There are a number of factors that should be considered when procuring the services of a construction contractor to ensure that the best value is obtained by the owner/principal. This is particularly true for projects utilising the more specialised forms of Trenchless Technology as there is a relatively small number of such contractors able to provide the desired service and they may be based a long way from the project.
While the general principles discussed in the paper can be applied to a wide range of projects it is particularly focused on the use of Trenchless Technology.
In broad terms the paper will address this challenge from two perspectives which are considered essential to driving value in the current market
1. Maximising Competition
The more open the tender documents are about the methodology to be used to achieve the desired outcome, the greater the number of contractors able to tender, and the more competitive tension there will be driving pricing.
2. Making the Project Attractive
There are many factors that will influence the attractiveness of the project compared to other opportunities that may be available to potential contractors. These factors inevitably also influence the tendered prices that are submitted. These factors include the nature of the project, how well defined it is, the opportunity for alternative approaches to be considered, the quality of the information available (particularly ground conditions), the time available for commencement and completion, whether it is a ‘one-off’ project or part of a multi-year / multi-site arrangement and perhaps most importantly, what risks there are and how those risks are shared between the owner/principal and the contractor.
In preparing the paper the author engaged with the leading Trenchless Technology contractors and the paper will illustrate their views of what makes tendered projects particularly attractive and unattractive to them. The paper will also highlight the most important of these considerations from the contractor’s perspective.
Application of the principles presented in the paper should provide the owner/principal with a range of competitive tenders and avoid the situation of a limited, if any, response from the market and/or prices that include unnecessary loadings for risk or inconvenience.