Case Study Flashcards
What other procurement route would you of recommended to the client in place the JCT D&B?
“I would recommend Traditional
It would allow the client to maintain control of design and get the design to a more progressed stage without handing control to the contractor.
Whilst this would potentially extend the programme it would allow the client to specify all details and design requirements as I feel there were areas within our design that were lacking or still in abatement
Would have given more cost certainty between PTE & Tenders
Current thoughts on TPI
“It is currently circa 2.2% (CHECK CLOSER TO INTERVIEW)
Lower than current market trends show”
What is the CPC forecast for inflation over the next couple of years
“CPC have carried out some forecasting for the residential sector and believe;
Pessimistic 8.5% 2022 - 6.0% 2023
Realistic 5.5% 2022 - 4.0% 2023
Optimistic 5.0% 2022 - 3.0% 2023”
What indices or market intelligence do you use to advise the client of changes in the market coming up?
“We use intelligence we receive from contractors & tender prices
Other consultants forecasts
BCIS
Articles & web links such as construction inquirer”
Are there any observations of criticisms of the BCIS and the TPI
“It is only as good as the information that is supplied to it.
If consultancies/ contractors don’t provide enough sample information then it will not be reflective of the wider industry”
Is it standard for clients to go with an unamended contract
No, We always (normally) see clients amend the contract
Is it fair that the clients amend the JCT contract
“No. The JCT is tested through the courts amending this changes the legal president of the contract
It will always be for the benefit of the client
Leads to protracted pre contract negotiations”
Your swing was circa 18% from lowest to highest. What is a swing that you would recommend to a client is acceptable
“No. We would anticipate this being circa 5% (NORMALLY)
Due to the changing market conditions however we are increasingly see this closer to 10% due to the uncertainty in the market the smaller the scheme the bigger the impact we are seeing in tender price as smaller contractors have less buying power”
What other elements of note did you VE other than FFE
“Finishes - Savings for acoustic ceiling tiles
Finishes - Vinyl wall covering (Paint)
Finishes - Green wall
External works - £20k tepee & bases
External - 5k connecting pathway
Glazed Entrance - £36k ADD back £12k for draft lobby
Electrical - £37k Omit Speed gates”
Did you focus on M&E or is there a reason you didn’t
M&E wasn’t a focus
HVAC diffusers relocated but layout remained mainly unchanged
Lighting was all new but internal layout not changed so LUX levels needed to be maintained
What happened in instances where you disagreed with the value that the contractor had proposed to be omitted
“We had to negotiate our position with the contractor
I discussed it with the client to set out our position to ensure agreement
Set this out to the contractor highlighting areas we agreed but highlighting where I had concerns
listened to the contractors positions and agreed on a position both agreed on.”
How does the unamended JCT deal with inflation in the contract
“Option A - Contribution, levy and tax payable as an employer
Option B - In addition to A this covers labour & material costs
Option C - Formula adjustment using the Formula Rules
OPTION D - NO PROVISION
JCT allows for an alternative provision to be stated by agreement by the parties”
Fluctuation Provision Option A - Contribution, levy and tax payable as an employer
Option A - Contribution, levy and tax payable as an employer
Deals with adjustments to contract sum based on TAX changes that an employer has to pay
Adjustment is made when statutory tax or duty change”
Fluctuation Provision Option B - In addition to A this covers labour & material costs
Option B - In addition to A this covers labour & material costs
“This allows for adjustment for labour & materials
Contract is based on wage fixing body. If a rate changes at the base date then the contract sum is adjusted
It includes; wage, bonus, OT, AL etc
Calculation can be difficult
Option A&B can require the contractor to supply full build up of rate& prices in tender. Not 100% accurate as contractor price will be approximate of plant labour materials”
Fluctuation Provision Option C - Formula adjustment using the Formula Rules
Option C - Formula adjustment using the Formula Rules
“Formula adjustment relies on indicie adjustment based on base date (normally 1 month before return)
Contract sum divided into categories/work groups which are adjusted by indices up/down
Provision of non adjustable items can be included for elements not related to change”
Who dealt with the drafting of the LOI
Solicitor
Can you explain the details of the L&E claim that formed part of your case study
“As a number of instructions were issued to the contractor during the scheme we had to review EOT & L&E claim.
They claimed for additional prelims due to the additional time implications of the works that were required.
Additional installation of EVC chargers
Additional fire stopping throughout building”
Covid is it still effecting the works
It is indirectly. Through impact on prices of materials. But isolations and covid related site issues have ceased since the removal of restrictions back in February
Why did the budget decrease (clients budget)
“As a result of the pandemic/Brexit and changing financial climate.
Increasing client costs reduced clients capital budget”
How did you gather the pre con information
This was supplied by the client. We were given the tender documents as provided by the previous EA along with the tender returns
All tenders over budget
Yes, based on the new budget but lowest was £18k over PTE (done by other consultant) This would indicate that the PTE was low
What were the VE options discussed
Focused on FFE wall ceiling and floor finishes
Glazed lobby
Speed gates
if you were to redo this project what would be the main lessons learned
“I would recommend to the client that they use a traditional procurement route.
I don’t feel ER’s were as clearly defined as they should be and the client should of done more design upfront to either go through a D&B or a traditional. A D&B operates similarly to a Traditional contract post contract with reference to changes and variations”
What is a lessons learnt workshop
Identify failings put procedures in place to stop happening again
Record success and share with others
You mentioned covid and the volatility of the market. What do you think is driving the volatility
Covid (price increases) (National shut down)
Ukraine
Current global economic state. High inflation affecting surety of future pricing
Can you provide 2 other examples of cost savings on the scheme
Removal of acoustic ceiling tiles £10k
Removal of rotating glazed entrance door £24k (had to install a draft lobby which reduced the saving)
Can you provide 2 other examples of cost savings on the scheme
Removal of acoustic ceiling tiles £10k
Removal of rotating glazed entrance door £24k (had to install a draft lobby which reduced the saving)
What were the qualifications you encountered during the tender analysis process
Contractor had qualified a number of prices due to the ER’s/designs not being suitably developed for the contractor to price
Contractor had qualified programme and start date based on receiving an order by a set date
How did you establish the value within the LOI
Contractors CSA
Further detailed breakdown requested
MEP quotations clearly identifiable
How did you establish the time frame for the LOI works
Based on programme provided strip out works were a line item
The other works were within MEP discussion and negotiation to agree period
Were considerations given to any covid delay clauses in the contract?
At the time we did not. As we took the scheme following tender return and the contract conditions had been established (unamended) contracotr unwilling to change any conditions of the contract.
We would ordinarily include the CLC clause for a pandemic event
Or include drafting from a solicitor around a public health event
You noted that the LOI does not cover for insolvency. How would you provide the client with insolvency cover in a main contract
PCG
PB
Building warranty with Insolvency cover
Would you recommend to a client that they take out a PB or a PCG
PCG - this will cover for all losses which could exceed the 10% a PB would normally cover for
Why didn’t you advise the client to stop the project and more forward when there was a better handle on the design and scheme generally
Due to the client key driver being for maintenance of the programme. Similar to retender it was considered but was not a feasible option for the client
