Flashcards in Procurement Deck (27)
What is procurement?
- The overall process of acquiring construction work or services
What should be considered when selecting a procurement route?
Type of project
Client objectives (time cost quality risk design)
Public sector rules
What are the advantages of traditional procurement?
a) Competitive fairness and transparent process – increase value for money
b) Design led – can ensure quality
c) Price certainty before commencement
d) Well known procedures
e) Changes are reasonably easy to arrange and value
What are the disadvantages of Trad Procurement?
a) Overall project duration may be longer than others – sequential process
b) No input into design and planning by the contractor
c) Strategy based on price competition – could lead to adversarial relations
d) Dual point of responsibility – design team for design and contractor for construction
e) If design not complete at time of tender, cost and time certainty are reduced
What are the advantages of design and build?
a) Single point of responsibility for design and construction
b) Earlier commencement on site
c) Early price certainty
d) Benefit of contractor’s experience harnessed during design
What are the disadvantages of D&B?
Requirement to create comprehensive brief
Variations are difficult to arrange and often expensive
Harder to compare tenders – harder to determine if getting value for money
Aesthetic quality may be compromised
May be less real competition due to fewer design and build firms
How much design input will the contractor have in D&B?
- This depends on the amount of design work the employer has already had completed at time of tender
- Can range from full design to production information and coordination only
Who carries out the design for the contractor? (D&B)
- It may be outsourced to a separate design company (contractor retains responsibility)
- They may have in-house design capabilities
- OR the client’s team may be novated
What is management contracting?
- A management contractor is employed to contribute their expertise to the design and to manage construction and is paid a fee for doing so
When might MC be appropriate?
- Where the client does not want cost certainty before commencement
- Where an early start on site in a priority
What are the disadvantages of MC?
Price not achieved until final package
Lack of incentive to save money
What is construction management?
- The employer places a direct contract with each fo the trade contractors and utilises the expertise of a construction managers who acts as a consultant to coordinate the contracts
How does CM work?
- The trade contactors carry out the work
- The construction managers supervises the construction process and coordinates the design team
What are the advantages of MC?
Overall project duration reduced by overlapping design and construction
MC can contribute to the design and project planning processes
Client has means of redress to trade contractors through direct contractual links
What are the disadvantages of MC?
a) Price certainty not achieved until last trade package is let
b) Changes to later packages may adversely affect packages already let - expensive
c) Need an informed, pro active client
d) Client has a lot of consultants and contractors to deal with – not just one – more fees
If the client wishes to start on site asap what route would you recommend?
- If time was their overriding priority then CM or MC as they offer the fastest start on site
- This is because start on site is not dependent upon a long tender period
What if client wanted an early start but also cost certainty
- Then design and build might be the most appropriate
- Allows design and construction to be overlapped rather than being sequential
- Tenders are based on the provision of all services so the client gets a lump sum price
What is Strategic Partnering?
Multi project relationship
- Framework Agreement – an agreement between contractors/ suppliers and the employer. It provides and agreement to fix the T’s & C’s for future purchases. Subject to inflation agreements.
What are the benefits of partnering?
Long term relationships
Collaboration to reach project success
Buildability input from Contractor
Reduction in cost and time
Relationships for future prospects
Please explain the main headings in one of your tender recommendation reports?
Unsuccessful Contractor analysis
Tender Recommendation justification
Post Tender negotiations
If a client needed an immediate start on site, what procurement route would you advise?
Management Contracting or Construction Management- design and construction can occur concurrently, typically the most programme advantageous procurement routes
What are the benefits of a framework?
A selection of contractors shortlisted to be capable of providing the delivery of a project
What are factors that may affect the tender period?
Level of design
Complexity of project
What are the main sections of your procurement strategy report?
Form of Contract
Value for Money
What is meant by market appetite?
Contractors don't want to resource large projects on competitive basis
May not have capability
Better opportunities elsewhere at less risk
How do you deal with risks associated with D&B?
Appoint CoW to assess quality
SC approval process