Area D - Procurement

Question 1

Name common procurement pricing models?

Answer 1

Lump sum (with or without monetary allowances)
Cost reimbursement
Guaranteed maximum price (turnkey type)
Labour only
Measure and value
Multi - Prime: principal enters into agreements with multiple subbies for different packages of work. Principal effectively as head contractor, engineer and principal.

Question 2

What are common procurement methods?

Answer 2

Open or invited tender at completion of documentation
Early contractor involvement - could tender early off P&G
Direct Negotiation
Fast track
Design build (novation)
2 stage tenders - open tender non price attributes, then selected tender for price competition?

Question 3

Your client has a small commercial fit out project they want to project manage themselves. What contract/s could you suggest they use?

Answer 3

Nzs 3915 or NBC

Question 4

What documents are included in an RFT?

Answer 4

Cover letter
Tender schedules
Contract schedules
Drawings amd specs
Other relevant info

Question 5

What are nominated sub contractors and what would your advice to your client be?

Answer 5

Risk of not gaining competitive pricing by selecting single sub contractor.
Contractor may not have any prior working relationship with particular subbie - usually head contractor will tender to subbies they have an existing relationship with and can attest to their performance.

Question 6

What are the advantages and disadvantages of a GMP contract?

Answer 6

For the client:
Quality is at risk unless sketch plans are very thorough or a bench marking process is established. (Another job client has undertaken?)
Cost is fixed - provides cost surety so reduces risk but may end up paying a premium for contractor to carry the risk.
Time is generally fixed and no direct cost penalty to the client for delays - no risk.

For the consultant:
Quality - compromised to meet budget = consultants responsibility/ liability put at risk
Cost - consultants costs may be harder to define depending on contractors approach.
Time - may be under pressure to do your work
Liabilities - additional risks if novated

For the contractor:
Quality - contractor may have greater control within limits of contract. Can be good or bad for client.
Cost - contractor arguably has more control of the cost on the job and can vary the finish to maintain or improve their margin. Risk is reduced.
Time - greater influence in setting the time frame. Can details to manage time better.