Case Study - Level 2 - Key Issue 1

Question 1

What was the target budget?

Answer 1

£14.5m

Question 2

Tell me more about the scale of the problem? What were the causes?

Answer 2

The previous Quantity Surveyor on the project using a London Supply Chain to provide the costs.

They therefore did not go out to tender to enough subcontractors that are local to the project.

There were also items within the specification that were more expensive than what the client anticipated.

Question 3

Take me through the options to reconcile with the client’s budget.

Answer 3

Option A – Value Engineering

Option B – Re-tendering

Option C – Combining Packages

Question 4

In Option B- retender some packages? What was going to be different this time around?

Answer 4

I would focus on subcontractors who are local to the project to understand whether savings could be made from reduced preliminary costs and potentially reduced rates.

Question 5

Option B- Tell me more about the impact on preliminaries for not using local subcontractors. Explain.

Answer 5

It was identified that the less local subcontractors who were originally recommended had high preliminary costs due to costs of working away such as travel and accommodation costs.

Question 6

Option C - Combine some packages - Take me through some examples where you did this effectively.

Answer 6

When retendering the ceramic tiling and floor finishes, I came across a subcontractor who was able to undertake both of these packages, which offered a huge cost saving when compared with tendering the packages separately. The glazed screens, door package, adaptable meeting pods was also able to be combined with one contractor, as well as the mechanical and electrical packages as these tenderers offered this within their tenders.

Question 7

Option C - Tell me about the results of the implementation of the options?

Answer 7

o Soft Floor Finishes and Ceramic Tiling - £360k
o MEP - £210k
o Glazed partitions, doors and adaptable meeting pods - £320k

Total saving = £890k

Question 8

Combination of the 3 options - Take me through the savings you achieved via each of the options.

Answer 8

Option A – Value Engineering – Generated a cost saving of £1.48 million across nine different works packages.

Option B – Re-tendering and Option C – Combining packages generated a cost saving of £1.38 million.

Combined, this generated a total cost saving of £2.86 million.

Question 9

Combination of the 3 options - Take me through the process of creating a tender list for the local subcontractors.

Answer 9

Contacted the director of the retail department who operate more within the midlands and Northern region to obtain a bid list for subcontractors that they use

Undertaking market research of the ISG supply chain database to create my own list of subcontractors in the northern region which listed their address, their distance from the site, their contact details.

This document was updated using a RAG rating where red showed that they would not tender the project, amber showed that they would tender the project and green showed that they had returned their tender.

Question 10

Combination of the 3 options - Tell me about the results of the implementation of the options?

Answer 10

Option A and C:
o Drylining – Saving of £78k
o RAF – Saving of £15k
o Joinery – saving of £340k
o Decorations - £10k
o Ceramic Tiling and Floor finishes - £47k

Option B – Retendering provided a total saving of £490k.