Construction A New Student Amenity Building

Published Date: 02 Nov 2017

Executive Summary

Introduction

Assumption

Background

Procurement Approaches

Recommended Procurement Method

Risk Management

Management and Recommendations

Conclusion

Reference

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1. Executive Summary

This report was requested by University of Worthington due to a construction a new student amenity building.

The purpose of this report was to advice on the selection of procurement method and suitable form of contract for the construction, and also the management of risks during the construction.

The general contracting, which also be called the traditional path, is a well-known procurement method. This is the most commonly used method of procurement. It is well definite on time such as the certainty of completion date. It is also suited with high quality project. The appointments of a wide range of professional consultants can provide a proper design and management services to a client. In addition to consultants, contractors and sub-contractors also play important roles which are containing detailed knowledge of specific construction technologies for fabrication. Having discussed about general contracting and its appointment, it is recommended that the general contracting would be the most suitable route due to its good control on time, cost and quality. In addition, consultants, such as architect, engineer, quantity surveyor etc, would be incorporated in the design team due to their professional identities. A main contractor and several specialized sub-contractors would be included in the production team due to their high productivity and reliability

2. Introduction

The report is prepared for suggesting a suitable procurement route for the University of Worthington for the construction of a new student amenity building.

The main aims of the report are to suggest procurement method, form of contract and list out the reasons to support it. This report also contributes to resolve the risks client would come across during the construction period.

3. Assumption

It has been assumed that no design team has been appointed at this stage. An outline budget estimate based on schedule of areas has been prepared. The design team will be appointed directly by the client for developing the entire tender document including design drawings and specification prior to going out for tender.

Background

At this stage, the design was not completed. The University of Worthington has only received an outline budget estimate for the construction cost based on a schedule of areas.

As a higher education image in the city, the University of Worthington wants a high quality amenity building

In order to construct a high quality amenity building, the University of Worthington assures the quality at all cost. However, the University of Worthington has adopted the previous outline budget estimate.

The University of Worthington has only expressed its concern on completing the construction on timely completion. Therefore, there is no rush for early completion.

4.The different procurement approaches considered

For the construction of the new student amenity, there are several procurement methods that might be considered. They are the traditional path, the design and build path and the management path. These methods are explained in the followings.

Traditional path (general contracting) is defined as the traditional consultant-led competitive tendering approach. In this approach, contractor agrees to produce what has been specified in the contract documents. The designer, on behalf of the employer, produces these documents and contractor produces the building.

Design and build path is a contractor-led contracting method. The Employer employs a Contractor to carry out design work and construction works. Also, the contractor needs to do a lot of managements during the design and construction process.

Management path is defined as ‘the overall planning, control and coordination of a project from inception to completion on time, within cost and to the required quality standards’. It is therefore designed to focus on the client’s interest from a user or a developer’s point of view.

5. Recommended Procurement Method

Among the three approaches explained in last chapter, I recommended the traditional path for this construction project.

Reasons for choosing the traditional path

The employer appoints an architect to act as an administrator to co-ordinate different aspects in the project. It takes advantages that an experienced professional manages the project and gives suitable advice for the client. Therefore, the work can be done efficiently so the cost and time can be easily controlled.

Quantity surveyor is the most important role in the financial aspect in traditional method. The professional contributes to cost planning, cost control, procurement such responsibilities. Quantity surveyor may even be appointed as a project manager to oversee designs and the construction if required.

Since designs and specifications are prepared before bidding and scopes of work are well-defined, risks in each phase of construction works will be anticipated and the professionals are able to carry out measures to minimize the risks.

The cost plan prepared under this method is reliable for the client. The reason is a firmed lump sum is agreed in the early stage. Valuations for changes in taxes, variation of works and fluctuation of the costs of labours, materials and plants can be carried out efficiently. It can easier for the client to know its financial position.

Recommended route and the form of contract

Traditional method is established very well and all parties involved in the project

are understands the role of each others.

Under traditional contractual arrangement, there are three main types of traditional contract. They are mainly divided into lump sum contracts, measurement contracts and

cost reimbursement contracts. I recommend the lump sum contracts with measured bills of quantities for this project. The reasons are explained in the followings.

For lump sum contract, the contractor agreed to construct the works for an agreed sum of money based on a set of contract documents which involves firm bills of quantities and complete set of design drawings that describe the proposed building fully. Those documents and information are provided to all interested construction organizations which could be selected by the client to price the work in the form of competition with others. The competitiveness minimizes the potential awarded contract sum. Therefore, it is an advantage in client’s view.

As the client is also concern about the aesthetic requirements of the building, this method allows for sub-contract packages in order to ensure the quality of design input from a specialist sub-contractor such as external façade sub-contractor and interior fitting out sub-contractor. Therefore, client can put more effort appearance of the building.

Furthermore, the design is sufficiently advanced to prepare the bills of quantities and

with readily formulated drawings. Since there is no rush for early completion, the

design team has enough time to revise the design to become better and predict the

completion date on an accurate basis. So, the chosen contractor can focuses on

finishing all the works without interruptions before completion date and obtaining the quality of work stated in the contract document. Thus, it provides good quality and time control throughout the construction process.

All tenderers receive identical information at tender stage. So, each of them can price on the same basis by using identical quantities and descriptions. Therefore, it can avoid exceptional low prices from a contractor, who may has different view on his own measurement method or make different assumptions. Uniformed bills of quantities could reduce the analysis time due to easy comparison. As the time for contract award become shorter, the most valuable contractor could be awarded in lower cost.

On the other hand, John Murdoch and Will Hughes (2008) states that ‘the contractor’s

offer of price is based on the bill of quantities, a document that not only the pricing

document but also, because of its comprehensiveness, an important mechanism for

controlling costs as the project progress’. The rates in the bill priced by the chosen contractor will be used to price variations as to provide a precise measure of cost control and final account prediction.

6. Risk Management:

The project team has to come across many risks at pre-contract or post-contract stage.

In this project, the building works are complex in design and the traditional

procurement method separate two areas, design and construction. Due to the lack of

input from the construction industry at the design stage, the contractor may find out the

lack of feasibility in the design. The contractor may submit variations order to alter the method statement related to the design. As the result, the client may be exposed to claims related to design and constructability issues.

In this part, the client could transfer the risk to the contractor. It is because the unit rates used in the bills provide a basis for the valuation of variations to the design and good cost control.

On the other hand, although the drawings and specifications have detailed information for constructing a building, the quality building depends heavily on the contractor’s instruction on site.

However, traditional method is a documented control system that acts upon the tender

documents and bills of quantities as evidence of quality. Client could state his perspective or standard definition of quality in the tender document clearly. Therefore,

client has the final legal recourse when the contractor fails to do that.

Conclusion

The traditional procurement method is the most suitable way to be adopted in this project and would meet all the demands of the client.

It is important to consider the potential problems that may emerge during the construction. In the report, the risks of using traditional method have been taken into account. The solutions were also discussed.

By appointing different professional parties for different purposes, those consultants and contractor with a wide range of skills could assist to construct the new building which is in favor of client’s interest.

Apart from the appointment of different parties, it is also important to choose suitable parties based on a number of criteria by using two stage selective tendering. Technical and commercial factors were some criteria which have been taken into account.

Therefore, this strategy is very suitable for clients who wish to minimize their exposure to the risks of over spend delays or defects.

(1739) words

Question 2

Prepare a separate report explaining in detail to the employer what his role in the procurement process will be.

Contents

Introduction

2. Role of the employer in the procurement process

Conclusion