Case Study Flashcards
What alternative option did the project use for dealing with errors?
- Alternative 2 - the tenderer was given the opportunity of confirming their offer or amending to correct the error/s.
What is the risk involved in using alternative 1 for dealing with errors?
- The tenderer will either be invited to stand by the offer or withdraw.
- If they withdraw then the next lowest bid may be considered.
- If they stand by their tender then documents need to be amended to reconcile the error/s.
What was the risk for the stage 3 cost plan on GMV 401 & 403?
As the cost plan was divided into three elements for 401, 403 and public realm works there was a design development risk of approx. 5% included which equated to approx. 4.26% overall.
What was the value of risk in the stage 3 cost plan?
£3.09m.
How did you go about calculating the value of risk for the stage 3 cost plan?
- We held numerous risk workshops and a risk register was prepared where all the risks were scheduled and assigned it’s cost impact.
What was the value of some of the risks captured within the risk register for the Stage 3 cost plan?
- Fluctuations in price of materials over and beyond the inflationary allowance - £500k.
- Risk in the ground due to contamination in ground and based on similar scheme - £100k.
- UFH to affordable units - £100k.
- Comfort cooling to apartments due to incomplete energy model and the potential need for some units to have comfort cooling and for the client to comply with building regs. - £500k.
- Client changes to internal finishes spec. (kitchens and etc.) - £100k.
- Client changes to scheme - £200k
- Electrical vehicle charging - £100k.
- Building Safety Act measures causing delay to project and introducing sign-offs from BSR - £300k.
- Compliance with Part M accessibility - £200k.
- Compliance with fire strategy - £50k.
What was the percentage of costs on GMV 401 & 403 Stage 3 cost plan of the following:
- Substructure.
- External Walls.
- Windows/External Doors.
- Services.
- Risks.
- 401:
- Substructure - 10% - £3.5m.
- External walls - 9% - £3.06m.
- Windows/External doors - 4% - £1.5m.
- Services - 17% - £5.9m.
- Risks - 5% - £1.61m.
- 403:
- Substructure - 12% - £3.54m.
- External walls - 10% - £2.92m.
- Windows/External doors - 4% - £1.23m.
- Services - 17% - £4.88m.
- Risks - 5% - £1.37m.
What was the percentage of costs on GMV 401 & 403 PTE of the following:
- Substructure.
- External Walls.
- Windows/External Doors.
- Services.
- Risks.
- 401:
- Substructure - 6% - £2.14m.
- External walls - 13% - £4.94m.
- Windows/External doors - 5% - £1.8m.
- Services - 17% - £6.65m.
- Risks - 2% - £893k.
- 403:
- Substructure - 6% - £1.98m.
- External walls - 14% - £4.97m.
- Windows/External doors - 5% - £1.61m.
- Services - 17% - £5.17m.
- Risks - 2% - £823k.
Where did the tenders sit when compared to your PTE?
The tenders came below our PTE as follows:
- Bennetts - £71m.
- MAR - £69.7m.
Did you prepare a PTE for GMV 401 & 403? If so, what was the value of the PTE and how did this compare against the stage 3 cost plan?
Yes a PTE was prepared and the value of it was approx. £73.6m. This had gone up by approximately £1m.
Why had the costs gone up for the PTE from the Stage 3 Cost Plan?
There were numerous reasons why the costs had gone up for example:
- Design development.
- Areas amended.
- Frame costs had gone up due to changes in structural requirements resulting in more supports which subsequently had a cost impact of £650k.
- Extent of green roof had increased resulting in a cost impact of approx. £65k
- Due to areas being amended this had an impact on internal partitions which resulted in a cost impact of £100k.
- Impact on internal finishes as a result of areas amended resulting in a cost impact of £50k.
- On costs, Prelims, OH&P, Risk and Inflation.
Why did the tenders come under?
There were a number of reasons:
- Exclusions.
- Irregularities in pricing.
- Changes in the market.
What items had been excluded from their tender price?
Some of these exclusions included:
- MAR Additional costs:
- Bond - £274k from MAR.
- Acceptance of risk in ground - £53k.
- Post tender pricing adjustment/normalization - £306k.
- Revised price - £70.38m.
- BCL Additional costs:
- Waterproof concrete - £28k.
- Additional site setup - £53k.
- Increase in concrete - £400k.
- Increase in brick supply - £100k.
- Other PTQ process/normalization costs - £60k.
- Revised price - £71.61m.
On your first key issue, you mentioned you tendered via selected tender through single stage. Was any other tendering route considered, say, negotiated? If not, why?
- The reason why another tendering route was not considered was because GMVL had entered into an agreement for lease with the GLA for a drawdown of land on which they build residential units. One of the terms of this agreement for lease is that the construction works are competitively tendered. Therefore GMVL are obliged to tender the works.
In key issue 1, option 2, what were the other fluctuation options under the JCT D&B 2016 contract and why weren’t these considered?
- Option A - allows for adjustments to contract sum in respect of changes in tax, levies and contributions.
- Option B - allows for adjustments to contract sum in respect of changes to price of labour and materials that were current at the base date.
- The reason why option A was not considered because it does not reflect the situation on changes to material prices just the tax on the import of goods.
- The reason why option B was not considered is because that would be reliant on the contractor’s own specific market research or supply chain fluctuation which may not reflect what the wider market is experiencing.
- Therefore option C seemed to be the only viable option as it was based on predetermined indices that would take an average of material fluctuations across the entire market so a suitable percentage uplift or reduction could be applied.