Key Issue 1 - Case Study Flashcards

1
Q

What types of inflation are there in construction?

A
  • Tender Price Indices (TPI) (The BCIS All-In-TPI) This is the inflation used during tender stage till order place.
  • Output price indices (OPI) (BCIS All-In-OPI) This is used convert construction output volume figures from current to constant prices. I.e., to reflect works completed in the future.
  • Resource Cost Indices (RCI) – Cost of labour, materials, and plant. (This is often General Building Cost Index).
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2
Q

What are the current inflation rates?

A

• The consumer pricing index is 7.8% in 12 months

  • Between Q1 21 and Q1 22:
    Material growth was 18% !
    General Inflation is 9%
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3
Q

Why wouldn’t you value engineer with the Façade Sub-Contractor?

A
  • The sub-contractor perhaps lacked the knowledge of how to value engineer as they were likely to sub-let this out.
  • They may have seen the design opportunity and saw this as an opportunity they would pursue.
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4
Q

Where would you find a sub-contractor’s design responsibility in the contract?

A

• recital no 3 of the agreement

Further clarification in:

Section 2 ‘Carrying out the Sub-Contract works’, Clause 2.2 of the JCT D&B Sub-Contract and defined clearly in numbered documents (scope document).

And numbered documents

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5
Q

If you went with Option 1, what tender route were you proposing to use?

A

• As it was a stand along acoustic product, I would have looked to procure this through a single stage competitive tender.

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6
Q

Why was the plan to buy the plant screen with the façade contractor?

A

• A competitive and fast-paced tender meant the works were wrapped up within the curtain walling scope, on reflection there should have been more consideration.

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7
Q

Where does it define in the sub-contract who holds the design risk?

A
  • Sub-Contracts designed works, clarified in Recitals no. 3.

* Then extent is clarified in Section 2 of the sub-contract ‘Sub-Contractors Designed works.

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8
Q

How did you carry out value engineering?

A
  • I understood the problem (i.e., we were over budget)
  • I identified different solutions (i.e., acoustic screen, VE option etc)
  • I evaluated and advised on each solution
  • I then advanced with the best option and explored this in greater detail
  • I then identified and advised senior management on the best solution.
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9
Q

In what stage of the RIBA does Value Engineering typically take place?

A
  • Usually, contractor led 4-5 stages.

* Can be offered in earlier stages as a selling point.

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10
Q

What is the overall purpose of value engineering?

A

• To achieve overall optimum best value (value changes depending on parties involved).

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11
Q

What is a key consideration when value engineering?

A

• I must consider the true value to all parties, i.e. at Norwood Zurich wanted a building that achieved the employers requirements. We wanted to deliver that and within our budget. = i.e., value engineering option worked.

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12
Q

What resources are needed when carrying out Value Engineering?

A
  • Time
  • Information
  • Skills and Knowledge (Competent people)
  • Clear plan.
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13
Q

What is value engineering?

A

• Maximising project value and achieving the objectives, whilst finding efficiencies through cost, time, or quality.

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14
Q

Why did you take the consideration to value engineer this screen?

A
  • There was the benefit of reducing cost by focusing on the fundamental requirement of the works and considering alternative approaches.
  • The RICS guidance note suggests that is not uncommon to have unchallenged assumptions…
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15
Q

How did you manage risk throughout the VE process?

A
  • I advised the team on the information received, for example I requested all test data and ensure the offered solution was achieving our Employers requirements.
  • I held frequent team meetings to discuss the process throughout the VE exercise, reviewing any risks is an important stage of the value engineering process.
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16
Q

What are the risks associated with the value engineering process that you advised on?

A
  • The RICS guidance note states the following:
  • Not enough time (I advised senior management we had sufficient time after reviewing with project planner)
  • Lack of precision (I involved design manager and design teams as soon as I realised this option had some feasibility, advising them of the option I wanted to consider)
  • Not including appropriate stakeholders (planning dept, and client were informed).
17
Q

What advice did you give throughout the value engineering process?

A
  • I advised on costs by completing comparisons
  • I advised on lead-in periods
  • I was the central point (alongside the Snr design Manager) on the value engineering process and throughout I was advising senior management on the progress.
18
Q

How did you conduct your cost comparisons?

A
  • I obtained cost data for acoustic screen from the same sub-contractor (valuing the VE option) for a comparison, I compared this to system data and the curtain walling firms costs.
  • I conducted a high-level comparison for all works
  • I included an allowance for additional bracing to make the comparison fair, I then removed this when confirmed it was not needed
  • I advised senior management when the VE process was completed, and we could move forward with getting into contract.
19
Q

What is a technical submission and why do you need to do it?

A

• Mainly to submit details of design solution to client and their team approval, it could be either not developed enough in the ER’s or is a large change in the design of an element. Must still comply with the ER’s.

20
Q

Where in the main contract is the design submission procedure detailed?

A

• Schedule 1 – Design Submission procedure

21
Q

Where in the sub-contract is the design submission procedure detailed?

A

• Schedule 7 – Design Submission procedure

22
Q

Who managed the planning authority and the planning requirements?

A
  • The design lead led on speaking to the planning department
  • When reviewing this, it was discussed and agreed pre-tender that the planning department were not concerned about the aesthetics of the screen provided it had louvred blades. (Pre-contract it was discussed about having a solid sheet around the building) this was rejected.
23
Q

Did the solid screen not restrict air movement?

A

• This screen wasn’t providing any ventilation, it was hiding the plant on the roof whilst looking like a louvred screen to satisfy planning.

24
Q

How did you ensure your stakeholders were informed of the process through this exercise?

A
  • I helped with collating the data for a technical submission
  • We presented the screen proposal at client meeting and design reviews to all designers.
25
Q

How did you manage the risk on the change with planning department?

A

We engaged early with them, we also had our planning consultant aware of the change so they could offer any support or guidance with the planning authority.

26
Q

What was the risk with splitting the package out?

A

An extra sub-contractor on site

Design interfaces, however i attended a design workshop where these interfaces were discussed.

27
Q

Was the facade contractor not annoyed about the plant screen being removed from their scope?

A

No they were fully aware of the situation, it was only works that would have required them to sub-let the package.
It wasn’t their preference to have it and they welcomed it to be omitted.

28
Q

What if the employer refused or could they refuse this change?

A

The process is described in the design submission procedure in the main contract

  • Schedule 1, this details that if the contractor disagrees a comment the employer has made the employer then must reply with a statement as to why the design has not been accepted.

Skanska are responsible for designing the building and we have inherited the risks as well as the opportunities with the design.
If the works are in accordance with the ER’s and the design requirements of the contract they would be unable to refuse.