“Facts About Procurement” describes the overall process of identifying potential contractors, conducting the tender procedure and awarding the contract.
The procurement process is fundamental to the success of a dredging project and is primarily the responsibility of the client / project owner. Procurement specifically related to dredging and maritime construction projects typically has several stages:
- identifying the client’s objectives,
- developing options,
- studying the feasibility of the different options,
- determining the need for dredging,
- specifying the various requirements to fulfil the need,
- identifying potential dredging contractors,
- soliciting bids and proposals,
- evaluating these bids and proposals, and
- awarding the contract.
An important step in this process is the establishment of pre-qualification criteria. These are determined by the client with the advice of the consultant and are particular to each project. The selection of a contractor will also consider of the timing of the project, its cost, quality, complexity and flexibility and risk allocations.
Another approach to procurement called “performance-based procurement” differs from the general procurement process in that it tries to improve the delivery of services by linking payment to the delivery of services instead of the delivery of a facility. Performance-based procurement is based on specific characteristics:
- Long-term, strategic partnerships with qualified contractors,
- Business-driven proven solutions achieved by innovative means,
- Best value solutions instead of lowest bid,
- Performance-based payments which means payment is made when benefits are realised after implementation of the solution.
Dredging contractors are not always able to comply with the last element as they do not take over a project. However, Public-Private Partnerships (PPPs), which are a form of performance-based procurement, can be suitable for large, complex and expensive infrastructure projects. In a Public-Private Partnership the private sector provides the capital, or some of it, for the investment. Then, for the duration of the contract, the contractor takes over the construction and/or operating risks in exchange for earnings from the project.
A successful procurement process will provide management, leadership, and policy direction. It will effectively manage the tendering process as well as support the management of financial aspects of the project.
“Facts About Procurement” answers essential questions such as:
- What is procurement?
- Who is in charge of the procurement process: Client? Contractor? Consultant?
- Why spend attention to the procurement process?
- What is pre-qualification?
- How are the pre-qualification criteria determined?
- What considerations are important for the procurement strategy?
- At what stage should the contractor be selected?
- What are the other advantages and disadvantages of an early selection?
- What does the traditional tender process look like?
- How are the tenders to be assessed?
- How can the client obtain this information?
- How is the final choice made?
- How can attributes be weighted and scored?
- Is the “two-envelope system” a serious alternative?
- What is “Performance-based Procurement”?
- Can Public-Private Partnerships (PPPs) be used as a model as well?
- Why is a good procurement process necessary?