Collaborative Tendering

Abstract

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

alinea1-tendering 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 (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 of the contracts,

-->Define what type will be the main aim

alinea 2- Procurement + contract types

-Design&build contracts

-define where in the procurement process!

EU regulation-> over .. million euros -> -Economically Most advantageous tenders are becoming more common in big infrastructure projects. 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.

Alinea 3- Joint venture, aim at collaboration during full project

Collaborative Tendering usually has the aim ---> Joint Venture

-Tender Requirements (Reference) -Contractor Requirements----> Has Resulted in recent years in -- Easier to meet contract requirements

Alinea 4-Work towards a more structural collaboration Work towards more integration/collaboration between companies 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, this is limited to a project basis, and rarely makes it to a strategic level.

Alinea 5-Bridge to next paragraph This article will work towards a 'guideline' for best practices in Collaborative tendering, based on literary and case studies.