Case Study

Question 1

What other procurement route would you of recommended to the client in place the JCT D&B?

Answer 1

“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

Question 2

Current thoughts on TPI

Answer 2

“It is currently circa 2.2% (CHECK CLOSER TO INTERVIEW)

Lower than current market trends show”

Question 3

What is the CPC forecast for inflation over the next couple of years

Answer 3

“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”

Question 4

What indices or market intelligence do you use to advise the client of changes in the market coming up?

Answer 4

“We use intelligence we receive from contractors & tender prices

Other consultants forecasts

BCIS

Articles & web links such as construction inquirer”

Question 5

Are there any observations of criticisms of the BCIS and the TPI

Answer 5

“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”

Question 6

Is it standard for clients to go with an unamended contract

Answer 6

No, We always (normally) see clients amend the contract

Question 7

Is it fair that the clients amend the JCT contract

Answer 7

“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”

Question 8

Your swing was circa 18% from lowest to highest. What is a swing that you would recommend to a client is acceptable

Answer 8

“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”

Question 9

What other elements of note did you VE other than FFE

Answer 9

“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”

Question 10

Did you focus on M&E or is there a reason you didn’t

Answer 10

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

Question 11

What happened in instances where you disagreed with the value that the contractor had proposed to be omitted

Answer 11

“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.”

Question 12

How does the unamended JCT deal with inflation in the contract

Answer 12

“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”

Question 13

Fluctuation Provision Option A - Contribution, levy and tax payable as an employer

Answer 13

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”

Question 14

Fluctuation Provision Option B - In addition to A this covers labour & material costs

Answer 14

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”

Question 15

Fluctuation Provision Option C - Formula adjustment using the Formula Rules

Answer 15

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”

Question 16

Who dealt with the drafting of the LOI

Answer 16

Solicitor

Question 17

Can you explain the details of the L&E claim that formed part of your case study

Answer 17

“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”

Question 18

Covid is it still effecting the works

Answer 18

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

Question 19

Why did the budget decrease (clients budget)

Answer 19

“As a result of the pandemic/Brexit and changing financial climate.

Increasing client costs reduced clients capital budget”

Question 20

How did you gather the pre con information

Answer 20

This was supplied by the client. We were given the tender documents as provided by the previous EA along with the tender returns

Question 21

All tenders over budget

Answer 21

Yes, based on the new budget but lowest was £18k over PTE (done by other consultant) This would indicate that the PTE was low

Question 22

What were the VE options discussed

Answer 22

Focused on FFE wall ceiling and floor finishes
Glazed lobby
Speed gates

Question 23

if you were to redo this project what would be the main lessons learned

Answer 23

“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”

Question 24

What is a lessons learnt workshop

Answer 24

Identify failings put procedures in place to stop happening again

Record success and share with others

Question 25

You mentioned covid and the volatility of the market. What do you think is driving the volatility

Answer 25

Covid (price increases) (National shut down)

Ukraine

Current global economic state. High inflation affecting surety of future pricing

Question 26

Can you provide 2 other examples of cost savings on the scheme

Answer 26

Removal of acoustic ceiling tiles £10k

Removal of rotating glazed entrance door £24k (had to install a draft lobby which reduced the saving)

Question 26

Can you provide 2 other examples of cost savings on the scheme

Answer 26

Removal of acoustic ceiling tiles £10k

Removal of rotating glazed entrance door £24k (had to install a draft lobby which reduced the saving)

Question 27

What were the qualifications you encountered during the tender analysis process

Answer 27

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

Question 28

How did you establish the value within the LOI

Answer 28

Contractors CSA

Further detailed breakdown requested

MEP quotations clearly identifiable

Question 29

How did you establish the time frame for the LOI works

Answer 29

Based on programme provided strip out works were a line item

The other works were within MEP discussion and negotiation to agree period

Question 30

Were considerations given to any covid delay clauses in the contract?

Answer 30

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

Question 31

You noted that the LOI does not cover for insolvency. How would you provide the client with insolvency cover in a main contract

Answer 31

PCG

PB

Building warranty with Insolvency cover

Question 32

Would you recommend to a client that they take out a PB or a PCG

Answer 32

PCG - this will cover for all losses which could exceed the 10% a PB would normally cover for

Question 33

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

Answer 33

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