Combined Heat and Power Focus

DECC's Free resource supporting the development of CHP

CHP Helpline 0845 365 5153 or 01235 753033

Project Design & Management

Tender preparation

The preparation of a design and manage tender is a major undertaking, since it involves overall design of the project and then the specification and tendering of a number of separate equipment or services packages. A typical project would consist of between five and ten tender packages, each highly detailed in terms of equipment and service supply. Where a number of detailed specifications are prepared, a vital area of the design work is to ensure that the interfaces between each one is correctly managed and specified, to ensure compatibility. The detailed nature of the specifications improves the chances of achieving rapid, compliant and cost-effective bids.

Inviting suppliers to bid

The number of suppliers invited to quote for each component package should be limited to the minimum necessary to ensure that specified requirements are met at the best possible price. It is often worth asking potential tenderers to demonstrate their experience and capabilities by supplying examples of similar work that has been carried out successfully. An ability to work on a complex project in close proximity with other contractors is particularly important.

An excessive tenderer list is counter-productive in two ways:

  • It adds to the project team’s work load at a time when it is already high.
  • It can act as a deterrent to some potential tenderers if they perceive that their chances of success are low.
Tender evaluation

Most companies have their own tender evaluation procedures, and the usual methods of checking the technical and contractual contents of a tender against the specified requirements are usually equally applicable to a CHP project, without major modification.

The key factors that will determine the final selection include issues such as total project cost, project timescale, and guaranteed plant performance and its effect on on-going energy and maintenance costs. It is vital that the minimum guaranteed energy performance of the prime mover/electrical generator(s) is clearly stated. Some plant items may be offered with comprehensive maintenance contracts that guarantee equipment performance and availability, and are based on a fixed cost per hour of operation.

The energy efficiency and operating costs of major plant items can have a significant effect on the long-term economics of the project, and hence on its viability. The company should, therefore, re-run the detailed feasibility study’s energy and cost savings analysis (the basis of project economics), feeding in the energy and cost performance changes (positive or negative) identified during the tender process. It is also important to check the compatibility of preferred suppliers’ equipment.

Supplier selection

The final list of suppliers should provide a total package with no gaps and no overlaps. It may be necessary to involve several suppliers in negotiations to obtain mutual agreement regarding the termination points of their area of activity, so that responsibility for achieving effective connections at common boundaries is clearly defined.


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What's New

UK CHP Development Map

UK CHP Development Map

UK CHP Development Map

UK CHP Development Map Screenshot

The UK CHP Development Tool is the latest version of the map, originally developed as a tool aimed at assisting power station developers consider the opportunities for supplying heat and development of combined heat and power (CHP) as required under planning policy. However, it can also be used by both small and large organisations to help identify the locations where the supply of CHP heat would have the greatest potential, and therefore the largest positive environmental impact.

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