations with the preferred tenderer are unsuccessful. NB If the lead consultant disagrees with the construction managers appraisal, they may submit their own tender appraisal.

E. Entering into negotiations with the preferred tenderer(s).

1. The construction manager co-ordinates negotiations with the preferred tenderer(s). NB It is paramount in any negotiation that the individuals at the negotiating table either have authority to fully negotiate terms or make it clear from the start the limits of their authority. This may mean re-convening with the right people empowered to make decisions.
2. The construction manager co-ordinates the preparation of a tender report.
3. The client considers the tender report; and instructs the construction manager if any changes are required to the tender documents.
4. If instructed the construction manager co-ordinates adjustments to tender documents and requests a revised tender from the preferred tenderer(s).

F. Appointing the trade contractor.

1. The construction manager collates the contract documents and arranges for the execution (engrossment) of two copies, one for the client and one for the trade contractor. This can take place at a specially convened signing meeting. Alternatively, the client might retain one executed contract, with certified copies being issued to the trade contractor, this can avoid potential errors in preparing two contracts for execution. The trade contractor may be required to provide: a performance bond, warranties and evidence of insurance cover.
2. The construction manager arranges for copies of the contract documentation (or relevant parts) to be issued to the consultant team.
3. The construction manager informs other tenderers that they have been unsuccessful.

NB. Trade contracts may not all be tendered at the same stage, and so this process might be repeated a number of times during the project.

Next work stage: Construction management: mobilisation.

Previous work stage: Construction management: production information.

Return to: Construction management: outline work plan.