Pre-Contract Commercial Management Services in a Project Management Consultancy

Matt Whipp
Faithful+Gould’s client-centric project management consultancy (PMC) teams include commercially and contractually astute quantity surveyors, contract administrators and commercial managers. These specialists provide commercial services from inception to completion, tailored towards the project’s financial/contractual requirements and the client’s specific needs.

The value of a project management consultancy

When evaluating cost and time parameters, our team provides sound advice to the client, enabling informed decision making, regardless of the:

  1. Design stage – i.e. concept, schematic or detailed;
  2. Tendering procedure – i.e. single source or two-stage;
  3. Procurement route – i.e. traditional, design and build or PPP; or
  4. Contract mechanism – i.e. fixed price lump sum, re-measurable or GMP.

We understand that cost and programme control are major components of any construction project, so our team devises the procurement process in concept design and manages it to contract award.

Teamwork

The commercial role includes, but is not limited to, reviewing scope of works/services documents, preparing tender and contract documents, producing recommendation reports, and finally administering the contract from award to final account.

When reviewing scope of works/services documents, the technical input is obtained from the design and construction managers. By understanding the scope required from a consultant or contractor before issuing tender documents, the PMC team prevents any of the client’s requirements from being missed.

The team also ensures that the client is not overlapping or doubling-up on deliverables – this function is carried out by preparing a scope gap analysis and cross-referencing documents. An integrated team ethos negates the risk of the client over-paying and also limits post-contract variation orders.

Our pre-contract procurement process is focused around a detailed and carefully considered strategy which incorporates past project experience.

Allocating sufficient time, and adopting a strategic approach which incorporates unexpected eventualities, ensures a robust and accurate procurement process. This attitude provides the required level of integrity and standard of service to the client.

Preparing robust tender documents

Before issuing tender documents to the market, an in-depth audit should be carried out to ensure they are user-friendly and easy to navigate. Uncoordinated documents cause confusion and can be detrimental to the tendering process. We recommend structuring tender documents into three volumes:           

  1. Volume 1 – Instruction to Bidders and Contract Conditions
  2. Volume 2 – Employer’s Requirements and Design Documents           
  3. Volume 3 – Bill of Quantities (BOQ) and Pricing Schedules

All content included within each volume is prepared or reviewed by our team before releasing to the market. We liaise with the client and prepare site-specific documents that include the intended construction method statement, pricing strategy, and post-contract administration approach.

Safeguarding the client’s interest

As part of our audit process, we undertake a quality assurance review of the lead design consultant’s and cost consultant’s deliverables. This includes reviews and workshops to ensure that the design meets the client’s aspirations, complies with the applicable codes and regulations, and that the BOQ descriptions and quantities are correct. We also work closely with the client’s legal department to recommend contract amendments and new clauses to the particular conditions of contract that have protected previous clients from claims and damages. This due diligence aims to prevent unwanted occurrences and protects the client’s interest.

Experience and technology

Experience in procurement and tendering, contract practice and cost control inevitably pays dividends, but Faithful+Gould also uses industry-leading software that provides major benefits during the project cycle. Our in-house software platform, iNSIGHT allows our team to obtain and acquire cost and contract data from current or historic projects.

The software data enables us to identify the key consultant/contractors for certain services/works, and to benchmark market tested rates and prices. This interface and sharing mechanism is exceptionally useful during pre- and post-contract activities.

Reviewing tender proposals and recommending a preferred bidder

Upon receipt of tender proposals from consultants and contractors, an evaluation exercise scores the bidders against pre-determined factors. Our intention during this stage is to evaluate the bidder’s proposals ensuring the bidder’s design and construction approach will achieve the client’s aspirations. The PMC prepare and issue clarification and request for information documents seeking additional supporting document to substantiate the bidder’s proposal.

The commercial evaluation includes challenging the bidders on their priced submission. This is carried out via the production of a commercial comparison which provides data to identify and challenge spike rates, exclusions and tenderer’s adjustments. This provides a platform for rate breakdowns to be requested and further commercial offers to be submitted. This robust commercial evaluation endeavours to achieve best value for money and a market tested contractor.

Following this period of tendering, a holistic view is taken and captured in a recommendation report incorporating all factors, ensuring that the selected party is technically capable and commercially competitive.

Post client endorsement, our team starts the contract preparation stage. This includes the incorporation of agreed contract terms (i.e. qualifications and exclusions may have been proposed during tender stage), design and technical documents, insurance policies, agreed bond wordings, and the preparation of a succinct execution contract which can be administered.

Achieving the client’s vision

Within an evolving construction industry, where clients seek to balance ambitious visions with tighter budgets, an integrated and highly skilled PMC sets the foundations for a project delivered on time and within budget.

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