Page 81 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
66
the procurement of tenders, designed to ensure tenders are obtained openly
in a manner which gives best value for taxpayer’s money. The rules may stipu-
late the number of contractors to be pre-qualified under selective tendering
according to the size of contract to be let, and penalties to be imposed if bribery
or collusion by tenderers is discovered. In the UK the government introduced
‘compulsory competitive tendering’ (CCT) into local government, national
health and other public services, under which the employing authority’s own
direct labour force was required to bid in competition with outside contractors’
offers in order to gain work. Initially the competition was on tendered price,
but later was modified to be on ‘Best Value’, that is, on the quality of materials,
workmanship, design, etc. of tender offers (see Section 1.15). The UK Local
Government Task Force later published a guide for local authorities containing
some 120 recommendations for procedures advisable when commissioning
a construction project. 1
Under some European Community (EC) Directives rules have been set for
tendering procedures for construction work, and also for the supply of goods
and services, which members of the Community are obliged to follow. An
appendix to this chapter lists the UK Regulations implementing the EC Direct-
ives. The EC has also been considering how bids for contracts can be submit-
ted by electronic communication means, that is, ‘E-procurement’. An EC study
group (IST 1999/20570) of contractors was set up to advise and report by 2002
on the framework needed for specifying the legal conditions for use of elec-
tronic communication.
The rules vary according to the expected value of the contract and the type of
service required. Most supply contracts for public works come under EC rules
if they exceed a threshold value of 400000 ECU (£250000 approximately); while
construction contracts for the utilities (e.g. gas, water, drainage, electricity, etc.)
come under control for contract values exceeding 5 million ECU (£3.2 million
approximately). Limitations are applied to prevent splitting down work to
avoid such rules. Some general features of the EC rules are as follows:
• Procedure. Open, restricted (i.e. selective), or negotiated tenders may be
sought. Open tendering requires public advertisement inviting tenders
for a contract. Restricted or selective tendering, requires public advertise-
ment inviting tenderers to pre-qualify for some specified type of work,
then inviting bids for work of that type from some or all of pre-qualified
tenderers. For a negotiated tender at least three tenderers from those pre-
qualified must be invited to bid – except in certain circumstances, such as for
emergency work, for research or development, or for technical or artistic
works available from only one source, or as an unforeseen addition to a
current contract or a repetition of some current contract work.
• Advertising. Work coming under the rules must be advertised annually, or
for each contract individually, to permit tenderers to register their interest.

1 Rethinking construction: an implementation guide for local authorities; implementation toolkit, published by
Local Government Task Force, 108–110 Judd Street, London WC1 – undated but issued mid 2001.