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In the final analysis, whether the two-stage route adds value will depend more on the quality of the design information and post-contract relationships than on the basis on which the contract was bought. However, in an increasingly time-driven and consolidated tender market and with a greater transfer of design responsibility to the supply chain, many clients find themselves having little option but to go down the two-stage route. Where clients need lump-sum cost commitment from their contractor and they have the time available, single-stage tendering continues to be a viable route for obtaining good-quality bids. Furthermore, for clients following a public sector OJEU procedure, limits on their discretion to engage in any negotiation with the preferred tenderer effectively eliminates the opportunity to drive value into the bid.
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So is two-stage tendering a mechanism that enables a more collaborative approach to be adopted by clients and their contractors, while still delivering value for money, or does its use potentially compromise a client’s commercial position? The answer is somewhere in between - in that the main benefit of two-stage tendering, speed of programme, inevitably comes at the price of some degree of cost premium. Value and cost certainty still count for a great deal in the overall balance of most clients’ priorities and as a result, some form of competitive tendering will continue to be used on a large number of projects. Indeed, there is evidence to demonstrate that, where lump-sum contracts are in use, this approach can still deliver good-value solutions if the process is not abused. Although many commentators now recommend the adoption of negotiation and -based arrangements, many clients continue to seek the reassurance of some element of competition in their tendering processes. Historically, clients have mostly chosen contractors on the basis of lowest cost. This seemingly innocuous objective has become increasingly more difficult to achieve as programmes have accelerated and as both employers and contractors seek, in particular, to strengthen their position with regard to the apportionment of risk. Introduction The objective of contract procurement is broadly to identify an appropriately skilled contractor and to secure an appointment on the basis of the right team, agreed costs, programme and appropriate transfer of risk.