Computing, Engineering And Mathematics Assignment

Assignment Task

should describe and analyse the positive and negative aspects of three different procurement methods for construction projects. Benefits and problems for the client/developer, the consultants, the builders, the subcontractors and the end-users should all be considered.

The report must be divided into subsections and must be provided with an executive summary of one paragraph, a contents page at the beginning as well as page numbers. Referencing should conform to the Harvard system.

You are advised to consult the electronic journals available in the library for reference sources. The report should describe the characteristics of the three contrasting procurement systems which you have selected. You should express an opinion about the kinds of projects which are suited to the different procurement methods. Remember that you have ethical obligations when recommending a course of action to a potential client. Support your opinions with high quality references.

Introduction

The procuring methods are availed to meet the desires of their clients. As a client, it is difficult to decide what method to use as one’s goals and the priorities need to coincide with a method to be selected to increase the probability of undertaken project procured successfully. A decision on what type of system of procurement to use should be made early enough and included in the business case of the client of the project. How the risks can affect the business of the client should be put into consideration. Once identification of a business case is made, the client should appoint an adviser. The principal advisor should determine the client’s requirements and brief, and later help in considering the best procurement method that should be put in place having made the client aware of the various methods characteristics, merits and demerits, and risks of each. The systems of procurement are grouped as separated, relational and packaged, and integrated (New South Wales Government, 2005). The features, merits and demerits, and contexts where a structure is appropriate in a design are identified and discussed below.

1.Introduction

Building projects strategies in the last twenty five year have insignificantly changed. Although cost and time over runs, they are still useful in the industry. To curb the time and cost incidences, differences that may happen, and the probability of the projects achievement, on the procurement forms have been proposed such as alliancing and partnering. Not all procurement systems are applicable in all projects as objectives, priorities of different clients differ, and they need to comply with the given form of procurement (Weele, 2006). Therefore, for effective selection of a procurement system, the client and their advisor should understand the characteristics of different forms of procurement.

2.1 Strategy of procurement

The major steps of successful procurement building include:

1. Selection of an–house executive project
2. Appointment of the adviser
3. Careful consideration when deciding the requirements of the client
4. Having a realistic timing of the project
5. Selection of the path of procurement
6. Making choice of the organizations to work for client
7. Choosing a site
8. Implementation of the project with supplier(s) partaking in the asset delivery
9. Operation and maintenance of the assets
10. Evaluation of the project during and after delivery with comparison of the outcomes achieved and makes use of the lessons learnt

2.2 Risk Identification

To establish a strategy that makes identification, prioritizes the main project objectives, and on the same reflects the expected risks and how the entire process will be undertaken should be the major consideration to a successful outcome of a project. The risks that may be encountered include: delivery of a project late than the time set, a program that outshines the clients monitory capability (Smith, Love & Wyatt, 2001). Hence procurement methods should be chosen that equilibrium objectives of the program and the risk to be encountered.

3. Factors influencing procurement strategy

Once the major strategy such as the client may adopt the collaborative strategy irrespective of the method selected, therefore, different factors should be put into consideration such as;

• External factors – these include the impact on economic, technological, commercial, social, political and the legal factors, for instance the changes in interest rates and changes that may occur in legislation.
• Client resources –such as client’s knowledge, the experience of the company chosen and it is working conditions. .
• Project characteristics – these are size, location, complexity and the project uniqueness as it influences the time, the cost incurred and the risk to be encountered.
• Ability to make changes – this is only where necessary as the client’s objectives should be identified at the very early stage as change may lead to adjustment of cost and time to be taken.
• Cost issues – For price certainty, the design should be completed before the commencing of construction and design change should be avoided (Smith, Love & Wyatt, 2001).
• Timing – as different designs have different time frames, each design should be given adequate time to reduce risks due to rush of completion.

4. Procurement systems

An organized system delegates authority and responsibilities to individuals or organization, and outlines the different elements in a project.

Procurement systems include:

• traditional
• design and construct
• management
• collaborative

4.1 Traditional Method

Under this method, the client is liable to all the risks. It is also possible to obtain the best price for a design. There is quality assurance as the client is the overall controller of the scope (Turner, 2010).

There are three types of contract under the traditional procurement method:

1. Lump sum
2. Contracts measurement
3. Reimbursement cost

4.1.1 Lump sum

Where the contract totals are resolved before the start of construction, and the figures entered in the contract in agreement.

4.1.2 Measurement

It is also referred to re-measurement contract. This is where the work to be done by the servicer cannot be accurately be calculated before the issuing of the tender. It is assumed that this method is accurately designed, a reasonable figure of money and the quantity and quantity of what to be used is submitted to a tenderer (Lewis & Roehrich, 2009).

4.1.3 Reimbursement Cost

Sometimes referred to cost plus, where the contractor performs an indeterminate job as he has been paid the actual cost of the program, labor, and materials. In addition, a contractor is given an agreed amount of money to cater for management, profit and overheads.

Cost reimbursement hybrids include:

• Cost-plus percentage fee – the fee charged without interest and is related directly to prime cost
• Cost-plus fixed fee – This is the fee charged and usually allotted by a contractor as he/she has to work effectively and efficiently to remain in range of the agreed cost.

4.1.4 Merits and demerits of traditional system

Merits

• It is accountable as it has competitive selection.
• has competition equity because all contractors bid equally on all basis.
• Design comes first therefore the client has a direct influence that leads to quality overall scope.
• The client is aware of the price at contract awarding level.
• Changes are relatively easy according to the contract to arrange.
• It is a tried and tested method, which is familiar in the market.

Demerits

• Its a timely process to have all contract documentation produced and lead to minimal cost and thus may bring disputes if cost plus arise.
• The duration of the entire project is longer as the system is sequential and no work can start before design completion.
• There is no input or planning about the project as contractors are not select at initial start.

4.1.6 When traditional method is used

Can be used;

• When a program has enough time span
• When a consultant design has a warrant
• When a client wills to manage designers and contractors in separation
• When the price certainty of the entire construction is known
• When the client requires product quality
• When the risk is to be balanced between both the constructor and the client

4.2 Construct and Design Procurement

In this design, a contractor accepts responsibility of whole scope or some. In the contract, there should be liability extent. A contractor who lacks in-house designer and he/she has to work with external consultants should make the consultants known before the tender is given (Mortledge, Smith & Kashiwagi, 2006). Using this system one is guaranteed faster start on the site. The consultants require time to prepare enough set of the requirements and make comparisons from other competing tenderers. Once the contract is signed, changes should be avoided as they may be costly to the client.

Under design and construct there variations that include:

• Direct – appraisals of the best and possible is made before tendering hence no tenderers have no competition.
• Competitive – In this, tenders are given as per documents prepared that make contractors to compete equally in their designs and pricing.
• Develop and construct – consultants make a scope design, and left for the contractors to complete and selection is made.
• Package deal – there is less innovation as the contractors use another building of their own or a proprietary thus a repetitive theme.
• Novation –The contractor continues from the client’s previous contract, completes and constructs the designed building.

4.2.2 Merits and Demerits of construct and design procurement

Merits

• The client deals with a specific firm thus reducing the commitment of resources and time trying to reach several designers separately (Mortledge, Smith & Kashiwagi, 2006)
• Since the client’s requirements are specified and no change introduction hence price certainty
• has a maximum price which is guaranteed thus stimulating innovation that leads to reduction of time and cost (Benslimane, Plaisent & Bernard, 2005).
• since the design is overlapped with construction activities it reduces time.
• contractors input improves constructability of the design.

Demerits

• Clients experience difficulties in preparing sufficient and adequate brief.
• A client project change is expensive.
• There is difficulty in making comparison bids as designs are different from those of the bidders.
• The design liability is only grounded to the available contracts standards.

4.2.3 When design and construct method can be used

It should be used when;

• The building is not prestigious but functional.
• The building is of a simple design.
• There is likelihood of change in the brief scope design.
• Acceleration is required in a program where design is overlapped with construction activities
• It is a single organization to take risk and responsibility of the design and entire construction (Mortledge, Smith & Kashiwagi, 2006).

4.3 Procurement Management

There are various forms of procurement management such as; managementcontracting and management construction.

4.3.1 Management contracting

Under this method, the employer selects a crew that is self-dependent and a separate management contractor. During the pre-construction stage, they are advisers and take their roles during construction as in the work contract (Victorian State Government, 2006). This method is flexible thus gives the client a room for change.

A contractor is appointed at design stage so as to advise on tender action, goods and materials delivery and design program. He undertakes work as in the cost plan that is made by quantity surveyor, the project specifications and project drawings (Lewis & Roehrich, 2009). This method leaves the client as the risk taker as no costs and program certainty.

4.3.2 Construction management

This method first does a careful selection after which a management contractor is chosen and paid management fee. Although the management contractor is the overall, this method gives the client a greater weight on the control thus gives the client a reasonable acceptable quantity of risk (Smith & Love, 2001). Managing contractor is an agent thus cannot guarantee a timely finishing and cost of the project.

Merits

• There is reduced conflict between the design team and the consultation team.
• There is design and construction overlap thus time reduction.
• Due to splitting of construction activities there is competition work of construction in large projects (Vitasek et al. 2016).
• has even documentation development.
• Contract variations are fewer.
• Trade contractors are not necessary.
• Has high public accountability

Demerits

• No price certainty until last work package
• Requires a proactive and informed client
• Requires close time control

Conclusion

At the onset of a project, the client should warrant that he/she is able to reach a solution in their objectives with their set budget and the set time and date in future. Only achievable a client seeks advice from experienced professionals in construction.