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Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 1
The Construction Works and Associated Services (CWAS) framework includes mechanisms for awarding contracts using a Competitive Award or a Direct Award route. It is anticipated that the Competitive Award route will be used more often, as it provides additional evidence of value for money by including a competitive tension.
There are however situations where a Direct Award route may be considered by Clients to be a more appropriate procurement route and this example looks at considerations when using a Direct Award process, to assist in the development of an appropriate project procurement strategy.
This document is drafted as guidance to Clients awarding contracts under the CWAS framework, although it will be useful for Suppliers to also make themselves aware of this guidance.
Words in italics are defined in the CCS Construction Works and Associated Services Framework Alliance Contract (‘the Framework’).
For simplicity and clarity, the following conventions have been applied in this document:
“Client” means Additional Client
“Supplier” means Supplier Alliance Member
If not already registered as a Client for the relevant Lot Alliance, complete and submit a Registration Document. Once approved by CCS’ Alliance Manager, you will be able to access the Framework Suppliers and pricing information.
Complete and submit an Additional Client User Agreement (ACUA) request for the particular project or programme of works. This will generate your project reference. The ACUA reference must be quoted on all documentation to allow CCS to centrally manage Framework Suppliers and contracts.
(Registration and Additional Client User Agreement Documents are available on the Framework website – https://www.crowncommercial.gov.uk/agreements/RM6088)
Consider whether cost efficiencies can be made by packaging multiple projects with similar characteristics into a single contract. This may be e.g. similar scope of work; technology or location.
Consider using the Lot Selection Guided Match tool to confirm the appropriate lot and link to appropriate supplier details.
Consider using the Procurement Strategy Guided Match tool to support you in reaching a decision on the most appropriate procurement strategy for the remaining aspects, i.e. optimal combination of:
Procurement Route: e.g. "Traditional" Lump Sum; Design & Build; Fee Based routes
Tendering Method: already determined – Direct Award
Register for use
of the
Framework
Selecting the Appropriate Lot
and Procurement
Strategy
Works Contract Packaging
Considerations
Introduction
Terminology
and
Interpretation
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 2
Pricing Mechanism: e.g. lump sum or target cost
Most appropriate industry standard forms of contract, relative to the potential procurement strategy identified.
The selection of your procurement strategy should always take account of advice from appropriate specialists in your project design and delivery team.
The Direct Award process is described in detail in Schedule 4, Part 1 of the Framework.
Circumstances when Direct Award can be used:
There are 4 circumstances where a Client can use Direct Award:
Where all the terms governing the provision of works, supplies and services to be delivered are laid down in the Framework Brief, the Framework Prices and the other documents comprising the Framework Alliance Contract.
o This situation applies most readily to Lot 11 - Construction Management, due to its fee-based pricing structure.
Where the Competitive Award Procedure produces only one suitable response from the Suppliers invited to take part.
Where the Competitive Award Procedure produces no suitable responses from the Suppliers invited to take part.
Where other criteria are met that the Client sets out that necessitates a Direct Award Procedure that is in accordance with the Client’s governance and in line with the Public Contract Regulations 2015 – Regulation 33(8).
o Note: it is for the Client to determine and satisfy themselves that their own governance is met and that the process is carried out in accordance with the Public Contract Regulations 2015. A worksheet is included in Appendix 2 to help you record your objective decision -making process to identify the most economically advantageous solution for your project requirements.
Establishing capability:
A phased evaluation process can be used to enable Suppliers to de-select
themselves and also to enable Clients to identify which Suppliers are actually
capable of meeting the Project Brief.
This could take the form of an enhanced Expression of Interest stage using objectively scored qualitative assessments. See separate Worked Example – Phased Award for further details of this process. A template Expression of Interest proforma is available to download from the website.
It could also take the form of a desktop exercise, based on information researched and established by the Client.
Direct Award
Process
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 3
Assessment of the Most Economically Advantageous Solution:
When awarding a contract via Direct Award, the criteria and weightings used to choose the supplier can either be:
based on those set out by CCS when procuring the Framework (these are reproduced for reference in Appendix 3), or
specific to the Project,
always subject to ensuring that any action taken is transparent, non-discriminatory and fair.
It will normally be more appropriate to use project - specific criteria and weightings.
The direct award criteria should be applied to the description of the works or
services set out in the relevant Project Brief, for all Suppliers capable of
meeting the Project Brief.
The Quality/Price ratio adopted at Framework level was 75%/25% and this ratio must be maintained when using the Direct Award process.
When deciding which criteria to adopt, you should always consider the following subject areas:
Quality: service delivery, technical merit, coverage, account management, fitness for purpose
Price: life cycle costs, cost effectiveness & price
You may also consider other subject areas related to the project. The number of criteria to use is at your discretion.
The weightings of each of the criteria chosen is also at your discretion, as long as the overall 75%/25% Quality/Price ratio is maintained.
So an assessment may be carried out across a broad or narrow range of criteria, as appropriate. The level of complexity of the assessment and evaluation model that you use should normally be reflective of the scale, complexity and risk profile of your project.
Assessment techniques such as minimum acceptable scores may be used, as long as the principles of transparency, non-discrimination and fairness are maintained.
The Price assessment should be based on the suppliers’ Framework Prices. (These are available from CCS once you have joined the Lot Alliance.)
Once the assessment is completed for all capable suppliers, the Supplier assessed by you to provide the most economically advantageous solution becomes the proposed Supplier.
Expression of Interest:
The Client should confirm that the proposed Supplier is interested in delivering the Project Contract.
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 4
Project Brief
The Client should issue to the proposed Supplier an invitation to submit an offer in writing and set out details of:
the Project Contract,
the Project Contract Conditions to be used,
the relevant pricing model or price framework,
the timetable for the return of the invitation, and
other matters relating to the Project Contract.
Project Proposal
The proposed Supplier submits a Project Proposal in writing.
Validation and Acceptance
The proposed Supplier may be invited to give a presentation or attend an interview to the Client’s organisation as part of the full validation process.
As part of the final validation process, the Client will agree and/or confirm with the proposed Supplier all relevant items detailed in the Project Brief and any other relevant information which may include key personnel of the proposed Supplier who will be responsible for carrying out the Project Contract.
When assessing Framework Prices, the framework percentages and prices are maximums; suppliers may reduce prices when submitting their proposals, but may not increase them.
Where Framework Prices are not appropriate for pricing the Project Brief, appropriate prices should be agreed with the supplier, but using the Framework Prices as a basis wherever possible. E.g. Hourly rates are defined as applying to all hours worked between 08:00 – 18:00 Monday to Friday and 08:00 – 13:00 Saturday. You should agree appropriate additions for any work required to be carried out outside of these hours when reviewing and validating the supplier’s Project Proposal.
Acceptance or Rejection
The Client is not bound to accept any Project Proposal and at its absolute discretion can accept or not accept any Project Proposal submitted.
Award
If the Client decides to appoint the proposed Supplier, they issue a Project Contract.
The Supplier executes and returns the Project Contract to the Client within 21 working days of receipt. A longer period for return may be specified by the Client.
Although this is the Framework requirement, in the event that a shorter period for return is required, it is recommended that this aspiration should be clearly stated and agreed at the Expression of Interest stage.
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 5
If the Supplier fails to return the Project Contract within the 21 working day limits, the Supplier is deemed to have declined the offer to enter into the Project Contract and the Client may terminate the process.
Both the Client and the Supplier should notify CCS when the Project Contract has been signed.
1. Establishing Interest and Capability
You could establish supplier interest either by: o running a formal Expression of Interest process using either your
own documents or the template Expression of Interest proforma, which is available to download, or
o by discussion with the individual suppliers, perhaps after you have established their capability to deliver the project.
Although at the outset you should consider all suppliers on the relevant lot, an exercise can be undertaken to reduce the pool being considered to those most capable of delivering the project. This should be done using an objective scoring exercise to maintain fairness, non-discrimination and transparency but it is up to the individual Client to decide whether this is undertaken by issuing documentation to all Suppliers on the lot and requiring a response, or for example through desktop-based research.
It is recommended that you keep a record of your objective scoring process. You should not re-evaluate areas that CCS have already evaluated when procuring the Framework (e.g. PAS91 question areas around Health & Safety, Quality Management etc).
2. Choosing and Scoring the Quality Criteria and Weightings
The Quality criteria must make up 75% of the assessment.
The subject areas specified in Schedule 4, Part 1 of the Framework should be adopted as a starting point. These are: service delivery, technical merit, coverage, account management and fitness for purpose.
You may then add your own specific criteria e.g. in the example below: availability to mobilise within a specific time, availability of required critical resources
The weighting of these criteria is at the Client’s discretion, so a simple assessment model may look like this:
Examples
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 6
Quality Criteria Weighting (total 75%)
Assessed Score of Supplier
1
Assessed Score of Supplier
2
Assessed Score of Supplier
3
Schedule 4
Service delivery
- addressed below
0% 0% 0% 0%
Technical merit – existing system compatability
20% 15% 10% 15%
Coverage
- n/a
0% 0% 0% 0%
Account management
-n/a
0% 0% 0% 0%
Fitness for purpose
5% 5% 3% 0%
Client/Project specific
Availability to mobilise
25% 10% 15% 25%
Critical resources availability
25% 20% 25% 15%
Totals 75% 50% 53% 55%
The number of criteria to use in the assessment model and evaluation methodology is at the Client’s sole discretion. Normally, you should test the key project risks and required outcomes.
An objective evaluation methodology should be used to maintain fairness, non-discrimination and transparency, but it is up to the individual Client to decide whether this undertaken by issuing documentation to all Suppliers on the lot and requiring a response, or for example through desktop-based research.
An example of an objective evaluation methodology that could be used for the Technical Merit criteria above would be:
o Capability exceeds all technical requirements – 20% o Capability meets all technical requirements – 15% o Capability meets most key requirements but not all technical
requirements – 10% o Capability does not meets most technical requirements – 0%
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 7
3. Choosing and Scoring the Price Criteria and Weightings
The Price criteria must make up 25% of the assessment.
The Framework Prices should be used as the basis for the assessment.
The criteria specified in Schedule 4 should be adopted as a starting point. These are: life cycle costs, cost effectiveness & price.
You may then add your own specific criteria e.g. in the example below: overhead and profit applied to direct cost, average rates for staff, designers and site labour.
The weighting of these criteria is at the Client’s discretion, so a simple assessment model may look like this:
Price Criteria Weighting (total 25%)
Assessed Score of Supplier
1
Assessed Score of Supplier
2
Assessed Score of Supplier
3
Schedule 4
Life cycle costs
- n/a
0% 0% 0% 0%
Cost effectiveness
- addressed below
0% 0% 0% 0%
Price
- addressed below
0% 0% 0% 0%
Client - specific
Overhead and profit %
15% 0% 10.7% 15%
Average rates for staff, designers and site labour
10% 6% 10% 0%
Totals 25% 6% 20.7% 15%
The number of criteria to use in the assessment model and evaluation methodology is at the Client’s sole discretion. Normally, you should test the key project cost drivers.
An objective evaluation methodology should be used to maintain fairness, non-discrimination and transparency.
An example of an objective evaluation methodology that could be used for the Overhead and profit % criteria above would be:
o Lowest OH & P% is (say) 8% and scores maximum 15% o Highest OH & P% is (say) 15% and scores maximum 0% o Intermediate OH & P% is (say) 10% and score is calculated as
variance in proportion to difference between highest and lowest:
(15-10) / (15-8) x 15% = 10.7%
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 8
Again, it is recommended that you keep a record of your scoring process.
4. Identifying the Most Economically Advantageous Solution
The combined Quality and Price Assessment scores should be used to determine which supplier provides the most economically advantageous solution and therefore becomes the Proposed Supplier.
Combined Quality and Price Assessment scores
Weighting (total 75%)
Assessed Score of Supplier
1
Assessed Score of Supplier
2
Assessed Score of Supplier
3
Quality Criteria Totals b/fwd
75% 50% 53% 55%
Price Criteria Totals b/fwd
25% 6% 20.7% 15%
Total Score 100% 56% 73.7% 70%
On the basis of this assessment, Supplier 2 would be chosen as the Proposed Supplier.
5. Alternative Pricing Assessment Methodologies
Other methodologies from that shown under heading 3 above may be used, as long as they meet the standard of being an objective evaluation methodology which maintains fairness, non-discrimination and transparency.
For example, if Overhead and Profit was the over-riding factor, then a simple ranking of tendered fee percentages against the chosen form of contract might be used.
A more complex example, using a notional project cost model is shown in Appendix 1.
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 9
Appendix 1: Example of Pricing Assessment Model
Price Model Calculation/Notes Supplier 1 Supplier 2 Supplier 3
Fees and rates b/fwd or calculated from Framework Prices:
NEC3 Direct Fee Percentage Framework Prices 5.5% 5.95% 7%
Average hourly cost of Construction Staff
Average of tendered rates
£41.88 £39.77 £39.43
Average hourly cost of Design Staff
Average of tendered rates
£52.97 £57.93 £56.88
Average hourly cost of Site Labour
Average of tendered rates
£23.91 £28.34 £26.76
Model Assumptions:
Estimate of direct construction costs and preliminaries (excl OH&P)
Client estimate 2,750,000 2,750,000 2,750,000
Ditto – variations Client estimate £150,000 £150,000 £150,000
Estimated construction staff hours for variations
Client estimate 750 750 750
Estimated design hours for variations
Client estimate 250 250 250
Estimated site labour hours for variations
Client estimate 2,500 2,500 2,500
Assessed Model Cost:
Direct construction costs and preliminaries
Client estimate b/fwd
2,750,000 2,750,000 2,750,000
Variations:
Direct Cost Client estimate b/fwd
£150,000 £150,000 £150,000
Construction Staff Est hrs x avg rate £31,410 £29,828 £29,573
Designers Est hrs x avg rate £13,243 £14,483 £14,220
Site Labour Est hrs x avg rate £59,775 £70,850 £66,900
Nett Total Cost £3,004,428 £3,015,161 £3,010,693
OH&P Nett cost x fee % £165,244 £179,402 £210,749
Model Total Assessed Cost £3,169,672 £3,194,563 £3,221,442
Price Criteria score (max 25%) Based on variance from lowest
25% 13% 0%
Construction Works and Associated Services Framework
Worked Examples
Scenario: Direct Award
Rev 1.0 Page 10
Appendix 2: Direct Award Form
Clients should determine and satisfy themselves that their own governance is met and that the process is carried out in accordance with the Public Contract Regulations 2015.
This form is to support you to undertake the Direct Award Procedure.
It is designed to help you record your objective decision making process to identify the most economically advantageous solution for your project requirements.
See following sheets.
Construction Works and Associated Services
RM6088 Framework Alliance Contract
Direct Award Form
This form is to support you to undertake the Direct Award Procedure.
It is designed to help you record your objective decision making process to identify the most
economically advantageous solution for your project requirements. Please note that the Direct Award
Procedure is undertaken at your own risk and must be undertaken in line with your organisation’s
governance procedures.
You may wish to demonstrate how this Direct Award Procedure complies with your organisations
governance procedures and the PCR Regulations, in particular Regulation 33 (8) here;
Criteria and weightings shall be applied to the Supplier Alliance Members at 75% Quality and 25%
Price, however you can weight the sub criteria to best suit your project. Alternatively you may want to
use a ranked order of importance for the criteria. Both of these approaches allow you to add
additional criteria relevant to your project. The assessment criteria should be applied to all Supplier
Alliance Members that are capable of meeting the Project Brief.
If you are unsure which suppliers are capable of meeting the Project Brief you may wish to undertake
an initial Expression of Interest stage either formally or by informal research.
For more details on the process you should view the following documents;
CCS Construction Works and Associated Services Framework Alliance Contract, Schedule 4.
RM6088 Customer Guidance and Ordering Procedure which can be found here
A Worked Example - Direct Award which can be found here
[Name of Project]
[Project Overview]
[Estimated Project Value]
[Framework Lot number]
[Name of Supplier]
Quality Weighting 75% (fixed)
Service Delivery [0-75%]
Service Delivery Score [insert score achieved]
[insert evidence to justify score]
Technical Merit [0-75%]
Technical Merit Score [insert score achieved]
[insert evidence to justify score]
Coverage [0-75%]
Coverage Score [insert score achieved]
[insert evidence to justify score]
Account Management [0-75%]
Account Management Score [insert score achieved]
[insert evidence to justify score]
Fitness for Purpose [0-75%]
Fitness for Purpose Score [insert score achieved]
[insert evidence to justify score]
[insert any other relevant criteria here] [0-75%]
Score [insert score achieved]
[insert evidence to justify score]
[insert any other relevant criteria here] [0-75%]
Score [insert score achieved]
[insert evidence to justify score]
Price 25% (fixed)
Life Cycle Costs [0-25%]
Score [insert score achieved]
[insert evidence to justify score]
Cost Effectiveness [0-25%]
Score [insert score achieved]
[insert evidence to justify score]
Price [0-25%]
Score [insert score achieved]
[insert evidence to justify score]
[insert any other relevant criteria here] [0-25%]
Score [insert score achieved]
[insert evidence to justify score]
[insert any other relevant criteria here] [0-25%]
Score [insert score achieved]
[insert evidence to justify score]
Total Quality Score out of 75% [total score %]
Total Price Score out of 25% [total score %]
Signed:
Print Name:
Position:
Date:
Appendix 3: Criteria and Weightings set out by CCS in the original Framework Brief
For ease of reference, the criteria and weightings used by CCS in the original Framework Brief (Invitation to Tender Attachment 2 – How to Bid) were as follows:
Lots 1 - 9
QUALITY CRITERIA Weightings (%)
Quality Management 10
Mobilisation 7.5
Continuous Improvement & Innovation 7.5
Supply Chain Management 12.5
Delivery of Construction Works (Pre-Construction Phase)
10.5
Delivery of Construction Works (Construction Phase)
16.5
Delivery of Construction Works (Post-Construction Phase)
10.5
Total 75
PRICE CRITERIA
Overhead, Profit & Fee Additions 20
Rate Cards 5
Total 25
Lot 10
QUALITY CRITERIA Weightings (%)
Quality Management 10
Mobilisation 7.5
Continuous Improvement & Innovation 7.5
Supply Chain Management 12.5
Delivery of Demolition/Decommissioning Works (Pre-Demolition Phase)
15
Delivery of Demolition/Decommissioning Works (Demolition Phase)
22.5
Total 75
PRICE CRITERIA
Overhead, Profit & Fee Additions 20
Rate Cards 5
Total 25
Lot 11
QUALITY CRITERIA Weightings (%)
Quality Management 10
Mobilisation 7.5
Continuous Improvement & Innovation 7.5
Supply Chain Management 12.5
Construction Management (Pre-Construction Phase)
10.5
Construction Management (Construction Phase)
16.5
Construction Management (Post-Construction Phase)
10.5
Total 75
PRICE CRITERIA
Project Fees & Complexity 10
Hourly Time charges 2.5
Daily Time charges 2.5
Site Facilities & Services 5
Total 25