Construction Procurement and Tendering for Hospital Extension

This report delves into the intricacies of construction procurement and tendering processes, focusing on the Mater Hospital extension project. It investigates the inception, development, and implementation stages of the procurement process, exploring various methods and strategies employed in both public and private sectors. The report analyzes the tender process, including supporting documentation, and evaluates different procurement methods and standard forms of contract to meet stakeholder requirements. A key aspect is the development of a risk management strategy to mitigate potential challenges. The report examines the selected negotiated procurement method, the importance of Building Information Modeling (BIM), and the application of standard forms of contract, highlighting the benefits and limitations of each approach. Overall, the report provides a comprehensive analysis of the procurement and tendering aspects of the Mater Hospital project, offering valuable insights into the practical application of these concepts in the construction industry.

Running head: CONSTRUCTION PROCUREMENT AND TENDERING
Construction Procurement and Tendering
Name of the Student:
Name of the University:

1CONSTRUCTION PROCUREMENT AND TENDERING
Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Investigate inception, development and implementation stages of procurement process.........2
3.0 Investigate the tender process and supporting documentation..................................................5
4.0 Analyze and select procurement method and standard form of contract to meet with
stakeholder requirements.................................................................................................................8
5.0 Develop risk management strategy............................................................................................9
6.0 Conclusion...............................................................................................................................11
References......................................................................................................................................13

2CONSTRUCTION PROCUREMENT AND TENDERING
1.0 Introduction
The paper is based on examining the tender process as well as how the construction
projects are procured. The selected construction project is based on extension to the Mater
Hospital in Newcastle which is used of procurement and tendering methods. The tendering
principles as well as procurement processes are investigated by analyzing different strategies in
public, as well as private sector using the case study. The procurement methods ensure that
funded goods as well as services, IT are being acquired by hospital through the procurement
processes (Brook, 2016). It provides an outline of responsibilities of hospital through each stages
of procurement process. The project work is assigned to materials management and delegate for
monitoring, scheming and giving out over purchasing of the hospital equipments and suppliers.
Time spent to prepare the project is rarely wasted and there is an impact of changes at this
particular point will impact in cost at the time of delivery.
This particular report investigates inception, development and implementation stages of
procurement process of infrastructure project such as extension of hospital. There is analysis of
tender process as well as support the documentation with analysis and selection of procurement
method and standard form of contract to meet with stakeholder requirements. A risk management
strategy is developed regarding the infrastructure project to overcome with the project risks.
2.0 Investigate inception, development and implementation stages of
procurement process
The Mater Hospital in Newcastle must be accountable for results of the procurement
decisions as well as appropriateness of the procurement processes. The hospital is transparent to

3CONSTRUCTION PROCUREMENT AND TENDERING
the stakeholders where they have equal access to the information on procurement opportunities
and processes. They must maximize value to receive from use of the public funds. The value for
money approach aims for delivering goods as well as services at most favorable lifecycle cost.
Front line services are provided by the hospital to receive of right products at right time and
place (Smith, 2017). Following are the stages which are used to investigate inception,
development and implementation stages for the procurement processes in Mater Hospital such
as:
Stage 1: Planning
This stage is included planning of the elements and parameters which are used to ready
for implementation. It defines the performance indicators which are used to monitor project
implementation processes as well as evaluate the performance of construction and infrastructure
project against the project objectives. This phase is related to preliminary procurement planning
to issuance of the bid solicitation (Hackett & Statham, 2016). The activities are included of
verification of requisition forms of goods as well as services, security requirements, reviewed the
project requirement for extension of the hospital, and chosen proper procurement instruments.
Stage 2: Creation of a tender
The tendering process under the construction is process to submit the proposal for
undertaking the government construction projects. The buyers advertised the project and invited
the contractors to apply based on list of the contractors those are invited to bid for infrastructure
project. The buyers are invited contractor to submit prices for the project. Negotiation tendering
is used in this case (Hughes, Champion, & Murdoch, 2015). The bid proposal is based on bill of

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the quantities and schedule work. The rates are to be submitted to value works over series of
similar projects and fixed period of time while there is repetition of tendering procedures.
Stage 3: Bid evaluation criteria
This phase is established in earlier stage of the procurement method to support simplicity,
value for the money as well as integrity within procurement processes. The tender is evaluated to
identify which bid offers best value for the money, these criteria is specified to the tender
document as base for trading decisions. The result of bid evaluation process is based on
procurement methods as well as procedures to determine selected supplier, service provider for
negotiations and contract (Naoum & Egbu, 2016). The bid selection is based on price such as
lowest size of accessibility payment necessary by bidder, lower size of financing, higher
concession fee offered by the bidder. The bid which meets with minimum bar of technical
criteria is assessed based on price, but among technical quantification bids, the price is one of the
factor to be considered.
Stage 4: Publication of tender notices
This phase is based on publication of the bid proposal among the public so that they can
choose the project based on its bidding price. The procurement processes are used in publication
of tender notices (Rahmani, Maqsood, & Khalfan, 2017). The minimum time to allow for
submission of the bids is three weeks from date of publication of the tender notices and
availability of the bidding documents for the sale.
Stage 5: Evaluation

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The result of bid and proposal evaluation processes are based on the procurement
methods along with procedures to determine selected supplier, contractor and service provider
that is recommended for negotiations and contract awards. Before staring the technical as well as
financial evaluation of bids, it is required to make sure that the information needed at bid closing
is available and transmitted to evaluators. There is verification of certifications as well as
securities needed at bid closing (Stanford & Molenaar, 2017). It also evaluates if the bids are
signed, identification of bidder and acceptance of terms as well as conditions for the bid
solicitation. It has ability to meet particular critical delivery schedules. There is evaluation of the
bids with accordance with procedures into the bid solicitation. The evaluation process is
consisted of preliminary examination along with evaluation of offered received and measured to
valid, assessed responsiveness to the project specifications defined into the solicitation
documents. This process is conducted by the evaluation team based on tender regulations, rules
as well as procedures with use of evaluation criteria (Richard, Luqman, & Nurayn, 2015). The
process is required to transparent and each of the processes is documented within evaluation
reports. It evaluates offers according to predefined evaluation criteria which are selected such as
price of tender.
Stage 6: Contracting
The contact of the tender coordinator is to seek the clarification. The tender panels are
responsible for higher value contracts which may request for the formal presentation from the
side of bidders (Ruparathna & Hewage, 2015).

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3.0 Investigate the tender process and supporting documentation
This section is based on investigating the tender process and supporting documentation
for strategic development of the regional infrastructure projects with extension to Mater Hospital
in Newcastle. The hospital infrastructure project is assessed for possibility of partnerships among
the public as well as private sectors with an importance provided reduction within public sector
budgets for the infrastructure development (Osei-Kyei & Chan, 2015). This section demonstrates
the tender process for construction contract. In this case, negotiated tendering is selected as
tendering process. Negotiating with single supplier is suitable for highly expert contracts, and
extended scope of existing tendering contract. It reduces cost of tendering and allows the
involvement of contractor (Naoum & Egbu, 2015). Its competitive element is being reduced,
unless there is structure of negotiation is set out that there is potential for development and even
before the contract is awarded. This tendering process is seen as anti-competitive which is
developed among the client as well as supplier. The limitation of this tendering process is that it
has lack of accountability. On the public projects, it is included with publicly funded elements as
it is required to advertise the contracts (Beikkhakhian et al., 2015). This process is open to public
procurement and ensured free movement of the suppliers, services as well as project works.
The tender documentation is consisted of technical, administrative as well as contractual
materials. In this regional infrastructure project, the widely used tender documents are drawings,
specifications as well as bill of quantities. In this public sector project, the tender documentation
is comprised of invitation to tender, works requirements, form of tender as well as schedule
referencing in forms of the contract. Below is the table for tender documentation:

7CONSTRUCTION PROCUREMENT AND TENDERING
Form of
contract
Drawings Specifications Bill of quantities
Traditional There is required to have
fully developed working
drawings (Mukherjee, 2016).
There is required to have
fully detailed project
specifications.
There is a pricing
document.
Design
and build
It is generated by contractor.
It is based on preliminary
drawings provided into
requirements of employer for
contractor developments
(Junior, Osiro, & Carpinetti,
2014).
It is generated by contractor.
Based on the output and
performance specifications
as part of employer’s needs.
It is not applicable.
Format of the contract
sum examination is
provided by employer.
The tender documentation is on the procurement routes such as:
The invitation to tender: A formal request is made to the tendering contractors for
submission of bids for infrastructure project. This letter is consisted of instructions to tendering
contractors (Hueskes, Verhoest, & Block, 2017). The invitation informs contractor which
documents are attached, arrangements for the construction site and deadline for return of tenders.
Form of letter: This document consists of contractor’s offer for carrying out the work
requirements. The binding contract comes with existence if the employer is accepted this offer
with no qualifications (Govindan et al., 2015).

8CONSTRUCTION PROCUREMENT AND TENDERING
Drawings and specifications: The scenery of drawn information is included in tender
documents based on proposed form of tendering contract. This project is required of developed
designs consisting of the construction quality drawings as well as details as part of tender
documentation. It is comprised of full location and detailed drawings (Franz & Leicht, 2016).
The schedule is supplied to provide positional information related to the project work.
4.0 Analyze and select procurement method and standard form of contract to
meet with stakeholder requirements
The selected procurement method is negotiated procurement which is a method to select
the contractor without prior advertising along with formal competition over price. This method
helps to deal with the tender which is raised against the infrastructure project of Mater Hospital
in Newcastle. At this particular stage, NSW Government has being confirmed that $250 million
is allocated to the project (Larson & Gray, 2015). It is analyzed that $350 million extension of
the hospital, therefore there is shortfall of funds. The procurement negotiation allows NSW
government to choose the contractor those seem to prepare and meet with all project
requirements. Negotiation enables the government to become flexible. The organization is
focused on bargaining through the negotiation procurement.
The project work is adopted of building information modeling (BIM) which is required of
obligations along with liabilities and limitations must place on use of model. BIM protocols are
incorporate with the contractual documents by adding model enabling amendments which
provides benefits to the infrastructure project (Elmhedwi, Elmabrouk, & Sherif, 2015). The
construction contracts are complex in nature and it is included among types of contracts which
are written. Under the construction and regeneration act1996, the standard form of contract is an

9CONSTRUCTION PROCUREMENT AND TENDERING
agreement with the person to carry and arrange the construction operations (Roos et al., 2017). A
separate contract is being formed among designer, client, constructor which makes difficult for
the designer to alter hospital design; even it is required to rise throughout construction period.
In recent time, construction contracts are used as procurement method to solve conflicts
among designer as well as workmanship. The other advantage of standard form of the contracts
are seek to make sure about certainty for the clients in terms of both time as well as cost. It
prevents the client from unforeseen financial losses in the regional infrastructure project
(Sadgrove, 2016). One success losses is being illustrated by the selected project where the initial
estimation of cost was $250 million, but the cost of end of this project was $350 million.
Selection of construction management is a single factor to misfortune that have fallen the project.
It is a method of contracting method which was chosen to speed the project work. Unlike the
traditional form of the contracts, it provides the clients with belief in both time furthermore cost.
In order to motivate the contractors for delivering the project on time, the contractor programme
is submitted to employer and provide the client with ensure about the cost (Pritchard & PMP,
2014). The standard of form contracts are introduced to make sure that the contractors should
deliver the project on time, there is no such unavoidable delays because of nature of industry. In
most cases, the contract type is dealt with time delay along with payment delay. There are
warning procedures which are dealt with delay in completion along with there is an increase of
price because of compensation events.
5.0 Develop risk management strategy
A risk management strategy is developed for the risks such as risk of delay from the
public inquiries and legal formalities. There are financial hazards in the construction project like

10CONSTRUCTION PROCUREMENT AND TENDERING
increase in statutory wage along with high inflation. The loss of property, damage on works is
raised from thefts, explosion and due to unnatural reasons. There are some risks related to
ground condition like unforeseen difficulties and earth movements (Lavon & Fermont, 2017).
Poor workmanship by contractor is resulted in stipulation for the repairs along with higher
maintenance and occurrence of the latent defects. The risk response process is being directed as
identification of ways to contract with evaluated project risks. The risk management strategy
provides effective approach for making and improving decisions and then minimizing the risks.
Undeveloped infrastructure presents high obstacles for both economic growth as well as social
development (Uhl & Gollenia, 2016). The Mater Hospital infrastructure project in Newcastle is
higher on governments and infrastructure development. There is developed economics which is
consisted of infrastructure plans. The risk management strategies are involved with eliminating
and reducing the risk level for implementation of managerial actions. Therefore, a risk
management strategy is implemented for identified risks so that the project work is completed
successfully on time and budget.
The risk management strategy is based on the extension work of hospital where there is
management of procurement as well as tendering risks are carried out. The risk management
strategies are as follows:
1. Earlier as well as systematic identification and assessment of procurement risks and
development of risk management plan to handle the risks.
2. There is proper allocation of responsibilities of stakeholders to manage each risk
individually. Each of the individuals is allocated to manage each risk based on their
expertise to overcome with possible issues (Elmhedwi, Elmabrouk, & Sherif, 2015).

11CONSTRUCTION PROCUREMENT AND TENDERING
3. There is also adoption of risk management approaches with importance of purchase and
involvement of construction risks.
After analyzing all the risks, formal risk management is being recommended for the
procurements for various reasons like size and capital outlays are implied that there are potential
losses unless it is managed. It involves range of the participants with divergent interests as well
as various capabilities to manage identified risks. The framework is used to identify, analyze and
assess risks and develop of risk management plan for dealing with simpler procurements (Larson
& Gray, 2015). The organization should develop of risk management strategy that consists of
policies as well as guidelines for managing uncertainties into the tendering processes and
negotiation phases. The purpose of this proposed system is reduction of risks with positive
outcomes. A proper risk management system delivers successful project to their client. The
entire purpose is increasing rate of return on investments by avoiding the projects which are
associated with loss and increase in project transparency (Elmhedwi, Elmabrouk, & Sherif,
2015). The activities related to risk management is based on risk awareness rather than adversity
of risk. It is recommended an open minded approach along with system to share experiences in
addition to knowledge.
6.0 Conclusion
It is concluded that the procurement is carried out by process of tendering rather than
trading the products. The procurement and tendering method for extension to Mater Hospital in
Newcastle is consisted of negotiation process where there is assessment of opportunity of
partnerships between the public as well as private sectors with a consequence presented
lessening within public sector budgets for the infrastructure expansion. The infrastructure project

12CONSTRUCTION PROCUREMENT AND TENDERING
is used of procurement method as process to buy the products, and services. It is involved with
acquisition of the operation along with management services for basic services. Bidding is done
where the organizations are submitted their proposals to their client for meeting with the project
requirements. The company is interested in tendering processes which perform the project work
by contract. The infrastructure project is used of BIM protocols which are incorporating with the
contractual papers by addition of model allowing adjustments which gives profits to the
infrastructure project. The negotiations of tender are based on nature of each individuals tender
procurement procedures. The construction contracts are compound in natural world in addition to
it is incorporated among types of contracts which are written. The three main tendering
documents used in this project are technical, administrative as well as contractual materials. The
organizations are implementing risk management system to overcome with the risks.

13CONSTRUCTION PROCUREMENT AND TENDERING
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