State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

MethodsofTendering
AlltenderingproceduresshallconformtotheActandregulationsissuedpursuanttoTheProject DevelopmentandConstructionManagementAct1994including:
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MinisterialDirectionNo.1TenderingProvisionsforPublicConstructioneffectivefrom1July2008 MinisterialDirectionNo.2ContractualProvisionsforPublicConstructioneffectivefrom1December 1996 MinisterialDirectionNo3BushfirePreparednessforPublicConstructioneffectivefrom1February2010. AssociatedGuidesandPracticeNotes,publishedfromtimetotime.

Themainmethodsoftenderingare: 1. Twostageselectivetender(alsotermedpublicsoughtExpressionofInterestfollowedbyRequestfor Tender) 2. Tenderingbyinvitation(usingthegovernmentprequalifiedregistertoidentifyshortlistoftenderers). Othertenderingmethodswhichmayapplyinclude:

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1.Publictendering 2.SinglewrittentenderorthreetendersubmissionsforlowvalueworkinaccordwithMD1andMD2 3.CertificateofExemptionsignedbytheMinisterorAccountableOfficer(SecretaryDepartmentof Health)certifyingthatspecialcircumstancesapply.

Thedecisionofappropriateprocurementmethodwillhavebeenratifiedbythedepartmentfollowinga comprehensiveassessmentofalternatives.Thoselikelyincludelumpsum,constructionmanagement,design& construct,scheduleofrates,publicprivatepartnershipsandotherviableprocurementmethodswherethe advantagesanddisadvantagesofeachprocurementmethodrecommendedbytheprofessionalteamfor endorsementbythePCGandapprovalbytheDepartment.

SelectiveTendering
SelectiveTenderingisthemostcommonlyusedtendermethodfortheDepartment'scapitalworksprojects.It isa2stagetenderprocesscommencingwithadvertisementscalledExpressionofInterest(EOI)beingplaced ongovernmentwebsite,inamajormetropolitannewspaper,and/orlocalpaperforruralprojectsinviting tendererstoregistertheirinterestintenderingfortheproject.Theadvertisementshouldindicatethe selectioncriteriaapplicabletotheprojectandstatethatashortlistwillbemadefromthoseregistering. RegistrantsareevaluatedandashortlistoftenderersisidentifiedbyaSPnormallycomprisedofconsultants andmembersofthePCG. Theshortlistissubmittedtothedepartmentforapproval.Theshortlistedtendererswillbesubjecttorisk andfinancialassessments,whichhasaninfluenceonthelevelofsecuritytobeincorporatedintothetender documents.Forprojectsgreaterthan$5Mitisexpectedthatthefinancialassessmentoftheshortlisted tendererswillbeundertakenbyasuitableindependentfinancialadvisor.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

ThelevelofsecurityintheformofaBankGuaranteesetoutintheTenderdocumentsistobesetin accordancewiththeriskassessmentbythefinancialadvisor. ARequestforTenders(RFT)consistingofdetailedtenderdocumentsisthenissuedtoshortlistedtenderers inthesecondstageoftheprocess.Thenumberoftenderersinthissituationisusuallybetweenthreeandsix. TheSPmayinterviewsomeoralltenderers. Whentenderingforconstructioncontractorsonlumpsumprojectsfromaprequalifiedpanel,itisusualto acceptthelowestconformingtender.Itisexpectedthatthepreselectionprocessshouldhaveeliminatedany causeforrejectionofatendererongroundssuchascapability,experience,qualityofserviceandfinancial viabilityTherearehowever,occasionswhenthisdoesnotoccuregfailuretocomplywithtenderrequirements (ifomissions,nonconformityoranyobviousmistakehasbeenmade)orthereareothercriterianotcovered bythepreselectionprocesssuchasvalueformoney,timetocompleteworksorqualityrequirements. Thismethodoftenderingisthemostsuitableforthedepartment'scapitalworksprojectsthatarefully documented.

PublicTender
PublictenderingisasystembywhichaninvitationtotenderisadvertisedinthepressandontheVictorian GovernmentPurchasingBoardTendersVic'websitehttp://www.tenders.vic.gov.au/.NOTE:Detailsfor publicationoftendersonthewebmaybesubjecttochangefollowingrecentMachineryofGovernment Change'. Builders/Contractorsareaskedtoapplyfortenderdocumentsorareabletodownloadthemfromthetenders' site. Allapplicantsregisteringinteresttotenderwillbeissuedwithtenderdocuments. Thismethodoftenderingmaybedeemedsuitableforsmall(lessthan$1M),noncomplexand/orremotearea projectswhereitisdifficulttoobtaincontestabletenders.

TenderbyInvitation
UnderthissystemofTendering,anumberofContractorsarechosenfromaWholeofGovernmentorAgency SpecificRegisterofprequalifiedcontractors,suchastheConstructionSupplierRegister(CSR),oran approvedagencyregisterthatcomplieswithgovernmentguidelines. ThetenderersselectedforinvitationareapprovedbytheSPnominatedbythePCG,havingregardtothe acceptabilityandcapabilityofthetendererstosatisfactorilycarryouttheproject. Thetendererschosenareinvitedtotenderfortheprojectandtenderdocumentsareissuedtotheminthe normalmanner. UnderTenderbyInvitation',exceptifanyomissionsorobviousmistakehasbeenmade,itisusualtoaccept thelowestconformingtender,asthepreselectionprocessshouldhaveeliminatedanycauseforrejectionofa tendereronanyothergrounds. Thismethodoftenderingissuitableforprojectswherethereisaneedtoexpeditetheprocess,forremote regionalworks,forconstructionmanagementtypeprojects,wherespecialexpertiseisrequiredorwherethere maybeanumberofongoing,linked,small,individualprojects.

StandardContractForms
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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

Standardlumpsumcontracts
ThestandardformofconstructioncontractforVictorianGovernmentdepartmentsisAustralianStandard LumpSumAS21241992GeneralConditionofContract(AS2124)withgovernmentapprovedSpecial ConditionsassetoutinMinisterialDirectionNo.2ContractualProvisionsforPublicConstruction(MD2). Theseguidelinesarebasedontenderingforprojectsusingthisstandardcontract.Consultantsareexpected toassessalternativeprocurementoptionshowever,approvalofthedepartmentisrequiredifanotherformof contractoramendedspecialconditionsistobeused.

ConditionsofTender
ThestandardConditionsofTenderforVictorianpublicsectorprojectsshallbeusedwhenseekingcontractors forcapitalworksprojects. ReferencetotheConditionsofTenderneedtobeincludedwhenadvertisingtenders.Thiswillapplyfor expressionofinterestorinvitingtendererstomakedetailedsubmissionsfortheproject.Theadvertisement shouldstatethatthesedocumentswillbemadeavailabletothosefirmsproposingtomakesubmissions,upon request.

SpecialConditionsofContract
TheGuidetoContractualProvisionsforPublicConstructionissuedinaccordancewithMinisterialDirectionNo 2liststhestandardformsofcontractwhichmaybeemployedbyGovernmentDepartmentsandagenciesto obtainconstructionworksandservices.TheDepartment'sProjectManagercanprovideaccesstothisguideif required. TheDepartmentparticipatesinwholeofGovernmentConstructionactivities,includingthedevelopmentof modelspecialconditionclausestobeusedinallGovernmentandAgencyContracts. Thesemodelclauseswillbemadeavailablebythedepartment'sProjectManagerforconsultantsinvolvedin documentationandtenderingactivities.

ConstructionManagement
ConstructionManagementisamethodforthedeliveryofconstructionworkwhichismoreflexiblethan traditionalcontractsinarangeofareasandmaybeapplicablewhere:
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Itisnecessarytoexercisecontroloverworkmethodsandtimingeg.inoccupiedorfunctioningbuildings Itisdifficulttofullyquantifytherequiredworkortheremaybenoaccuratedocumentationofexisting servicesandinfrastructure Itisnecessarytoexpediteaprojectbylettingprogressiveorstagedpackagesofwork.

TheConstructionManager(CM)mayoperateasanagentoftheprincipalorasaheadcontractor.Themain differencebetweentheseisintheformer,theCMisarrangesseparatecontractswheretheagencyor departmententerintothecontractswiththesubcontractorsdirectlywhereasinthelattercasetheCMhas contractswithsubcontractorsandtheCMactsastheprincipaltothesecontractswiththesubcontractors. TheCMisusuallypaidafeebasedonatenderedpercentageofthevalueoftheseparatecontracts.This percentagemayvarydependingontheservicesprovideddirectlybytheconstructionmanagersuchas hoisting,security,hoardings,setout,permitsandapprovals,industrialrelations,tendering,earlyworks, demolitionetc. SuitableConstructionManagersaretypicallydrawnfromlargercontractingfirms.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

EngagementofaConstructionManagerandthelettingofsubcontractsandmaterialssupplycontractsmust beinaccordancewiththeMinisterialDirections,GuidesandPracticeNotes.ThecontractwiththeConstruction ManagermustspecifythattheConstructionManagerwillbeappointedasthePrincipalContractor'asdefined intheOH&SRegulations,andwillbeprimarilyresponsibleforOH&Sintheconstructionworkplace,includingfor subcontractors.

Probity
Governmentprocurementprinciplesrequirethatprobityintenderingisappliedtoallprojectprocurements. Thekeyissuesofconcernarethatthefollowingstepsoccur:
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Probityispartoftheprocessofprocurementandpermeatesthewholetenderphase Whenprojectsareidentifiedasofsufficientcomplexity,riskorscale(>$10M)aprobityplanisprepared andaprobityadvisormaybeengaged Thereisevidenceretainedtosupportthatprobityissuesidentifiedweredealtwith

Wherenecessaryaprobityadvisororprobityauditorshallreviewtheprocessandcertifyastothesuitability ofthetender,evaluationandawardactivities.Notethattheprobityadvisorisnotinvolvedintheselectionof thesuccessfulcontractorbuttoattesttothesuitabilityofthetenderprocess. Ofparticularinterestwillbethatalltenderersaretreatedequallyandfairly,thatallmaterialiskeptconfidential andthatanaudittrailofcommunicationsanddecisionmakingisretainedforproofofprocess. AProbityPlanTemplateisavailablefromtheBuildingCommissionwebsite http://www.buildingcommission.com.au/foruseonpublicconstructionprojects.Theprobityplantemplate shouldbecustomisedtotakeaccountofprojectspecificrisks,especiallythoseidentifiedintheprojectrisk assessment,theprocurementmethodriskassessment,projectprofilemodellingorstrategicprocurement plan.

AdvertisementofTenderers
AdvertisementofinitialstagesofSelectiveorPublictendersmustbeundertakenby:
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InclusionintheVictorianGovernmentCompositeAdvertisement.ThisisarrangedbytheBranche mailingtotheDepartment'sCorporateCommunicationsUnitaVictorianGovernmentComposite AdvertisementBookingForm'oraPromotionsUnitMediaBookingForm'. AdvertisementontheVictorianGovernmentPurchasingBoardTendersVic'website http://www.tenders.vic.gov.au/.Notethatthiswebsitecanaccommodateuploadedtenderdocuments fordownloadbyprospectivetenderers. OptionaladvertisementinMetropolitanorRegionalnewspapersforworksinRegionalVictoria.

SelectionofTenderers
Aspreviouslystated,themostcommontenderingmethodforcapitalworksprojectsisthe2stageprocess.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

ThisentailsobtainingregistrationsofinterestoruseoftheCSRprequalificationregisterandshortlistingthe mostsuitabletenderers. TheshortlistingoftheExpressionsofIntereststageorCSRshortlistingisfollowedbyadetailedRTF.

Projectsover$200,000
Guidelinesfortenderingproceduresoncapitalworksprojectsinexcessof$200,000arethattendersmustbe soughtfromashortlistofprequalifiedbuildingorspecialistcontractorsorthroughpublicadvertisement:
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Ifadvertised,anindicationofthescopeandsizeoftheprojectshouldbeincludedintheadvertisement butanyreferencetotheestimatedvalueoftheworksshouldnotbeincluded. AdvertisementsaretobeplacedinamajormetropolitanorregionalnewspaperwithintheVictorian GovernmentCompositeAdvertisement,plusontheTendersVic'websiteandifappropriate,inthelocal press Ashortlistoftendererswillthenbepreparedfromtheregistrationofinterestusingagreedkeyselection criteria.

KeySelectionCriteria
Keyselectioncriteriaforshortlistingcontractorswhohaveregisteredtheirinterestinaprojectnormally includebutarenotnecessarilylimitedto:
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G G G G G G G G G G

CompliancewiththemandatoryrequirementssetoutinMinisterialDirections,andassociatedGuidesand PracticeNotes. CompliancewiththemandatoryrequirementsinrespectoftheVictorianGovernment'sOH&Sand IndustrialRelationspolicy Buildingpractitionernumberandregistrationcategory Affiliation Relevantexperience Currentworkload Financialstatus Referees Sizeandstructureofcompany Nominatedpersonnel ACNandABN Environmentalsustainabilitypolicies.

Keyselectioncriteria,specifictoeachproject,mustbedeterminedbytheSPpriortotenderadvertisement. Thisincludes:
G G G

Thelistingofmandatorycriteriawhichmustbemet(thesecriteriaarenotweighted) oVIPPStatementorCertifiedVIPPplan(asapplicableattheRFTstageonly) Othercriteriatobeusedtodifferentiatebetweentenders,includingtheirrespectiveweightings.

NumberofTenderers
TheDepartmentwillnormallyincludebetween3and6tenderersonashortlistandgenerallywillnotbe preparedtoapprovetheacceptanceofatenderwherefewerthanthreecompetitivetendershavebeen sought. However,approvalmaybegiveninexceptionalcircumstancessuchas:
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Whentheurgencyoftheworkisofoverridingsignificance,forexample,itemsofbuildingsafety,summer bushfirepreparednessoritisimperativeforthedeliveryofservicestopatients/clientsandstaff Wheretherearefewerthanthreefirmswhoarecapableofhandlingtheparticularprojectrequirements

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

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Whenfewerthanthreetendershavebeenreceivedinresponsetoanadvertisementandthetendersare within10%oftheagreedestimate.

Ifnotenders/quotationshavebeenreceived,approvalshouldbesoughtfromtheDepartmentregardingthe timingofseekingfurthertenders.

TenderProcess
TenderproceduresmustbeclearlysetoutandrecordedtoensureevidenceoffullcompliancewiththeCode. Careshouldbetakenregardingthereceipt,recording,assessment,confidentialityetc.ofallcommunications includingverbal,writtenandelectronicmethods.Auditsmaybeundertakenatanystageofthetenderprocess byinternalorexternalauditorssuchastheVictorianAuditorGeneral'sOfficeortheOmbudsman.

Stages
Thestandardtenderprocessconsistsof4mainstages
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PreTender, Tender, Evaluationand Award

AsshowninthefollowingTable1StagesoftheTenderProcess'thekeycomponentsofeachstagearelisted, togetherwiththetypicalresponsibilitiesforeachcomponent. Note:Inatwostagetenderprocess,thetenderandevaluationprocessesareeffectivelyrepeatedforboth EOIanddetailedRFT.

SelectionPanel
AnimportantearlystageofthetenderprocessistheformationofatenderSelectionPanel(SP).TheSP (usuallyatleast3members)isdrawnfrommembersofthePCGincludinganAgencyandDepartmentaland consultantsrepresentativee.g.PrincipalConsultantand/ortheQuantitySurveyor. TheSPappointsaChairandalsonominatesasinglepointofcontactfortheinformationofalltenderers.The nominatedcontactpersonshallrecordallcommunicationsregardingthetenderprocess,controlsitevisitsand contactwiththeAgencyonsitepersonnel,respondtotenderersseekingclarification,issueaddendaif required,arrangeSPmeetings,interviewsandensurethestepsintheprocessarefollowed. TheSPresponsibilitiesinclude:
G G G G

TenderbehaviourabideswithrelevantlegislationandtheCode, Declareandmanageanypotentialconflictsofinterest, Ensureprobity,ensureconfidentialityandmaintainanaudittrail Facilitateanynecessaryinspections,briefingsorsiteinductionsprovidedforprospectivetenderers.

Table1StagesoftheTenderProcess
1PreTender Stage
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AppointtheTenderSP(andcheckforconflictsofinterest

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

G

G G

G G

andconfidentiality.Ifnecessaryprepareprobityplan,seek abriefingfromaProbityAdvisor)(PCG) Obtainandretaincertificationregardingconfidentialityand conflictofinterestfromSPmembers(PM) Confirmselectedtenderingmethod(PCG/Departmentto approve) Check&signoffdrawingsandspecificationsandconfirm consistencywithbrief(Consultant/PM) Confirmsuitablepreliminarieshavebeeninsertedintothe documentstoreflectanyspecialrequirements (Consultant/QS/PM) Includetenderrequirements/rulessuchasVIIP,AUSFTA, BankGuarantees,LiquidatedDamages,andanyschedules orothersubmissionstobeincludedwiththetenderand anynecessaryreferencestowebdocuments.(SP/ Consultant/ClientAgency/PM) CheckMarketconditions(QS) Confirmpretenderestimate(CostPlanD)iswithinthe approvedbudget(QS) Confirmpackagestobetendered(Consultant/PM) PreparetenderevaluationKeySelectionCriteriaandtheir respectiveweightings(SP)

2TenderStage (maybe2part dependingon selectedtendering method)

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Selectanappropriatetenderperiodadvertisingdate tendervalidityperiodandclosinglocation,dateandtime (PM/QS/SP) Assembleandchecktenderdocumentsincludingwhere applicable,contractandspecialconditions,drawings, specifications,BillofQuantitiesifapplicable,provisional sums(Consultant/PM) Nominateacontactpersonforqueriesduringthetender period.Insomesituations,prospectivetenderersmayneed toattendorganisedsitevisitsandclientandconsultant briefings.(SP) Ina2stagetenderprocess, oTheEOIstagewillbesimplerandreferencesome requirementsonly. oTheRFTstagewillincludefulldocumentationandcallfor detailedsubmissionsincludingpriceandprogramdetails (Consultant/PM) Arrangetoadvertisetender(PM).Insomeinstancesthis maybeassignedtotheConstructionManagerdepending onthemethodofprocurementselected. Managequeriesandtheissueofanynecessaryaddenda duringthetenderperiod,andifappropriateissuean extensiontothetenderdate(SP). Closetendersatthetimeanddatespecifiedinthetender documents.Wheretendersclosewithinthedepartment's system,thesubmissionsshallbeforwardedtotheSP membersbythedepartment'srepresentativeattendingthe tenderopening(PM)

3EvaluationStage

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

G G

G G

G G

Listandrecordtendersensuringconfidentiallyoftender submissionsandmanagedocumentationsecurity(SP) Assesstendersforconformancewithtenderrequirements andrejectlateornonconformingtenders(SP) Applykeyselectioncriteriaandagreedweightingsto conformingtendersandidentifythebestvaluetenderas thepreferredtender(SP) Clarifyanyuncertainaspectsofthepreferredtender(SP nominatedcontactperson) Undertakerefereechecks(SP) Negotiateanyvariationstothetenderdocuments,suchas optionsandresolveanyconditionalstatements(SP) Ifsuccessfulnegotiationscannotbereachedwiththe preferredtenderer,considerthenextbestvaluetender (SP) Reconfirmbudgetisavailabletoproceed Prepareandsignoffthetenderevaluationand recommendationreport(SP),noteAllTenderSPmembers aretosignoffonthepreferredtendererasthe RecommendedTenderer(SP).

4ContractAward Stage
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G G G G

Submittenderevaluationandrecommendationreportfor approval(SelectionPanel) Obtainendorsement(PCG) Obtainapproval(DepartmentDelegatewithAuthority) AdvisePrincipalofapproval(Department) Awardcontract(Principal)

Thestagesarefornormal'projects,usingstandardcontractdocuments.Thestagesareequallyapplicableto LumpSumandConstructionManagementtenders.

OpeningofTendersandApprovaltoAcceptaTender
Toensurethatproperrecordingofsubmittedtendersiscarriedout,theSPmustadoptaformalprocedure forthereceiptandopeningoftenders.Ifnotusingthedepartment'sformaltenderclosingprocess,tenders aretobeclosedintheHealthService/Agencyofficeswithsuitablefacilitiesandprocesses. Thetenderopeningprocessrequiresthatanopeningpanelofatleast2personsshouldbeconstituted.One ofthesepeoplemustbeanofficerofthedepartmentorAgencywithknowledgeofprobityandconfidentiality. Itisnormalpracticetohaveatenderboxthatcanbesecured(i.e.locked)availableuntiltendercloseandonly tendersreceivedontimeshallbeconsideredforevaluation.Tendersforpubliclyfundedprojectsshallnotbe receivedinconsultant'soffices. Thedateandtimeforreceiptoftendersshouldbeatapredeterminedplace,timeanddayasrequiredbythe Codeandtheopeningoftendersshouldrecordinorderofopeningtherelevanttendersummarydetailsas listedbelow.Anytendersreceivedafterthenominateddateandtimeshallbemarkedassuch,shallremain unopenedandshallbereturnedtothesubmittingparty. Tendersusuallycloseat200PMonaThursday,whichisnoteithersideofapublicholiday.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

TenderOpeningSummaryForm
Thetenderbriefshouldclearlyspecifytheinformationrequiredtobeincludedintenders.Thefollowing informationshallberecordedonthetenderopeningsummaryform:
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Thefulllegalnameofthetenderer ACN/ABNofTenderer BuildingPractitionerNumber Tenderedprice

Notethatwhereatendererprovidesanalternativetender,thisshouldbeincludedonaseparatelineofthe TenderOpeningSummaryForm.

Tenders
TheSParetoensurethattendererssubmitatenderprice,whichisfullyconformingforallworksdescribedin thedocumentationandthattherearenoconditions,exclusionsorexceptions. Tenderersmayofferalternativetenderpricesprovidingthataconformingtenderisalsosubmittedandall technicaldetailsofthealternativeareprovidedincludingperformancecharacteristicsofproposedmaterials, timing,warrantiesandsoforth. TendersmustbeprovidedontheapproveddocumentformatsorinthemannersetoutinthetenderEOIor RFT. Undernocircumstanceswilllatetendersbeconsidered.

Evaluation
Followingtheopening,atenderevaluationshouldbeundertakenandatenderevaluationandrecommendation reportpreparedbytheSPwithinputfromtheProjectManager,PrincipalConsultantandQuantitySurveyor. ApprovaltoacceptatenderisbasedonthetenderevaluationandrecommendationreportbytheSP,and followingendorsementbythePCG.

Negotiation
Whererelevant,alternativeoptionsaredeemedappropriatetoconsider,thetenderprovidesfortheinclusion orexclusionofseparableworkspackages,theSPmay:
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Undertakenegotiationswithascheduleofamendmentstothedocumentsortendertocomplywiththe projectbudget Recordallnegotiationstoclearlyillustratehowthefinaldecisionhasbeenreached TheCodestipulatesthatnegotiationsmustcommencewiththebestvaluetenderandbecompletedprior togoingtonextbestvalueconformingtenderifrequired. Negotiationmayincludeseekingcommentsorclarificationsfromthepreferredtendererregardingoptions oralternativeproposals,wheresavingsmaybeachieved,withoutaffectingthefacilitiesperformance requirements.

ItisimportanttoretainrecordsofthenegotiationssothatagreedchangesbeincorporatedintotheContract andreferencedduringtheContractAdministrationstageoftheproject.

Consideration
ThePCGwillgivedueconsiderationtothetenderevaluationandrecommendationreportfromtheSPand ensureallconditionsoftheAct,MDs,associatedGuides,PracticeNotesandtheCodehavebeenmet.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

Appointment
UponendorsementoftheSPtenderevaluationandrecommendationreportbythePCG,theHealth Service/Agencyshallobtaindepartmentalapprovalbeforeanycommitmentsaremade,contractsareexecuted, letterssent,insurancesandpermitssoughtandworkscommence.

Notification
FollowingtheSPreporttothePCG(withrepresentationfromtheHealthService/AgencyandDepartment) endorsementthepreferredtenderercanbenotifiedoftheirpreferredstatus.Noletterofintentorletterof appointmentshallbeissuedtothepreferredtendereruntilformalnoticehasbeenprovidedbytheMinisteror delegatetothePrincipalofthecontract. Allunsuccessfultenderersshouldalsobenotifiedoftheoutcomefollowingaletterofacceptancebeingissued. UnsuccessfultenderersshouldbeprovidedwiththecontactdetailsofanominatedrepresentativeoftheSP whocanprovidefeedback.Allfeedbackprovidedshouldbepositiveandrelatetothetenderer'sown submissionsoastoassistthetendererwithfuturetenders.Noreferenceshouldbemadetoother submissions,otherthanthenameandamountofthesuccessfultender. Theappointmentofacontractorshallalsobepubliclynotified,suchasthroughtheTendersVic'website.

ProceduresRequiredforDepartmentalProjects
Astandardapproachtopreandposttenderacceptance,forinstanceswheretheprincipaliseitherthe SecretaryortheMinister,issetoutintheProceduresRequiredforDepartmentalProjectsChecklist.

TenderEvaluationandRecommendationReport
ThepurposeofthissectionistoalertHealthServices/AgenciesandConsultantsinvolvedinmanagingprojects oftheinformationtobeincludedinthetenderevaluationandrecommendationreportinordertocomplywith process,probityandauditrequirements. Inaccordancewithindustrypracticeandgovernmentauditrequirements,thedepartmentwillcarryout randomindependentauditsofthetenderingprocessusedinawardingcontracts.Theadministrativetimeofall partiesinvolvedintheauditprocesscanbeminimisedifrelevantinformationisincludedinthetender evaluationandrecommendationreport. TheCoderequirementsneedtobeadequatelycovered.Requirementsmaybeincludedinthebodyofthe report,asattachmentsorassummariesasapplicable.

TypicalInclusionsforTenderEvaluationandRecommendationReport
Tender/Scope
G G G

Briefdescriptionofthescopeofworksbeingtendered Proposedprocurementmethod NominatethePrincipaltothecontract

PreTenderEstimate

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

G G

CostPlanDestimateofbuildingworkstendered Dateestimateprepared.

TypeofTender
G G G

Expressionofinterestandshortlistincludingthenamesofshortlistedtenderersor Prequalifiedtenderor Publictender.

TenderDocuments
G G G

ConditionsofTenderorindicatestandardconditionsused ContractConditionsandSpecialConditionsorindicatestandardformsused Refertodocumentationworkingdrawings,specificationandBofQwhereapplicable(tobemade availableinfullifrequired) TenderProformasandscheduleswhicharerequiredtenderinclusions(thesemayincludewebbased references) BillofQuantitiesifincluded.

KeySelectionCriteria
G G G

PredeterminedKeySelectionCriteria(KSC) IdentificationofMandatoryKSC's WeightingsofKSC's

TenderAdvertisement
G G G G

Copyofadvertisementanddateoftenderadvertisement Nameofnewspapersusedforadvertisement Tenderperiodincludingclosingdate,timeandplace Nominatedcontactforqueries.

Addenda(andClarifications)IssuedDuringTenderPeriod
G G G G

RefertoLogofallqueriesreceived,togetherwithresponses(tobemadeavailableinfullifrequired) Copyofeachwrittenaddendumissued Copyofadvicetotenderersiftheissueofaddendacausedanextensiontothetenderperiod Confirmationthatalltenderersreceivedalladdendaandincorporatedtheaddendaintotheirtender

TenderOpening
G

Formal/documentedprocedureadoptedwithdetailsofwhere,whenandnamesofpersonsresponsible foropeningandrecordingtendersreceived Shortlistedtenderers.Tendererswhohavecollectedtenderdocumentsanddidnotsubmitatenderare tobenoted.Itisgoodpracticetocontactnontenderersandobtainanexplanationforatendernot beingsubmitted.

TenderValidityPeriod
G

Inweeksordayswithexpirycalendardatetobeincluded.Thisisusually90days.

Note:Topreventtendersfromlapsing,itshallbetheresponsibilityofthePrincipalConsultanttoseek,onthe Agency'sbehalf,confirmationfromtenderersforanextensionofthevalidityperiodifatenderisnotawarded beforetheexpiryoftheoriginalvalidityperiod. TendersReceived

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

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CopyoftheTenderOpeningSummaryForm.

TenderEvaluation
Ananalysisoftendersagainsteachpredeterminedkeycriteriaincluding:
G G G G G G G G G G G

Methodofdelivery Cost Time Quality EnvironmentalSustainability,suchasmaterials,resources,waterandwastemanagement Team OH&SandIRCompliancewithGovernmentrequirementsinMinisterialDirections(mandatory) VIPPcompliance,beingaCertifiedVIPPPlanorVIPPStatement(dependingontenderedvalue) Rankingoftendersoftensummarisedintheformofamatrix Subcontractorapprovalofnominations Referencechecks. Rankingoftendersoftensummarisedintheformofamatrix Subcontractorapprovalofnominations Referencechecks.

G G G

FinancialCapacity
WhereaHealthService/Agencyordepartmentistoenterintoacontracttheyshouldconfirmthattheir financialandlegaladvisersaresatisfiedwiththefinancialandlegalstatusoftherecommendedtenderer. Foracontractperceivedtobehighrisk,complexorlarge($5Mormore)anindependentassessmentof financialviabilityistobeundertakenandthelevelofsurety(generallyintheformofunconditionalbank undertakings)istobesetaccordingly.

ProjectRisks
Severalstudiesofdisputesinthebuildingandconstructionindustryhaverevealedthatamajorcauseof disputation(includinglitigation)resultsfromthepoormanagementofrisks.Disputesarecostly,oftencause projectdelays,andshouldbeavoidedwhereverpossiblethroughtheproactivemanagementofrisk.Major causesofdisputesarisefrom:
G

Poorqualitydocumentation(ambiguous,inconsistentorincompletedrawingsandspecificationaretypical mattersofconcern)anditisimportantthattheconsultantattestastothesuitabilityofthedocuments asfitforpurpose. Anotherareaofconcernarisesfromclientinitiatedchangesandthedisruptiontoallpartiescancreate extensiveproblemsforthecontractorandconsultantsanditisimportantthattheclientcarefully considerthesuitabilitybeforeagreeingtothedesignandsignoffaccordingly.

ProjectrisksexistatallstagesofacapitalworksprojectandthePCGorgovernancegroupshouldidentifyand incorporatekeyrisksintoaProjectRiskRegister.TheRegistershouldidentifyrisksandhavestrategiesfor riskmitigationitshouldbekeptuptodatethroughouttheproject. TheSPshallrevisittheRiskRegistertoconfirmthatidentifiedrisksassociatedwithtenderinghavebeen effectivelymanagedwithspecificattentiontorisksidentifiedforthetenderingprocess. Theexperienceandqualificationsoftheproposedcontractor'smanagement,supervisionandotherstaffisan

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importantriskfactor.Otherrisksincludeissuesofprobity,transparency,timeliness,security,scheduleof ratesandchargesetc.Risksareusuallymanagedthroughinclusioninthekeyselectioncriteriaandmayaffect therequiredlevelofcontractsecuritytobeincorporatedintothecontract. ContractorrelatedrisksshouldbeascertainedattheEOIstageandattheRFTforatwostagetender process,andshouldbeconsideredinthetenderevaluation.

ProjectTimeframe
TimelinessisimportanttothePrincipalandoccupiersoffacilities.Theexperienceofthedepartmentand projectconsultantsshouldbeusedtodeveloparealisticprojecttimeframecoveringallstagesfromfeasibility studytotheendofoccupiedcommissioning.Asaprojectprogresses,theprojecttimeframeisrevisedand thispermitsmoredetailedplanningbytheoccupiersforexampleregardingfitout,commissioningand occupation. Atthetenderstage,atentativeprogramwillbesoughtfromtenderers,showinghowtheyintendtodeliver theprojectwithinthecontractperiodandthelevelofallowabledelayscalledfloat'intheirprogram.The contractprogramshouldincludeallowancesforexpecteddelayscausedbyseasonalweatherconditionsand unexpectedsiteconditions. Thecontractconditionscoverhowdelayandslippagearemanagedduringthecontractstage,butwheretime iscriticaltotheAgency,HealthServiceordepartmentnegotiationsatthetenderevaluationstagemayinclude thetendererscapacitytoaccelerateactivitiestomakeupforlosttime.

ValueforMoney
Thetenderevaluationshouldconsidervalueformoneyasakeyevaluationcriterion.Thiswillincludefactors suchaslifecyclecosts,alternativedetails/finishesoffered,etc.Operationsandmaintenancecostscanbemore significantwherethefacilityneedstobedecantedorservicedeliveryisinterruptedwhilereplacementsor upgradesoccurandtheinclusionofacheaperinitialtenderpricemayneedtobecriticallyappraisedwhen consideringthewiderimplicationsfortheagency.Thismayresultinthelowesttendernotbeingrecommended foracceptance.

NonConformingTenders
Allnonconformingtenderersaretobenotedwithreasonsprovided,forexample:
G G G G G G G G

Latetender Exclusionsfromtenderprice FailuretoprovidecertifiedVIPPplan Qualificationonmaterials/equipmentwhicharedifferentfromthosespecified Qualificationonperformancecriteriaofmechanicalorelectricalequipment Qualificationontimeforcompletionwhichisdifferenttothatspecified Qualificationonpricesubmitted,e.g.Riseandfallbasisinsteadoffixedprice Noncompliancewithstatutorydocuments.

TenderRecommendationPrinciples
G

G G G

Awardshouldbebasedonthebestvalueconformingtenderinconjunctionwithprojectspecificsand generaltenderselectioncriteria Ifanonlowesttenderhasbeenselectedthereasonssupportingtheselectionshouldbereported Confirmallnonconformingtendersarerejected Confirmallunsuccessfultendererswillbeformallyinformedafterawardofacontracttothesuccessful tenderer.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

AttachmentstobeIncluded Thefollowingattachmentsaretobeincludedasanappendixtothetenderrecommendationreport:
G

G G

SummaryofshortlistingprocessorminutesofprequalificationmeetingwiththeContractSupplier Register Copyoftenderadvertisement Copyofthetenderopeningsummaryformanddetailsofanytendersrejectedbecausetheywerenot receivedontime Statementfromprobityadvisor,whereappropriate.

ConditionsofContract
VictorianGovernmentapprovedconditionsofcontractmustbeusedandmustbeincorporatedintothetender documents.Theyconsistof:
G G

Conditionsoftender.ConsultantsshouldconsulttheDepartmenttoobtainthecurrentversion. LumpsumgeneralconditionsofcontractAS21241992.Thisformofcontractisusedalmost universallybyGovernmentPrincipalsthroughoutAustraliabecauseofitsallocationofrisk(comparedto laterversionswhicharenotconsideredacceptable). AnnexurePartAtoconditionsofcontractAS21241992.Thisdocumentprovidesspecificcontract detailsandselectsoptions,wherethegeneralconditionsofcontracthasprovisionforalternatives. ConsultantsshouldconsulttheDepartment'sProjectManagerforassistanceinfillingouttheAnnexure. Itwillforexamplecontaindetailsofcontractsecurityrequirementstoaddressperceivedcontractrisks. SpecialconditionstolumpsumcontractAS21241992.ConsultantsshouldconsulttheDepartment toobtainthecurrentversion.TheSpecialConditionsareincludedinthecontractthroughAnnexurePart BtoAS21241992.

InadditiontotheConditionsofContractabove,ConsultantsshouldgiveconsiderationtotheDepartmental considerations,whichfollowthissection. AstandardcontractforConstructionManagementisavailablebyapplicationtotheDepartment.

DepartmentalConsiderationforContractConditions

VariationsforLatentConditions
Thetendererisrequiredtoacquaintitselfwiththesiteandallphysicalconditionsonthesiteorits surroundings.AS21241992Clause12definesLatentConditionsessentiallyasthosephysicalconditionsor artificialobstructionsencounteredonthesitebythecontractorduringtheexecutionoftheworkwhich:
G G

Differmateriallyfromthosewhichwouldhavebeenascertainablebythecontractor Couldnotreasonablyhavebeenanticipatedatthedateoftender.

Latentconditionsmayrelatetobuildingworks,servicesorsubsoilconditions.

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Clause12thenincludesthenotificationproceduresandconditionsunderwhichtheContractormayobtain additionalpayment,viaavariation,wheresuchaLatentConditionisencountered.

InfectionControlDuringConstruction
Thissectionappliestorelevanthealthcarefacilitiesremainingoccupiedwhilstalterationsornewworksare carriedout. Duringtheconstruction,demolitionorrenovationofbuildings,increasedairborneparticlesoriginatingfrom drysoil,dustorfragmentingbuildingmaterials,andexhaustsandemissionsfromplantandequipmentare common.Thesecanbeexaggeratedbyprevailingclimaticconditions.Resultantairpollutioncancausehazards anddiscomforttopatients,stafforvisitorsby:
G

G G

Increasedparticulatematterinbreathingairthisisobviouslyimportantforpatientswithrespiratory disease Conveyingtoxicsubstances,e.g.asbestosfibres Conveyinganincreasedloadofpathogenicmicroorganisms,e.g.fungi.Thishasresultedinserious diseaseinsomepatientssuchasthosewhoareimmunocompromised.

TheStandingCommitteeonInfectionControlhasdrawnupthefollowinginterimrecommendationsin consultationwiththeDepartment. TheInfectionControlNurse(ICN),InfectionControlCommittee(ICC)orInfectionControlAdviser(ICA)should beconsultedatthetimebuildingconstruction,demolitionorrenovationisbeingplanned.Thatissothatany infectioncontrolorothermatter,whichcouldaffectpatientcare,isbroughttotheattentionoftheprincipal andthesuperintendentpriortoworkcommencing. TheICN,ICCorICAshouldbeadvisedofthedateofcommencementofbuildingworksandtheiranticipated duration.Itisadvisablefortheconsultanttoconsultwiththefacility'sinfectioncontroller/sandthehealth carefacilityengineerorfacilitymanagertoprovideappropriateprotection. Therelevantpointsbelowshouldbeincorporatedinthecontractfortheworks.Theserequirementsdonot coverotherimportantmatterstobeconsidered,whichmayaffectpatientcaresuchasnoisepollutionor vibration.
G

TheContractorshallberesponsibleforsuppressingallairpollutionemanatingfromtheworksiteand shallensureconstructionactivitiescauseminimalinterferencewiththeoperationandfunctionofthe hospital. TheContractorshallprovideconstructionbarriersbetweentheworksiteandtherestofthehealthcare facilitywithparticularattentiontoareassuchaspatientcareareas,laboratories,clinicalareas,kitchen anddiningfacilities.Airintakeareasspecificallyaretobeprotectedtoensurethatbuildingsarekeptfree ofcontamination. Forconstruction/renovationareasinsidehospitalbuildings,theContractorshallensurethattheairflow isdirectedawayfromadjacentpatientareaswherepracticaltodosoandotherwisetakestepstoensure contaminatedairisnotintroducedintoadjacentoccupiedareas. TheContractorshallensurethatgoodsandpeopletrafficfromconstructionandsetdownareasare directedawayfrompatientcareareasasmuchasispractical. Theworksitewhereitabutsoccupiedareasshouldbecleanedregularlytheintervalsbetweencleaning shouldbebasedonthenatureoftheworkandtheneedtominimiseairpollution.

WorkinginCustodial,ForensicorSecureFacilities
Forthesesituations,tenderersaretocomplywithadditionalrequirements.Thesemayextendtodetailed briefings,inductionsandinstructionsregardingsiteappearance,workmethods,access,setdownandstorage areasandspecialisedrequirementsincludingthecontroloftools,utensils,equipmentandmaterialsthatmay servetobeusedasweapons,escapemeansorforselfharm.FullparticipationintheAgencyinduction

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programisrequired.

AdvancePayment
Paymentsinadvancefortheprovisionofmaterials,plantandequipmentisnotusuallyundertaken.However, prepaymentmaybemadewhereitisconsideredappropriatebytheSuperintendentandapprovedbythe Network/Agency(e.g.depositforspecialiseditemsrequiringlongleadtimesorimporteditemsofequipment fromoverseas).Attentionneedstobepaidtoensurethat:
G G G

Prepaymentsareidentifiedandadjustedintheprogresscertificate AdditionalBanksecurityand/orinsurancemustbeobtainedinfavouroftheNetwork/Agency Insurancetocaterforcurrencyfluctuationsisincluded.

ConsultantstoNote:TheprovisionsofAS21241992,Clause42.4.Onparticularprojects,ifpaymentistobe consideredatanytimeduringtheconstructionperiodofthework,thenAlternate2mustbeadopted,witha modificationtorequireadditionalsecurityasperAlternate1.

GST
Allgoodsandmaterials(aswellasservicessuppliedunderthecontract),whichareincorporatedintothe works,aresubjecttoGST.

IndustrialRelationsInstruments
TheCodeofPracticefortheBuildingandConstructionIndustrycoversthepermissibleformsofIndustrial RelationsInstrumentsinaccordancewithrelevantFederalandStateAwards.Itneedstobeemphasisedthat neitherCashinHand'paymentsnorpyramidsubcontractingarepermitted. TheFederalCodeofConductshallalsoapplytoapplicableprojects. OtherpointstobedetailedinthedocumentsareinrelationtoSiteAmenitiesforconstructionworkersandthe Superintendent,FirstAid,Safety,HearingProtection,Apprentices,WorkerCompensation,LongServiceLeave, ProtectiveClothing,DisputesProcedureandAllowances.

PermitSystems
Agencyspecificpermitsystemsorspecificrequirementsneedtobespecifiedwhereworksoccuronfunctioning facilities.Permitapprovalsystemsshouldconformtothesystemsalreadyinplaceforthefacilityandmay cover:
G G G

Hotwork Penetrationsinthestructure,particularlyinfireratedcomponents Temporarydisconnectionofserviceswheretappingsandextensionsarerequiredorwherenecessaryto ensuresafeworkingmethods. Visitorand/orsecurityarrangements

ConstructionProgramandCashFlowInformation
AConstructionProgramistobeprovidedbytheTendererandacopyistobeforwardedtotheDepartment andtheNetwork/Agency. Thisprogramshouldshow:
G G

Durationtimeoftheproject Startandfinishtimesforcriticalactivities.ThiswillformthebasisforassessmentbytheSuperintendent

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G G

ofExtensionofTimeclaims Monthlycashflow Allowancesforexpecteddelayssuchasseasonalweatherconditions.

Theseitemsaretobeupdatedasrequiredduringtheprojectduration.

SiteMeetings
Thecontractoristoarrangeforsitemeetingsthroughoutthedurationofthecontract.Itisrecommended thatthesebeheldfortnightly.CopiesofMinutesofmeetingsaretobeforwardedtotheDepartment'sProject Manager.

Signboard
Asignboardprovidingprojectinformationshallbeerectedonthesiteoftheworks.Theformatandwording onthesignboardshallbeasprescribedintheConstructionSiteSignBoards'Planning&Development GuidelineorCommunityInformationBillboards'totherequirementsoftheDepartmentofPremier&Cabinet andshallbesubmittedtotheDepartmentforapproval.

LiquidatedDamagesandotherScheduledSums
CarefulconsiderationisrequiredoftheliquidatedDamagesandprovisionalandothersumsincludedin contractschedules.LiquidatedDamagesinparticularshouldbeajustifiablepreestimateofthedamageslikely tobesufferedbythePrincipalduetolatedeliveryoftheworksbythecontractor,andshouldnotcontaina penalty'element.

Checklists
Thefollowingchecklistsrelatetothecontentofthisguideline.

Checklists
TenderingEvaluationandAcceptanceChecklist(MSWord,104.5KB) TheTendering,EvaluationandAcceptancechecklististobecompletedandsignedwitheachprojectand senttotheappropriateDepartmentofHealthProjectManager. ProceduresRequiredforDHProjectsChecklist(MSWord,43.5KB) TheProcedureschecklististobecompletedinadditiontothe'Tendering,EvaluationandAcceptance Checklist'forDepartmentalprojects.ItistobesenttotheappropriateDepartmentofHealthProject Manager.

ProFormas
Thefollowingproformasrelatetothecontentofthisguideline.

ProFormas

TenderOpeningSummary(MSWord,33.0KB) Thisformistobecompletedanddocumentsplacedonfileforeachproject.ForDepartmentalProjects,use thestandardform.

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State Government of Victoria, Australia, Department of Health

Tendering, Evaluation and Acceptance

ExpressionofInterest(EOI)EvaluationForm(MSWord,71.5KB) ThisFormistobeusedforeachprojecttenderingprocesstoensurefairandcomparabletender evaluations. AdditionalTenderInformation(MSWord,30.0KB) TheadditionalTenderInformationRequiredformistobecompletedasrequired. StatutoryDeclaration(MSWord,26.5KB) TheStatutoryDeclarationFormistobecompletedbyeachtenderer. TenderFormVIPPStatement(MSWord,40.5KB) Thisformistobecompletedbyeachtendererwhereapplicable.

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