Two-Stage Rendering Procurement - Coursework Example

TOPIC: TWO- STAGE TENDERING Author’s Name [ ] University’s Name [ ] Executive Summary Two-stage rendering procurement is a supply method that is primarily used in procurement of goods, services and construction works. The approach differ from other procurement methods as technical and financial proposals are succumbed separately, but one before the other, rather than concurrently1. The principal feature in this approach is that compliance takes place in two stages. At the same time, the bidders can help in defining the technical requirement and scope of work. As with other methods, the use of this method must stringently observe to the stipulations of the procurement authorized setting. Introduction Two- stage tendering process has been very common in prestigious construction projectsnowadays.This study scrutinizes the logic for using thisapproach as well as theapparent paybacks and probable drawbacks. Again, the characteristic and how important they are in the approach. Traditionally,this procurement process employs a methodology where a contractor is selected early in the design and planning process.However, selection of the contractoris basedon narrow information.Primary objective of this arrangement is to achieve less cost and time. Following, is additional mediationwith the contractor only whencomprehensivepolicy and organization work has been accomplished. In two stage-tendering, early tender is usually attained from some bidders who are chosen on the basis of budget, framework of design, a range of work and program2. Thereby, the bidder with a perfect qualification of the above is granted the tender to supply materials, as well as, construction work. However, before this is granted to the contractor, the site owner must sign an agreement with the contractor. Violation of this agreement is a subject to prosecution in a court of law. Body of report Case study project My chosen procurement method is two-staged tendering approach. It will be used in maintenance, repair and construction of VISN 5 Facilities, the system locations are in 5 cities in United States. The contract has been awarded to BSE builds and design. As discussed above, the approach includes two stages of proposal submissions. That is the technical proposal, and the financial proposal which are submitted separately rather than instantaneously. First stage The first stage tender will comprise of particulars like the profit margins, preliminaries cost and other overheads, and also the pre-contract fee. At the same time, the bidders are invited to submit the partially developed technical proposals. Bidders are supposed to contribute to the work plan and also the methodology to be employed. After the contractors submit the above, the employer or the owner of the site largely access the contractors experience, resources and also successful completed tenders as well as responsiveness. A clarification and a discussion follows and the minutes of the meeting are taken and distributed to all the bidders’. The results of this meeting are used to conclude the particulars and scope of work. After this, the favored bidder will be known and the two willarrive into pre-contract servicessettlement. Second stage The second phase is for obtaining bidders who are supposed to submit the technical and financial proposal as demanded Technical proposal will be evaluated first while the financial proposal remains sealed and secured3. The technical proposals are evaluated, and the bidder with the best qualification of technical proposal will be invited to the public to open the financial proposal. When the financial proposal will opened, the bidder with the highest score of technical proposal and financial proposal aggregate will be requested for contract negotiation. If the agreement is reached and all the terms of references are concluded,the highest bidder wins the contract. However, if the contract negotiation fails the next highest enterprise is called for negotiation of the contract. Nevertheless, the preferred bidder will have to work together with the design team and agree on the final design. Again, it is an obligation of the contractor to market-test the new contract as see if it is workable Also, the bidder has to agree on the chosen program as well as formulate a cost plan that will act as a guideline of the total cost of the contract. Finally, the preferred bidder must only enter the main contract with the knowledge of the design he is supposed to physique as well as the building basis, once the employer or the owner consent the expense. Nonetheless, the final price is finalized when around 80%of the subcontracted are tendered. Moreover, the two parties have an obligation to honor the agreement as violation of the same is a subject to a court of law and a punishable offense. The main features of two-stage tendering are: the technical and financial proposals are submitted separately that is in two different stages. Also, in this method agreement takes place in two stages therefore the assurance of highly qualified contractor is high. At the same time, the contractors will help in defining the technical requirement and scope of work. Needless to say, many employers are rejecting single stage tender as many view the approach not value for their money. Benefits and Drawbacks of two-staged Tendering The approach will be very beneficial to both parties who have been using it, consequently, very popular nowadays. To start with, due to the two stages involved and high evaluation of both technical and financial proposals, the preferred bidder will have a high probability of understanding the obligation, therefore reducing risks in the implementation of contracts. Again, the approach is flexible as all the potential bidders will be involved in the in technical specification and scope of work. Therefore making two -stage tendering flexible approach in awarding contracts. At the same time, the existence of the first stage where the bidders discuss and clarify issues of technical and scope of work will give the bidders chance to make suggestions for improvement of technical specifications through their technical proposal and clarity discussions. As opposed to other tendering approaches where bidders have to waste a lot of time in the tendering, this process combines the highest in both technical and financial proposals and award them the contract. Therefore, second stage tendering time will be significantly reduced. Additionally, after discussions and clarification the bidders will have chances to adjust their technical approach and methodology to the specification and scope of work of the employer. Also, the risk will be curtailed given the earlycontribution of potential dealers in the characterization of technical specification and scope of work. At the same time, the process reduces vices such as corruption as financial proposals are opened in public and after technical specification and scope of work. Again, due to the evaluation of the bidders technical and financial probability, there will be high certainty that the bidder awarded the contract will deliver. Lastly, the contract will be negotiated by agreed technical specifications and scope of work therefore the contractor will be qualified4. Despite all the benefits, there are drawbacks of the same. First bidders will experience lengthy procurement lead-time presence of two-stage submission process. Again, the two-staged process could prove difficult and lengthy because the bidder will be sure he has won the tender. To expound on the same when the bidder is aware that he has been chosen, there is the high risk of them hiking prices and the negotiations of the contract becoming confrontable in the second stage. Additionally, when a firm will be chosen for negotiation as the highest bidder competition is lost thereby, there will be a possibility of the bidder hiking prices on and this may tamper with free and fair tendering5 . Main features of the approach The most vital feature of this approach is that the technical and the financial proposals are submitted separately. This has highly boosted the approach as the bidders get chances to change the specifications and scope of work. At the same time, the factor of offering two contracts one based on agreed technical resolution and the overall highest bidder of the technical and financial proposal plays a big role in the certainty of the employer. This gives employer surety of excellent qualification and value of his/her money. Additionally, bidders are involved in the accomplishment of technical specification and scope of work. Therefore, a great advantage as the bidders are aware of what to expect when awarded contracts6. Why popular for adoption The method has been popular, and it is highly preferred by business people as well as engineers who work in the sites. The approach is favorite to many because contractors work as a team, and also, it minimizes the exposure to risks such as unwanted cost as well as time-consuming tender preparation. On the other hand, this approach enables the employer to transmit design risk to the contractor immediately the agreement is signed. Needless to say, during the second stage, there is need of attentive management to make sure the client has not paid more than they should in a building construction. The key issue of any employer is to embolden the contractor to change all low risk, fee-plus-cost into a time and cost certain contract that design and constructionare at disposal of contractor. Assumed thatviablepressurein second phaseis caused by competition, it is of great importance that the employer to be involved in the tender process including subcontractors invited to tender and its assessment. Thismove ensures that there is a candid approach to tendering of the subcontracts7. At the same time, it restricts the addition of superfluous cost in second- stage tender. Any package on which contractorproposes tohold as his own should always be placed in the competitive tender. This will ensure there is an open competition for all. However, despite all efforts to ensure competition in tendering processes, there has been a lack of transparency and competition pressure from most tenders. This are the main approaches that are used to reduce this risks. Firstly there has been employing of not-to- exceed, this is a budget limit, many employers are using this thereby any contractor with a total exceeding the stipulated amount is kicked out with immediate effect. Secondly, employers have also been involved guarantee in target cost arrangement. This Measure works in a way that the employer stipulates the prices in which he wants to buy the items ant interested contractor with such prices will receive the order. Lastly, there has been limiting the contractor's on-site participation before awarding the main contract. Which projects fits best The two staged tendering approach will typically fit goods, services supply as well as construction works. As this type of businesses require various options of contractors,it’s worth noting that, in the three fields that is the goods, services and construction works needs the qualified contractors because there is the high competition on this field. Again,the possibility to get a fake or non-qualified expertise in this field will be very high. At the same time, the finished products of this three are of great demand. Therefore, there will be big need to have the best quality. Suitability of the method This method is the best for the BSE BUILDS/DESIGN case study project as the two stages of tendering assures competence. Also, it can be used by any employers who adhere to competition and want the best quality products to be supplied. At the same time ,the approach guarantee qualified contrators only Conclusion It's apparent in this paper that prime contractor should be involved in early stages. At the same time, it’s advisable for employers to in construction field to use this approach in tendering. Also, it’s of great importance for bidders not to be involved in price hiking as this may delay contract negotiation. This approach is more practical as quality is assured as well as combating corruption. In spite of all, the approach offers lengthy procurement lead time. References Faix, Martin, Stephan Hobe, Mahulena Hoffmannová, and Jan Wouters. A coherent European procurement law and policy for the space sector towards a third way.(Berlin : Münster Lit, 2011). Maclidenk Gerrard and World Bank. Border management modernization. (Washington DC World bank, 2010) Mosey , service,. David and Wiley interscience online.early contrstor involvement in building procurement :contract partnering and project management.( West sussex,Wiley backwell, 2009) Nather, Aziz, Yusuf, Norimah, Hilmy and nazly.Allograft, procurement processing and transplantation: A compressive guide of tissue bank. (Hackensack,NJ : World Scientific, 2010) Nordic Council of Ministers Innovative green public procurement of constructions, IT and transport services in Nordic countries .( Conpenhagen, Nordic Council of Ministers, 2010) Russill Richard . Short guide to procurement risk.(Farnham, Burlington, VT 2011). Turner, robert W.management and procurement:From basic to best in class. (FortLauderdale, FL : J. Ross Pub 2011.). APPENDICES: Two-staged tendering approach includes two stages of proposal submissions. That is the technical proposal, and the financial proposal which are submitted separately rather than instantaneously. Read More