RICS APC: Procurement and Tendering

This week’s focus is procurement and tendering. This phase of the project is often crucial to the financial outcome of the project. The tasks we perform and the advice we give helps us select the right partners, at the right price and risk profile, ensuring we make a value selection as opposed to a lowest price selection.

The Definition

Procurement and tendering ‘covers how a project is structured and delivered in terms of risk allocation and contractual relationships and how tendering processes are used to establish a contract price. Candidates should have a clear understanding of the different types of procurement and tendering commonly used and the advantages and disadvantages of each to the parties involved. They should have a detailed working knowledge of the procurement routes and tendering procedures used on their projects’.

A snapshot of the competency description from the pathway guide is provided at Figure 1, where you will see what is required of you at level 1, level 2 and level 3. At your APC assessment, you need to demonstrate that you have achieved level 3 competency.

Remember: level 3 is advising; level 2 is doing; and level 1 is knowing. What constitutes advice? The Oxford English Dictionary defines advice as ‘guidance or recommendations offered with regard to prudent future action’.

For me, in the context of the APC, this means there was an issue, and you used your professional judgement to understand the issue and recommend to your client or your employer as to the action which should be taken.

Let’s explore this further with some hypothetical examples of procurement and tendering.

Level 3, Bullet 1

At level 3, you are required to demonstrate that you can competently ‘evaluate the appropriateness of various procurement routes’.

If the extent of your advice is limited to a ‘best price wins, risk dump’ type competition then you will struggle at interview. I would look for a candidate to demonstrate that your thinking is agile and that you are open minded to the available options.

As a contractor’s QS, asking the supply chain to take the risk on design which is not sufficiently developed is, generally, not a good idea. If you need the supply chain member on board early to maintain programme then you should demonstrate the options available to achieve that without looking to nail down a price which will ultimately leave you exposed; because the design will develop and that will inevitably lead to to exponential and uncontrollable price increases.

Level 3, Bullet 2

At level 3, you are required to demonstrate that you can competently ‘managing the tendering and negotiation process’.

So, you run a tender process. All supply chain members are given a fair opportunity to price on the same available information. You evaluate the returns, meet with the supply chain to query aspects of their tender to ensure it has been evaluated on a comparative basis, and one supply chain member emerges as the best value option.

Do you give them the squeeze on price? Do you go to second and third and tell them what they need to beat if they want to win the project? Do you shift the goal posts so that the evaluation criteria suit the company your employer prefers to use?

Your employer might be impressed by these tactics which get the lowest possible price you can, thereby improving your employer’s profitability. However, it would not impress me either as a professional or as an assessor. If you outline the basis of competition rules in an invitation to tender (if you don't you should so that the process is transparent) then you need to stick to them, to the letter.

When you undermine the integrity of the whole process in this way it might be sufficient to constitute a contravention of the RICS rules for members: keep that in mind.

Level 3, Bullet 3

At level 3, you are required to demonstrate that you can competently ‘prepare procurement and tendering reports’.

The report in itself is advice. You are documenting the end-to-end journey of the process, why you made the decisions that you made through that process, the basis on which that decision and the decision that was made.

I would want someone to show that they understand the component parts of a report and, even if they haven’t prepared one, explain hypothetically how they arrived at their decision and that the advice on who to select is sound and reasoned.

Final Reflections

As a quantity surveyor, you have a very privileged position and play a pivotal role in procurement and tendering processes. I would be looking for you to demonstrate that you are aware of this and that this comes through in the advice you give to your stakeholders. At the core of that advice is upholding the integrity of the process whilst reaching an outcome which delivers best value for your employer.

This competency possibly has the closest link with the Ethics, Rules of Conduct and professionalism competency so keep that in mind both when you write your experience record and when you prepare for your interview.

In next week’s article, we will look at project finance (control and reporting). Keep an eye out for that and, in the meantime, enjoy the rest of your week!

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