Course Description

 

Good endings usually require good beginnings. This is particularly true for contracting where best practices in tender management are essential for a successful project outcome and minimization of total cost. This program is designed to provide knowledge in:

·         Critical issues of understanding owner and contractor objectives

·         Risk mitigation thru contract types

·         Evaluating proposals to determine-Did I get a good price?

·         Planning for successful negotiations

 

Course Objective

 

Upon completion of this seminar, participants will know:

·         The tendering process and the major steps that should be followed

·         Objects of both owner and contractor

·         Pre-tender Checklist

·         Mitigation of risk by selection of contract type

·         Methods of selection and qualifying contractors

·         The criticality of the Statement of Work

·         Structure and application of incentive arrangements

·         How to evaluate the proposals using price analysis and/or cost analysis

·         Terms & Conditions for economic price adjustments

·         Negotiation Planning and Strategies

 

Organizational Impact - The organization will benefit by:

·         Reduced cost of Contracts for Materials & Services

·         Reduced risks in contracting

·         Improved Supplier Performance

·         Higher Productivity of Contracting Personnel

·         Greater strategic focus of those involved in Contracting

 

Personal Impact - Attendees will gain by participation in this program as a result of:

 

·         Increased skill sets in the tendering process

·         A greater sense of Professionalism

·         Knowledge of World-Class tendering practices

·         Greater ability to lead successful negotiations

·         Increased recognition by the organization due to improved performance

 

 

 

Who Should attend?

The program is designed for Engineering Project Managers, Construction Managers, Tenders Managers, Contract Managers, Buyers, Purchasing Managers, and financial personnel in organizations whose leadership wants advanced skills sets in those involved in major contracting activities. The program is a great way to develop those new to the function, or to prepare for a major project, or useful as a refresher for veteran owner managers.

Course Outline

 

Module one

The Tendering Process

·         Major Steps and flow of the Tendering Process

Objectives of the Parties

·         Owners Objectives

·         Elements of Reasonable Pricing

·         Contractor’s Objectives

Contractor/Supplier Pricing Strategies

·         Cost Based Models

·         Market Based Strategies

Presolicitation Research

·         Reviewing the Tender Request

·         Reviewing the Price Estimate

·         Identify Basic Planning Assumptions

Defining the Scope

·         Types of Statement of Work

·         Work Breakdown Structure

Tender Management Team

·         Team Composition

·         Responsibilities

Module tow

Types of Contracts & Risks

·         Contract Types

·         Mitigating risk by Contract Type

Methods of Payment

·         Progress Payments

·         Issues related to forward Pricing

Suppliers

1.     Qualifying Suppliers

2.     Performance Evaluation Criteria

3.     Obtaining Financial Information

Bidding Process

·         Typical Parts of the Tender

·         Model Tender Check List

Model Agreement

·         Structuring The Contract

·         Commercial Terms & Conditions

·         Acceptance Clause And Other Important Clauses

Module three

Price Analysis

·         Selecting Prices for Comparison

·         Factors that Affect Comparability

Economic Price Adjustments

·         Terms & Conditions for Adjustments

·         Price adjustments using price indexes

Structuring and Applying Incentive Arrangements

·         Cost Incentive Pricing Arrangement

·         Award-fee Pricing Arrangement

Quantitative Techniques for Contract Pricing

·         Cost-Volume-Profit Analysis

Module four

Modifications and Clarifications

·         Basic Policies

Key Cost Analysis Considerations

·         Reason for Cost Analysis

·         Defining Contract Cost

·         Cost Estimating Methods

·         Requesting Supplier’s Cost or Pricing Data

·         Analysis of Supplier provided Cost Data

Cost Analysis - Direct

·         Identifying direct materials and subcontract pricing

·         Analyzing direct labor costs

·         Determining and evaluating other direct costs

Cost Analysis – Indirect

·         Importance of indirect cost in cost analysis

·         Identifying indirect cost categories

·         Insuring fair allocation of indirect costs

Profit Fee Analysis

·         Factors to be considered

·         Examples of weighted guidelines

Module Five

Exchanges Prior to Negotiations

·         Determine the need for Pre-negotiation Exchanges

·         Methods for Conducting Exchange

·         Preparing Participants for Face to Face Exchanges

Advanced Negotiation Planning and Strategies

·         Identifying negotiation Issues and objectives

·         Assessing bargaining strengths & weaknesses

·         Preparing a negotiation plan

·         Bargaining techniques

·         Important Points for conducting the negations