Procurement Way Selection And Analysis

Keywords: construction procurement routes

The purpose of this record is to evaluate the procurement routes of build a fresh auditorium with high standards technology for Heriot Watt School. The survey includes determining several procurement routes, deciding the advised procurement route because of this project. This report also includes the evaluation of impact factors and the actual benefits for adopting the recommended procurement route.

Background

Heriot Watt University (HWU) is likely to build a new auditorium at the existing grass land next to HWU's area with the land area of around 1500m2. The proposed auditorium is one storey with mezzanine floor with total 1950m2 gross floor area.

The need and the need for auditorium will be perfect for meetings, lectures and presentations, includes the facilities as pursuing:

  • 200 comfortable tiered car seats,
  • high specs technology,
  • multimedia theatre with air-con,
  • full size interactive display screen and computer driven demonstration facilities,

In view of the HWU top management has decided to build a new auditorium, the project's procurement strategy has to be created for achieve the perfect balance of risk, control and funding for this job.

2. 0 Procurement Strategy

Procurement is the amalgam of activities undertaken by the client to obtain a building (BPS, 2nd Release, 1990). The project's procurement strategy is established for identify the most appropriate way of reaching the project's targets and the worthiness for money. The key steps in utilizing the procurement strategy as following:-

Finding out the real needs for the auditorium project and the project's goals;

Analysis the procurement routes for the auditorium project

Evaluating the procurement strategy and the influence factors

Implement procurement strategy and design team selection and company selection for the project

Final handover for procedure and review successfulness of the project

There are numerous factors are able to impact on procurement strategy and eventually influence on selecting procurement route. We have outlined down some most important factors for top level management to consider for the procurement way.

The project objectives and the client's capabilities

HWU with a brief history dating back to 1821, has established one of the very best UK colleges. The goals of the project are to build a new comfortable auditorium with high technology and also to be able to complete within the cost limit, to the mandatory quality and within the time constraints.

In view of HWU is not really a regular programmer of works, the chance to HWU for this auditorium project shall be reduced. The HWU shall be the solo point of contact and responsibility for the job during design and engineering and in case of the building failing.

During the design level, our HWU top management would like to implement their concerns and reliable ideas in to the task. The high specification technology with special gadgets wish to require some changes to the design due to the unable fixed circumstances.

Risk management

Risk management is critically important to project success. It will involve identifying and evaluating risk, assigning the right risk owners and constantly controlling, monitoring and confirming on key hazards. (OGC03, 2007)

In order to look for the most suited procurement route, the necessary comparability of varies procurement routes such as Traditional Route, Design & Build route, Management Contracting Route & Structure Management Route, etc will be achieved. Chosen of any route will have its own risks. When the procurement route is determined, the specific key hazards, that HWU adopts, must be been able efficiently.

The Project Constraints

The constraints of the job are that company is able to consider the possible impact on neighbouring properties and the actual concerns of the neighbours. They shall obtain a new access and temporary access to the construction site to reduce the impact to campus. The non permanent access will be reinstated to original.

The sound pollution throughout the day time will be limited in 75 dBA and in 55 dBA during night time.

In order to improve the Environmental, Health and safety standard for this project, we've proposed to work with the precast components for column, slab and staircase. The factor and adoption of precast components isn't just greatly simplified the engineering series but also help to reduce building wastage with such techniques.

Another factor of reduce potential environmental impact is to look at the interior drywall partition. Interior drywall is widely used in the commercial sector to make staff's office buildings.

Traditional ?

Project Objectives

Time, Cost, Quality

Other Factors

Risk Management

Constraints

Procurement Strategy

Client's Capablities

Procurement Way Selection

Design & Build ?

Management ?

Partnering ?

Others ???

Figure 1: The connection of procurement strategy of procurement routes selection

With consider the above mentioned factors, the procurement strategy will be based on the following concepts and guidelines:-

The design should be completely meet the job objectives.

The project should be predicated on a firmed price and limited time to create. The auditorium must ready for procedure by End of 2013 for the new intake in Jan 2014.

The contract honor should be predicated on the company's capacity and capacity instead of lowest price.

Selection of service provider intends low risk to HWU.

3. 0 Procurement option selection and analysis

Once the procurement strategy has been shaped, the procurement path then can be selected with consider the client's specific necessity and how the client's dangers will be minimized.

Various procurement routes have emerged to identify the procurement systems in current use, even more advanced procurement procedures tend to be used presently as shown in Figure 2.

Figure 2: Syetems for Advanced building procurement routes

Traditional Procurement Routes

The traditional procurement consists of the visit of custom & consultants by customer before call for sensitive, and the visit of a company on the other side after tender. The construction task is handled by HWU's task management with no concurrent collection works which have to occur by following the other person as short, design, tendering & structure.

The traditional procurement road is varies in Traditional Sequential road and Traditional Accelerated way. Traditional Sequential path means the Companies bet will be submitted predicated on the completed design documents and completed tender cost documents as normal. Traditional Accelerated course has requested your client to appoint the service provider earlier on the foundation of partial information by negotiation or in competition. The contractor can be engaged in the task as early as possible. The contractor's experience, knowledge and existing materials and equipments can be viewed as in the final design.

Design & Build Procurement Routes

The D&B procurement option has changed the traditional sequence of work. It needs HWU to develop the tender documents that will send to possible companies for provide and returning their design proposal and relevant cost. D&B has achieved the client's intend for a single-point of responsibility so that they can reduce client's risks and control the overall costs.

D&B is allowed the look and development works concurrently to reduce the total task duration when compared with traditional routes. D&B is also firmed the entire price prior to building with low cost risk, so that HWU won't essential to expend huge resources to close involvement.

D&B is varies in several types such as: Turnkey, Deal, Design & build, Develop & build.

Turnkey is followed the D&B's concepts and expanded the contractor's responsibility to add the commissioning and fit-out of center, that same as EPC (executive, production & engineering). The contractor has been put with responsibility, risk and ability and your client has the least risk in all procurement routes.

Develop & Build is followed D&B with two-stage tendering and novation for give the client better control over both design and cost. The client will has the higher risk among D&B routes. Make reference to Figure 3: Risk syndication among D&B routes

Figure 3: Risk distribution among D&B routes

Management Procurement Routes

Construction management is a building director who appointed by consumer to advise the client on a charge basis. The client has to entail into agreements with numerous companies that requested your client has experience and has to be totally involved with faster respond to decisions. Engineering management is normally suitable for sophisticated building task.

Management contracting can be explained as a management service provider appointed by consumer will advise client on the program and buildability. It requires the client a good quality quick and uses good quality task team. There are higher risk on the uncertain actual cost and total construction duration when equate to D&B course. See below Figure 4: Risk research between Client & Builder.

100%

Construction Management

Management Contracting

Traditional

50%

Client's Risk

Design & Build

100%

50%

Contractor's Risk

Figure 4: Risk Research between Customer & Contractor

Other Procurement Routes

There are other aspects of procurement routes such as Best contracting, Partnering, Public-Private Partnerships (PPP), etc.

Partnering is a procurement school of thought that will ensure the cooperating working between client and service provider and the problems can be solved over adversarial attitudes and techniques.

Partnering, Prime contracting and PPP procurement routes are mostly suitable for major and huge jobs. Because of build the auditorium is a little project, it is strongly recommended that these complicated procurement routes are unsuitable or unneeded.

Procurement Option Selection

In view of create a new auditorium is able to consider as an easy small project, we suggest that the "Design & Build" procurement course shall be followed.

D&B procurement route has considered and reduced the client's risk. Refer to the Number 5: Brief summary of Customer Risk beforehand Procurement Routes.

Figure 5: Brief summary of Consumer Risk beforehand Procurement Routes

The client has to avoid to reduction control for the task also to avoid a very high price rate, the "Turnkey" and "Pachage offer" are not advised for adoption in this job. Hence, we could suggesting to take up the "Design and Build" to this project.

D&B is a far more refined form of an package deal which obtained acceptance from the JCT in 1981 with the publication of the JCT Standard Type of Building Agreement with Contractor's Design (Compact disc 81). Body 6 is shown the task of D&B job.

By chosen the D&B procurement route, HWU knows the full total financial commitment early on in the project's life, and also has learned that HWU does not introduce changes during the course of the works. D&B has recommended the direct negotiation and contact way between your client and the contractor. This has improved upon the communication lines and allowed the builder not only to fully respond for the deal but also to modify more rapidly to meet up with the client's needs.

The company is accountable for the whole of the design and construction of the building. Obligations are not break up between designer and builder so that the client confirms himself seeking to separate "functions" in case of a building failing. (BPS, 2nd Release, 1990)

Figure 6: Design & Build Building Procedure

When the D&B procurement path is chosen for the task, HWU begins on a path to success by adherence to the targets, time, cost and quality requirements of the project.

Wider Choice of Design

By asked three or more contractors to tender for this job, different with the original way, more designers provides wider idea and design intend, HWU gets the wider choice to choose the best design that has totally known and achieved the project objectives. Before HWU top management have decision to choose the service provider, they can input their concerns and remarks to the design rather than demand changes during engineering stage. When both HWU and builder buy into the amendment, the contract is preparing to award consequently.

Time & Cost Saving

D&B will save you time and cost for your client, HWU, when it is providing the possibility to achieve development in the sent center. Time and cost benefits result from the ability of the design-build team to fast-track the task by overlapping the look and construction phases of the routine. As the HWU doesn't need to provide a full group of biddable building documents, cost savings are also associated with design.

Reduced Risk with lesser involvement

D&B allows the client, HWU, to don't be placed directly between your architect/technicians and the builder. HWU will not take on significant risk because of avoid the positioning on direct engagement.

Even moreover, the contractor will need the responsibility for design errors and omissions under D&B path, and HWU can relive the major legal and managerial obligations. From HWU's view, the D&B is an instrument to repair many problems associated with the traditional way of contracting for design and structure independently and sequentially.

We have also compared the procurement routes as shown in Figure 7.

Figure 7: Evaluation of procurement routes (Which Deal? 3rd Model, 2003)

A disadvantage of D&B would be that the contractor could use a preexisting building system or modular building form so that the company can reduce design time and save their own design fee, may lack cosmetic charm. By chosen the D&B procurement option, HWU is able to be aware of some serious failures among building systems and shall undertake careful research before honor the agreement.

There is not any indie architect and consultants to advice also to protect HWU's interests, is another disadvantage of D&B course. In order to avoid a blind monitoring, HWU can utilize an agent to execute this role on behalf. The agent shall supervise the works from quick, tender stage to design and construction stage, until handover the completed job to HWU, to make certain that the contractor's proposal and works are complied with the required goals and standard.

Next, once HWU released the contract, it will be costly for HWU to change the look, materials or works. HWU must finalize the requirement before the sensitive and must finally amend and verify contractor's proposal before sign the deal.

Finally, HWU shall be aware of the duty for high quality risk. Some contractor's nervous about simplifying engineering activities are able to lead to a reduction in design quality, because of this, it creates design and build inappropriate for this project where high specification technology is necessary. Hence, HWU shall write clearly into the quick for the quality requirements.

6. 0 The Alternative Procurement Route

In case of your client has more concern on the cost control and changes of design and function, we have propose the "Traditional Accelerated" way as the choice procurement course.

As mentioned early on in clause 3. 1, Traditional Accelerated option has allowed the client to appoint the builder earlier on the foundation of incomplete information by negotiation or in competition.

The two-stage tendering will be utilized to appoint a contractor as early as possible to the job. Through the 1st tender level, the design may not be completed and the tenderers will post a price based on the available information. Before 2nd tender stage, the excess design information will ready and the deals are finally costed. The client may comprise negotiation with the contractor (winning sensitive from 1st stage). When the price agreed, your client can award of the agreement as traditional lump amount contract to contractor for commence the works.

By equate to the original single-stage tendering, the benefit for Traditional Accelerated route to your client are:

Shorten the sensitive period and quicker start site works;

Design stage can increase to development period, may not requested to complete for tender package.

By choose the Nominated Sub-contractor, the quality can control by your client.

The company can consider their experience to the design and their existing or extra resources to the project, that they may have less price bundle.

The traditional accelerated path is well suited for our client who is not required much experience and the quality and buildability may also achieve the requirement.

The client must consider the risks during 2nd sensitive level that the service provider may not meet up with the client's requirement. This is solved by spend additional time to get alternative contractor involve and seek the arrangement.

7. 0 Demo of procurement

Researches on Selecting Project Delivery Systems found that D&B assignments are delivered 33. 5% faster than projects that were created and built under individual parties. The studies also proved that D&B task are created 12% faster for construction stage and have a device cost that is 6. 1% less than traditional assignments. (PDS 1998)

8. 0 Conclusion

The Design and Build is the advised procurement route to HWU for this auditorium project. In order to achieve HWU's anticipations and eyesight of delivery of the job, HWU is also to be a part of the design process. A proper completed auditorium job with D&B path includes HWU in the original design process of development and schematic design, and will include HWU's involvement not only in design level meetings but also in the further interim reviews of the design, construction, operation and even looks at various steps along the look and building process.

D&B has its ability to consider all relevant factors that could effect the desirability of the project. The very best value collection of D&B procurement course offers the factor of both cost, time and other more subjective factors such as project management, quality control and team reputation.

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