The main purpose of this article is to evaluate key procurement issues that the client has to consider in selecting an appropriate procurement route for the quick reconstruct of three hotel building task. We have analysed four varieties of procurement routes such as traditional procurement option, design and build procurement course, management contracting procurement road and engineering management procurement course. After the evaluation, we've chosen a most suitable method to meet our aim, in terms of cost certainty, engineering within the designed period and quality of the building. Also, making a gleaming and luring environment for hotel friends in the near future. We too have considered the economic benefits consequently if the hotel re-opened promptly within the budgeted cost, we can also retrieve the investment costs at the earliest opportunity. Therefore we have recommended the design and build procurement way for this job.
Introduction
In structure industry, many factors cause the results of the task. The right procurement course is one of the factors to achieve project successfully. In order to choose best procurement option, we have to analyse client's qualifications, objective, project requirements, technical complexness of the task, building risk (cost, time and design/quality) and etc.
Analysis
Client Background
"Cinnamon Grand" is a privately owned or operated large hotel string in the UK. They provide comfortable accommodation over the UK and are focused on preserving their abundant heritage. They are very passionate about the outlook with their hotel buildings and they're experienced at renovation of buildings. However they have insufficient in-house executive who is either experienced enough or allow to devote sufficient time in advising the reconstruction of these properties.
Project Requirements
As the hotel has designed to reopen on the very first April 2015, we've started planning the project on August 2012 and construction will be started on 1st March 2014. Lastly, the hotel will be handed over to the owner latest by 28th Feb 2015.
Reconstruct in two stages,
Phase 1 - Fast reconstruction for the main regions of the hotels such as swimming pools, roofs, restaurant and visitor rooms, which allows the hotel to be re-opened for business within a period of twelve months (from 1st March 2014 to 28th February 2015).
Phase 2 - Recently structure of some facilities such as health and fitness centre, seminar and conference, rooms dance studios. High technology multimedia system facilities with air conditioning shall also be provided for seminar and conference rooms. During development, good service will also be provided to hotel friends.
Quality of the buildings is also important. The new constructed hotel must create sparkling and luring environment that can be enjoyed by all hotel guests. It has to match the prevailing hotel or better still which allows the former spectacular look to be brought back.
Design requirements
Design quality should at least match the existing hotel or even better.
The tender report posted by the sensitive contractor will include opportunity of works, development methods, programming, management methods, option of resources and costing.
The material application will send through template or sample and requires tight inspection and endorsement by client.
Contractor's typical design proposals require authorization by client, scheduled to customer experienced in the renovation of buildings.
Client requires keeping the ancient architectural style- abundant traditions for the external top features of the hotel
Using renewable materials to be able to lessen impact to the surroundings. For example: using inexperienced roof.
Demolitions works will minimize the damage to the building when working with suitable method.
Maintenance proposals should be done during the preparation time (from August 2012 to 1st March 2014).
Good building planning and planning will include safe practices, environmental and health issues and solution. Especially during the stage 2 constructions, the standard business of the hotel will not be damaged by the structure. Hotel guests will also not go through the influence of the structure.
Client Objectives
To complete project within the budget of 120 million by choosing the best possible procurement route.
To complete the building within the prepared schedule.
To improve the quality of creating and facilities provided, making a sparkling and luring environment after reconstruction of the building
During phase 2 constructions, good service must be provided to the customer.
Analysis of the Procurement Route
There are three generally accepted standard approaches to construction procurement in the united kingdom development industry: traditional procurement; design and build procurement and management procurement (management contracting and development management). Different procurement road has different strategy. Hence, we will analysis the original procurement, design and build procurement, construction management and management contracting.
3. 4. 1 Analysis of traditional procurement route
The client's consultants will complete fully the design before contractors sensitive. Then the sensitive will be usually honored to the company with the cheapest price.
Advantages
Good design quality due to create completed by client's consultants.
Client will choose the lowest tender price as companies will tender based on the same information given.
Procedures popular by both party
Disadvantages
Long prep time, due to create totally completed by client's consultants before sensitive.
Construction will only start site upon the conclusion of the design.
Client is totally responsible for the look risk
Risks
Lump sum deal will bring the cost risk to low risk as same information distributed by client.
As for set contract date, the contractor might have the to lay claim for extensions anticipated to create or contraction issues, it is therefore medium time risk.
As design quality control by client's specialist based on client's requirement, therefore it reduces design risk to low design quality risk.
In final result, traditional procedure is suitable for inexperienced clients or periodic engineering clients and job without critical time requirements. It is not suited to some large and sophisticated project which requires advanced management systems, buildings and skills.
3. 4. 2 Examination of design and build procurement route
The design and structure is performed by a single service provider for a lump amount contract, which allows overlapping. Design is not fully develop by contractor before the deal is given.
Advantage
Single contact point due to company is accountable on design and development.
Early start and shorter task duration due to create and development is overlapping.
Client can control job cost credited to lump amount basis.
Disadvantages
Tender need to be honored before design totally complete.
Client gets the difficulty to prepare the adequate short.
After the sensitive has been given, changing of design can be expensive for your client.
Risks
Lump sum contract will reduce the price risk to low risk.
Design and building can be overlapping; therefore it is a low time risk.
Design and build service provider is in charge of the design, if client's design necessity is not clearly mentioned, then maybe it is a high risk for design quality.
Therefore Design and build way is suitable for all clients including inexperienced or customer requiring cost certainty and fast keep tabs on projects. Not well suited for complicated or high quality buildings.
3. 4. 3 Evaluation of building management procurement route
Construction Management, where the design is developed by the Employer's consultants and construction commences before the design is complete. A fee-earning consulting "Construction Administrator" works for the Workplace to define and take care of several Works Plans, each representing a specialised or useful aspect of the task.
Advantage
Shorter overall project duration
Clarity of jobs, risks and connections for everyone participants
Client requires late design change easily credited to contact honored by different package
Disadvantages
Client does not have control on cost.
Need a good quality project team to control the task.
Needs effective control of time and information.
Risks
Actual cost will only be known before last program is granted, so cost risk is medium.
Because job is granted by individual package deal, so will not has the main company to overall control the construction time. Therefore time risk is considering as medium risk.
Project done by individual specialist contractors to reduce the look risk to low risk.
Construction Management way is suitable for experienced clients, fast keep track of projects, sophisticated building rather than suitable for project needing cost certainty.
3. 4. 4 Examination of management contracting procurement route
Management Contracting, in which the design is produced by the Employer's consultants and development commences before the design is complete. A "Management Builder" is appointed early on to let components of work gradually as some trade or bundle deals (called 'works packages'). As with Construction Management, the final cost can only just be driven when the last packaged has been let.
Advantages
Overall task duration shorter
Client requires past due design change easily anticipated to contact honored by different package
Work plans let competitively
Disadvantages
Poor cost certainty, customer will only know the ultimate price till the last package been granted.
Need a good quality job team to manage the project
Need a good quality simple to every works company, if not the case, contractor might not make client requirement.
Risks
Actual cost will only be known till the previous package is given, so cost risk is medium.
The total structure duration is a consequence of bundle selection. Therefore time risk is considering as medium risk.
Project done by individual specialist contractors to reduce the look risk to low risk.
Management contracting approach is well suited for experienced clients, fast keep tabs on projects, complicated building, and pretty large project. It is not suitable for task demanding cost certainty.
Conclusion
No procurement path is best suited in all circumstances. We can only starting on the key elements and to select a most suitable procurement option. Time within planned schedule, cost certainty and quality of the building are the key elements we need to consider in this job.
Both traditional and design and build can perform client's goal of cost certainty. Management contracting, structure management and design and build can achieve client's objective of your energy within planned agenda. Management contracting, construction management and traditional can perform client's purpose of quality of building.
Based on above analysis, out of 3 important elements we only can choose two most significant elements as following:-
Cost is the first concern. Both management contracting and construction management procurement routes, the price can only just be known till the previous package is honored. But credited to customer concerns for cost overrun, they would like to know the cost before task start. So both routes are not recommended.
Time is the second consideration. Hotel must be re-opened on 1st Apr 2015. As only twelve months is given for period 1 building and the opening before the vacationer season has a great impact on the hotel business, therefore traditional is not ideal for fast track building. Design and build is well suited to warrant maximum price contracts and design and construction overlapping. This will involve considering return on capital investment, the likely advantages to functional efficiency or income flow. So we are not considering using traditional in this job.
Quality of the building is the third consideration. It is generally thought in the construction industry that quality is the first thing to go through in design and build contracts. However, the data does not support this. Quality of the building is the result of how exactly we management the engineering process. There is absolutely no correlation between procurement method and perceived quality of the merchandise.
After factor, we will recommend design and build procurement course for this task. The appointed builder is in charge of the design, records and structure of the project, based on your client project short and requirements through lump amount cost. So the speed of structure is faster and the client will know the costs of the project earlier. If the quality of building can be achieved, it is depending on how well our job requirements have been identified and delivered. Project director will be in charge of co-ordinated design and construction programme. This might significantly reduce revisions after contract award and minimise possible interferences. All associates must build up well communication programs, to solve the challenge at the earliest opportunity when construction is certainly going on.
Referencing
John Murdoch and Will Hughes (2008), Building Contract Legislations and Management, Fourth edition
School of the Built Environment Herriot - Watt College or university (2012), Procurement & Contracts
Task 2
Option A
Discuss the responsibility of Alexander Companies to the Company for the excess costs that the Company was required to incur as a consequence of being necessary to employ a more costly tenderer to carry out the construction project.
Discuss the Clerk of Work's power to issue a Way as detailed in the given circumstance and its own implications on losing and expenses incurred by the Builder.
Detail the possible promises with regards to the given scenario, the primary facts that may be contained in the statements and the contractual provisions available to substantiate the boasts in line with the 'JCT Standard Building Deal With Quantities 2005 Edition (JCT SBC05) Revision 2 2009'.
If you were the Deal Administrator make a record outlining your analysis of the Contractor's state including the process you have used, the relevant issues of the dispute and the contractual procedures relevant.
