Procurement and Tendering Shortfalls Flashcards
What are the key advantages of traditional procurement?
- Employer retains design
- Design finished before contractor’s tender
- Price cetainty can be achieved
- All tenders price on the same documentation
What are the key dis-advantages of traditional procurement?
- Lengthier time than D&B
- Zero contractor input
- Risks held by the Employer
- Dual points of responsibility
When is traditional procurement most appropriate?
- When time is not a priority
- When Client wants to retain control over design
- When cost certainty is important.
What are the key advantages of design and build?
- Single point of responsibility
- Cost certainty
- Contractor’s experience used
- Quick start on site.
What are the key dis-advantages of design and build?
- Design is only as good as the client’s requirements
- More complex to compare tender return
- Don’t know what you’re getting in terms of quality and look
- Contractor builds in risk premiums
When is D&B most appropriate?
- when there is need to start on site asap
- projects which are complex and would need the experience of a contractor
- inexperienced client - lower risk
- retaining design, not a priortiy
What are Contractor’s proposals?
Where the Contractor responds to Employers Requirements - detailed design for the Client’s approval.
What is Construction Management?
Employer directly appoints multiple sub-contractors.
- Construction manager programmes and co-ordinates work, they have no contractual link with trades, construction manager carries no risk.
Design needs to be available.
What is Management Contracting?
Employer appoints someone like LOR/Skanska to manage the build.
Management contractor paid a fee.
Design doesn’t necessarily need to be available.
What are the advantages of Construction management?
- Speed to site
- Project duration reduced by overlapping design and construction
- Changes easily accommodated
- Prices lower due to direct link with trade contractors
What are the dis-advantages of Construction management?
- price certainty not achieved until last package let
- requires a pro-active employer to work
- Employer has lots of consultants to manage.
When is construction management appropriate?
- When the employer is experienced and has resources to manage project
- Employer wants quick start on site
- Employer wants flexibility
- When project is complex and needs input from specialists.
Which route is most risky for the employer?
Construction management because the construction manager carries no risk (apart from professional negligence) and there is a wide range of people to deal with.
What are the advantages of management contracting?
- Packages let competitively
- Single point of responsibility
- Have management contractor buildability input
What are the dis-advantages of management contracting?
- Price certainty not achieved until last package let
- Requires pro-active employer
- Can be expensive based on fee
What is a Framework?
An umbrella agreement where a party enters into an agreement with one or more suppliers/subcontractors/consultants to establish terms.
How long can a framework agreement be?
2 - 10 years. But usually 4 years.
