COMMERCIAL AND CONTRACTUAL MANAGEMENT OF PROJECTS

COMMERCIAL AND CONTRACTUAL MANAGEMENT OF PROJECTS

Table of Contents 1.

Introduction.......................................................................................................................3

2.

The Tendering Process in the UK...................................................................................3

3.

The Tendering Process in the UK for Prospective Bidders including the 11-Stage

Tendering Process....................................................................................................................6 4.

Types of Tenders in the UK...........................................................................................10

5.

Tendering Stages in the UK...........................................................................................10

6.

How a Project Manager manages the Commercial and Contract Matters of Large

Complex Projects...................................................................................................................12 7.

Conclusion.......................................................................................................................13

8.

Reference List..................................................................................................................14

COMMERCIAL AND CONTRACTUAL MANAGEMENT OF PROJECTS The techniques that are used in the UK (United Kingdom) when tendering for a contract and how a project manager manages the commercial and contract matters of large complex projects 1. Introduction According to Experian (2020), a tender refers to a valuable document that is required to be completed when a company or an individual bids for a particular contract. It is paramount to note that the buyer utilises the tender document to significantly assess the contractor’s suitability to undertake the specific contract in question. Thus, the tender document primarily contains numerous questions that the contractor is required to respond to accordingly. Most importantly, a tender denotes a formal bid or offer to secure a specific contract eventually.

This research report will articulate the techniques that are used when tendering for a contract within the UK (United Kingdom) and how a project manager manages the commercial and contract matters of large complex projects.

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2. The Tendering Process in the UK In principle, tendering for a contract in the UK is primarily undertaken through the tendering process. In reference to Experian (2020), tendering primarily refers to a formal process whereby organisations, individuals, businesses, or companies are invited to place their bids for a particular contract from private or public sector organisations, requiring specific skills for goods and services, or a project on an ongoing basis. It is worth noting that significantly few firms in the UK and globally possess the capabilities of performing all their duties and operations in-house. Thus, it makes economic sense for such firms to outsource some of their operations and duties to other organisations possessing the required expertise and resources to deliver on behalf of these firms. Moreover, firms are always searching for specialists who can significantly assist them in achieving some of their functions and objectives, including building a road, supplying different goods and services, and building a website. Notably, tenders unconditionally offer performance or money to accomplish a particular obligation (Law Business Research, 2021).

On the same note, the tendering process in the UK is primarily designed to be transparent and fair. The tendering process in the UK entails expressing interest or making a proposal, bid, or offer in response to a request or an invitation for tender. Many firms in the UK will seek other organisations or individuals to respond to a precise need, for instance, supply of services and goods, and will choose a tender or an offer, which eventually offers the best value for their money and meets their needs. It is also paramount to note that the tendering process in the UK is not restricted only to big organisations, but SMEs (small-medium enterprises) and individuals, such as contractors, are also invited to bid for tenders if they believe that they have the required capabilities to undertake a precise contract (Experian, 2020).

In the current technological era, the tendering process for many UK organisations is conducted through online Internet platforms where these firms place their tenders to invite prospective bidders to place their bids. Thus, the current tendering process in the UK is gradually migrating to eTendering (electronic tendering), where tenders are placed, and interested bidders can place their bids through online Internet platforms. It is also worth noting that eTendering enables these bidders to upload or submit the required documents online, and communication channels are also integrated into these online tendering processes (Law Business Research, 2021).

In particular, recent authoritative research findings conducted by renowned UK scholars have shown that with the latest emergence of the COVID-19 pandemic, many UK organisations have heavily invested in conducting their tendering processes through the online Internet platform. As such, many contractors and other bidders for contracts have also followed suit, whereby they conduct their online research to search for prospective tenders. For instance, the UK government currently operates what is referred to as a Contracts Finder Service for any future or current public sector contract above £10,000 (UK Government, 2022). Notably, contractors can look for the latest UK government’s opportunities based on their value, location, and industry and whether these opportunities are suitable for SMEs. Moreover, apart from the Contracts Finder Service, the UK government’s website also offers other tendering suggestion routes, such as the SBRI (Small Business Research Initiative) (NI Business, 2022). The UK government’s website suggests other tendering routes include the Digital Marketplace specifically designed to cater to digital services providers. The website also suggests the TED (Tenders Electronic Daily) designed explicitly for tender work in the European Union (EU). Importantly, public sector contracts for Northern Ireland, Wales, and Scotland mostly appear on eTender NI, eSourcing NI, Sell 2 Wales, Public Contracts Scotland, and separate websites (UK Government, 2022).

On the other hand, unlike the UK’s public sector, the private sector offers tendering opportunities on various platforms, including contacting businesses directly, trade publications, company websites, social media, or events. Hence, prospective bidders must be proactive, ensuring that they build their company profiles in appropriate publications, network within their respective industries, and ensure that their social media channels and websites reflect their capabilities. These prospective bidders should also search for contracts matching their expertise, experiences, and skills to provide them with opportunities to be shortlisted. Subsequently, these prospective bidders should also avoid undertaking a scattergun approach when searching for prospective contracts since such a tender approach will only deprive their resources without delivering any tangible outcomes and results (Law Business Research, 2021).

3. The Tendering Process in the UK for Prospective Bidders including the 11-Stage Tendering Process According to Hudson Outsourcing (2017), prospective bidders can utilise the 11-stage tendering process as their technique for tendering for contracts to ensure that they succeed in winning bids for tenders within both the private and public sectors. The 11-stage tendering process, according to Hudson Outsourcing (2017), includes developing a checklist, looking for suitable tenders, reviewing against a particular drafted checklist, roles, and responsibilities, conducting thorough research, completing draft one of a particular tender, as well as amending, editing, and reviewing. Other tendering processes include sleeping on it, proofreading, submitting, and the evaluation process (Hudson Outsourcing, 2017).

In principle, developing a checklist is the first stage of the 11-stage tendering process, enabling prospective bidders and contractors to create checklists containing between 5 to 10 questions. Notably, these questions will enable these prospective bidders and contractors to make informed decisions regarding whether or not they should place their bids for particular

projects. Hudson Outsourcing (2017) further notes that these prospective bidders and contractors should also utilise percentage (%) points and rank their questions to make these informed decisions. Moreover, looking for suitable tenders is the second stage of the 11-stage tendering process, enabling prospective bidders to populate and scrape through numerous tender portals with suitable private and public sector opportunities. Notably, looking for suitable tenders requires adequate commitment and takes valuable time. Thus, prospective contract bidders should establish in-house teams and allocate adequate resources for this useful function within the tendering process (Hudson Outsourcing, 2017).

On the other hand, reviewing against a particular drafted checklist is the third stage of the 11stage tendering process, which significantly ensures that prospective bidders draft a checklist for each tender they are interested in pursuing. It is also worth noting that each tender is unique and different since the requirements and other factors differ. As such, it is always important for prospective bidders to draft independent checklists for every tender they would be interested in bidding. Moreover, these prospective contract bidders should also score their sourced relevant tenders against their independent checklists. Notably, if they fail to score 80% and above in this particular scoring exercise, they should not place their tender for such work since their probabilities of failing to undertake such work are high (Hudson Outsourcing, 2017).

Additionally, the roles and responsibilities stage is the fourth stage of the 11-stage tendering process that should be undertaken by those prospective bidders that score 80% and above in stage 3, as explained earlier on in this research report. Hence, in this fourth stage, prospective bidders that score 80% and above should agree with their teams about their respective roles and responsibilities, as well as deadlines to succeed in placing their bids and winning tenders eventually. Conducting thorough research is the fifth stage of the 11-stage tendering process, whereby prospective bidders research the operations and businesses of those organisations

tendering. Moreover, this stage also entails reading the tender documents in detail and compiling a thorough comprehension of its contents, including its objectives, requirements, major competitors, and how to win such a tender (Hudson Outsourcing, 2017).

In the same breath, completing draft one of a particular tender is the sixth stage of the 11stage tendering process since drafting this specific draft is critical. It is worth noting that this draft one involves noting down all the necessary details and later adding any experiences and knowledge required. Moreover, this draft one should be written appropriately, ensuring that it answers all the information contained in the tender document. The prospective bidders should also ensure that this draft one is 100% relevant to the tendering organisation to win the bid effectively (Hudson Outsourcing, 2017).

Subsequently, the amending, editing, and reviewing stage is the seventh stage of the 11-stage tendering process, involving proofreading and ensuring that all the questions have been answered correctly. Sleeping on it is the eighth stage of the 11-stage tendering process, ensuring that the tender response includes all the necessary details. Thus, at this particular stage, all necessary details should be analysed effectively and included accordingly, ensuring that the tender response is appropriate. The proofreading stage is the ninth stage of the 11stage tendering process, ensuring that any grammatical and spelling errors are handled effectively. Furthermore, this stage also entails adhering to the required font and word count suggestions as stipulated in the Invitation to Tender document. Someone else should also be requested to read the tender response and provide their views. Submitting is the tenth stage of the 11-stage tendering process and the tendering process’s final stage, from the side of the supplier, involves submitting the tender response (Hudson Outsourcing, 2017).

Lastly, the evaluation process is the eleventh stage of the 11-stage tendering process, involving the buyer assessing all the tender responses and selecting the most appropriate bidder or supplier. It is worth noting that the tendering process’s key objective in reference to

the Chartered Institute of Procurement and Supply (CIPS) involves ensuring that the “best fit” bidder or supplier is chosen to supply services and/or goods to the buyer, offering the best money value. Notably, such a supplier or bidder is most probable to be financially sound, technically competent, sound commercially, and viewed as the best option for undertaking the task stipulated in a particular tender (Hudson Outsourcing, 2017).

Most importantly, in reference to Executive Compass (2022), the tendering process in the UK, according to many prospective bidders and contractors, seems to be extremely timeconsuming and complicated. However, these prospective bidders and contractors should fully comprehend the simple basics regarding the techniques used when tendering for contracts in the UK to succeed in their tendering processes. Executive Compass (2022) further notes that the tendering process in the UK refers to a stringent, structured selection process primarily aimed at being transparent and fair, involving receiving bidders’ expressions of interest through the tender requests and the tender evaluation process. Executive Compass (2022) also states that a tender document, tender bid, or ITT is a tender bidding process stage, requiring prospective bidders to provide an in-depth explanation on how they will deliver the contract effectively, including their pricing proposals and technical solutions. It is worth noting that companies placing their bids should provide persuasive, high-quality narrative responses, demonstrating why they are best suited to undertake the stipulated contract.

Ideally, the buyer eventually shortlists the most appropriate bidders and finally chooses a winning supplier or tender (Experian, 2020).

In practice, prospective bidders or suppliers should always remember that they are mostly evaluated on quality, pricing, and ability to deliver the stipulated tender during the tender procurement process. Notably, this crucial information enables the buyers to make informed decisions during the tender’s selection process regarding the best prospective bidder or supplier to be awarded a particular tender. In essence, prospective bidders or suppliers should

fully comprehend the tender process since no margin for any errors should be entertained.

Moreover, prospective bidders or suppliers should also know that their bid documents are not mostly assessed on the lowest prices, but other factors are considered. Prospective bidders or suppliers should also know that some public contracts bidding processes have a PQQ (prequalification questionnaire) stage, requiring them to submit various certifications as the contract’s requirements, which is primarily in the first stage. Examples of these certification requirements include Investors in People and ISO Certification, and memberships, including Constructionline, CHAS, and CQC (Experian, 2020).

4. Types of Tenders in the UK In particular, there are generally two forms of tenders in the UK, including restricted tenders and open tenders. Notably, open tenders entail responding to various advertised tender opportunities, whereby the buyer’s procurement teams send out a Request for Proposal (RFP) or an ITT (Invitation to Tender). On the other hand, restricted tenders are mostly a two-stage process whereby prospective bidders or interested parties are shortlisted utilising a PQQ (PreQualification Questionnaire). It is worth noting that this process is necessary since organisations utilising these restricted tenders mostly receive huge applications. Hence, these organisations must swiftly identify prospective bidders or suppliers, meeting their stipulated tender requirements. Ideally, prospective bidders or suppliers are mostly requested to submit details of their experience, quality standards, capacity, and ability, as well as their financial and corporate information (Law Business Research, 2021).

5. Tendering Stages in the UK In principle, there are six major tendering stages in the UK, including invitation to tender, clarification, submission, settlement, contract engrossment, and execution. It is imperative to

note that the invitation to tender stage can include the tender form, an invitation to tender letter, and preliminaries, including site waste management plan and pre-construction information. It can also include the contract form, amendments form, contract conditions form, specifications, design drawings, a drawing schedule, a tender pricing document, and employer’s information requirements. It is worth noting that an invitation to tender primarily refers to a formal invitation to prospective bidders, whereby they make their offers for goods supply or services supply. An invitation to tender can be issued for different contracts, including enabling works or demolition, main construction contractors, works contractors, trade contractors, design by contractors, and equipment supply. Examples of items that can appear on a tender form include adjustment prices, prices, tender reference number, address, name, date, and latest return time (Experian, 2020).

On the same note, preliminaries or “prelims” offer a particular project’s description, allowing contractors to evaluate costs as per the circumstances and method of the works. Moreover, contract tendering in the UK also entails Standard Form Contracts, which are mainly agreements employing non-negotiated, standardized provisions mostly undertaken using preprinted forms. These Standard Form Contracts are also known as “Take It or Leave It Contracts,” “Contracts of Adhesion,” or “Boilerplate Contracts.” The tender pricing documents have different objectives, including enabling a similar comparison between the pre-tender estimate (cost plan) and tenders and enabling the cost consultant to evaluate value within various tenders. It is worth noting that the tendering process in the UK can also include tender negotiations involving clarification or anomalies contained in the tender pricing documents, provisional returns’ resolution, and alternative offers to specifications or designs (Experian, 2020).

On the other hand, the contract engrossment stage primarily refers to the preparation process of the final contract form and its appendices and schedules, ensuring that it is executed

appropriately. On the other hand, contract execution refers to the signing process of an agreed contract, whereby the stipulated terms and conditions of the contract become binding to all the parties involved after the signing of the contract. Most importantly, traditionally, bills of quantities, specifications, invitations to tender, and other relevant contract documents used to be exchanged in paper forms and drawn up independently. However, eTendering through the latest technological advancements has enabled the current trend in the tendering processes in the UK. Hence, current comprehensive and collaborative software tools can greatly assist and support the complete tendering process. Moreover, communication within the tendering processes is exclusively conducted electronically with documents being exchanged by email, websites, and portable data storage devices, including memory cards and flash disks (Law Business Research, 2021).

6. How a Project Manager manages the Commercial and Contract Matters of Large Complex Projects According to different authoritative research findings conducted by renowned scholars, many project managers encounter numerous challenges when managing the commercial and contract matters of large complex projects. Nonetheless, according to Davies (2019), project managers should fully comprehend that a project is a transient, unique endeavour undertaken to attain planned objectives, defined in terms of benefits, outcomes, or outputs. Davies (2019) also states that when managing the commercial and contract matters of large complex projects, project managers should first begin with having the bigger picture in their minds.

Thus, this enables these project managers to strategise on various issues, including measuring success, analysing opportunities or problems they are tackling, outcomes that their projects will deliver, and key objectives of accomplishing their projects (Davies, 2019).

On the same note, Davies (2019) notes that project managers should form competent project teams possessing the relevant experiences, skills, and expertise required to undertake

projects. Notably, this should include assigning them roles, ensuring all the project team members fully understand their roles, and allocating them adequate resources to undertake the projects. Project managers should also create and define their shared goals with their respective project teams. Ideally, project managers should define their shared goals to their respective project teams before delegating tasks and assigning roles. Subsequently, when creating and defining their shared goals, project managers should ensure that their goals are crystal clear and are aligned with their organisational mission and big picture (The Technical University of Munich, 2022).

In the same breath, project managers should also consider their project teams’ roles and responsibilities by recognising every individual and the stakeholders and understanding the value and goal of a particular project. Project managers should also define their project scopes effectively and break down their key project goals into smaller visible goals using the SMART (Specific, Measurable, Attainable), Realistic, and Timely) Model. It is paramount to note that breaking down larger objectives ensures that large projects are manageable and the project teams become more focused on their tasks and feel less stressed. Project managers should also determine their key deadlines, tasks, and objectives (RSM UK Group LLP, 2016).

Moreover, project managers should also utilise different collaboration tools, such as webbased project management software, establish effective communication channels for all teams, and establish emergency response teams. Project managers should also create positive team environments and reward-based motivation packages for their respective project teams, standardise and apportion risks properly, harness innovation, establish an unforeseeable emergency fund, and undertake thorough risk management (MIT, 2017).

7. Conclusion

In summation, this research report has articulated the techniques that are used when tendering for a contract within the UK (United Kingdom) and how a project manager manages the commercial and contract matters of large complex projects. Notably, many prospective bidders have perceived the tendering process in the UK to be seemingly complicated, although they only require to have an in-depth comprehension of these mentioned techniques.

On the other hand, project managers, when managing the commercial and contract matters of large complex projects, should also fully understand the literature mentioned above in this research report to succeed in their projects effectively.

8. Reference List Davies, A. (2019) Project management for large, complex projects. Available at: https://www.apm.org.uk/media/32612/digital_edinburgh-tram-report.pdf (Accessed: 1 February 2022).

Executive Compass. (2022) Simple Facts about the Tendering Process. Available at: https://www.executivecompass.co.uk/resources/bid-writing/what-is-tenderingprocess/ (Accessed: 1 February 2022).

Experian. (2020) How to tender for contracts. Available at: https://www.experian.co.uk/blogs/latest-thinking/small-business/how-to-tender-forcontracts/ (Accessed: 1 February 2022).

Hudson Outsourcing. (2017) The 11 Stages of the Tendering Process. Available at: https://www.tenderconsultants.co.uk/tendering-process/ (Accessed: 1 February 2022).

Law Business Research. (2021) The public procurement bidding process in United Kingdom.

Available at: https://www.lexology.com/library/detail.aspx?g=1c5a8703-89cf-43baa423-c6fa43a5d5de (Accessed: 1 February 2022).

MIT. (2017) Five Rules for Managing Large, Complex Projects. Available at: https://sloanreview.mit.edu/article/five-rules-for-managing-large-complex-projects/ (Accessed: 1 February 2022).

NI Business. (2022) Tender for public sector contracts in Great Britain and Ireland.

Available at: https://www.nibusinessinfo.co.uk/content/where-find-out-about-tenderopportunities-great-britain-and-ireland (Accessed: 1 February 2022).

RSM UK Group LLP. (2016) What goes wrong on Complex Projects? Available at: https://www.rsmuk.com/-/media/files/consulting/consulting-what-goes-wrong-oncomplex-projects.pdf (Accessed: 1 February 2022).

The Technical University of Munich. (2022) A New Theory for Managing Large Complex Projects. Available at: https://www.futureofconstruction.org/solution/a-new-theoryfor-managing-large-complex-projects/ (Accessed: 1 February 2022).

UK Government. (2022) Sell goods or services to the public sector. Available at: https://www.gov.uk/tendering-for-public-sector-contracts (Accessed: 1 February 2022).