Case Study Q&A Flashcards
What constitutes value for money?
In construction, value for money (VfM) means achieving the best possible balance between project benefits, quality, and overall cost, ensuring the project meets the client’s needs and objectives efficiently.
How did you ascertain the clients objectives?
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.
Could you start on site earlier with a singe stage competitive tender and how?
Going out to tender with a less developed design including CDP and PSums
What is Management Contracting
management contracting involves a client appointing a management contractor to oversee the project, who then engages subcontractors directly
What is Construction management
the client directly employ’s trade contractors, with a construction manager acting as a consultant and advisor
Why do Management Contracting and Construction Management carry a higher financial risk?
The management contractor is paid a fee for their services, and they are also reimbursed for the costs incurred in managing the subcontractors.
The construction manager is paid a fee for their services
What can be done to eliminate/reduce design compromise under a D&B contract?
One option is formal novation, where the contractor assumes full responsibility for the design team, managing the remaining design process with the existing team. Alternatively, clients can retain a designer as a ‘technical advisor’ to scrutinize the work of the contractor’s chosen designer
Did you explain to the client that all four objectives (Time, Risk, Quality & Cost), may not be achieved?
Yes, typically 2 or 3 of these priorities take precedence and are achieved at the sacrifice of the other(s)
What design stage was the project tendered at?
RIBA stage 4.
On a single stage competitive tender, is there a way you could allow part of the design to be less developed?
Yes, through the use of CDP and PSums.
Traditional two-stage tender - How did you ensure competitiveness throughout the second stage?
You could ask for 3 quotes for certain / large package.
In two stage how did you assess the risk apportionment on this approach?
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.
how can you still get value for money in a negotiated tender in construction
Open book approach - requesting 3 sub-contractor quotations.
Post tender KPI’s; performance, compliance and risk management.
- Cost tracking - are costs inline with the contract
What is a PCSA
The Pre-Construction Services Agreement enables the contractor to collaborate with the employer or their team of consultants to develop detailed designs.
What kind of information would you expect to be included in a PCSA.
including scope of work, payment terms, design liability, intellectual property, termination conditions, and often includes provisions for the services to be subsumed into the main works contract.
It should make clear whether the contractor is undertaking design work, whether they will have any design liability, and what will happen to this liability if they are not appointed for the second stage (the construction works). It should also set out the method of payment, and any provisions for deferred payment.
Can works be undertaken under a PCSA?
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.
Is a Pre-Construction Agreement always necessary?
No, it’s a contractual agreement used in specific circumstances, particularly in design and build projects, to enable a contractor to commence design work before the main contract is finalized.
What is an alternative to a PCSA Agreement
Letter of Intent (LOI) - is a non-binding document outlining the preliminary agreement or intentions of parties before entering into a formal contract.
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.
Why is a traditional Single stage Tender time consuming Pre-Contract?
It involves a sequential process where design and tender preparation, evaluation, and potentially negotiation, all occur before construction can begin
What is Value Engineering
reduce costs while maintaining or enhancing functionality and quality.
Did you come up with the value engineering options yourself?
No, I discussed these with the wider design team, to try and establish, given the programme constraints, what we could VE
What is the difference between scope reduction and VE?
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
Is VE purely about reducing cost?
No, value engineering is about a creative problem-solving process that aims to optimize value while minimizing costs.
Could you tell me the difference between Value Management and Value Engineering?
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.
Examples of Value Engineering
Internal Doors - from solid oak to solid tulip
What are the consequences of not issuing an EOT to the contractor if they are entitled to one.
Contract would be at Large, meaning no contractual completion date. Contractor may then argue that they are not obligated to complete the works within a reasonable time frame and that the LADS clause no longer applies. Contractor may also claim general damages for the delay, potentially including loss and expense. Finally they may refer to adjudication.
What advise did I give to the client of the estimated cost impact for the changes to the contract which ultimately causes the delay?
I assessed the change in the first instance to confirm its validity. I then conducted my own assessment of the variation breakdown using either contract rates or benchmark against other projects.
How did you advise the Client of the programme impact following the changes?
analyse the potential impact such as lead in time, installation time etc.
Traditional two-stage tender - How did you ensure competitiveness throughout the second stage?
You could ask for 3 quotes for certain / large package.
Can a client reject a client variation
Yes a contractor can reject a client variation if they feel it impacts the efficiency of the design, CDM onsite, related to named specialist.
What are the contract provisions for awarding an extension of time?
Clause 2.29 references what constitutes to a relevant event. 14 relevant events.
Examples are;
- Variations
- CAI
- Opening up or inspecting work
- works carried out by a statutory undertaker
- adverse weather
- Force majeure
- Civil commotion or threat of terrorism.
How long does the CA have to notify the contractor of his EOT decsion?
CA has 12 weeks from receipt of the required particulars to notify the contractor of their EOT decision. If the period to completion is less than 12 weeks then the CA should endeavour to do so prior to the completion date. Notice should reference clause 2.27.
What is a relevant event?
A relevant event may be caused by the client, or may be a neutral event such as exceptionally adverse weather. The contract should set out what constitutes a relevant event.
What was the relevant event that caused the delay in your case study?
Variation.
- There were several over EOT 01 & 02.
Examples were;
- Delay to the procurement of the external doors
- Delay to the addition of the hidden speakers
- delay to the installation of the sanitaryware first fix
- Delay to the extended plantroom and bin store
Change to the external doors from timber to Aluminium secco doors was the only delay which impacted the critical path.
What is a relevant matter?
A relevant matter is a matter for which the client is responsible that materially effects the progress of the works. This enables the contractor to claim direct loss and / or expense that has been incurred.
When was the contractor notice of delay issued?
The contractor must issue a notice of delay when it becomes reasonably apparent that the progress of the works will be delayed.
When does the contractor have to notify employer of a delay in an NEC contract?
Contractor must notify a project manager of a compensation event within 8 weeks of becoming aware of it.
Were prolongation costs not accounted for when you advised the client on the cost implications of the change before they were instructed?
Yes i did, i calculated the weekly run on cost and multiplied it by the number of extended weeks which the client was happy with.
What is included in a Contractors loss & expense breakdown?
I did not receive a formal loss and expense breakdown on my project, however I am aware that they typically include;
- Increased labour costs
- Material costs
- extended site overheads
- loss of profit from other opportunities
- finance charges.
Does a notice of delay always constitute a extension of time claim.
No not always. The contractor may be able to mitigate the delay through programme management
What EOT did you award?
I awarded an extension of 14 weeks, which was based on the delay event which impacted the critical path.
What is As planned Vs As Built delay analysis?
The As-Planned versus As-Built Method simply compares what actually happened to what was supposed to happen. It measures the activities of the baseline or other planned schedule against that of the as-built schedule or schedule updates to identify encountered delays.
What other delay analysis methods could have you used?
Time impact analysis;
- Identify the delay event and its impact on the project schedule.
- Insert the delay event into a project schedule update (preferably one closest to the actual date of the change).
- Run the schedule through CPM software to determine the impact on the completion date
Time Slice window analysis;
- Divides the project into time periods (windows) and compares the schedules at the beginning and end of each window to assess delays.
Process:
- Create “windows” (e.g., monthly) and compare the schedules at the start and end of each window.
- Identify which activities were delayed and examine the causes of delay.
Pros:
Accounts for changes in the critical path that can occur on complex projects.
When can delay analysis be undertaken?
- Prospectively
- Retrospectively
- Contemporaneously
What is a deed of variation?
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.
On project A, why were construction management or management contracting routes not selected?
- 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
How would a PCSA be adopted if the two stage route had been selected?
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.
What information would you expect to see in the PCSA?
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.
What would your advice be in regards to implementing a PCSA contractually?
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.
In an amended contract, why do the ERs take precedence?
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.
On a single stage competitive tender, is there a way you could allow part of the design to be less developed?
Yes, through the use of CDP and PSums.
Would the traditional single stage have more cost certainty than a single stage D&B?
- More complete design in single stage
- Less risk of design changes
- D&B make accompany higher premium to account for risk.
Can you engage a contractor under a LOI for two stage tendering?
You can, but it is not advisable.
- Does not formally appoint the contractor.
- LOI provides intent to enter into contract.
In two stage how did you assess the risk apportionment on this approach?
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.
Can works be undertaken under a PCSA?
- 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.
What risk allowances does NRM state need to be accounted for?
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.
