Construction Procurement And Construction Law Assignment
Introduction-Construction Procurement And Construction Law
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Procurement refers to the same contract is to be assigned to one contractor that includes the design and construction of that building. Under this collaboration is conducted with the contractor and the contractor will be held responsible for all associated risks. The procurement process is to achieve goods and services required for any project. Procurement routes in construction are the manners of running a project. There are many ways of this route that are having advantages and disadvantages of the routes.
The main objective of this report is to identify the procurement issues that need to be considered by the client to select the appropriate procurement route for the construction of a grade 2 listed building that is having 10 one-bedroom apartments, 5 two-bedroom apartments, and a retail unit on the ground floor. There are mainly four types of procurement routes as traditional procurement route, design and building procurement route, management contracting procurement route, and construction procurement route.
In this report after analyzing all these four kinds of procurement routes, the one suitable route was selected according to the project. This task was done by a chartered surveyor. The cost and period for the desired project were decided by the client and mentioned in the contract after accepting all the terms of the contract the advisor started his work. A plan with the adaptation of the most suitable procurement route for the project and also considered the provided time and budget for the project. Some issues were identified and an advisory was given for them, providing appropriate suggestions to the client.
Under this report, some advice and suggestions are sought by the client for the completion of his project with one suitable procurement route and this was desired to assign the whole project so all associated risks will remain with the contractor. The budget and period for the completion of the project were mentioned in the project. The client asked for the issues that could occur in this project and need to be discussed with its board if there is any matter that is required permission from the board. So, these suggestions were made by the contractor or advisor. There are some abovementioned kinds of procurement routes out of the most suitable ones that can be implemented for this project
Advice for the first issue presented in the case
Every procurement route has its advantages and disadvantages. But some suggestions regarding the selection of procurement route were made by a colleague to the client. This suggestion was made regarding the selection of procurement route out of two routes such as traditional procurement route and design and build procurement route. The client also sought some suggestions on whether to choose the traditional procurement route or any design procurement route for this project. In another issue, the client was also asked for a suitable contract type for the chosen procurement route. So, some suitable contract types were also discussed and suggested according to that (Smith, J., et al 2021)
Analysis of traditional procurement route:
This procurement route separates the design from construction. Under this architect and design team is appointed on an individual basis. After that contractor is appointed after the competitive tender procedure and then the responsibility is shifted to the contractor for coordinating the construction team with all subcontractors. (Nguyen, P. H., et al 2018) Hence, it is the type of procurement route that separately measured the design and construction of any building that can be a very major drawback of this procurement route. In this case, the contractor is the only one who is assigned the whole contract that includes the whole project and construction, planning for construction, and design of the building.
There are some advantages of the traditional procurement route as:
It has a very long period because this construction can be started only after the completion of the design process by the architect of the client. So, after the completion of its construction will be started hence it will take extra time rather than the usual period consumed by any project. (Tang, Z. W., et al 2019)
Construction can only start on site after the completion of the design as it is also a disadvantage that no construction can be started without the finalization of the design.
Under this, another drawback is that client has to take all the responsibility for the design of the project that is a major risk for the client.
There are also some advantages for this procurement route as:
Effective and good quality of design can be achieved because it is completed by the consultant of the client and according to him, he can order the best design for the project.
The client can choose the lowest tender price as the contractor will tender based on the same information given.
The complete risk associated with the design lies upon the client only. He is responsible for the design and completion of it for applying it in further construction.
There are some risks associated with a lump sum contract such as this will bring the cost risk to low risk as similar information given by the client. The fixed period contract can demand additional time for the design and construction and it is having medium time risk. In addition to it, the risk regarding design and its quality is also associated with the client only because he is only responsible for choosing the design. So, there is a very low risk regarding the design of the project. (Elhag, T., et al 2020)
It can be concluded that the traditional approach of procurement is suitable for the inexperienced or occasional construction, projects that are having a not strict period. It is not suitable for complex and technical projects. Projects that are needed some advanced management systems, structures, and skills.
There is another procurement approach named as Design and build procurement route:
Under this type of procurement, the arrangement is to be done for the collaboration of team members for any project. In this procurement type contractor plays a vital role and all planning, appointments are assigned to them, he provides an easy and simple procedure to the client. The traditional approach can also be involved in this procurement route at the earlier stage and after that design and building procurement can be started. The design and construction are fully assigned to the contractor and overlapping is allowed in this procurement type.
There are some advantages of this approach as:
The whole and sole responsibility lies over the contractor due to the single contact point for the design and construction.
Under this project can be completed in a shorter period due to overlapping of the design and construction process.
The cost of the project can be easily measured and controlled by the client.
There are some disadvantages as:
It is required to award the tender before the completion of design,
The client can face some complexities during preparing the adequate brief.
Under this procurement design, it can be expensive for the client due to changes in the design after the tender is awarded. (Molwus, J. J., et al 2020)
This procurement type is also having some risks as a lump sum contract will reduce the cost risk to low risk, there is low time risk due to overlapping of design and contract. The complete responsibility of the contractor for the design and includes lower risk but when mentions about no need for client's design then it may be a high risk for the project. (Gottschling, P. 2018)
So, this type of procurement is suitable for all clients who priory decided the period and budget for the project. It’s also the better option for the inexperienced and cost certainty project.
Project requirements are included as 10 one-bedroom apartments, 5 two-bedroom apartments, and a retail unit on the ground floor that is in very deteriorating condition and needs to be constructed properly in budget and provided period.
There is a specified procedure of construction under the procurement route and it includes some stages. This process can be repeated at any stage of the project as different suppliers are procured it.
Some stages or steps for this procedure area
Assessing the requirement of the procurement
It is the first stage of the procurement and needs to be identified that if there is any requirement for any project for any construction. After identifying the need of the project a statement of need is prepared and discussed with all other stakeholders in the business. At this stage objectives of the project are established and prioritized that involves the budget, cost, and period for the project. (OYELAMI, C. F. 2021)
According to the case mentioned in this report, the requirements are examined and identified by the client and all requirements are discussed with other board members before the finalization of any process. Objectives are set out for the project and time, cost decided are also to be discussed with all members.
Assessing alternatives
After the preparation of the statement regarding the whole project, some kinds of procurement routes should be analyzed in many terms. It includes some important tasks as the development of strategic brief, feasibility studies, and options appraisals. In this stage all planning and policies, procedures are to be finalized for the project and its development. All responsibilities and assignments of work are decided for every person. Policies, procedures are defined at this stage.
After the designing of the statement having requirements of the project, some options or kinds of procurement routes are needed to be examined or analyzed and all disadvantages and advantages are evaluated than other policies, procedures are also to be evaluated for this project.
Defining the solution
there are two types of design as a concept and detailed design and these can be examined in the manner of its performance whether it is suitable for the client’s needs or not.
After examining and analyzing both the types of routes it can be stated that the design should be according to the project and it should be suitable for the project.
Developing procurement route
At this stage best option is to be chosen for the client according to his project needs. That can implement with the decided period and according to the budget. The liability of project delivery lies in different people according to the selected procurement route. There are various kinds of procurement routes as abovementioned for construction work under any project.
At this stage out of the two alternatives such as design and build procurement route and traditional route of procurement one is most suitable as build and design procurement route. This is suitable for the project mentioned in the case because the client has decided the period for the completion of the project and the estimated cost budget for the project. The client also desired to assign a lump sum contract to the contractor and all associated risk and responsibility lies upon the contractor only. Hence, the client needs to take permission from all board members for the implementation of this alternative.
Implementing the strategy
It is such as a tender process and it includes some steps as:
Preparation of tender documents, an invitation to tender, submission and assessment of tenders, settlement, and contract engrossment then implementation.
After the selection of one procurement route for the project some decided strategies and plans are implemented in the construction. In these plans and policies are applied.
Project Delivery
At this stage, it is to be analyzed whether after the implementation of all strategies, plans, and procedures according to the project the objectives of the project are met out or not. It will normally allow for the variations issues that arise in the project, retention of funds till the completion of the project, and damages for the failure to perform these all are included in the conditions of the contract. Some responsibilities and liability regarding any defect or default are decided according to the contract.
So, in this manner, procurement can be implemented for any project. According to this case, the building and design procurement route is most suitable for the project.
At the last stage, all strategies and selected procurement routes were implemented in the project. The decided time and budget are also to be mentioned in the project and the contract is designed according to that, after that this contract and all conditions of it should be discussed with the board by the client. After completion of all stages, the project is to be delivered to the client.
Hence, it can be concluded that the traditional approach is not appropriate for this project because the client required the completion of the construction in a certain period of 15 months and with the decided budget. He wished to assign a lump sum contract to any contractor or advisor so after analyzing all kinds of procurement routes and their implementation, procedure it can be stated that design and build type is most suitable for this project.
Under this report, some suggestions are provided by me after identifying all procurement routes and I would advise for the build and design procurement route as it will be beneficial and have lower risk according to the client. In my opinion, it will be most suitable as all requirements and cost, time was considered during the analysis of procurement routes. Hence, it is advised that this procurement route is most appropriate for the client and according to his project.
Advice for the second issue as follows:
There are mostly four types of construction contracts such as lump sum contract, cost-plus contract, small jobs, and large jobs contract. In the design and build, procurement type the contractor is responsible for all work in the project. The client can also claim legal remedies against the contractor in case of any fault or damage. The overall risks associated with the project lie with the contractor. In this procurement, type the client is only wished for the result or desired outcome regarding the project. For this project, the lump sum or fixed fee contract is advised to the client because under this a price is to be fixed for all works done for the project. And all works and responsibilities are decided at the earlier stage of the project. The contract is also having all the conditions, requirements and strategies, policies implemented for the contract. In this contract fixed amount is to be paid by the client to the advisor for all the works.
There are various advantages to implementing this type of contract such as lower risks to the owner due to all risks associated with the contractor, the cost is fixed and no additional amount is to be required to pay, it minimizing the alterations in order or project, there is not so much supervision of the owner, the contractor also completing the project promptly and it is widely accepted kind of contract. All the conditions time consumed in completion of project and cost; other requirements are mentioned in the contract. After the signing of the contract, any party breaches the term or condition of the contract then he can be punished according to the contract law. Any party can claim the damages provided under contract law. If any tort is made by the contractor, then the client has some remedies against him. In this contract, one party promises to pay the lump sum amount to the contractor and if he does not pay that amount then the contractor is also having some rights of claim against the client. But the client must prepare and plan every step for the contract very consciously.
Risk Matrix
The main risks
Owner of the risk
Reasons
Effects
Lack of acceptance by the investor of the design proposal
Investor
Delays in the approval
Increase in the cost as the suspension of the work of the design team
Delays and the difficulties in the opinions and the permits
Investors
Delay of design and there are various unknown scope of the design
Distributed designing process
Conflict of the designing team and the members
Designer office
Insufficient flow of the information that is provided among the different team members
Distributed form of designing process
Final Advice
So, I would advise traditional form of contract that would for a lump sum contract to the client because according to the requisites of the client and selected procurement route he should execute this type of contract.
The reason behind choosing this is because it will be more beneficial for contractor such as it includes payment of money in a lump sum and all risks are associated with an only contractor. Time and fixed costs are already decided by the client that can be mentioned in the contract. In my opinion, this contract type should be adopted by the client. It was also helpful to the client when he wished to make the changes in the contract. So, any required information can be provided to the contractor regarding the project. It is advisable to the client that traditional contract is to be more beneficial for him according to his project needs.
Conclusion
It can be concluded from the abovementioned report that any type of procurement route is selected for the construction project according to the project. But some identifications and examinations are required for the effective completion of the project. Under this report, an analysis is made for the selection of procurement route regarding project made in the case where the client has decided time and cost for the project. The best suitable kind of procurement is provided to him and according to that contract, the type is also detailed out in the report so he can consider and discuss all the risks, specifications, advantages, and disadvantages associated with this project on the board.
References
Akbiyikli, R., Dikmen, S. Ü., Onur U?ur, L., & Ate?, A. (2017). Procurement, Good Design And Quality Integration: Some Research Issues.
Elhag, T., Eapen, S., & Ballal, T. (2020). Moderating claims and disputes through collaborative procurement. Construction Innovation.
Gottschling, P. (2018). Architectural scripts: construction procurement within the user worlds of building events. Social & Cultural Geography, 19(5), 626-646.
Loveland, M. (2017). Routes to success. Construction Journal, 20.
Matveeva, M. V., Doroshenko, T. G., & Sukhanova, I. A. (2019, November). On the issue of cost and timing of contract tenders for industrial and civil construction. In IOP Conference Series: Materials Science and Engineering (Vol. 667, No. 1, p. 012063). IOP Publishing.
Molwus, J. J., Erdogan, B., & Ogunlana, S. O. (2020). EFFECTS OF PROCUREMENT ROUTES'CHARACTERISTICS ON STAKEHOLDER MANAGEMENT IN CONSTRUCTION. International Journal of Construction Project Management, 12(2), 101-123.
Nguyen, P. H., Lines, B. C., & Tran, D. Q. (2018). Best-value procurement in design-bid-build construction projects: Empirical analysis of selection outcomes. Journal of Construction Engineering and Management, 144(10), 04018093.
OYELAMI, C. F. (2021). ASSESSMENT OF RISK RESPONSE TECHNIQUES FOR CONSTRUCTION PROJECTS UNDER DESIGN BID BUILD AND DESIGN & BUILD PROCUREMENT METHODS IN ABUJA (Doctoral dissertation).
Smith, J., Edwards, D. J., Martek, I., Chileshe, N., Hayhow, S., & Roberts, C. J. (2021). The antecedents of construction project change: an analysis of design and build procurement application. Journal of Engineering, Design and Technology.
Tang, Z. W., Ng, S. T., & Skitmore, M. (2019). Influence of procurement systems to the success of sustainable buildings. Journal of Cleaner Production, 218, 1007-1030
