How managing & reporting tender & negotiate process and outcomes should be done well?

A negotiated tender presents more innovative thought regarding both the process and report. The process is essentially the same as a competitive tender up to the submission of an invitation to tender. The nominated tenderer will receive the tender information, as they would in a competitive environment, and will take some time to price the work and propose a suitable programme, proposed team, and in certain cases, method statements. The client’s surveyor will have a pre-tender estimate prepared, as they would do for a competitive tender for comparison purposes. The difference with a competitive tender takes place at the submission of the initial price by the contractor. At this point the client team and contractor review the proposal and negotiate on the submitted tender. Any agreements, errors, changes and so on should still be formalised and recorded but with the absence of any other tenderers the process is not required to comply with the JCT tendering practice note, as long as the final contract documents pick up all the changes. The biggest risk with the negotiated route is that the parties are too far apart in their assessment of a suitable price and cannot reach agreement. The tender documents should state that the client is not bound to agree a contract sum and can walk away if a price cannot be agreed. The negotiations should focus on dealing with the items which have the biggest variance between the parties. This should come from not only a cost perspective but may also include contractual items or programme issues. Once these bigger items are resolved the smaller items (i.e. dealing with a small variance in opinion of rates) are more easily overcome. The client will require reassurance that they are obtaining both value for money and a competent contractor. The tender report should therefore make a clear statement on both of these issues. The report should also highlight the main issues that were discussed and agreed during the negotiation process.

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