RICS draft guidance note - Subcontracting (1st edition)

Appendix 1: Example contents of a procurement strategy

Ref

Heading

Example content

1

Executive summary

  • high-level summary of procurement strategy

2

Introduction and purpose

  • background
  • purpose and objectives of procurement strategy

3

Main contract

  • name of employer
  • name of main contractor
  • site details: location, access, etc.
  • appointment of main contractor
  • form of main contract (e.g. JCT, NEC, etc.)

4

Main contract works

  • description of main contract works
  • key features associated with main contract works (e.g. date of commencement, date for completion)
  • key persons involved (e.g. employer's consultants)

5

Subcontract packages

  • division of main contract works into subcontract packages
  • allocation of a unique code number to each subcontract package (e.g. a four-digit number)
  • approval and signoff by main contractor's management

6

Financial planning

  • budget for each subcontract package
  • approval and signoff by main contractor's management

7

Subcontract package philosophy

  • use of main contractor's in-house companies:
    • in-house design specialists
    • in-house specialist subcontractors (e.g. piling, concrete works, mechanical and electrical works, cladding)
  • use of main contractor's existing supply chain arrangements:
    • preferred subcontract agreements
    • preferred supplier agreements
    • business-to-business relationships
  • strategic subcontract packages:
    • significant part of the main contract works
    • high value
    • programme criticality
    • low number of potential subcontractors
  • transactional subcontract packages:
    • less significant than strategic subcontract packages
    • medium to low value
    • medium to high number of potential subcontractors
  • approval and signoff by main contractor's management

8

Procurement programme

  • procurement programme
  • approval and signoff by main contractor's management

9

Pre-qualification of tenderers

  • identification of potential tenderers
  • confidentiality agreement (if applicable)
  • pre-qualification questionnaire (e.g. drafting and content)
  • audit/inspection visits to tenderer's premises
  • assessment of responses to pre-qualification questionnaire
  • credit checks
  • selection of tenderers
  • approval and signoff by main contractor's management

10

Tendering procedures

  • selecting the tendering procedure for each subcontract package
  • approval and signoff by main contractor's management

11

Tender security

  • tender bond

12

Invitation to tender (ITT)

  • ITT
  • required stage of design for each subcontract package
  • drafting the ITT
  • e-tendering (if applicable)
  • approval and signoff by main contractor's management

13

Tender administration

  • protocol for responding to queries from tenderers
  • mid-tender meetings and review
  • procedure for opening tenders
  • approval and signoff by main contractor's management

14

Assessment of tenders

  • assessment criteria:
    • ethics, transparency and fairness
    • compliance with ITT/instructions to tenderers
    • price
    • programme
    • technical
    • health and safety
  • assessment input - role of main contractor's departments:
    • procurement
    • management
    • commercial
    • engineering
    • quality
    • health and safety
    • finance
    • legal
  • initial tender analysis/comparison
  • post-tender meetings
  • reconcile tenders
  • negotiation (if applicable)
  • draft recommendation of preferred subcontractor
  • evaluation of recommendation
  • final recommendation of preferred subcontractor
  • selection of subcontractor
  • approval and signoff by main contractor's management

15

Appointment of subcontractor

  • preparation of the draft subcontract
  • evaluation of the draft subcontract
  • preparation of the subcontract for execution
  • approval and signoff by main contractor's management
  • execution of the subcontract

16

Corporate social responsibility

  • main contractor's objectives
  • role of subcontractors
  • health and safety
  • environment
  • working practices/industrial relations