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Phones
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Questions
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Involvement
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Procurement is the process of purchasing goods and services.
In construction terms it is the process of completing a building
project, i.e., building a house, an office, a sport centre or any other
type of building.
Tendering v Procurement
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Tendering is the process of obtaining a price.
Tendering is part of a Procurement Strategy.
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The Procurement Strategy needs to match the client's objectives
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What items should be considered?
1.
2.
3.
4.
5.
6.
7.
Cost
Time
Quality
Project type and size
Funding/Finance constraints
Risks
Client Experience
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Cost, Time & Quality
1.
2.
3.
4.
5.
6.
The degree of control the client has over the design and
construction processes.
The extent of design information available during tendering.
The information required for construction work to commence.
The amount of involvement of the contractor in designing the
project.
The distribution of risk, responsibility and accountability.
The sequencing of the Design, tendering and Construction phases in
the process.
1.
2.
3.
4.
5.
Traditional
Design & Build
Construction Management
Management Contracting
PFI/PPP
Employer
Clients
Consultants
Building
Contract
(FIDIC/MOW/JCT)
Architect
QS
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Main Contractor
Sub Contractor
Sub Contractor
Others
Sub Contractor
Sub Contractor
Direct Contractual Relationship
No Contractual link but authority
Pros
1. Client has more control over design and quality
2. Cost Certainty (Lump Sum contracts)
3. Variations easily controlled and priced (if full design info)
4. Familiarity in this route and method
Cons
1. Time - phases are sequential
2. No contractor knowledge or input
3. Lack of Design info can lead to cost and variation problems
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Employer
Clients
Consultants
Building
Contract
(FIDIC / MOW/JCT)
Employers Agent
Contract Administrator
Quantity Surveyor
Main Contractor
Architect
Sub Contractor
Sub Contractor
Direct Contractual Relationship
No Contractual link but authority
Pros
1. Speed
2. Single point of responsibility
3. Low Cost
4. Price certainty
5. Lower risk for client
6. Contractor input on design
Cons
1. Low quality
2. No control over design
3. High risk for contractor
4. Variations can be costly
5. Tender evaluation can be difficult
Employer
Clients Consultants
Quantity Surveyor
Architect
Building Contract (JCT)
Construction
Manager
Works Contractor
Works Contractor
Works Contractor
Direct Contractual Relationship
No Contractual link but authority
Pros
1. Speed
2. Construction Manager & Works Contractor input
3. Flexibility in Design (if Works packages not let)
4. Good for specialist projects
5. Cost – Construction Manager cheaper than traditional OH&P
Cons
1. Lack of Cost and Time Certainty at outset
2. Higher risk to client
3. Not for inexperienced clients
4. Relies on Construction Manager being expert
Employer
Clients Consultants
Quantity Surveyor
Building Contract (JCT)
Architect
Management
Contractor
Works Contractor
Works Contractor
Works Contractor
Direct Contractual Relationship
No Contractual link but authority
Pros
1. Speed
2. Management Contractor input
3. Flexibility in Design (if Works packages not let)
4. Good for specialist projects
Cons
1. Lack of Cost and Time Certainty at outset
2. Higher risk to client
3. Not for inexperienced clients
4. Relies on Management Contractor being expert
Design
8 weeks
Tendering
4 weeks
Construction
16 weeks
Design & Build Procurement
Design
Tendering
2 weeks
6 weeks
6 weeks
Construction
16 weeks
Management Contracting
Design
Tendering
Construction
8 weeks
8 weeks
18 weeks
Generally – Whole range of partnerships in which the public and
private sectors collaborate for some mutual benefit, with the private
sector funding the project and receiving income/profit over a long
time period (25/30 years)
Variations:
1. PFI - Private Finance Initiative
2.
PPP - Public Private Partnerships
3.
BOOT – Build, Own, Operate and Transfer
4.
BOT – Build, Operate and Transfer
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THE END
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QUESTIONS