Risk Management in the

Tendering Process

Risk Management in the Tendering Process

Five key areas of risk:

Concluding the Design

Tender Processes

Selection of Contractors

Appointment

Contract Risks

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Risk Management in the Tendering Process

Design Completion / Freeze Risks

Review and define implications of incomplete design elements

Be open with client about these explaining impact in terms of potential construction / delivery
delays and any cost impact

Be open with tenderers regarding incomplete any design aspects, taking care not to
misrepresent - enticement to bid / quote low can cause claims

Tender Drawings: No need for unnecessary design detail :

allow tenderers to allocate provisional sums

but should only form a small proportion of the overall value

still provide adequate information to plan for construction

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Risk Management in the Tendering Process

Design Completion / Freeze Risks (Continued)

Contract Drawings: Make clear to what extent changes are necessary between tender
and contract drawings, and what can be left to post-tender variations

Construction Drawings: ideally issue any variation instructions with the contract
drawings prior to any subsequent construction-related instructions

Retain whole of design information: not just tender documents but also related
preparatory docs, sketches, industry literature

Risks in this area greatly reduced if earlier design stages incl. feasibility are thorough

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Risk Management in the Tendering Process

Clear Tender Processes / Checklists for:

Conflicts: Consideration of independence and conflict / potential for conflict and deal
with any issues arising openly

Tender Invitation: procedures for preparing tender lists, collating tender documents,
establishing the tender period/due date, defining or reviewing criteria for selection to
ensure objectivity and transparency

Pre-tender meeting invite contractors to ensure those tendering have a clear

understanding of the overall vision / commitment to the project, (ensure this is part of
selection criteria) and answer any queries generally

Receipt of tenders: procedures for receipt of tenders, checking acceptability,

witnessing and independent review as appropriate

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Risk Management in the Tendering Process

Clear Tender Processes / Checklists for:

Document Check: on issue / return to ensure none missing (protects both parties)

document checklist to ensure this

get contractors to confirm

Detail Check: rates, quantities, totals, exchange rates if relevant, page totals etc.

checklist for this and/or QS for this purpose

Specifications: particular areas of risk are:

industry design responsibilities clarify which and liaise closely to confirm detail

materials / products / subcontract services clarify which need to be approved by design

team and/or client

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Risk Management in the Tendering Process

Selection Risks

Balance objectivity and experience of track record with the design team

But beware Remedies Directive!

Past performance with design team therefore needs to be part of the selection criteria rather
than applied as a factor that negates any original objectivity afterwards

If tender value exceeds client budget then beware risk of rushing through design
changes to accommodate budget

Take time to preserve quality of the design and design documents

Risk of knock-on effect with design integrity, programme and/or costs

Try to avoid letters of intent that might cause blurring around award of contract / part of
contract (reconcile with contract in any case)

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Risk Management in the Tendering Process

Appointment Risks

Reconcile tender documents and contract documents and be clear about any
changes in the interim

Review any items that could not be measured as part of tender process and clarify
with contractor

Ensure legal check of contractors T&Cs, any letter of intent and contract documents

Clarify preliminaries

Contract particulars, industry design responsibilities, programmes for submission of

information, construction programme, attendances / facilities (power, water, scaffolding etc)
site access, health and safety and environmental considerations

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Risk Management in the Tendering Process

Contract Risks

Re-check date of site possession may need re-negotiating to ensure contract

documents are in place prior to possession

Ensure site supervision and inspection responsibilities are clearly understood - whos
role is to do what, when / to what frequency and to what standards?

Appoint clerk of works or engineer as appropriate

Ensure those tendering know if their work must be subject to independent inspection
and at what stages / to what quality standards.

If any of above not clear at tendering or contracting stage, flag for early clarification.

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Quality Assurance Approach

to Risk Management

QA Approach to Risk Management Features

QBE has for a long time adopted a QA approach to Risk Management as the features
of this have numerous benefits in the way that risks are identified and managed:

QA Approach

Minimal Risk Management

Proactive

Reactive / lag in response time

Corrective & Preventive Action

Remedial Action

Holistic Risk Management

Compliance

Comprehensive Management System

Ad-hoc controls / documents

Embrace all failure incidents

Claims & Complaints only

Learning Culture

Blame Culture

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QA Approach to Risk Management - Services

Remote Assessments using QRisk - 3 levels:

RMEQ Essentials

Standard QA - issue that are high risk for PI claims

Comprehensive QA Q holistic assessment of business

On-Site Audits and Reviews

Using Standard or Comprehensive QAQs

At management level only or to compare views within the practice

Issues Analysis and Review

Claims, Circs, Client Feedback, Errors, Waste etc. as required

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QA Approach to Risk Management - QRisk

What is QRisk?
A unique and innovative web-based risk management software package designed by and for QBE
Its exclusive to QBE policy holders* (access can only be gained via a username and password)
(*Serious prospects can be granted a temporary login to use QRisk)
Key aim of QRisk is to raise awareness of a wide range of risk management issues affecting our
clients and over time, improve risk management profiles to reduce the likelihood of claims

How does it work?

Main client activity is the self-assessment questionnaire which can be completed by any client,
regardless of size, scope or nature of business (N/A options are built in where relevant)
Available for Architects, Engineers, Surveyors and Design & Construct firms (and other professions)
Other activities such as Business Process Audits & System Reviews by QBE consultants will also
use QRisk so that resultant documents are consistent and readily available on QRisk (saving on
lost reports and email traffic)

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QA Approach to Risk Management - QRisk

Using QRisk clients can:

benchmark their firm against a highly developed set of risk criteria using our comprehensive quality
assurance questionnaires

get instant results and report on prioritised recommendation to help them improve their risk profile

receive automated email reminders when actions become due

monitor and track risk improvement status and provide QBE underwriters with automated updates
on their risk profile

obtain CPD credits for time spent on risk assessment and consideration

Promo leaflet available and/or contact us on support.qrisk@uk.qbe.com

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Questionnaires

European Operations

Recommendations Graph

European Operations

Thank You for Listening