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This method of tendering entails finding suitable contractors, usually going from previous experience, and getting them to submit tenders for the programme. Because it is you who finds and chooses the contractor you can choose who is compatible to you and your project, this means searching to find the best one (who is more experienced, which ones finished the job and which didn't)
If a contractor has past experience this is great in helping you make a decision; past records and jobs are always presented and follow contractors with them just in the same way the grades I get follow me at the moment. Also health and safety records can be checked by their references. It is also sensible to hire contractors that are compatible with the type of work you are doing, some contractors specialise within different areas of work and can help out more and most likely get better results in their chosen fields. The benefits of this and a very good reason to use single stage selecting is that the contractor is a personal choice; chosen to fit you and the programme you are doing and moreover and contractors with bad records can be removed from the picture. Also companies compete for the tender so in turn you will receive a competitive rate for the work.
Two Stage Selection
When there is a short time scale to a job such as the one we have been given on this assignment contractors are often invited to discussions and formal meetings about the programme to provide their say on what should and should not happen. After this there is a time where we can decide the best person suited to this type of job and then contractors selected are invited back for a second interview. After this the client should then know who to choose by telling face to face who is compatible with the job and the staff at hand. There are advantages to take note of when using two stage selection primarily it is a good way to gather more ideas and different inputs on the project. Even if they aren't from the chosen contractor, others may have interesting ideas to use. This gives us a broader outlook on the project but could be dangerous as too many changes may ruin the project. In the second interview also contractors will be expected to bring bills of quantities so from an early stage you can see how much your project will cost and base your decision around the prices the different contractors bring back.
Open tendering is where a client will advertise a project to all contractors and welcome replies back from bidders. This means that any contractor can get the job. The client then must make a decision based on what he sees from previous references such as: portfolios and CVs etc. This usually takes place when it is public service projects that need to be carried out such as roads and drainage or even airports. Open tendering is sometimes quick and relatively easy but there is one thing that it stumbles on the fact that contractors that you know very little about and could be very inexperienced and not cut out for the job could get hired. This would only happen from a bad decision made by the client. This shows how important referencing is in tending and how important as a contractor it is to have a good reference.
Serial tendering involves the client hiring one contractor for a number of different projects, almost like a long term contract. The contractor will be expected to give a price for the first job and then estimates for all the rest. This method is used when there are a number of similar programmes to be completed all by one client such as housing estates. It saves time in hiring a new contractor every different job and means the client can work up a strong relationship with the contractor for future references. Also once the first job has been done the client gains knowledge on how good the contractor is and whether the work is suitable for him to continue, keeping the clients options wide open. But on the other hand any contractor that signs up to this kind of deal shows a long term commitment to the client which is always commendable.
Factors affecting the level of tenders
The actual price and value of a project is obviously the main influence in the levels of tenders. Interestingly though smaller projects cost more and large ones make more profit. This is because small jobs have a large sum of overheads resulting in small profit percentages and margins. Whereas larger projects have massive financial commitment from the client. Also the number of contractors trying to secure work can have a massive change on the level of tenders this is because if more people are bidding for the work then the more the cost will rise this is the same anywhere its buy and demand also this has a knock on effect. If others are bidding its human nature for companies to think if there's that many people bidding for one job then it must be profitable so they decide to bid and the bidding gets higher. Also the reputation of the companies has say on the levels of tendering in the same way. If the big companies are bidding its good advertisement and its unlimited money in some cases.
In the UK at the moment there is barley any work anywhere in any profession this has proven for a rise in price in tender because more people want to secure work they will pay more for it if there's less around. Moreover the Bank of England base rate has a input because the higher the base rate in the UK the higher the loan repayment.
The location of a project has an effect on the tender price; this is because there are different pricing climates in different countries this is the reason why the Middle East is booming in construction-because it's so cheap to buy land and materials out there meaning that buying tender is relatively cheap to buying in the UK. Even if the project is in UK but still a number of miles away from where the company is based. Transport will have to paid for by the company meaning the overall estimation of how much the project will cost will be higher. Moreover if the project is far away and it is long term then not only travel but accommodation is needed and this costs a lot this is why contractors usually try and stick to where they are based to relive these accommodation costs
The location or city where the project is also very important if we think about a project that is set out in the countryside then accessibility is going to be very easy but however if we have a job that is to be done in a large city then it's going to be substantially harder. Roads may have to be closed to allow you to get you plant machinery in; this will cost money. It is up to the contractor to time this perfectly to keep these costs down.
The site you choose when undertaking or buying tender is also very important where cost is concerned if you take a site that is already level and maybe has been used before for construction the chances are your site will be ready to start work on but there are sometimes where groundwork's must be done first to level the site or clear this means hiring in plant and extra work costing money.
Single stage selective
Single stage selecting involves searching through contractors and inviting them to send you their ideas for tender. The project in hand is small scale and basically the job has to be done efficiently for it to make a profit margin. Single stage selective would be advantageous because it only consists of one 'single' stage. This is quicker and easier than other ways of selection and is also simple. Another plus side is the fact that who you choose is personal to you, this means you can select contractors who you have a strong business relationship with and that you trust. This cuts out any early stages of the work where the client and contractor are just getting to know each other and how one another do business. This can be a tricky time if the two involved to not get on right away. When using this method of selection specialists we can see who is specialist in the field of work that is being done. In this case I personally would look for a contractor who keeps a very good time scale and has a reputation not to prolong work. However the massive problem with this job in particular is it may not prove to be massively profitable, this may end up in the best contractors not sending you tender as there may have higher aspirations.
Two stage Selection
With two stage selection there are two different interviews one with many contractors all with their bids and ideas for tender and then a second shortly after with the best ideas and pitches all invited back to bring estimations and bills of quantity's. This is great for a small scale project like the one in hand because firstly the client can get an overlook and many different ideas on how to save money, how to do work more efficiently and to a better standard. This is excellent as even if you don't hire all the contractors you can still take their ideas from the first interview and use them which can save you valuable time and money. At these interviews also you can get to know the potential contractors and see if they have the credentials to gel with the workforce you already have and in this case if they can handle a small scale job in the time given. This would probably be the method I would use if this was my job. Although there are two interviews these can be done in one week or even less and it doesn't take up too much time. Also the amount of ideas you can get from the first interview can be really vital. However, this can backfire as too many changes can ruin the project and also the timescale if changes are made late.
Open tendering is where the tender is advertised and put out for contractors to bid to the client for the tender. This can be good for public construction but as this is a small practice usually they are not done by this sort of company. The massive down side to this way of tendering can be the fact that no one may bid for the work. This can take a lot of time and therefore money; it is for this reason that I would not use this method of selecting in this scenario
Serial tendering is where one contractor is hired to do a series of jobs that are all similar. This is seen as a long term project and contract between client and contractor. When hiring for this type of job its good to hire someone you trust because in these cases its usually talking about a lot of money at hand. In a small practice this may not be the best way to select tender and there will never be many projects that are serial. However if one did come along then obviously this would be the only way to do business for me as it save so much time in hiring new contractors for the same sort of jobs. Also as a small business a business partner that can be trusted may be very beneficial.