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Competitive negotiation is another alternative to competitive bidding. The government selects several short-listed firms using particular criteria and then negotiates with each to obtain the best proposal based on clear objectives. This system is used when i) time does not permit the solicitation, submission, and evaluation of sealed bids ; ii) it is necessary to choose a contractor based on factors other than price; and iii) it may become necessary to discuss with bidders. Under the system, the government presents a written "Request for Proposal" to bidders, and the bidders submit proposals to meet the needs of the government. The government then examines and evaluates the proposals to choose a contractor from among them.
In this process, the client is allowed to discuss with bidders regarding the defects of their specifications, and the bidders are given opportunities to revise their proposals before the selection of a successful bidder. Competitive negotiated proposals are often used in the design-build system.
In competitive negotiated proposals, the client needs to predefine factors to be evaluated to ensure best value for them. The government should always consider the following three factors: price, quality (technical advantages, etc.), and past performances. In evaluating these factors, it is required to attribute more importance to narrative description than to quantitative evaluation and rating by scores, and the evaluation results should be explained by narrative descriptions.
ã€€In the negotiation process, the government will not disclose the names of other bidders, the number of these competitors, and the proposals made by other bidders, and each bidder will make efforts to make the best proposal to win a contract, which will promote competitive pricing.
Organizations which pass the PQQ move to the tender stage. The tender is all about the big sell and how your organization can deliver a better service than the competition. You should know what your prospective purchaser is looking for and what makes them tick.
A tender plan should contain the following:
Title - make your title punchy and use it to show the solution/advantage you will deliver.
Needs - re-state your prospective purchaser's needs to show you've grasped their requirements.
Solution - briefly explain what your organization will deliver and back it up with a list of benefits or pay-back for the client.
Why choose us? - provide brief credentials and keep them relevant to the client.
Budget - make sure your costs are transparent so that your prospective client can make an informed decision. Hiding something will only come back to haunt you at a later date.
Summary - this could be an executive summary at the start of the tender document or a brief, punchy paragraph at the end. Either way, to be succinct and clear about what you can deliver. A woolly summary will not inspire confidence!
Close - finish by emphasizing that you want the business and leave the door open for your prospect to contact you.
Many tender briefs have structured questions, but make sure all the above is included. It makes for a more engaging read.
Having reached the interview stage, don't rest on your laurels. As with any interview, preparation is everything.
Choose your team carefully. Balance senior management representation with people who may know more about the ins and outs of the service you hope to deliver. Also, find out beforehand how many interviewers will be at the meeting - your interview panel will not appreciate being outnumbered!
Don't skimp on the presentation. A well-produced and eye-catching presentation will immediately set the right tone. A few short case studies will also help prove your capabilities.
Stick to the point. Avoid long introductions and background information - cut to the chase with your unique selling points and keep it concise and relevant.
Be ready to back up your statements. Make sure you can elaborate with confidence on all the information you have supplied.
Successful tendering takes time, commitment and practice. But, with some common sense and application, you could have a head start.
Restricted Tendering is a two-stage bidding process in which potential providers expressing an interest in bidding are evaluated first through a pre qualification questionnaire (PQQ). Then a shortlist is drawn up from the evaluation exercise for the sole purpose of inviting bids.
In restricted tender, a limited number of suppliers will be invited to submit a tender. The contracting firm in the first stage will make advertisement for seeking expression of interest in tendering. The advert will give details on what information must be submitted by the supplier or how to receive the necessary documentation to be able to express an interest in being short listed. In response to the advertisement, interested contractors will have to submit a filled-in pre-qualification questionnaire (PQQ) to show that they have sufficient experience and resources to meet the needs of the procurement / project opportunity. The PQQ is split into a number of sections, and typically covers:
General Company details - including address, contact details and company structure. These questions are designed to ensure that Three Rivers District Council knows that it is dealing with a genuine, established company.
Technical Resources - including size of relevant business, work categories supplied, existence of any disputes, and outstanding claims, skills and qualifications of staff. These questions are designed to allow the supplier to demonstrate that they are indeed capable of performing the contract offered in the tender.
Financial Information - including turnover and profit information, taxation and insurance cover. These questions are designed to ensure that the supplier is financially strong, and has the financial capacity to handle the size of contract on offer.
Health & Safety - provision of a health and safety policy and details of the person responsible for implementing the policy. The Council has an obligation to ensure the safety of its own employees, the citizens of the district and indeed the supplier's employees.
Equal Opportunities - compliance with statutory obligations under Act.
References - provision of relevant references. The Council finds it very useful to ask suppliers' past clients about past performance.
The contractors or suppliers will be short-listed based on this information, and the Invitation to Tender will be sent to the appropriate number of tenderers.
The steps of the restricted tender are present below:
Step 1: make press advertisement and/or notice in the official journals to seek expression of interest for the project.
Step 2: receive filled- in pre-qualification questionnaires from interested contractors.
(37 days to respond to PQQ)
Step 3: prepare short-list of contractors using selection criteria as stated in the advertisements.
Step 4: send invitations to shortlisted contractors to submit tender (normally between 5 and 8)- (40 days to respond to ITT)
Step 5: receive filled-in tenders from the short-listed contractors.
Step 6: open the tenders together.
Step 7: evaluate the tenders against the award criteria.
Step 8: select the successful tender.
Step 9: issue contract/purchase order to the winning contracting firm.
Step 10: inform the unsuccessful contracting firms about their non-selection.
OHNO, Taishi, and Yuhei HARADA. "A Comparison of Tendering and Contracting Systems for Public Works between Japan, the United States and EU Countries." Government Auditing Review VOLUME13 (Mar. 2006): Web. 6 June 2010. http://www.jbaudit.go.jp/pr/pdf/e13d04.pdf
One contractor is nominated for the job, normally because the skills of the contractor are such that the architect and the other members of the design team wish to take advantage of the contractor's specialist knowledge at the design stage. This typically occurs where the client has a preference for a particular specialism that the contractor can offer. As competition is eliminated the price will normally be higher than that obtained through competition.
If recommending this form of tendering the landscape architect must be sure the benefits outweigh the potential additional cost to the client as it is very rare to have a totally nominated tender, most will be by negotiation.
Professional practice for landscape architects by Nicola Garmory, Rachel Tennant, Clare Winsch
Negotiated tendering, where a contracting authority negotiates directly with one or more bidders, which is a recommended choice of tendering once the designer/consultant have a shortlist of preferred builders or when a client choose to do away with competition and approach only one contractor to negotiate a price.
Negotiation means a process of conferring with the intent of finding terms of agreement. In the negotiated tendering, the contract price is negotiated between the client (or quantity surveyor if appointed) and one single contractor. Thus, this does not provide the owner with comparative prices though the cost of a work will be higher in this method, an owner may expect some advantages from employing a particular contractor whose policies and methods are known and who has in the past proved capable of fulfilling his obligations. The higher cost may be offset by better quality, early completion, and smooth administration.
There are some circumstances under which negotiation be preferable been used:
Where an early start is required.
There exist a good working relationship of long standing between the client and contractor.
Joint partnership between the developer and the contractor in undertaking the development of project.
Where the client envisages/sees a new project which is similar in size, scope and design to one recently completed or ongoing, and where good relationship exists between the client and contractor.
In times of construction boom when the building industry is overstretched and contractors are busy.
when a project needs to be completed within a short period of time/ construction time is limited.
there is only one supplier or contractor who has the necessary supplies or expertise
where the technical and other parameters may not be capable of precise definition and where security projects of national importance are involved.
The procedure of the negotiated tendering is as follows:
The consultant/client's QS - on behalf of the owner, invites a contractor to submit a bid. The initial invitation includes information regarding the proposed contract procedure, a brief description of the work, the approximate dates of commencement and completion of the works as well as other essential information.
The consultant or the contractor prepares the priced bill of quantities. In many cases it would be more practical that the contractor do the original pricing, as he is in a better position to judge the correct price, which may depend on construction equipments and methods of execution to be adopted by him.
The priced bills are then handed over to the other party for consideration.
The rates are examined by the other party. Rates in dispute are compared with current rates for similar work, obtained in competitive tendering after allowing for the special features of the situation.
When the Consultant and the Contractor reach agreement, the agreed schedule of prices is sent to the Owner for his approval and assent.
Negotiated procedures may takes place with or without prior notification. Negotiation with prior notification must be justified on the grounds of irregular or unacceptable tenders received in response to an earlier call for bids. In this case the selection process takes place over two stages. In the first stage, any interested contractors may submit an expression of interest, and from this pool the contracting authority choose one or more companies with whom to negotiate. In principle there are minimum three number of firms will passing through to the second stage, provide that there are sufficient acceptable firms arising from the first stage.
The regulations governing a contracting authority's ability to negotiate directly with a single firm with no prior notification are very restrictive.
Building Procurement by Roy Morledge, Adrian Smith, Dean T. Kashiwagi
Estimating for Builders and Surveyors by R. D. Buchan, Fiona E. K. Grant, Eric Fleming
Professional practice for landscape architects By Nicola Garmory, Rachel Tennant, Clare Winsch
Crawford, Clare. Sitra UK. Sitra publication, n.d. Web. Feb. 2006.
A competitive dialogue procedure may be used for "particularly complex contracts" where an open or restricted tender procedure will not allow the award of a procurement contract.
Suppliers will respond to advertisements by submitting an expression of interest in the tender and complete a pre-qualification questionnaire.
Suppliers who are short-listed will be invited to participate in a competitive dialogue with the Council. The dialogue is flexible and may include written or verbal submissions and interviews.
The dialogue may take place in successive stages to reduce the number of potential suppliers, and at the conclusion of the dialogue the Council will ask potential suppliers to submit their final tender.