Case Study Flashcards
In addition to the scope transfer, can you please explain what other VM/VE options were considered?
Some of the items we considered as part of the value engineering was:
Explored:
- Exposed ceiling system instead of a suspended ceiling (making sure acoustic requirements are not affected + price of full height partitions won’t impact the VE Option) .
- Different acoustic supplier, Treetops instead of Rockfon.
Rejected:
- Using different branded furniture than the specification provided.
Approved:
- Reclaimed RAF tiles (£80,000)
- Painting walls instead of the feature walls / cladding. (£20,000 saving - approved)
- Omitting glass and glazed doors and just using timber with vision panels. (£30,000 saving - approved)
- Using different branded furniture than the specification provided. (C. £35,000 saving approved)
How did your cost plan compare with the contractor’s sum?
The contractor’s sum was £16.7m when combined with the risk register and other project additions, so C.£300k cheaper. This was largely due to variation in pricing, i.e. the cost used for BG products was cheaper than I had allowed for.
You mention there was a 3% risk allowance in your cost plan to cover for the premium of a non-competitive tender; how did you get to this conclusion?
Benchmarking.
Within the London team, there have numerous examples of fitout projects that have started as negotiated tenders but were non-viable, and then when re tendered they have shown a trend of between 2%-5% construction costs savings.
What other risk allowances did you include in your cost plan?
There was a fully costed risk register. The big ticket items were the design development allowance, a general inflation allowance and supply chain default.
What contract mechanism did you advise the client to engage the contractor and their supply chain earlier?
We used a PCSA to engage with the contractor in order to gain insight on stage 3 design, costs, buildability etc.
The reason we used a PCSA even though we were direct awarding was because the university still needed a mechanism for aborting the project if the cost exceeded their budget.
How did you advise your client on procurement? What other procurement options did you consider?
I advised the client about the inflexibility of direct awarding but the decision had been made at an earlier stage. As part of my advice relating to the key issue I offered to the client, we explored other competitive methods but it prolonged the programme and affected the occupation date.
Why was NEC Option A selected over JCT D&B?
- Client experience was greater with JCT.
- Programme was tight, NEC has the programme as a contractual document, allowing for greater control and certainty.
- NEC Option provides a greater degree of customization.
- NEC places more emphasis on collaboration and proactive management.
You talk about proactive cost management, what do you mean by this?
Proactive cost management involves anticipating, planning, and controlling costs throughout a project’s life cycle to ensure financial efficiency and prevent cost overruns.
- Early budgeting and planning, including producing estimates and allocating appropriate levels of budget to different phases of the project.
- Continuous monitoring and control, monitor costs constantly and look to analyse variances between budgeted costs and actual costs.
- Risk management, identifying potential cost related risks and developing mitigation strategies.
- Change management, implementing a strict change control process in order to control changes to the scope and ensure they are viable within the project budget.
How did you report value for money when directly appointing a main contractor?
On Brent Cross the main two ways I reported value for money was through comparing contractor costs to rates from benchmark schemes in London, as well as to the rates used on the sister scheme in Sheffield once location and inflation had been accounted for.
What was the justification for choosing Option A over Option B or C?
The project was simple, with a low risk profile, so it was more suited to an Option A or Option B than a C.
Option A was chosen as it has the simplest payment process, providing greater cost certainty and less risk than Option B as it is not re measurable, the contractor is at risk for incorrectly measuring the quantities.
What is the purpose of the alliance contract between SHU and BAM?
The NEC4 Alliance Contract is designed to foster close collaboration among all parties involved in a construction project.
It introduces shared goals, integrates teams, encourages long term relationships, promotes more efficient risk management, promotes transparency as all parties sign up to a single set of terms.
It is usually employed on large projects with multiple stakeholders and parties, such as by Highways England for the conversion of hard shoulders into smart motorways.
Why did you recommend a design and build contract over a traditional one?
I would use a D&B contract where the client wished for the contractor to be responsible for the design. Usually this is because the client will benefit from the contractor’s knowledge and can increase the buildability of the design, whilst also transferring the design risk on to the contractor.
You mentioned the splitting the MEP installation between the floors in order to reduce costs, can you explain some of the issues this may cause?
- Student impact - when re-linking MEP in second phase as parts of floor would have to be sectioned off.
- Cost impact - increased BWIC
- Programme impact -
You said that you maintained continuous communication with both the contractor and the client team, what form did this take?
I maintained continuous communication through various forms.
Re-occurring teams meetings, progress, risk, etc.
Regular calls and emails.
Site visits.
What was your total construction cost?
What was your total contingency?
What was value of partitions?
£13m Construction Cost
£390k (3%) non-competitive pricing risk
£1.235m risk contingency remaining
£2m professional fees
£350k SHU Estates resource
What was the project duration? What was the start date? What was the longest activity on the programme?
December 2025 - July 2026 (26 weeks)
What was the ratio’s for design?
Net to gross = 10,670 (NIA) / 13,392m2 (GIA) / = 80%
How did you ensure that the client was protected from sub-contractors going into administration?
- Credit check on frame supplier.
- Type of contract - NEC Option A, contractor is only paid for amounts 100% complete.
- Contract Conditions -
, Performance Bond (X13), Retention (X16).
What is CLT?
CLT is a subcategory of engineered wood panel product made from gluing together at least 3 layers of solid-sawn lumber.
What are the benefits of using this material over another?
- CLT is made from wood, a renewable source and the manufacturing also requires less energy than concrete / steel.
- CLT generates minimal waste material as panels are available in wide range of shapes and size.
What are the negatives of using CLT?
- CLT is more expensive than more traditional materials.
- It is not as readily available in all regions in comparison to traditional materials.
- Prone to swelling or warping if exposed to moisture for too long.
Why did the client go with a direct award when funding was a concern?
The synergies of using BAM.
Already familiar with the building, previous good working relationship with the contractor, constructed identical sister scheme in Sheffield.
What did you do as part of managing the tender process?
- Organise tender documents
- Included in tender documents – form of tender, ITT, prelims documents, contractor design portion in the scope (clause for CDP), pre-construction information pack, contract data part 1, pricing doc (activity schedule).
- Definitions, scope, CDP – performance related criteria.
What is CAT A? What is CAT B? What is CAT A+?
- A CAT A fit out provides a basic level of finish above what can be expected from a shell and core. This could include raised floors, suspending ceilings and internal surfaces along with basic M&E services.
- A CAT B fit out provides a workplace that’s ready to move into, so all finishes, furniture, power outlets etc.
- A CAT A+ fitout is the midpoint between the traditional specifications of Cat A and Cat B fit outs.
You mentioned the inefficiency of re-connecting the M&E systems of floors 1-4 and 5-6 at a later date, how did you advise the client on this?
You mention giving advice in design team meetings - can you please provide an example of what advice you gave to the client?
I gave cost based advice based on options raised by design team. Gave some suggestions such as exposed instead of suspended ceilings but clarified it was not direct design advice as this is outside of my scope.
You received a detailed quote from a supplier so the university could offer cyber security courses. Did you review the quote from the specialist supplier? Were alternative quotes obtained? What was your advice to the client?
Yes, I reviewed the quote.
I compared the quote from others obtained on other mace projects and calculated a rough £/m2, which showed it was line.
I did suggest to the client the option of seeking other quotes to improve the price but they were happy to go with their existing supplier and were happy once i had validated the cost.
As this was a specialist system (cyber security) how did you satisfy yourself that the client was receiving value for money?
- Quote was reviewed by myself, an M&E consultant with experience in providing cyber security rooms, and compared to benchmark figures.
You state that the MEP package was being designed by the contractor - how was the contractor monitored to ensure that the client was receiving the product that they wanted and the systems were not being overdesigned?
The client design team who had designed the scheme up until stage 3 were employed as TA’s who had meetings with the contractor’s design team, provided input/comments during their design phase. This ensured the design was fit for purpose and specific.
What is the difference between traditional procurement with CDP and Design & Build?
- CDP is usually specific trade packages that are designed after tender.
- D&B is usually more wholesale design requirements and relies on contractor involvement at an early stage.
What typical CDP elements may an employer wish to transfer?
Frame/Structural design.
M&E systems.
You state in your achievements that the project benefited from a reduced construction programme which allowed for more float - can you please advise who owned this float?
This in theory was terminal float as it increased the duration between planned completion and the completion date, but as the contract has not been signed it is just theoretical.
The award for various reasons went directly to BAM, how did you manage the lack of commercial leverage with the incumbent contractor? Was it simply adding 3% to the prices?
The commercial leverage was the use of the sister scheme as a benchmark.
The 3% was an over and above risk allowance.
The client felt that the potential loss for money would be mitigated by the synergies that could be gained… what were these synergies?
The synergies were:
- The existing relationship between BAM and SHU.
- The fact the contractor was constructing the base build, meaning they were already intimately aware of the building, thus lowering design risk.
- The contractor is currently constructing a sister scheme in Sheffield with identical design and specification, offering LL.
Why was it prudent to draw down £100K of the design development (risk allowance) to partially fund the changes?
The design development risk allowance is supposed to be used during design phase, so prudent to use now, but also wanted to save the majority of it during stage 4 when BAM would take over design responsibility.
You mention leaving some risk funds allocated in the future, how would you do this exactly?
As a contingency fund, I would look to use bench marking early on to provide an appropriate figure (10% of construction cost). I would then look to allocate the contingency into specific risk allowances where known through risk workshops. I would also look to leave some as un-allocated to account for unforeseen risks.
You mention leveraging combined project experience. Who was present at these workshops and why?
The project team so:
- Designers, i.e. architects, mechanical engineers, electrical engineers.
- Project management, planners.
- Contractor and their pre-construction team.
