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PROPERTY342 > 14. Construction Contracting > Flashcards

14. Construction Contracting Flashcards

1
Q

What are 7 procurement considerations?

A
  1. Project size and complexity
  2. New build vs refurbishment
  3. Stakeholder needs
  4. Developer in house expertise
  5. Consultant relationships
  6. Contractor relationships
  7. Risk transfer to others
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2
Q

What is single point of delivery?

A

Where one contracting party is responsible for design, approvals and construction; no split responsibility

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3
Q

What are the benefits of single point delivery

A

Designs are cost effective and easier to deal with issues

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4
Q

What is common for major projects in terms of contractor responsibilities?

A

Contractors accountable for detailed design and other responsibilities

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5
Q

What is common for most contracts (smaller projects)?

A

Construction only with some pre-construction contractor input

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6
Q

What are the different contract options and when are they contracted?

A
  1. PPP (stage 1)
  2. PM Org (stages 2 and 3)
  3. D&C (stage 4)
  4. Construct only contracts (stage 5)
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7
Q

What is a PPP?

A

Public Private Partnership
Service contract with the client purchasing a service with a specified output and an exclusive license

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8
Q

What does the bidder provide in a PPP?

A

Capital facility and operates under licence over that period

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9
Q

What happens at the end of a PPP period?

A

Ownership transfers back to the client

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10
Q

What are 2 benefits of a PPP?

A

Cost effective and bidder is basically developer
Delivery risk away from Government

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11
Q

What are PPP’s mostly used for?

A

Infrastructure projects generally over $200m

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12
Q

What is a PM Org?

A

Contract with project manager organisation who manages design, development and construction (single point delivery)

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13
Q

What happens when contracting is done further up the funnel?

A

Requires contractors with greater skills to managed higher risks for better rewards

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14
Q

What 3 contract documents are there in a PM Org?

A
  1. Contract to develop concept and manage designers
  2. Construction contract
  3. Performance specifications and fit for purpose provisions
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15
Q

What are 4 advantages of a PM Org?

A
  1. Single responsibility and accountability
  2. Early input of building skills
  3. Focus on cost reduction and added value
  4. Overlap of design and construction
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16
Q

What are 2 disadvantages of PM Org?

A
  1. Higher fees
  2. Relationship is important as control with one organisation
17
Q

What is a D&C?

A

Design and Construct contract - like PM Org but contract entered into at the end of developed design; developer can choose other consultants but will be under the contractor’s control

18
Q

What are 2 advantages of D&C?

A
  1. Single accountability for risk from this point on
  2. Early input of building skills - overlap of design and construction
19
Q

What are 2 disadvantages of D&C?

A
  1. Higher fees
  2. For more simple projects
20
Q

What are the 3 types of construct only contracts?

A
  1. PM consult-construct tender (project manager consultant)
  2. Construct tender (tender traditional system by architect)
  3. Construct cost +
21
Q

What are 2 advantages of a project manager consultant contract?

A
  1. Skilled project manager - time, cost, quality
  2. Single point responsibility (not accountability)
22
Q

What is 1 disadvantage of a project manager consultant contract?

A

Risks are still held by the client (but controlled)

23
Q

What is a tender traditional system by architect?

A

Architect manages consultants and contractor

24
Q

What are 2 advantages of a tender traditional system by architect?

A
  1. Limited client involvement
  2. Perceived low cost as little risk to contractor
25
Q

What are 2 disadvantages of a tender traditional system by architect?

A
  1. History of substantial variations
  2. No overlap between design and construction - takes longer and cannot add value
26
Q

What is the current major project approach?

A
  1. Indicative feasibility - engage designers
  2. Detailed feasibility and RC - negotiate fees with consultants (novation clause) and work with specialists
  3. Contractor appointment - includes design responsibility
  4. Construction - novate consultants to contractor so contractor has singular accountability
27
Q

What is a novation clause?

A

Can assign the contract to someone else eg. put designers under contractor control

28
Q

What is the development control group?

A

Like a board of directors (core project group of 8-10 people max) for the project who meet to review progress and report and different aspects

PROPERTY342 (21 decks)

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