Procurement strategy - Start Dredging
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Procurement strategy

During the decision-making process, a general plan containing the scope of work is drafted. Once the plan has been approved, it is time to select the right contractor.

Procurement strategy

In order to select a contractor, the project has to be specified in greater detail and the contracting and/or tender strategy has to be determined. The employer can decide on direct contracting, shortlist tender or open tender, with or without pre-qualification. If the financing of a project needs public funds, it is often standard procedure to invite more tenderers.

Procurement preparation by the employer

Contractors require detailed information on the project to be able to prepare a tender offer. Therefore, the employer will start to collect data for the tender documents. The employing party’s expert staff can prepare this information or they can leave most of these activities to a consulting engineering company. Information that is gathered includes:

  • Dimensions of the works, including the alignment of the ports and channels, or other dredging areas, the designed depth in the specified areas and, in case of reclamation, the required level of the fill
  • Detailed surveys of the areas to be dredged or reclaimed
  • Types of soil, especially in remote areas where potential contractors have problems making their own site investigations
  • Other physical conditions. Although basic information can be found in nautical charts, pilots and tidal almanacs, tenderers will be pleased with detailed information on tides, waves, currents and monsoons in the working areas
  • Measurement and payment systems. The measurements of the dredged volumes can be done either in situ or by transported volumes. Payment can, for example, be based on the dredged volumes or on a fixed price
  • Estimated quantities to be dredged and other project items to be executed
  • For underwater disposal via hopper doors, the survey chart and coordinates of the area have to be included in the tender documents
  • For reclamation, beach nourishment or other landfill, the dimensions and the required level must be determined. If settlement of the underground of the fill can be expected, soil investigations for the prediction of the settlement are to be made in order to achieve the correct level of the fill
  • In case of contaminated dredged materials, the employer has to give instructions for storage. The contractors need to be informed about the rate of pollution in order to take measures for the protection of their personnel and equipment
  • Deadlines – when does the project need to be completed?
  • Maintenance work during the duration of the project. Some dredging projects require maintenance of the dredged areas until completion of the total projects. This should be included in the time schedule and cost estimation
  • Cost estimation – after collection of all possible data of the project, a total cost estimation, including employer’s costs and contract costs, has to be prepared and compared with the available funds. In case of discrepancy, either the funds or the project specifications have to be altered
  • Tender procedures and date – the employer has to determine the type of contract and the tender procedure. Depending on the urgency of the project, it is possible to make a choice for direct contracting, shortlist tender or open tender, with or without pre-qualification.

Invitation to tender

After preparing the tender specifications, the total packet of tender documents will be composed – including tender notice, form of tender, contract conditions, drawings, surveys, soil information, form of bid bond (if any), and form of performance bond. Then, contractors are invited to submit their tenders. In an open tender, all contractors can bid on the project. In a shortlist tender, only pre-qualified contractors or selected contractors are invited to submit a proposal.

Preparation of a tender by the contractor

Regardless of whether the employer opts for direct contracting, a shortlist tender or an open tender, the contractor will have to prepare a bid based on the information provided by the employer. Usually, there is an opportunity to ask questions. In this phase, the contractor will also check all possible general aspects, such as:

  • Exchange rate and inflation
  • Availability and costs of fuel
  • Suppliers and repair facilities
  • Availability of plant and equipment
  • Local labour and the role of the unions
  • Taxes, duties and fees
  • Licences and permits
  • Travel and accommodation costs.

Contractors generally have a local agent or representative who investigates a great deal of these matters. The contractor will start to put together a working plan to be able to calculate the costs and come up with a bid. Occasionally an employer will also ask for a technical proposal or design.

Awarding the contract

After the closing date of the tender, the employer will evaluate the bids and proposals. If necessary, additional interviews or questionnaires are carried out. The decision to opt for a certain contractor is generally not just based on price alone, but on the best value for money. The experience of the contractor, technical knowledge, dredging fleet, risk management, quality management, and health and safety records are, for instance, also taken into account.

Dredging contract

Once a contractor has been selected, the two parties will have to agree on the contract details. Different contract types are used in the dredging industry.After the contract has been signed, the contractor will start to plan the execution of the operation.
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