Case Study Q&A

Question 1

Why was D&B selected?

Answer 1

The client wanted to prioritise transferring risk over to the contractor over ensuring quality.

Risk was a higher priority than quality.

Question 2

What design stage was the project tendered at?

Answer 2

RIBA Stage 3

The design could of been developed to RIBA stage 4, to help retain quality and mitigate further risk for the client, but this would negate the programme savings.

Question 3

Given that a two-stage traditional tender was appraised, why wasn’t a two-stage D&B route appraised?

Answer 3

In heindsight, it would of been a good option to consider.

Advantages
- Increased contractor involvement in design
– Ability to overlap design and tendering

Disadvantages
- Lack of competitiveness during second stage
– Programme implication to include a tender period (although this can be overlapped with design)

Question 4

Which takes precedence the ERs or CPs under a D&B route?

Answer 4

Unamended, CP takes precedence if conflict with ERs

• CPs are prepared by the contractor which responds to the employer’s requirements.
• In this document(s), the contractor will set out a more detailed design (based on the employer’s requirements), which will require further development throughout the course of the project.

If amended, ERs take precedence.

Question 5

On St John Wood House, how was quality maintained and risk of derogation from the clients expectation of this quality maintained?

Answer 5

The design team were involved in inspecting and testing the completed design and construction work, and identifying and documenting any quality issues and defects.

Question 6

In Key Issue 2, you mention that due to limited time for cost planning and design development you recommend proceeding with the current specification – could you explain this a bit more?

Answer 6

Given that programme was also a key driver for the client, and given the point at which the overspend was identified, this left little time to engage in a detailed VE exercise. As such, it was decided to proceed with the the current specification.

Question 7

What is the difference between scope reduction and VE?

Answer 7

Scope reduction is the process of cutting activities associated with a project, while value engineering (VE) is a process that involves finding ways to reduce costs while maintaining the value of a project

Question 8

Is VE purely about reducing cost?

Answer 8

No, value engineering is about a creative problem-solving process that aims to optimize value while minimizing costs.

Question 9

Could you tell me the difference between Value Management and Value Engineering?

Answer 9

Value management (VM) and value engineering (VE) are both used to improve the value of a project, but they differ in their scope, approach, and when they are best applied:

Approach
VM is a positive process that seeks to balance time, cost, and quality, while VE can be seen as a negative process that focuses on eliminating costs.

Audience
VM reports are often strategic documents for a broad range of stakeholders, while VE reports are more technical and written for engineers or project managers.

Timing
VM should be carried out early in a project, while VE is more systematic and can be used to address specific functions.

Question 10

Could you suggest and example where VE may increase in cost?

Answer 10

1. Choosing cheaper materials to reduce upfront costs might lead to increased maintenance or replacement costs in the future.
2. Investing in a energy efficient material / plant in the short term, to reduce cost in the long term.

Question 11

You refer to comparing against benchmark data – what do you need to consider when comparing against benchmark data?

Answer 11

Location
Time
Abnormals

Using indices such as those in BCIS

Question 12

Did you come up with the value engineering options yourself?

Answer 12

No, I discussed these with the wider design team, to try and establish, given the programme constraints, what we could VE.

Question 13

Did you explain to the client that all four objectives (Time, Risk, Quality & Cost), may not be achieved?

Answer 13

Yes, typically 2 or 3 of these priorities take precedence and are achieved at the sacrifice of the other(s)

Question 14

If design lacked the detail, which I assume at RIBA stage 3 on a high end house it would, that there would be financial risk. Even if you developed design to RIBA stage 4, would there still not be a premium?

Answer 14

There would yes, but it would be likely that the premium included by the contractor may be lower due to less risk.

Question 15

How would you make sure the contractor does not cut costs on a D&B?

Answer 15

• Robust ERs
• Regular Monitoring - Ensuring the design team were involved in inspecting and testing the completed design and construction work, and identifying and documenting any quality issues and defects.
• Transparent Communication

Question 16

Could you start on site earlier with a singe stage competitive tender and how?

Answer 16

Going out to tender with a less developed design including CDP and PSums

Question 17

Is there a way you could appoint a contractor without a PCSA?

Answer 17

A letter of intent (LOI) is a possible alternative to a pre-construction service agreement (PCSA):

PCSA: A comprehensive, stand-alone agreement for a specific scope of work.

LOI: A temporary placeholder for a building contract that’s used when a preferred contractor has been identified but some details are still being worked out. LOIs are often used to give parties time to finish negotiations and start work while the final details are agreed. However, not all LOIs are legally binding.

Question 18

Traditional two-stage tender - How did you ensure competitiveness throughout the second stage?

Answer 18

You could ask for 3 quotes for certain / large package.

Question 19

How did the client set their budget?
Did you complete previous estimates?
Did you have sufficient contingency’s?

Answer 19

The client wanted to target a budget of approx £1000/ft2
Yes, the PTE did represent a significant uplift however, the client did not request any VE up until that point.
We had a contingency but the overspend ultimately used it all up.

Question 20

How far off was the PTE to the tender return?

Answer 20

The PTE was £65K higher.
£6.3m & £6.235m

Question 21

How did you get to the stage of having a project over £400k over budget - how did you control the costs from RIBA stage 3 to 4?

Answer 21

The client initially set a budget, but as out cost plans developped, the client did not flag any need to reduce costs or VE. It was only when we produced our PTE the client flagged that he wanted to brings costs down.

Question 22

Did you help the client understand the inflation costs if constructed in a few years?

Answer 22

In this circumstance, we did not. They wanted to proceed.
However if I did, I would have used TPIs to show this potential impact.

Question 23

What other ways could you aim to reduce risk associated with D&B?

Answer 23

Further surveys, investigations and developing the design further.

Question 24

What are some of the items you sought buildability advice from the contractor?

Answer 24

• Logistics of getting the piling rig into the rear garden
• Façade retention temp works

Question 25

If the client asks you to reduce your fee, what would you do?

Answer 25

1. Discuss with the client and try and understand their reasoning?
2. Try and make the client see the value in your fee and associated services.
3. If they still want to a reduced fee, I would have to look at reducing services.

Question 26

What is Novation?

Answer 26

Novation is a process in which the contractual rights and obligations are transferred to a third party.

The benefits and the burdens can be transferred by a novation agreement, rather than just the benefits as with assignment.

Question 27

How is quality driven by a novated design team?

Answer 27

• By also having a client monitoring role. There would be two distinct design teams, the novated team and the client team.
• They would work distinctly and separately
• The client team could then report and check on the novated teams design work.

Question 28

What’s the difference between novation and assignment?

Answer 28

A novation involves the transfer of both benefits and obligations to the new party, whereas an assignment concerns only the transfer of benefits.

Question 29

What contractural protections did you put in place for those novated consultants?

Answer 29

CW / bonds

Question 30

What risk does not having CW in place expose your client to?

Answer 30

If contractor goes bust, the client is then able to sue the consultant for any work they did for the contactor if there’sadesigndefect / negligence.
Not having this would prevent that.

Question 31

How did you ascertain the clients objectives?

Answer 31

I chaired a number of meetings with the client where we discussed his objectives and desired for the project.
I was also involved in a number of early design team meeting where we the initial design developed, which helped me understand the type of finish the client wanted to achieve.

Question 32

How was quality driven through the D&B route?

Answer 32

1. Regular visiting to site by the client’s design team through their CMT role
2. The novated design team were distinctly separate from the client’s team.

By keeping the design team separate from the team contractor maintains their objectivity.

Furthermore, this safeguards the client’s interests, and enhances risk management during the design and build process.

Question 33

On SJWH, what would have been done if water was discovered during excavation?

Answer 33

If water was discovered, suitable barrier protection would of been provided in the form of temporary sheet piling.

Pumps would then also of been used to ensure all water was being removed from the excavated area.

Question 34

What document details the 3 types of basement waterproofing?

Answer 34

British standards

Question 35

What is a deed of variation?

Answer 35

A deed of variation (DoV) is a legal document that modifies a contract after it has been signed:

Purpose: A DoV is used when the parties involved agree to change specific provisions of the original contract.

This can be to correct an error, meet new circumstances, or address other issues.

Benefits: A DoV ensures that changes are legally binding and documented, which can help avoid disputes and misunderstandings in the future.

Question 36

On SJWH, why were construction management or management contracting routes not selected?

Answer 36

• Cost certainty / risk - Little incentive for management contractor to reduce costs.
• No price certainty until final works contract let.
• Single point of contact with D&B
• Design responsibility remains with client

Question 37

How would a PCSA be adopted if the two stage route had been selected?

Answer 37

It is an appointment document between contractor and client, sets out the pre construction services and fee that should be provided during the second stage of tender, ahead of entering into contract.

Contractor is ultimately employed as a consultant.

Question 38

What information would you expect to see in the PCSA?

Answer 38

o Statement that PCSA does not mean the will enter into the contract.
o Scope of works.
o That only documented services will be paid for.
o Programme.
o That if the client does not appoint the contractor, the client has no liability for losses.

Question 39

What would your advice be in regards to implementing a PCSA contractually?

Answer 39

Its benefitial as It facilitates early involvement of the contractor provide refining the design, identify and manage risk, cost, and schedule before moving into the full construction contract, facilitating a smoother transition between stages.

• Also stipulates the defined scope they are to undertake and be paid for
• No obligation to enter into a formal contract and no liabiulity if the employer doesnt.

Question 40

In an amended contract, why do the ERs take precedence?

Answer 40

In an amended contract, the Employer’s Requirements (ERs) take precedence because the contractor must provide a design that meets the ERs.
The ERs are a set of requirements that the contractor must meet. The employer can’t amend the contractor’s proposals, so if the contractor’s proposals took precedence, the employer would have no way to make changes.

Question 41

On a single stage competitive tender, is there a way you could allow part of the design to be less developed?

Answer 41

Yes, through the use of CDP and PSums.

Question 42

Would the traditional single stage have more cost certainty than a single stage D&B?

Answer 42

• More complete design in single stage
• Less risk of design changes
• D&B make accompany higher premium to account for risk.

Question 43

Can you engage a contractor under a LOI for two stage tendering?

Answer 43

You can, but it is not advisable.
- Does not formally appoint the contractor.
- LOI provides intent to enter into contract.

Question 44

In two stage how did you assess the risk apportionment on this approach?

Answer 44

Contractor would be appointed under a PCSA clearly defining their responsibilities for pre construction.

They can help reduce the level of risk associated with construction and design, through input of buildability and expertise.

Would require PII.

Question 45

What basement water proofing measures were used on SJWH?

Answer 45

Structural integral protection.
Cavity drainage

Question 46

Can works be undertaken under a PCSA?

Answer 46

• Yes, but it is not advised.
• As no insurances or contractual clauses are included, I would recommend using a letter of intent to be more appropriate.

Question 47

On SJWH, how did you get to the project being over £400k over budget?

Answer 47

Through cost planning we have reported cost movement to the client, specifically which elements.

Through to cost plan stages, the client did not express a desire to implement any significant VE until after our PTE had been issued.

Lesson learned would be to make the client aware that an effective VE exercise is better conducted earlier on, to allow for collaboration with the design team, a more detailed approach.

Question 48

What risk allowances does NRM state need to be accounted for?

Answer 48

Design development risks
Construction risks
Employer change risks
Employer other risks

Total risk allowance = base cost estimate x % risk allowance for each of the above then added together.

Question 49

What types of risk were specific to SJWH?

Answer 49

Temporary works for façade retention

Question 50

What was the area of the project?

Answer 50

829 m2
8918 ft2

Question 51

Did you have a contingency included in the project?

Answer 51

Yes.
£467k