Collaborative Tendering

Revision as of 19:42, 22 September 2017

Summary

In recent years projects have become more complex in order to meet the societal demands. Big infrastructural projects require such specific knowledge and skillsets that individual companies, whether consultancy or contractors, are finding it increasingly difficult to fullfill all the requested requirements. Either on the aspect of technical/operational knowledge, or just the not having enough capacity (manpower) to fullfill the required work. In order to secure all the requirements in these complex contracts companies have been producing extensive tender proposals. These require a big initial investment, are labour intensive and require a vast and permanently available knowledge network in the company. All competitors are forced into producing this initial effort, however, only one can win the project.

Therefore it is becoming a more common phenomenon that companies collaborate on writing tenders for projects. By doing so, sharing not only knowledge but also resources. This mitigates the risk of having a high initial investment even though they are not being awarded the contract. Because companies have different areas of expertise, collaboration will not only be beneficial for the project, but will also encourage cross pollination between the companies in terms of knowledge. It also mitigates risks during the project. As resources are shared, the companies have reduced the amount of their resources on an individual project. In case something unforeseen happens during the project, they have to relocate or idle a smaller amount of their resources, therefore decreasing the costs risk.

Of course, each partner has to secure their own interest in these projects. Because the amount of collaboration between competitors is limited, clear guidelines have to be established before even starting on the tender. As each of the companies have their own interest as a priority, there will likely be conflicts. The key to solving or preventing this will be clear communication between the involved parties.

This article will discuss some of the benefits of the Collaborative Tendering from a Project and Program perspective, while at the same time critically reflect on some of the pitfalls of these collaborations. Project examples will be used to illustrate the literature statements, as Collaborative Tendering is a relatively new concept.

Introduction

As stated in the abstract, Tenders are becoming more extensive as a response to an increase in project and contract complexity.(Reference:missing) In order to illustrate more on the background there will be an overview of the most used tender types. These are Open Tendering, Selective Tendering and Negotiative Tenders ^[1] (Reference: Civil Engineering Management) In an Open tender any contractor is allowed to write their bid. However, due to high uncertainty for the bidding company, most bids are higher and not as accurate in order to save resources. Selective tendering introduces the concept of a pre-qualification. This means that companies have to prove themselves eligble for the contracts in terms of experience, financial situation and have the resources in order to fullfill the deliverables. Negotiated tenders, where a company just submits there price, are usually aim at specialized works or small extensions of existing contracts. Selective tendering will be the type of tender where the rest of this article will refer to. Collaborative tendering is a response to the increase in complexity in big contracts. Since Selective tendering is used in big contracts for big infrastructural projects, this what will be discussed further.

Before going more into the collaboration aspects, there will be a small introduction into procurement processes. With a distinctive focus on EU procurement strategies. EU procurement regulation starts acting at projects over 1.86 million euros (reference!). Since these are the projects suitable for collaborative tendering these regulations will be the most relevant. Procurements regulations aims at a equal, fair chance for companies to acquire contracts. Or, This legal framework is designed to ensure that contracts are awarded transparently, without discrimination on ground of nationality, and that all potential bidders are treated equally (Reference: Brief Procurement)

A good example for these new procurement procedures is a design-build contract. In general terms, with this type of procurement, one party is responsible for the design and implementation of a project. In order to secure all the requirements in these complex contracts companies have been producing extensive tender proposals. These require a big initial investment, are labour intensive and require a vast and permanently available knowledge network in the company. In these situations, an economically most advantageous tender are common. This is because in a economically most advantageous tender the criteria is not only the price, but a quality-to-price method is used. (reference:Tender evaluation) This results in a more extensive, detailed and complex tender bid. This further confirms the trend that tenders are becoming more complex and collaboration might be mutually benificial.

Therefore it is becoming a more common phenomenon that companies collaborate on writing tenders for projects. By doing so, sharing not only knowledge but also resources. This mitigates the risk of having a high initial investment even though they are not being awarded the contract. Because companies have different areas of expertise, collaboration will not only be beneficial for the project, but will also encourage cross pollination between the companies in terms of knowledge. It also mitigates risks during the project. As resources are shared, the companies have reduced the amount of their resources on an individual project. In case something unforeseen happens during the project, they have to relocate or idle a smaller amount of their resources, therefore decreasing the costs risk.

Collaborative Tendering usually has the aim at a joint venture, or joint organisation, from a program perspective. These are an array of projects under the same integrated plan, e.g. London Olympics, dutch Room for the river program. In the construction sector, partnering between companies is increasingly becoming a priority at construction companies (Reference:Partnering in the construction industry) According to this paper however, results are differ at each project on different levels. According to this article, it is not uncommon that collaboration is limited to a project basis, and after the project does not expand to a strategic level.

This article will work towards a 'guideline' for best practices in Collaborative tendering, based on literary and case studies. During the analysis, a specific corrolation will be made between Australia, United Kingdom and the Netherlands.

Analysis

Alinea 1: Introduction to the comparison The aim of this chapter is to identify some of the resemblances between tendering in different parts of the world while at the same time exploring the unity between them. The article will distinguish the differences and similarities between tendering strategies in the Netherlands, United Kingdom and Australia. The aim is to first establish the parameters on which to assess the differences. This will be done using literature. (Reference missing), has already established these parameters in an attempt to identify the similarities and contradictions between Australian and British tendering procedures, and the effect it has on collabortion between different

Alinea 2: Which level of P/P/P managementis mainly involved Program management level Collaboration on a program level, structural partnership -e.g. olympic games, partnership surpassing project basis

Criteria for Assessing the different

(Applications)

Australian/British/Netherlands -Main article missing, t.b.c.

3. Collaborative Tendering in the Netherlands

-Limitations

Limitations

Use case studies to illustrate Lessons from the Industry -Suez Canal (new one) -Sea Wall Jakarta -Tunnel Denmark-germany

Conclusion

Reference List

1. ↑ [Twort ; Rees, 2004] Civil Engineering Project Management Fourth Edition