contracting with bmw€¦ · contracting with bmw. ... super’s rep bmw general sub-account...

Department of Finance

Building Management and

Works (BMW)

October 2016

Contracting with BMW

Building Management and Works

Aim

Objective

To provide contractors a greater understanding of doing

business with BMW


Agenda

1. BMW policies and procedures

2. Tendering for BMW work (part 1)

3. BMW tender management

4. Tendering for BMW work (part 2)


BMW’s role

BMW manages the State Government’s non-

residential building program

New building projects

Alterations and additions to existing buildings

Maintenance of existing buildings

Office accommodation for Government employees


Meet the presenters

Tony

Halberg

Director,

Policy and

Procurement

Services

Grayam

Sandover

Project

Director,

Infrastructure

Delivery

Anna

Rechichi

Assistant

Director, Policy

and Tendering

Services


Tony Halberg

Director, Policy and

Procurement Services

October 2016

BMW policies and procedures


Agenda

Availability of work

Access to work

How decisions are made

Supporting local businesses

Prequalification

Contractor performance appraisal framework

Project Bank Accounts


Availability of work

Works contracts over $250,000 will be tendered

Early tender advice

Publicly announced projects are available on our website


Access to work

Submit a conforming tender

In most cases for contracts valued greater than $500,000

o Be prequalified

o Meet financial requirements

o Be a registered builder

No insolvency history


How decisions are made

1. Value for money

2. Generally lowest price and conforming

3. Multiple decision makers



Preferences

Regional tendering price preferences

o Regional business (5%, maximum $250,000)

o Regional content (5%, maximum $250,000)

Aboriginal enterprise and employment trading preference

o Registered Aboriginal enterprise

o Aboriginal employees or subcontractors

o Maximum $100,000

Imported content

o Overseas materials (20% impost)



Example of preferences

Scenario: you run Acme Builders Pty Ltd and you are located in

Perth. You bid for a project in Geraldton, tender is $2M.

o $1M to be provided by local subcontractors in Geraldton

o $200,000 to be provided by an Aboriginal business

o You plan to import goods to the value of $100,000

Bid Regional Business reference

Regional Content

Preference

Aboriginal Preference

Imported Content Impost

Adjusted Price for

ComparativeEvaluation

$2,000,000 nil minus$50,000

($1M x 5%)

minus$20,000

($200,000 x 10%)

plus$20,000

($100,000 x 20%)

$1,950,000


Prequalification

Identifies capable building contractors

Streamlines tendering processes

Generally required for construction projects

Not required for other types of projects


Prequalification

Criteria

Company profile

o Organisational structure

o Stability of organisation

Technical capacity

o Company experience

o Human resources

o Systems and processes

Financial capacity

o Business risk assessment


To become prequalified

1. Review our website to identify requirements

2. Consider your experience

3. Consider our financial requirements

4. Complete the application pack

5. BMW will assess your application


Prequalification

Financial Capacity (business risk assessments)

Minimum financial criteria

o 5% of turnover in net tangible assets

o 10% of the top of the prequalification value in working capital

Set a maximum workload capacity, Maximum Aggregate

Contract Value (MACV)

o highest turnover last 3 years plus a 30% uplift


Prequalification

Example of a business risk assessment

Turnover to net tangible assets

o Net tangible assets $600,000. Turnover $6M

o Ratio is 10%

Working capital to the top of the prequalification value

o Working capital $500,000. Top of prequalification value $3M

o Ratio is 17%

BMW sets the MACV

o Turnover $6M, plus 30% uplift

o MACV is $7.8M

Contractor is Low risk


Prequalification

Where risk mitigating strategies

can be implemented

o Medium risk

• Maximum Contract Value

• Guarantor

Where risk mitigating strategies

cannot be implemented

o High risk

• Prequalification declined

• Contracts not awarded

Business risk assessment outcomes


Prequalification

When tendering for a contract greater than

$500,000

You will be subject to another business risk assessment

Recalculate turnover/assets ratio and working capital

Compare workload against the MACV

o Workload is $5M. MACV set at $7.8M

o Ratio is 64%


Contractor performance appraisal framework

Contractor performance reports

Aim

When are reports undertaken

Who completes the report

Right of reply


Contractor Performance Reports

Criteria

1. Cost management

2. Time management

3. Contract administration

4. Quality management

5. Resource management

6. Communication and relationships

7. Occupational health and safety, and environment


Project Bank Accounts:

An Overview

22


Background

From 30 September PBAs will apply to tenders valued

between $1.5m and $100m that use the AS2124 general

conditions of contract (incl. GST).

23


A PBA is…

A project specific bank account set up by the head contractor

An account operated consistent with the trust agreement

A step in the payment process, not a pre-funded bank account

24


PBAs will…

Speed up the payment process for the next tier in the supply

chain.

Provide a degree of insolvency protection.

Increase transparency and accountability in the payment

process.

25


PBAs don’t…

Alter the contractual rights and responsibilities of contractors to:

o Select subcontractors and manage their performance

o Withhold payments when obligations are not satisfied

o Seek adjudication or commence legal action when in dispute (also

applies to subcontractors)

26

PBAs will apply…

AS2124 contract and

Where the tendered price is between $1.5 and $100 million

(inc. GST)

Subcontractors are being used on the contract

27

How a PBA is set up

Within 10 business days of Trust Deed being signed

Test payment of $1 made through PBA to contractor.

Within 28 calendar days of award

Trust Deed executed by contractor and BMW

PBA Agreement signed by contractor, BMW & Bank

Deed of Release or Priority Deed provided

Contract Award (Day 0)

Letter of award sent to contractor

28

PBA Progress Payments

Contractor submits payment

claim

SR issues payment

certificate

BMW assesses monthly payment

docs

BMW deposits funds to

general sub-account

Bank disburses funds to

contractor, joined subbies and retention

account

29

Payment Instruction

Payment Report

Statutory Declaration


Payment Process – Step by Step

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Super’s Rep

BMW

BANK (PBA provider)

General Account

Retention Account

30


1. Subcontractors Claim Payment from Head Contractor

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Super’s Rep

BMW

BANK (PBA provider)

General Sub-Account

RetentionSub-Account

31


2. Head Contractor Submits Payment Claim to Superintendent’s

Representative

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Super’s Rep

BMW

BANK (PBA provider)

General Sub-Account


32


3. Superintendent’s Representative Assesses Claim and

Issues Payment Certificate to Head Contractor and BMW

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Within 14 days of payment claim

being received

Super’s Rep

BMW

BANK (PBA provider)

General Sub-Account


33


4. Head Contractor submits Progress Payment Instruction and a

modified Statutory Declaration and Payment Report to BMW

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Within 19 days of payment claim being

received

Super’s Rep

BMW

BANK (PBA provider)

General Sub-Account


34


BANK (PBA provider)

5. BMW Deposits Payment into General Project Bank Account –

Unless there are Anomalies with the Statutory Declaration

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Super’s Rep

BMW

General Sub-Account


35


BANK (PBA provider)

General Sub-Account


6. Bank (Simultaneously) Pays Head Contractor, Subcontractors,

and Retention Account as Specified in Payment Instruction

Subcontractor #1

Subcontractor #2

Subcontractor #3

Subcontractor #4

Supplier #1

Head Contractor

Within 28 days of payment claim

being received

Super’s Rep

BMW

36


Grayam Sandover

Project Director,

Infrastructure DeliveryOctober 2016

Tendering for BMW work (part 1)


Agenda

Tender shells

BMW form of tender

Responding to tenders


Tender Shells

1. Goods and services

2. Minor works

3. Medium works (AS4906)

4. AS2124

5. AS4300

6. Bespoke


BMW form of tender

Common components

Tendering conditions

Conditions of contract

Scope

Response

Qualitative criteria

o Related to project

o Must be answered

o Can not be assumed

o Will be compared



Response format will be in the tender document

BMW forms of tender

Ready carefully

Respond appropriately and fully



Common errors

Incomplete forms

Inconsistent information

Incorrect addresses

Wrong entities (ABN, ACN, trading names)

No signature

Imposing conditions

Alternative bids

Wrong price


Anna Rechichi

Assistant Director, Policy

and Tendering ServicesOctober 2016

BMW’s tender management


Agenda

Tenders office

Tenders WA website

Tender lodgement

Closing of tenders


Tenders office

Optima Building

16 Parkland Road, Osborne Park

Tenders for works, goods and services are

managed for:

24 Government agencies


Government Procurement


Tenders WA website

• Advertised public requests

• Lodge tenders electronically

• Published contractual awards


Tenders WA website

Why register

Email notifications

Set up profile

Help desk assistance – (08) 6551 2020


Tender lodgement

How to lodge a tender

Electronic Tender Lodgement (ETL)

Delivery by hand or courier

Post: Locked Bag 11,Osborne Park BC, WA 6916

Fax: (08) 6551 2333 – being phased out


Tender lodgement

2:30pm

2:31pm


Closing of tenders

Tenders close 2:30pm Tuesday to Friday

Tenders do not close:

o on a Monday or

o on the day after a public holiday

Late tenders – advice in writing of all offers not received by

2.30pm

Preparation of contracts for signing

Release of submitted prices – split list, no correlation

o tenderers – alpha order

o prices – lowest to highest


Tender lodgement

2:30pm

2:31pm


Grayam Sandover

Project Director,

Infrastructure DeliveryOctober 2016

Tendering for BMW work (part 2)


Agenda

Tender evaluation process

Formal instrument of agreement

Tendering tips


Tender evaluation process

receive tender

clarification

tender analysis

business risk assessment

Tender Review

Committee

approvals

letter of contract award


Formal instrument of agreement

Sets out all of the documents which comprise the contract

documents

Applicable to all contracts

Once awarded, can be signed at the Tenders Office


Top 9 tendering tips

1. Read documents thoroughly – don't make assumptions

2. Respond as requested

3. State the legal entity name clearly

4. Visit the site if mandatory - a pre-requisite to tendering

5. Ensure you have the financial capacity – a major part of

evaluation

6. Check the qualitative criteria

7. Check closing date, time and location

8. Leave yourself time

9. Ask questions


Don’t be late

2:30pm

2:31pm


Contact us

Feedback Officer

(08) 6551 1888

[email protected]

mailto:[email protected]

contracting with bmw€¦ · contracting with bmw. ... super’s rep bmw general sub-account...

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