Two stage selective tendering

Two stage selective tendering
The majority of negotiated tenders, as stated above, arise from a desire to involve the builder in the design phase of a project. The Code of Procedure for Two Stage Selective Tendering describes a method which allows the negotiation of a tender with an element of competition.

First, suitable builders are selected in the same manner as for single stage selective tendering, and a list is compiled of those willing to take part in the initial competitive stage. The tender documents sent to the tendering contractors comprise outline sketches of the scheme, a summary of the client’s requirements and a notional bill of quantities. The notional bill of quantities is a document containing an outline specification and provisional item descriptions and quantities.

The Code states that tenderers should be given five weeks to prepare their tender. It recommends that the tender is submitted under the same rules as for single stage selective tendering, with the same procedures for notification, errors etc.

Many design teams, however, do not use the preliminary tender based upon the notional bill as the sole method of selection. Instead they will invite each tendering builder to a meeting to discuss the builder’s approach to the project. The approach will be discussed in terms of the builder’s contribution to the design, the previous experience of such schemes, the personnel to work with the design team and their previous experience. The aim is to ascertain whether the builder and the design team can work well together. It is the combination of these meetings and the preliminary tenders which determines the successful builder.

An agreement will be made with the successful builder regarding the cost of the builder’s input before the commencement of the design stage. The design stage is undertaken. Bills of quantities are prepared by the quantity surveyor and where possible priced at the rates in the notional bill. Those items which cannot be priced on this basis are priced by the builder and are subject to negotiation.

Finally following a successful negotiation the builder will make a formal offer to carry out the work for the sum of money negotiated, and this is formally accepted by the client. A standard form of contract is completed.
This method of tendering allows the choice of a builder who is capable and keen to contribute to the design while retaining the important element of competition.