procurement arrangement options - trent global · 2017. 3. 16. · arrangement options procurement...
Post on 04-Mar-2021
10 Views
Preview:
TRANSCRIPT
1
Procurement
Arrangement Options
Anand ANTHONY 安杰 褔<anand.anthony@a-ashington.com> [M: 9693 0407]
CHARTERED BUILDING ENGINEER (UK), Adjudicator (Malaysia), Mediator (UK)
EXPERT in FORENSIC PLANNING (Delay/Disruption/Production/Acceleration)
EXPERT in COST ENGINEERING (Quantum of Costs/Loss/Expense/Damages)
EXPERT in PRODUCTION ANALYSIS (Productivity capacity, Optimum manpower)
Education
• Master of Laws (Commercial & Corporate) LL.M London
• Master of Science (International construction Management) M.Sc. NTU S’pore
• Bachelor of Laws LL.B (Hons) London
• Bachelor of Engineering B.Eng. (Civil) NU S’pore
Working Experience
• 27 years of leadership and management in the construction industry
• 19 years as Construction Contracts Consultant
• 19 years lecturing in the areas of law, management, business, finance & insurance
2
Procurement
Arrangement Options
Learning Outcomes
Principles and practice of procurement
Contracting philosophies and arrangements
Procurement options, their strengths and weaknesses
Challenging current knowledge and practice of
Procurement
3
Procurement
Arrangement Options
The Procurement Routes
1. The Traditional Procurement Route
2. The Fast Track Procurement Route
3. The Fast Build Procurement Route
4
Procurement
Arrangement Options
The Procurement Routes
1. The Traditional Procurement Route
Advantages:
Complete design done before tender
Drawings and abstracts to form Bill of Quantities for
Tender Document
Design changes easier to make and control
Better quality and cost control
Better operation considerations incorporated
5
Procurement
Arrangement Options
The Procurement Routes
1. The Traditional Procurement Route
Disadvantages:
Design time taken too long; anything from 1 to 5 years common
Design seldom allows the builder opportunity to suggest ways of
improving the design
Design changes suggested by any tendering contractor will often
require that contractor to reveal this all other bidders
Little incentive for the contractor to lever the client value
When industry is experiencing over-supply, contractor’s
profitability from Variation Orders and claims
6
Procurement
Arrangement Options
The Procurement Routes
2. The Fast Track Procurement Route
Advantages:
Client’s lead-in time to markets is reduced
The design and construction period is compressed
Exposure to inflationary periods is reduced
Design options can be kept open closer to the
point of commitment
7
Procurement
Arrangement Options
The Procurement Routes
2. The Fast Track Procurement Route
Disadvantages:
Quality and cost control may take lower priority than programme
Design changes can be disastrous, as there is little time to stop impacts
hitting other work packages
Design team is placed under pressure to design to programme rather
than their natural disciplinary practice; often resulting in poor designs
Litigation may increase as time-flexibility is reduced causing more
knock-on effects
Wrong decisions may be irreversible
Buildings are often designed to ease constructability rather than
operability
Requires good working relationships between the parties
8
Procurement
Arrangement Options
The Procurement Routes
3. The Fast Build Procurement Route
Advantages:
Client’s lead-in time to markets is reduced drastically
The design and construction period is almost completely
overlapped
Exposure to inflationary periods is reduced drastically
Design options can be kept open closer to the point of
commitment; but must be known at the very onset
Suitable for ‘franchise’ works e.g. McDonalds outlets, petrol
kiosks etc.
9
Procurement
Arrangement Options
The Procurement Routes
3. The Fast Build Procurement Route
Disadvantages:
Quality and cost control takes lower priority than programme
Design changes will be disastrous, as there is little time to stop impacts
hitting other work packages
Contractor’s/Builder’s Design team is placed under pressure to design to
programme rather than their natural disciplinary practice
Litigation may increase as time-flexibility is reduced causing more
knock-on effects
Wrong decisions will be irreversible
Buildings most often designed to ease constructability rather than
operability
Requires very good working relationships between the parties
10
Procurement
Arrangement Options
Procurement Arrangement Options
1. The Traditional Method
Consultants appointed for design and cost control and a main
contractor is selected later to carry out the work
Client’s understand method well and know their financial
commitments when they accept the builder’s tender
Design usually ‘almost complete’ before tender
Specialist NSC info usually incorporated into design
Separation of design and construction gives rise to a “them
and us” attitude
11
Procurement
Arrangement Options
Procurement Arrangement Options
2. Traditional Method Variants
Traditional Sequential; Contractors bid on completed design
and cost documents
Traditional Accelerated; Contractor is appointed earlier on
the basis of partial information, by negotiation or in
competition
Standard Forms of Contract; JCT Standard Form of Building
Contract (1999 edition), General Conditions of Government
Contracts (GC Works Forms)
12
Procurement
Arrangement Options
Procurement Arrangement Options
3. Design and Build
Single Contractor appointed who is responsible for the design
and construction of the building; single point responsibility
Client’s know their financial commitments when they accept
the builder’s tender; provided no changes introduced
Client has direct contact with the Contractor
Nature of system promotes creation of an integrated design
and construction team
Nature of contract reduces changes (variations); also
produces time and cost savings
13
Procurement
Arrangement Options
Procurement Arrangement Options
4. Design and Build Variants
Direct; A Designer-Contractor appointed after some appraisal
and the price is negotiated
Competitive; “Client’s requirements” documents are
prepared by the client and his advisers to enable several
Contractors to offer designs and prices in competition
14
Procurement
Arrangement Options
Procurement Arrangement Options
5. Develop and Construct
Consultants are initially appointed to provide a partial design
for the building
Several Contractors then offer to complete the design and its
construction in competitive tender, either with their own
designers or taking on the clients’ consultants
Standard Forms of Contract; JCT Standard Form of Building
Contract, with Contractor’s Design (1999 edition), BPF/ACA
system and agreement, 1983/1984
15
Procurement
Arrangement Options
Procurement Arrangement Options
6. Management Method
Design and cost consultants and an organisation to manage
the construction are appointed for a fee
Construction work is tendered for and carried out by
specialist firms
“Them and us” attitudes are reduced and lines of
communication are improved
Once Construction Manager or Managing Contractor is
appointed, the client enters into contracts with numerous
specialist contractors rather than with a main contractor
16
Procurement
Arrangement Options
Procurement Arrangement Options
7. Management Method Variants
Management Contracting
Appointed management organisation takes a contractual risk in
guaranteeing to deliver the project on time and to a maximum
price
Construction work is split into packages and trade specialists
compete for the work. They are then taken on directly by the
management organisation as sub-contractors to carry out the
work
Standard Forms of Contract; JCT Standard Form of
Management Contract, 1998 edition (MC98)
17
Procurement
Arrangement Options
Procurement Arrangement Options
7. Management Method Variants (cont’d)
Construction Management
Management Service is provided by a fee based professional and
all trade contracts are direct with the client.
Client retains all time and cost risks
Standard Forms of Contract; The American Institute of
Architects conditions of engagement, The Association of
General Contractors conditions of engagement
18
Procurement
Arrangement Options
Procurement Arrangement Options
8. Design and Manage Method
Combines characteristics of Design & Build and management
Client appoints a single firm to design and deliver the
project, but specialist contractors tender for the
construction work
Client engages a Project Manager who acts in an independent
capacity
Design and Construction functions are separated so that
those involved can act as partners on equal terms; avoiding
the “them and us” confrontation
Reduction of overall project period provides consequential
cost reductions
19
Procurement
Arrangement Options
Procurement Arrangement Options
9. Design and Manage Variants
Contractor Project Manager; The project design and
management firm guarantees cost and time and takes on
trade, and sometimes design specialists as subcontractors
Consultant Project Manager; The Project Manager acts as
the client’s agent to manage the design and construction
process. All design and trade contracts are direct with the
client.
Standard Forms of Contract; Each design and management
organisation offers its own form of contract
20
Procurement
Arrangement Options
Steps to Successful Building Procurement
NEDO identified seven(7) steps: -
1. Selecting an in-house project executive
2. Appointment of a principle adviser
3. Care in deciding the client’s requirements
4. Timing the project realistically
5. Selecting the procurement path
6. Choosing the organisations to work for the client
7. Designating a site or building for remodelling
21
Procurement
Arrangement Options
Steps to Successful Building Procurement
1. Selecting an in-house project executive
The in-house executive should undertake the
following: -
Be available full time for the project
Be the single point of contact for the organisation
Understand and organise the internal decision
making processes required for the project
Have the power to speak and act for the
organisation
22
Procurement
Arrangement Options
Steps to Successful Building Procurement
2. Appointment of a principle adviser
The role of the principle adviser will be to: -
Complement the skills available within the client
organisation
Supply impartial advice on the need (or not) to
build and how to go about it
23
Procurement
Arrangement Options
Steps to Successful Building Procurement
3. Care in deciding the client’s requirements
The assessment should consider the following criteria:
Timing (programme)
Variation (2 principle sources)
Complexity
Product (quality)
Price (cost)
Competition
Responsibility
Risk avoidance
24
Procurement
Arrangement Options
Steps to Successful Building Procurement
4. Timing the project realistically
Clients need to consider the following actions to ensure
speed in building: Organise their decision making process
Compare value of time saving to extra cost
Clarity and firmness of design brief essential
Choose contractors and designers with care
Establish good relationships and avoid punitive contracts
Payment patterns should create incentives. Bonuses and cost
target rather than penalties for delay
Take a strong interest in the progress of the project
25
Procurement
Arrangement Options
Steps to Successful Building Procurement
5. Selecting the procurement path
The NEDO selection charts suggests the following steps: -
Rank the criteria in order of importance and give
reasons for your selection
Add weighting to reflect extent criteria is satisfied,
giving reasons
Multiply the weightings by the criteria rankings and
add up the scores. The highest score should indicate
that that procurement path is the most appropriate
for the project
26
Procurement
Arrangement Options
Steps to Successful Building Procurement
6. Choosing organisations to work for the client
The following points are critical concerning the selection of
people and organisations for the project:
Employing people with the essential skills
Get people with real interest in the project objectives, with
flexibility of approach and a co-operative nature
Mutual trust is essential
Unamended standard forms of contract are the best way of
encouraging a collaborative environment in which to work
Establish good relationships and avoid punitive contracts
Selection of people and organisation based on
accomplishments and attitude
27
Procurement
Arrangement Options
Steps to Successful Building Procurement
7. Designating a site or building for renovation
The “proposed site” will have direct impact on to the choice of
procurement path
Avoid pre-determining a site or building
Get professionals to appraise the “proposed” site or building
Commit only after a feasibility study has been completed
Unamended standard forms of contract are the best way of
encouraging a collaborative environment in which to work
Role of Principle Adviser here is crucial
top related