Presentation and Case Study Flashcards
How was the cost increase managed between the stage one and two submissions in your case study?
As soon as new strategy became apparent:
- Flagged likelihood of significant cost increases directly to the client
- Reported to the client on monthly pre contract cost reports
Did you propose any mitigation to the cost increase in the period between Stage 1 and Stage 2 such as Value Engineering?
VE was something that was continuously looked at, however with the nature of the scheme being for prison windows and strict technical standards having to be met.
Phasing strategy was also looked at however there was immense pressure to get the works complete and an already lengthened programme ruled this out.
How did you demonstrate the Risk Management competency within your submission?
By advising the client of the various risks associated with each of the options I presented i.e. with retendering where there was a risk that no savings would be achieved.
You mention that the MoJ use the PPC200 contract, can you explain why that contract in particular is used?
- Standard form of partnering contract and to gain the benefits of the partnering terms.
- Familiarity with contract as used on various current and previous frameworks across the MoJ estate.
How does a PPC compare to JCT or NEC in terms of administration?
- Less administration
- Shorter form of contract if unamended
- Written in simpler terms
- No mechanisms for retention of LAD’s
Can you explain what the £10m increase was made up of in your Case Study?
- £3m for supply of windows
- £4m for prelims
- £3m for OH&P, storage of windows and inflation allowances
In your case study for option 1 re-tender, what was the clients appetite to progressing with this?
Client weren’t keen on progressing with this due to;
- Additional time and further delay to the scheme
- Additional cost of retendering and preconstruction services
- Did not want to damage their relationship with the contractor
In option 1 you have noted the relationship with the contractor could be damaged, why would this matter?
- Contractor have a large portfolio of projects on site with the Client
- They are on multiple frameworks with the Client so would have lots of future projects with them
How were the tender negotiations communicated in your Case Study?
- I compiled a list of queries and supporting information
- These were sent to the CR who added them to the query log and formally uploaded them onto a portal called Jaggaer.
- Queries were then formally responded to by the Contractor via this portal through the CR
What represents Value for Money for the MoJ?
- The MoJ value Time and Quality over Cost in many instances given the nature of the schemes.
- However in order to protect the client I still must ensure that costs are reasonable.
In your case study how many different window suppliers did the Contractor go to?
In this instance only one.
There was another supplier that covered the region however they did not have the capacity to undertake a scheme of this size.
How did you know the price for the prison windows was correct if only one supplier was approached?
T&T have worked in the prison sector on various frameworks for a number of decades so I was able to draw on some actual costs from real projects and adjust the cost data for an accurate benchmark.
Can you give me the benefits of using a framework agreement for clients like the MoJ?
- Time benefits as they have consultants and contractors on the framework
- Cost benefit as rates for staff and overheads and profit agreed with individual contractors
- Familiarity with the contract and partnering team
What are the key differences between CR/CA/EA
- CR is essentially the same as an EA and is acting as/on behalf of the client
- CA must be impartial and are simply there to administer the contract
You reference the use of a partnering agreement - how does partnering differ from framework agreements and what are the benefits of this?
A framework is an agreement between parties that allows clients to procure goods services on a call-off basis as and when required.
The term partnering refers to forming a cooperative relationship between parties in order to improve performance and delivery of a commission or group of projects - the main benefits include less disputes and collaborative and efficient working to achieve the same end goal.
Had the phasing of the works not been picked up as a risk factor in the initial review of the project. Seems a huge detail to be overlooked. Who was managing the tender process and why was this change not reflected in a commercial update to the client to advise of the potential cost implications?
The phasing of the works had been picked up as a risk within the risk register, however the decant strategy changing was unforeseen. The overall tender process was managed by the CR, the decant issue was advised a few weeks before the tender return and as soon as this became apparent T&T advised the Client of the potential cost implications as a result based on the likely delay advised by the CR which fell short of the actual 2 year delay.
Appreciating that the inflation needed to be inceased to account for the 2 additional years added to the
programme, surely costs were included for 4 years of that period. What was the increase for the 2 years on BCIS?
The initial 4 years inflation had been agreed at stage one. BCIS was showing around 6.5% increase for the additional 2 years so this is what was agreed upon.
What increase did the contractor include as an inflationary increase?
The Contractor had allowed for an inflation allowance of 5% for each additional year
Were any elements of VE considered or was the option taken from the table prior to any workshops being held? What was so specific about the specification that you were unable to look into VE?
VE is something that I consider on all schemes to achieve best value for clients. In this case the window specification was based on a set of MoJ technical standards which had been produced and been through rigorous testing which was a lengthy process.
The phasing strategy is also something which could typically be VE’d, however in this case following review with the CR and design team as part of the tender review, we were able to reduce the programme from 308 weeks to 297 weeks and felt that this was the best that could be achieved.
You note that one of your achievements was demonstrating VFM through a review for the client, did we not provide cost advice at interim stages where the client was advising these issues?
Yes, although my involvement did not begin until after at stage 4, during my initial review when starting on the scheme I was able to identify T&T provided cost advice to the client as issues became apparent based on the limited information provided through formal issue of pre-contract reports and also informally within meetings and calls where they first became apparent which all ultimately mitigated the risk.
How was the cost increase apportioned between the programme increases and the increased window cost?
- 3.5m for window supply
- 3.5m for programme
- 3m for OH&P, inflation, storage etc.
How long would it have taken to retender the works and would this programme risk not have been offset by more competitive pricing and potentially a better contract sum for the client?
Best case scenario would have been a 6 month delay which was minor in comparison to the 6 year construction programme. The main benefit would have been the more competitive pricing however after review I concluded the cost saving would have been minimal due to:
- Additional fees to re tender
- Lack of appetite from the market to take on the project due to it’s length and complexity
- Likely minimal cost savings as only one supplier able to carry out window supply and install in the region
Also important to note the importance of getting the project started due to security concerns.
How did you go about ensuring the client got value for money? Did you undertake any market testing? If not, why?
- Bench marked against previously tendered rates
- Other suppliers unable to carry out a scheme of this size therefore, checked against previously competitively tendered projects in other regions.
What was your approach within your case study and what techniques did you use to present your findings to the client?
I immediately advised on possible options at a high level informally through phone calls and emails to allow the client to get a head start.
I formally presented these via a written appraisal report of these options from a commercial perspective. Finally at the end of my review of the tender I presented a tender report recommending that the Client accept the tender.
