Technical - Level 3 Flashcards
Procurement & Tendering
Wendover Road
What were the client’s requirements?
-Public procurement = traditional for comparison, inf framework for competition (over incumbent). See other flash card
-Quality = traditional for quality/design control (reputational risk), inf framework for guaranteed ability/resources (over external tender)
-Programme = inf framework for speed/less familiarisation and come in at earlier design stage (over external tender)
-Cost = traditional for certainty, inf framework for competitiveness (over incumbent)
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Procurement compliance - high risk
-Must comply as funded by public client and NRSWA (TW)
-Mitigated by: competitive infrastructure framework to tender to a sufficient standard to ensure VFM, follow 2015 regulations, traditional procurement to allow easy comparison of tenders and demonstrate value for money through competitiveness, eg in design and build you can’t compare different designs as well and justify eg choosing the most expensive even if it’s the best
Programme - high risk
-Must meet date as part of wider HS2 development so no delay in appointing contractor
-Although traditional procurement isn’t the quickest: Mitigated by tendering through infrastructure framework… current framework quickest but infrastructure framework next best option
Reputational damage - high risk
-High profile stakeholders and residents not in support of project
-Mitigated by: client retaining design control with traditional procurement, infrastructure framework ensuring good reputation/technical ability of contractors (ability to phase works around highway construction)
Commercial (VFM) - medium risk
-Ensure VFM for procurement rules and save money
-Mitigated by: Tender from more competitive infrastructure framework, Single stage cost certainty, traditional procurement for cost certainty, 50% tender weighting on price
Operations (contractor technical knowledge) - low risk
-Contractor must have technical knowledge and large resource availability, Must meet asset standards/flow rate/no leakages
-Mitigated by: tender from infrastructure framework as ensures contractor knowledgable, early procurement of contractor to help in earliest design stage possible
Note: another option was open/selective tendering, which although offers best competitive price and procurement compliance , it is slower to procure, slower for contractor to familiarise,
Procurement and Tendering
Wendover Road
Why did you advise on single stage tendering?
-Sufficient information/employer’s requirements available to obtain price of all works, collaboration not required
-Get most competitive price, two stage less competitive as contractor already embedded
-Provides earlier cost certainty
-Faster
-Not a complex project
Downsides:
-If not sufficient information then can lead to variations during construction. In this case should use two-stage
-Cannot benefit from ECI
Procurement and Tendering
Magdalen College
Why did you advise on two stage tendering?
Summary:
-Non crystallised employer’s requirements for firm price
-Benefit from contractor ECI to develop three solutions before main works
-Complex project and ECI provides VE options for value for money
-Provides cost/design certainty because … less assumptions/subcontract prices (not estimates)/contractor knows risks
-Reduces disputes: ECI collaboration is less adversarial than single stage as design/specifications clearer
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-Employer’s requirements have not crystallised (site conditions, flood remediation, and finer details of diversion connections)
-Contractor/specialist input required to develop these requirements, goes hand in hand with NEC X22 two stage process
-Used on complex projects to facilitate ECI/early collaboration before sufficient information available which also increases scope for VE
-Reduces chance of variations as contractor part of early design
-Provides design and cost certainty , enhanced by eg less assumptions/qualifications, getting subcontractor prices rather than estimates, contractor can assess risks
-Reduces possibility of disputes over inaccurate design/specifications
-Two stage provides best value for money by contractor providing best solution/buildability and whole life options (part of qualitative bid)
-single stage not suitable as design has to be well developed for this to occur.Two stage suits design and build procurement better as contractor contributes more
First stage allows contractor to 1.price for known works, and 2. submit details under a PCSA including aspects regarding project preliminaries, method statements, design, overheads, and profit.
Second stage should then be a process of using the criteria agreed in the first stage. But often will be more items not previously considered so will need negotiations e.g where sub-contractors are used.
Procurement and Tendering
Magdalen College
What are the downsides of two-stage tendering?
Summary:
-Less competitive price as no competition (albeit gives more certainty)
-Slower as need second stage to finalise details
-More admin effort and upfront cost
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Downsides:
-Although more certain price, can lead to an overall higher price due to lack of competition
-Slower for D&B procurement (where there is already an overlap) so the two stages almost cancels it out, only really quicker for traditional procurement
-If try to get contractor involved too early this can reduce cost certainty
-More administrative effort
-Increased upfront costs
Procurement and Tendering
Magdalen College
How did you ensure a competitive price in two stage tendering?
-Pain/gain from target cost contract
-Incentive budget, offering contractor further share of final cost below ‘Budget’ (estimated project cost agreed for whole works at the first stage)
Maybe:
-Portion of pre-construction fee contingent on award of main works
Procurement and Tendering
Magdalen College
Why not separate contracts for ECI and main works?
Summary:
-Integration of preparatory and main works to maximise VE
-At concept design so needed contractor to develop main works design along with remedial works
-Facilitated collaboration with one contractor doing both sections
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-Client wanted integration of early works to provide value engineering for main works
-I advised on an X22 clause which is only for NEC options C and E, and Magdalen was option C so it worked.
I advised this over the other option of a separate PCSA for the ECI works BEFORE the main contract is let because:
-It facilitated collaboration (imperative in ECI)
-Significant overlap eg contractor input on abandonment, flood remediation could affect diversion route/connections
-Condition of current mains determine how much of it reinforced
-Extent of pumping station upgrade and surface runoff measures can affect programme/sequencing
All interlinked
Procurement and Tendering
Magdalen College
Why did you advise on two-stage to maintain design control?
Summary:
-Client can evaluate technical submissions before detailed main works proposals in second stage, so maintains control even in D&B
-High profile/complex job with large potential for disruption so programme coordination required
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-Two stage allows client to evaluate technical capabilities / technical (design) submission before inviting them to submit detailed proposals .. so helped TW ensure design quality even though a D&B project
-Complex design of diversion and proximity to highway, large POTENTIAL FOR DISRUPTION so close programme coordination required in accordance with design, also a large diameter job (600mm)
-High profile/influential stakeholders, and so high reputational risk
-Sufficient time allowed for two-stage to take place
Procurement and Tendering
Magdalen College
Why did you advise on a design & build procurement route?
Summary:
-Insufficient information for for full design (so can’t do traditional) so provided employers requirements
-Contractor expertise to develop these requirements with proposals (buildability)
-Integrated preparatory and main works so single point of responsibility
-Pass design responsibility to contractor
-Improves cost certainty with contractor contributing to design earlier eg site conditions / key subcontracts in place instead of estimates quotes
-Speeds up two-stage tender as contractor designs preparatory and main works together
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-Project would benefit from contractor expertise by selecting specialists and considering alternative construction methods (buildability). The client wanted works to be INTEGRATED as certain works eg pipe remediation technique/extent of repairs can affect programme and even main works eg extent of pipe that needs to be replaced / water pumping station location
-I advised client they wouldn’t want to take take design risk for works, and so contractor can take it, as they are also experts in the ECI stuff so good to take that risk
-Single point of responsibility for variety of works (flood prevention and main works)
-Improves cost certainty as contractor involved earlier on and more clear on risks eg site conditions and key subcontracts can be in place instead of estimates quotes
-Also provided cost certainty earlier in project
-Good for complex projects if used with two stage tendering (see other flashcard …client can control element of design). Conversely, if one-stage tender then better if a simple project
-This project wasn’t particularly complex, just a large variety of different works. So would really benefit from contractor expertise and under a single point of responsibility
-Above could be achieved as there was sufficient information for employer’s requirements, but not enough for full design (so couldn’t do traditional)
-Provided speed to meet programme requirements
-Two stage tendering was needed on this job so design and build speeds it up
*Even though it’s the client’s job it’s TW’s responsibility to deliver the project eg procurement and tendering, and so design is their risk unless passed to contractor
At TW: DESIGN IS NEVER CLIENT’S RISK?
Procurement and Tendering
Wendover Road
What are the disadvantages of design & build?
-Price/cost certainty only as good as quality of information/employer’s requirements provided. If they’re poor then variations will occur
-Client relinquishes an element of design control e.g choosing specialist subcontractors so not generally suitable for complex projects
-Contractor can price in risk
Procurement and Tendering
Wendover Road
Why did you choose the Infrastructure Framework?
Summary
-Public: more competitive than incumbent framework
-Programme: faster than external tender
-Quality: bigger pool than incumbent, guaranteed technical ability over the eternal tender
-Cost: more competitive price than expected incumbent
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-Not as quick as incumbent framework (direct award as only 1 contractor) but provided wider competitiveness to meet procurement rules
-Not as competitive as external selective tendering but was much quicker, especially as external selective had to adhere to public procurement rules when in framework all tenderers had gone through PQQ stage requirements
-All tenderers been through vetting terms of ability and resources
The best ‘middle ground’ option
Procurement and Tendering
Wendover Road
What effect did public procurement have on this project?
Summary:
- Inf framework for sufficient competitiveness
-Inf framework as PQQ/ITT stage met requirements already (publish criteria/weighting/ minimum time limits of 30 days for PQQ and 30 days for contractor’s to return)
-Traditional for easy comparison, D&B time consuming to justify best option if most expensive
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-The infrastructure framework (and incumbent framework) already met public procurement rules
-External selective tendering would need to adhere to the rules, such as being MEAT (not just lowest price), publish criteria/weighting and ITT and contract terms if known, lots of detail in specification for tenderers, meet minimum time limits of 30 days for PQQ and 30 days for contractor’s to return
-So it’s most competitive but much slower, especially because of procurement rules.
Public Procurement Regulations 2015 because so can see how Local Authority spent money. Also TW made contribution from public funds (NRSWA)
-Contributed to choosing traditional procurement route: Easier to compare like for like tenders and demonstrate value for money through competitiveness, eg in design and build you can’t compare different designs as well and justify eg choosing the most expensive even if it’s the best
Procurement & Tendering
Magdalen College
What were the client’s requirements?
Summary:
-Quality: lots of different works so needed contractor to design and build from ECI stage. Two stage would provide design control for client
-Cost: contractor provide buildability/VE options to reduce cost
-Cost certainty: two stage would provide early cost certainty of remedial works with solutions eg subcontract costs instead of estimates, clearer on risks
-Programme: design and build will speed up two-stage as remedial works to be done while finalising main works design
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-Quality: high performance needed (900 litres a second/manhole spill analysis, pumping station efficiency), wastewater so strict H&S requirements, upgrade of sewage pumping station (new pumps/pipes/valves/systems/control panels) so complex, flood remediation/prevention, upgrade of pipes, abandonment
High profile stakeholders so high quality imperative
-Value for money (cost) - Two stage provides best value for money by contractor providing best solution/buildability and whole life options (part of qualitative bid),
-Cost certainty, so two stage would provide early cost certainty of remedial works and subsequent rates for main works, also cost certainty as ECI will allow contractor to be more clear of risks (such as site conditions) and key subcontracts in place rather than estimated quotes, all aided by natural cost certainty of traditional route
-Speed (programme) - not a top priority therefore two-stage tendering chosen, although still to some degree as first phase to be complete before start of football season (near a stadium). Contractor doing ECI stuff while design complete could speed up pre-construction time over normal traditional route.
Procurement and Tendering
Magdalen College
Was this through a framework or external selective tendering?
External selective tendering due to variety of works
Eg also includes contractors who didn’t win the frameworks
Procurement and Tendering
Magdalen College
When would you advise on ECI?
-Preperatory/flood prevention/spill analysis/pipe remediation/manhole fixing (after spill analysis) works.. client wanted INTEGRATION of these with the main works as these earlier works could affect main works eg the programme sequencing or extent of pipe that needs to be replaced / water pumping station location
-Contractor can use experience to propose value engineering to reduce costs, compress programme, improve sequencing and overall buildability… earlier it happens the bigger the impact
-Facilitates collaboration and reduces number of variations. The earlier in design contractor gets involved the bigger the impact
-Creates a strong focus on Client’s objectives at the outset
-improve safety/environmental performance
-ECI allows quicker start on site eg for site clearance so can speed up project
-Provide a more reliable ‘Budget’
-Allows contractor to procure long lead materials
-If the project is NEC option C or E, as X22 clause only available on these contracts as these options are best suited for collaboration where involving the contractor early in the design process is most beneficial, whereas options A and B (priced contracts) have less need due to their fixed price nature.
-X22 clause goes hand in hand with 2 stage tendering
-X22 essentially allows contractor involvement into project before full design or price has been established, enabling contractor to take part in design development and early construction
Procurement and Tendering
Magdalen College
What was the ECI process?
Summary:
-Used on this D&B project where employer’s requirements not developed for contractor to calculate realistic price. So contractor tenders a fee for ECI and completing main works design (currently at stage 2) along with SOR that can be used to establish price for second stage tender.
-Contractor proposals against ECI deliverables, estimate of main works,
-Contractor provide staff rate for ECI staff and those carried on in main works
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-TW establish scope/objectives and prepare tender criteria
-Contractor provides Stage 1 (ECI) price against required deliverables (for Magdalen was early works) and a forecast of entire Stage 2 main works.
All based on TW current design*
Used on design and build projects where employer’s requirements not sufficiently developed for contractor to calculate realistic price. So contractor tenders a fee for designing it (or completing design) along with a schedule of rates that can be used to establish the construction price for the second stage tender.
-Stage 1 works carried out and TW give notice to proceed to Stage 2
-Contractor tenders for main works against completed TW design
- Contractor could also include any proposals for Stage 2 with a forecast (either VE proposals or changes if their ECI works discover changes needed to main works)
Procurement and Tendering
Magdalen College
How was the first stage appointment made?
Summary:
-One contract with ECI due to interlinked works, facilitate collaboration
-Contractor tender for design/construction of remedial works against deliverables/works packages… eg with subcontractor/supplier costs or on open book basis
-Also tenders an estimate to develop TW’s concept design of main works (becomes incentive budget) and developing construction method
-Provide staff and remeasurable rates (eg slip lining per m) for remedial works and also general staff rates to be used at remedial AND main works stage
-Second stage re-negotiation of main works based on their initial estimated, and negotiation of prelims/staff as more info available
-This was through a quantified ACTIVITY SCHEDULE and TARGET COST so based on open book accounting.
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I advised on one contract with NEC X22 (ECI) clause instead of other method of where a PCSA is undertaken BEFORE the main contract as:
-All work interlinked so wanted under one contract
-X22 possible on Options C and E
-Facilitated collaboration better as under one contract
Stage 1 included an appendix with design TW had done, pre-construction information, list setting out where schedule of rates items for Stage 1 items can be applied to Stage 2 e.g flood remediation per m.
Contractor provided in their submission these rates, staff rates, preliminaries, Stage 1 proposals, Stage 2 forecast, break down of work into different packages, CV’s
Contractor’s services include:
-Helping client develop design (paid through design fees per day)
-Helping client with method of construction (flood remediation, pipe fixing etc)
-Obtaining prices for these works through eg subcontractor/supplier costs or on open book basis
This was through a quantified ACTIVITY SCHEDULE (with remeasurable rates), and OPTION C (TARGET COST) so based on open book accounting.
Procurement and Tendering
Magdalen College
How was the second stage appointment made?
Summary:
-Full design developed by TW/contractor can now be priced against
-Re-negotiation of main works based on their initial estimated,
-Replacement of assumptions with firm prices, adjustment of incentive budget
-rates already agreed for specialist staff, remeasurable slip lining rate, surveys , subcontract costs etc … this stage is negotiation of the quantities
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-TW provided full detailed design at this stage for contractor to price
-Changes to design could allow Contractor’s Stage 2 forecast (done at Stage 1) to be repriced through change procedure. In this case it is really just replacing ‘assumptions’/qualifications’ made by contractor with firm prices eg of connection details so will need some negotiation to iron this out
-Though second mostly a mathematical me exercise using pricing agreed at first stage
-On Magdalen, rates already agreed for specialist staff, remeasurable work eg pipe fixing, flood remediation per m/m2, some subcontractor costs eg surveys.
Procurement and Tendering
Magdalen College
How did you advise on the qualitative criteria of the submission?
Summary:
-Importance of QUALITY of submission rather than lowest price, so advised on 60% quality and 40% price, meet MEAT
-Of this 60% I advised higher weighting on project management and delivery (method statement, solution proposals, VE proposals, how contractor measure success eg leakage analysis and efficiency of pumping station (litres per second)
-Next highest weighting on H&S as was wastewater and deep excavation work using harnesses.
-Then on quality record/experience and VFM
-Then on supply chain eg subcontractors and their experience
-Then on sustainability
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-Advised TW’s procurement policy favoured ‘most economically advantageous tender’ as well as importance of quality of submission rather than lowest price, so advised on 60% quality and 40% price
-Of this 60% I advised higher weighting on project management and delivery: focusing on method statement, solutions provided by contractor, VE proposals, how contractor would measure success eg leakage analysis and efficiency of pumping station (litres per second)
-Next highest weighting on H&S as was wastewater and deep excavation work using harnesses.. so close look at RAMS
-Next highest on quality record and value for money
-Next highest in supply chain eg their experience
-Next highest in sustainability
Procurement and Tendering
Magdalen College
Why did you recommend the winning contractor’s tender?
Summary:
Although winning bidder had higher cost it provided:
-Better track record / specific experience in critical areas
-Tested supply chain
-Clear proposals against packages with no normalisation needed, not many assumptions against requirements so clearly understood requirements
-Good VE options to reduce initial cost and also whole life costing
-Good H&S record
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Although winning bidder had higher cost it provided:
-Experienced/tested supply chain provided greater confidence of cost certainty. Cheaper tenderer had untested supply chain so greater risk of variations
-Provided clear proposals against the criteria without normalisation needed, showing they understood requirements. Other tenderers not always clearly defined against criteria
-Superior track record in critical project aspects eg sewer infiltration reduction preventing surface runoff, pipe remedial works, ground soil contamination removal
-Good VE options to reduce initial cost and also whole life costing
-Good H&S record
Procurement and Tendering
Magdalen College
What ECI works did contractor do on this job?
-Sewer infiltration reduction: identified through leakage analysis near pipes/manholes to allow work to be done on:
-Ground remediation
-Pipe fixing (slip lining by slipping new pipe inside old, full sewer lining with resin membrane), improving jointing techniques
-Same as above on manhole repair
-Surface water separation eg natural drainage with landscaped grassy areas
-Sewer overflow screens
-Cleaning/scouring of pipes
-Install pressure monitoring valves/NAV’s
-Wet well cleaning (in pumping station)
-Fitting equipment in pumping station (BUT TW DID ITS DESIGN) though contractor could offer solutions if needed
Above based on labour, plant, and subcontractor quotes
SEE CESMM4 CLASS Y
Contract Practice
Cherry Tree Lane
Why did you advise on X22 early involvement?
Summary:
-ECI for Phase 2 started tendering half way through Phase 1 for enabling/temp works design before starting on Phase 2
-More uncertain works so option C and ECI X22 work well together - Contractor could compress programme and provided VE option
-ECI allowed procurement of long lead materials
Why not separate contracts:
-ECI over a PCSA (separate contract) as just needed little overlap between phases to speed up SAME contractor on linked works
-Couldn’t be one contract as Phase 1 was activity schedule and Phase 2 was defined cost (with enabling works)
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NOTE: ECI TYPICALLY USED ON DESIGN & BUILD AS ASSUME CONTRACTOR WILL CONTRIBUTE TO THE DESIGN DURING DESIGN STAGES - THIS PROJECT FOLLOWS THIS
Basically, contractor does full design for Phase 1 (diversion) and for Phase 2 (reinforcement/replacement) does a little bit of temp works design
-ECI used for Phase 2 (option C) to provide little transition period between Phase 1 and Phase 2.
-X22 clause goes hand in hand with 2 stage tendering. ECI for Phase 2 started tendering half way through Phase 1 for enabling/temp works design before starting on Phase 2
-Sped up work which was useful due to DELAY BETWEEN FRAMEWORKS
-Advised ECI over a PCSA (which would have a separate contract in between phases) as just needed a little overlap between phases so separate contract unnecessary where same contractor will be doing work directly linked to main works
-Also better than having Phase 1 (Option A) and Phase 2 (Option C) contracts running simultaneously as Phase 1 needed to be completed before Phase 2 started (because diversion determined when could access old pipes that needed to be reinforced/replaced)
…..but enabling works (eg site preparation ) COULD start.
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-ECI facilitated collaboration and reduced variations
-Contractor could compress programme and provided VE options
-Provide a more reliable ‘Budget’ for Phase 2
-ECI allows contractor to procure long lead materials
-Phase 2 is NEC option C which allows X22 (along with option E) as these are contracts best suited for collaboration/involving contractor in design asap is most beneficial, whereas options A and B (priced contracts) like for Phase 1 have less need due to their fixed price nature.
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Why in different phases:
I advised ideally their requirements should be complete (no provisional sums) and work required in the Works Information, ideally slowing tender until they know. So THIS IS WHY SPLIT INTO 2 PHASES
Phases 1 and 2 are SEPARATE CONTRACTS, cannot be in same one as messes with defined cost/activity schedule etc
Contract Practice
Cherry Tree Lane
How does a Design and Build route being chosen affect NEC option?
-Fits better with activity schedule options, so Option A (lump sum) or Option C (target cost). This is because design wouldn’t have been developed so you wouldn’t be able to produce a bill of quantities
-Traditional lends itself well to Option A or Option B if the design is at a detailed enough stage to procure bill of quantities.
Technically can use all options but others are cost reimbursable so have less cost certainty (used when scope less clear)
Contract Practice
Cherry Tree Lane
For Phase 1, why did you choose Option A over Option C?
Summary:
-Happy with scope that no changes (Stage 3 design), BOQ not far off so a contractor could get a realistic price
-Provided cost certainty
-Risk register costs low
-Simple project under design and build procurement route (so contractor can control easy)
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-In Option A the financial risk sits with contractor (Lump Sum) so Client needs to be happy with no scope changes. Thames Water previously designed project to RIBA Stage 3 and did surveys under previous framework so I advised that best to have lump sum rather than sharing profit in target cost.
-I assessed the client’s well defined works information AND risks in the risk register and decided that Phase 1 should be lump sum
-Suitable for design & build route as contractor has control of activity schedule and can easily define activities, making it easy for client to see how price determined. Note: D&B chosen to facilitate speed due to framework transition delay
-Bill of quantities wasn’t too far off so happy with scope/requirements that it was sensible/realistic for contractor to price
-Cost certainty required by client, risk appetite was happy that wouldn’t be any more design/scope changes. Lump sum tends to be used on simpler projects as easier to achieve this rigid scope, and this project wasn’t hugely complicated
-Note: Options A and B use short schedule of cost components for CE’s only (using pre determined people rates included in tender submission rather than first principles), full version for defined cost AND CE’s
Contract Practice
Cherry Tree Lane
Why did you advise on an NEC contract?
Summary:
-Programme management important, time bars make sure CE’s constantly updated to keep a up-to-date record
-Ability to transfer risk eg unforeseen ground conditions usually Contractor risk but client took this risk as done extensive surveys (JCT more adversarial employer v contractor)
-Allows target cost for phase 2
-JCT doesn’t have ECI clause, only a PCSA which is separate contract (at TW the early and main works are often integrated) which is better for collaboration
-Option C provides good audit trail of change/open book - helpful for auditing as project partially publicly funded
-Client wanted provisional sums in Phase 2 but NEC should be used with proper consideration of pre-contract risk register instead with pre-set cost/PROGRAMME impact
-Hence made sense splitting into 2 phases with a target cost for uncertain Phase 2 - which relied on information/progress from at Phase 1 to determine when it started/how risks developed
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NEC:
-Good programme management to speed up project after delay between frameworks: facilitated through NEC always having up to date programme so client always informed, which happens due to strict time bars of EWN/CE process making sure everything updated as it happens
-Approach to risk is collaborative and allows it to be allocated to best meet project objectives (whoever is best to control risk) through a risk register. …. Unforeseen ground conditions usually Contractor risk but TW took this risk as had done extensive surveys in previous framework and happy to take on risk/not pay contractor premium
-More flexible in terms of payment arrangements, allowing target cost for Phase 2. JCT only fixed price and only in 2024 introduced target cost contract
-High level of collaboration needed for ECI which NEC facilitates
-Often used on complex/infrastructure projects with potential for change, NEC deals with change and so it happens AND can use target cost for Phase 2 to reduce cost risk of going over budget
-NEC option C provides good audit trail of change and rolling final account giving client constant update of completion date and final cost. Also an open book procedure, important for auditing as project is NRSWA, partially publicly funded
-For Phase 2, the client asked about provisional sums for cost certainty of unknown excavation. I advised that they should use NEC (which doesn’t use provisional sums) but instead dealt with through a proper consideration in the pre-contract risk register instead of provisional sums ‘plugging gaps’. The risk register will have pre-set cost and PROGRAMME impact (PS’s vague on this) if it occurs, and if risk occurs then PM issues instruction and whoever ‘owns’ the risk pays for it.
I advised ideally their requirements should be complete and work required in the Works Information, ideally slowing tender until they know. So THIS IS WHY SPLIT INTO 2 PHASES
Change in scope will be a compensation event
Also much better for setting initial ECI budget and public funded auditing purposes
Note: Phases 1 and 2 are SEPARATE CONTRACTS, cannot be in same one as messes with defined cost/activity schedule etc
*Different to JCT which doesn’t have risk register/allow transfer of risk (apart from
Constructing Excellence) so Contractor would still take ground conditions risk and price for it
Contract Practice
Cherry Tree Lane
For Phase 1, why did you choose Option A over Option B?
Summary:
-Insufficient time to design to Stage 4 and produce full BOQ
-Scope not quite well developed enough for BOQ eg exact excavation quantities. Client preferred early cost certainty (without surprise CE’s during construction ) even if higher cost
-As no BOQ, design and build chosen so contractor could complete design while initial site works while design finished
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-COST CERTAINTY: If a well defined job and can list out activities and approximate quantities under Option B then contractor will price that tender cheaper than Option A. HOWEVER, any risks/omissions are Client’s risk and treated as CE’s, so if there is any doubt then Option A provides more cost certainty to the Client in this case, albeit for possibly a higher price. As this project was only to RIBA Stage 3 I advised that there was too much risk on
variance on the excavation amounts to have approximate quantities.
Although Option B can act as a SoR to remeasure rates, it wouldn’t provide the cost certainty the client required.
-SPEED: Option B could have been an option as wasn’t too far from having enough information to produce a BOQ, but would need to take project from RIBA Stage 3 to Stage 4 and then produce BOQ and would have taken too long, and delay already caused from framework transition. So although Option B has best cost certainty, it takes the longest
Ultimately it is a balance of risk and cost certainty.
-PROCUREMENT: In the end, as there wasn’t a BOQ design and build procurement route chosen for contractor to take this project to Stage 4, speeding up project as could do initial site works while design finished
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Contract Practice
Cherry Tree Lane
How did you advise setting the Phase 2 Option C target cost?
-Assessed tenders from prospective contractors
-Think about how you set the target cost by what risks the Client will have (eg client wanted to take on risk of ground conditions)
Contract Practice
Cherry Tree Lane
Why did you advise Option C for Phase 2?
Summary:
-Scope less well determined and Client didn’t have risk appetite for lump sum so wanted to share cost
-Stage 2 design, still needed enabling works/thrust block/temp works/reinforcement extent to be determined
-Notable risks in risk register
-Encouraged collaboration and facilitated X22 ECI for this (and speed)
-Provided some cost certainty with agreed tender (over Option E)
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-Design at RIBA Stage 2 as enabling works / exact thrust block / extent of reinforcement length still needed to be fully determined. So not completely convinced there will be no scope/works information changes which are CE’s
-Client retain ground conditions risk as know what these are from before Phase 1
-I assessed the other risks in the risk register and advised on Option C as client owning risks of possible scope changes
-Suitable for design & build route as contractor has control of activity schedule and can easily define activities, making it easy for client to see how price determined. Note: D&B chosen to facilitate speed due to framework transition delay
-Option C provided some cost certainty as there was an agreed tendered target cost
-Encourages collaboration that goes hand in hand with the X22 ECI as needed contractor’s help to find solution
-Collaboration also allows both parties to work together for overall cost saving
Note: Options C, D, E, F use full schedule of cost components for CE’s
X22 for C, D, E, F only
Contract Practice
Colindale Gardens
Why did you advise on a Key Date?
Summary:
-Advised over Sectional Completion as Client needed to retain possession of works as was mid way through programme
-If key date met then the Client does NOT take control of works (as would happen in Sectional Completion) and so contractor still has duty to insure those works (Clause 30.3)
-Also couldn’t break the access road down into a ‘section’ to have its own completion as was a small part within entire works. In water it’s not easy to have ‘sections’ of works as it’s linear
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-I advised against Sectional Completion because the Client needed to retain possession of the works.
So it is possible to have little completions in sectional completion but the access road was a small part of the entire works which was not complete and so couldn’t break it up into a ‘section’. Sectional Completion NOT EASY FOR WATER PIPES as it’s linear.
“If I was working on a more traditional building I would likely advise on sectional completion”
-Key dates recorded in accepted programme and moved same way as CE’s
Note: the access road was to allow large concrete deliveries required for HS2
—
HS2 NEC subcontract states ‘X7 Key Date Delay Damages’
normal delay damages £2500 a day and key date delay damages £1000 a day
Say it’s a traditionally procured job?
Contract Practice
Colindale Gardens
Why did you advise it was a valid compensation event?
Summary:
-60.1(12) physical conditions stating the contractor has priced for these in accordance with the site information
-Read in conjunction with 60.3 stating if ambiguity between site information and actual ground conditions, then most favourable for contractor is chosen.
-Here, borehole log in site information was from a different area of site
-CEN was within 8 weeks of being aware
—————-
-The core clause of 60.1(12) deals with ‘physical conditions’, stating the contractor has priced for these in accordance with the site information. It is valid if contractor encounters ‘physical conditions’ which are: within the site, not weather, experienced contractor would not have judged reasonable to allow for
Note: this CE can include man-made services too
-In this case, read in conjunction with clause 60.3 which states if there is an ambiguity between actual ground conditions and site conditions then the most favourable for contractor is chosen. Here, the borehole log within the site information was from a different area of site
-The CEN was also within 8 weeks of becoming aware
Contract Practice
Colindale Gardens
How did you advise on the process to issue a quotation instruction for the compensation event?
Summary:
-Contractor CEN (clause 61)
-PM assesses validity (clause 62) within 1 week, further 2 weeks after notification
-Contractor quotation in 3 weeks
-PM has 2 weeks to assess, further 2 weeks after notification
—————
-Contractor issues CE notification under Clause 61 (and mentioned they expected a 5 week delay)
-PM has 1 week from date of contractor’s CE notification to assess its validity and either reject or instruct a quotation (Clause 62)
-After this, if PM has not replied then contractor can notify them and if still not done after 2 weeks it is deemed accepted and deemed a PM has issued an instruction for quotation.
-I kept a strict tracker/diary to advise PM of this who was working across multiple jobs
-Within instruction I advised on including an assumption that it would only take 3 weeks.
Note that I would have included an assumption even if the contractor didn’t mention 5 weeks in original notification as assumptions used when CE is “too uncertain to be forecast reasonably”
Contract Practice
Colindale Gardens
How did you advise on the process to assess the contractor’s quotation?
-Contractor has up to 3 weeks to submit quotation (Clause 62). If they don’t then PM makes own assessment (Clause 64)
-PM then has 2 weeks to respond to quotation and can either accept it, notify contractor they’ll make own assessment (Clause 64), or instruct contractor to resubmit quotation (Clause 65)
-If PM doesn’t respond then contractor can notify any time after the 2 weeks, and if no response within another 2 weeks then it is deemed accepted (Clause 63)
Note: Contractor can also claim a CE if PM’s delay led them to incur additional cost/time.. but hard to prove
Contract Practice
Colindale Gardens
What did the contractor’s CE contain?
Stated they were unable to excavate rock based off on methodology set in original contract
-Excess time to excavate harder rock
-Excess cost of getting larger machinery to break rock + longer time
-Excess preliminaries + longer time
-Trial hole to see if rock throughout whole pipe run
Contract Practice
Colindale Gardens
How did you create your 3 week estimate of the CE delay?
Note: contractor only entitled to DIFFERENCE (duration on top of what they would have normally done), and same with cost
-So I calculated how long it would have originally taken from programme
-Then worked out how long it would take for new work by using historic data of same heavy machinery and seeing productivity/efficiency per m per day
-Compared with length of current scheme and worked out it would take 3 weeks
Contract Practice
Colindale Gardens
How did you advise on the assumption?
-Clause 61.6 allows use of assumption if effects of compensation event are too uncertain to be forecast reasonably, as contractor will be pricing for a risk that they can’t accurately determine. Or PM may simply determine it is better for the employer to retain a particular risk in a quotation. In these cases:
-The PM states assumptions in its quotation instruction to contractor (eg it will take 3 weeks) that will be used to base their quotation ‘forecast’ on.
-Assessment of the event is also based on these assumptions.
Contract Practice
Colindale Gardens
How did you advise what to do when PM assumption turned out to be wrong?
Summary:
-CE under 60.1(17)
-For costs ON TOP OF original assumption
-Took 3.5 weeks instead of assumed 3 so contractor gets cost for 0.5 weeks
——
-If any assumption later found have been wrong, the PM notifies a correction as a separate CE (Clause 60.1(17))
-Once the CE has been accepted, it can never be revisited (Clause 65.2). However, as mentioned above, the only way more costs can be claimed by contractor is if PM’s assumption turns out to be wrong eg it takes 3.5 weeks. The original CE is left alone and only the extra cost due to the contractor is implemented under a new CE (Clause 60.1(17) - it is only the CHANGE IN ASSUMPTION that can be considered under a new CE
So PM’s assumptions can go for or against the PM:
The idea of a PM assumption is to base the quote on that assumption and then that element can be revisited by either Party if it turns out to be incorrect. So on one hand the initial CE quote will not be as high as the Contractor is pricing less risk.. but runs the risk of incurring even more cost than the ‘contractor’s quote without assumption’ if cost is even more than assumption.
Double edged sword.
Contract Practice
Colindale Grdens
Were there any alternatives to PM’s assumptions?
Not really
-Require a revised quotation if contractor submitted situation clearly in error, with PM providing reasons (clause 62.3)
Or
-PM make their own assessment in circumstances where the contractor has failed to act in accordance with certain key provisions of the contract (clause 64.1)
Neither of these valid in this case
Quantification
Carterton Growth
What elements were required to be measured using NRM 2?
Summary:
-NRM 2 = facilitating works (ground investigation, clearance, prep), external works (demolition/site clearance), excavation, substructure (foundations) , trench filling, formwork, superstructure (masonry) roof (structural metalwork), design fees, risk allowance
-CESMM4 for civil (water) elements like: pipework excavation, pipework, ancillaries
-BOTH used for bridge eg structural metalwork (eg steel members, trusses), slab used NRM 2 but CESMM4 for culvert, parapet,
-BOTH for prelims eg NRM 2 for more general things like staff site accommodation/IT, but CESMM4 for civil things like plant for (boring, pipe laying, paving) and temporary works (traffic diversions, etc)
————
“I advised on NRM 2 for most things like: facilitating works (ground investigation), external works (demolition/site clearance), excavation, substructure, superstructure, roof, contractor prelims, design fees, risk allowance…… and CESMM4 for civil (water) elements like: pipework, ancillaries
BOTH used for bridge eg structural metalwork/slab used NRM 2 but CESMM4 for culvert, parapet,
Note: excavation/earthwork actually sufficient in NRM 2 so don’t need CESMM for that
Using NRM 2:
Ground remediation
-Site dewatering (item) > area and maximum depth > method of disposal
Foundations (WBS)
-Preliminary sitework (nr/item) > Locating underground services, trial pits, boreholes > maximum depth > location, how it’s located, extent of report
-Site clearance (m2) > description
-Site preparation (m2) > remove topsoil, remove hard surface > surface type, designation eg disposed/kept > method of breaking
Excavation (WBS)
-Excavation (m3) > not exceeding 2m deep > details of obstructions
Excavation (Pipework) THIS IS CESMM4
-General excavation (m3) > topsoil, rock, tarmac > maximum depth up to 0.25, 0.25-0.5, 0.5-1, 1-2, 2-5, 5-10
-Disposal of excavated materials (m3) > topsoil, rock
Note how CESMM4 has more detailed depths (better for varying depths of utilities/TW work), and emphasis on surface type. Excavation is also its own separate section which suits TW work better.
NRM 2 again:
-Support to excavation > maximum depth > location/proximity to roads buildings or services > method of forming, if removed or left
-Imported filling (m3) > type
-Landscaping (m2) > turfing > seeding
In Situ Concrete section
-Formwork (m/m2) > height
-Mass Concrete(m3) > thickness > in trench filling > poured against hardcore
—-
Superstructure:
In situ concrete section (Ground bearing slab)
Horizontal work > less than 300mm thick > in structure (not just blinding) > poured against hardcore
Masonry section
Walls with thickness stages (m2) > brickwork > skins of hollow walls > method of forming > finish
Roof:
Structural metalwork section
-Framed members (tonnes) > lengths over 1m but less than 9m > weight 25-50kg > columns, beams, rafters, trusses > detail
So a roof has horizontal across, two diagonal ones to form triangle with vertical columns within it
Soffit / Fascia (m/m2) > not exceeding 600mm wide > horizontal, sloping, vertical > PVC > finish > fixing location
—
Bridge:
Is a bridge with no middle piers (supports)
-Truss supports (m) - See structural metalwork above
-Slab (m2) - see insitu concrete above
-Concrete abutment either side (m3) - inside see insitu concrete above
-Parapet (fence)
-Culvert tubing (m) > state diameter
reinforced mesh (m2)
—-
*From design economics (NRM 1)
Unit rates calculated by:
-Vegetation clearance = m2 for site area x UNIT RATE
-Preparatory groundworks > removing old manhole concrete n = item/nr x UNIT RATE
-Preparatory groundworks > filling in old manholes = item/nr for (before backfilling) x UNIT RATE
-Access road > surface type > width x UNIT RATE
—
For contractor’s preliminaries I used NRM 2 AND CESMM4……
NRM 2 more substantial for more general things (prelims) like staff site accommodation/IT, but CESMM4 better for more civil specific things like plant for (boring, pipe laying, paving) and temporary works (traffic diversions, dewatering, formwork etc)
Quantification
Carterton Growth
What elements were required to be measured using CESMM4?
Summary:
-CESMM4 for civil (water) elements like: pipework excavation, fittings and valves, manholes, grouting abandonment,
-Also for WBS inside eg: pipe risers (m), Fittings: pumps (nr), motors (nr), skid mount (m2))
-BOTH used for bridge eg structural metalwork (eg steel members, trusses), slab used NRM 2 but CESMM4 for culvert, parapet,
-BOTH for prelims eg NRM 2 for more general things like staff site accommodation/IT, but CESMM4 for civil things like plant for (boring, pipe laying, paving) and temporary works (traffic diversions, etc)
————
Pipework
Work classification I
Clay, concrete, iron, steel, MDPE, HDPE (m) > 200-300, 300-600 > maximum depth 1.5, 1.5-2, 2-2.5 etc
Work classification J (fittings and valves)
-Materials (see above) > bends, junctions, branches, tapers, bell mouths etc > diameter
-Valves (nr)
Work classification K (manholes and pipe ancillaries)
-Manholes (nr), brick, in situ concrete, pre cast concrete > 1.5-2m, 2-2.5m depth etc
Class Y - Grouting abandonment - m3 with unit rates including plant needed, labour, concrete mix (material), capping
WBS: pipe risers (m) Fittings: pumps (nr), motors (nr), skid mount (m2)
Design Economics
Chesterton Farm
What did you advise in the Stage 2 design review meetings / cost plan?
Summary:
-Design review: regular concept reviews to see if meets project brief ‘, constantly seek client comments
-Cost plan: advise cost implications of decisions, cost limit, information used
———
Design review meetings
-At stage 2: reviews of architectural concept with client to determine if meets project brief, these reviews done regularly to seek comments from client and make them aware of design decisions with brief updates to reflect it.
At end of stage the strategic engineering aspects are incorporated into architectural concept
-Regular reviews with client to seek comments
Cost plan:
-Items included/excluded from estimated cost clearly communicated to client
-Statement of cost, and cost limit
-Details of information on which the cost plan was prepared, and assumptions
-Statement of floor areas, measurements
-Estimate base date to which inflation has been applied
Design Economics
Deptford Green
How did you produce the elemental unit rates?
Summary:
-Top down
-Achieved by getting high level breakdown of the overall cost of each element (from historic data), then divide this by unit quantity to get the EUR.
-eg metres of pipe or site clearance per GIFA (not m2 - this is used for specific items)
-In contrast, bottom up unit rates (not EUR’s) are from first principles.
-Eg excavation per m3, contaminated material removal per m3, backfill per m3, manhole rings (nr), imported material (m3), plant hire rates (wks), trench sheets, flanges, valves
————
-They are built up using a top down approach
-You get the high level breakdown of the overall cost into each element from historic data
-Then the rate (EUR) is ascertained by dividing the whole element value by the unit quantity (EUQ) eg metres of pipe or site clearance per GIFA (not m2 - this is used for specific items)
-In contrast, unit rates are more specific and built from a ‘bottom up’ approach such as excavation per m3, contaminated material removal per m3, backfill per m3, manhole rings (nr), imported material (m3), plant hire rates (wks), trench sheets, flanges, valves
Design Economics
Deptford Green
How did you produce the overall elemental values?
Summary:
-Found projects with same parameters eg wastewater>London>rising main
-Then did top down approach, using cost analyses from historic projects to divide their element values (eg pipe) by unit quantities (eg 100m) produce EUR (£1000). Can then multiply this rate by current project’s pipe meterage
-Can do normalisation for cost anomalies or clear differences eg compound
-At earlier stage will probably know GIFA, but may only know pipe length needed and not diameter/depth etc
-Broke down these costs into elements to see which are most cost significant elements. Then a prerequisite to cost plan where pipe broken down further into diameter, excavation etc
———
-So in using historic data (cost analyses) from other projects, can use their overall element values to produce either:
Elemental cost per M2 of GIFA….. OR …..Elemental unit quantities (eg per m of pipe)
At this early stage, a top down approach used with lack of information.
-On this project at Stage 1, I used GIFA from other projects (floor area method) for eg site clearance to get a rough cost per m2
-I did the same with pipe cost per m by finding jobs with same parameters eg wastewater>London>rising main.. to get a rough pipe cost per m
-Other elements at TW: enabling work (m2 GIFA), surveys (nr)
-Then you divide these overall values by the quantity. Eg historic project worked out £50,000 at 50m2 of GIFA then elemental unit rate is £1000.
-Apply this rate to Deptford Green which is 30m2 in size and you’ve got its elemental value of £30,000 (site clearance)
-Same principles with pipe cost per m
-GIFA easier to get as know site parameters earliest, at a stage when only know site dimensions and may only know pipe length needed and not its diameter/depth etc and so not properly measurable
-Broke down these costs into elements to see which are most cost significant elements, can see how inflation might affect overall element value
-These elements are an prerequisite to the cost plan where pipe is broken down further into diameter, excavation etc
Design Economics
Deptford Green
Where did the cost data come from?
-Historic costs from cost analyses/benchmarks of previous projects. Basically getting the high level elemental breakdown of these similar projects, then adjusted for time and location.
-Agreed tender price (not final contract sum as much harder to compare and can take 3-4 years to get final sum)
Design Economics
Deptford Green
What do you need at RIBA stage 1?
-Project requirements, site location, pipe meterage, quality needs, enabling works
-Also: budget, site information eg likely ground conditions, initial contract/procurement views, rough programme/key dates, rough drawings
Design Economics
Chesterton Farm
How were the Stage 2 risk percentages calculated?
Summary:
-In stage 1 had percentages of project value/programme impact against each NRM1 risk category.
-This is developed in stage 2 based on historic data as design/information progresses.
-Eg design development and employer change risk %’s generally reduced, construction and other risks could be reduced/increased
-However, some individual risks start to get identified
-Specific risk allotted into correct NRM1 category and its value offset against category value
———
-Percentages based on historical data, not a standard percentage but a properly considered assessment of risk that changes as design/information progresses
-Updated version from RIBA Stage 1
-Separate allowances for:
-Design development risks: eg changes in estimating data (reduces as more cost data becomes available), third party risks like planning/legal/environmental requirements (reduces as more project/site information becomes available), higher risk if designing yourself (traditional procurement), delays in tendering
-Construction risks: site conditions like access, ground conditions, existing services. All reduces as more site information becomes available)
-Employer change risks: used during design and construction for client changes to scope/brief/quality (eg if approximate quantities then A HIGHER ALLOWANCE FOR THIS)
-Employer other risks: early handover, postponement, liquidated damages, special contract arrangements
So each category has its own percentage multiplied by base cost estimate.
As more information becomes available individual risks are identified with a risk allowance built up
Design Economics
Chesterton Farm
What did you advise in the Stage 2 cost plan?
Summary:
-Cost information
-Cost implications of client’s decisions/requirements
-Kept expenditure within cost limit
-Advice on VFM
—-
-Provided robust cost information with which the client can make informed decisions
-Made client and designers aware of cost consequences of their design decisions and requirements
-Kept expenditure within the cost limit approved by the client, providing value for money
Design Economics
Chesterton Farm
What was established in the Stage 2 cost plan?
Summary:
-Concept /outline specification is set and aligned to budget (cost limit), by end the client approves this budget before next stage
-Regular design reviews to seek client comments and brief adjusted. Advise on high level design parameters of significant elements eg pipe parameters per m, and number of connections)
-Review cost implications of these by considering the project outcomes/procurement strategy/programme implications/project risks
-At start of Stage 2, the initial EUQ’s will be superseded by more detailed measurement of elements, sub-elements, components and the EUR’s by bottom up unit rates (first principles) eg labour materials etc.
-Strategies eg construction, health & safety
-More accurate risk allowances
————-
-Overall: During stage the architectural concept /outline specification is set and aligned to budget (cost limit), and by end of stage the client approves this budget before proceeding to next stage
-Regular design reviews to seek comments with client and brief adjusted to reflect it where I advised on initial design parameters/strategic engineering
requirements and advised on high-level
analysis of these significant elements of cost and initial quantities of key items in outline specification (eg high level pipe parameters per m, and number of connections)
-I then reviewed cost implications of these by considering the project outcomes/procurement strategy/programme implications/project risks
-Initial EUQ’s superseded by more detailed measurement of elements, and EUR’s replaced by bottom up unit rates (first principles) eg labour materials etc. At Thames Water the elements unit rates are created for more detailed things like specific facilitating works (eg ground remediation) per m2, pipe laying by diameter/depth per m, excavation per depth per m, connection cost. Non-cost significant items (e.g minor items/labour on cost significant items) accounted for by increasing unit rate by an appropriate percentage
-Strategies eg construction, sustainability, health & safety, and maintenance strategies
-Identified more accurate risk allowances
Design Economics
Chesterton Farm
What was established in the Stage 3 cost plan?
Summary:
-Test concept, making sure pipe/excavation/water boosting station spatially coordinated before the detailed information resulted to construct it is produced at Stage 4.
-Undertake engineering analysis (e.g thrust blocks, boosting station foundation loading capacity, confirmation of pipe diameter/depth… to RATIFY assumptions made at stage 2
-NOT about adjusting architectural concept
-More detailed cost data eg specification, specialist subcontractors.. to establish affordability against cost limit
-Update cost plan iteratively with increasing cost certainty, allowing any cost increases to be balanced by transfer between cost targets and reductions in risk allowances
-Identify risk allowances in more detail
——-
-Testing/validating the architectural concept, making sure pipe/excavation/water boosting station spatially coordinated and with engineering information (outline specification) before the detailed information resulted to construct it is produced at Stage 4.
-Undertake initial detailed design studies and analysis and engineering analysis (e.g thrust blocks, boosting station foundation loading capacity, confirmation of pipe diameter/depth… to RATIFY assumptions made at stage 2, layering on more detail to design. NOT about adjusting architectural concept, although detailed design/engineering may need adjustment.. if so then agreed with client via change control
-I advised on cost exercises on more detailed aspects of design, strategies, outline specification, specialist subcontractors.. to establish affordability against budget
-Update cost plan iteratively with increasing cost certainty which allows any cost increases to be balanced by transfer between cost targets and reductions in risk allowances
-Identify risk allowances in more detail
-Making sure cost plan aligns with budget and agreeing with client before proceeding to this stage.
Design Economics
Chesterton Farm and Deptford Green
Summarise outcomes of Stages 1-4
Summary:
-Stage 1: brief, budget, site info, procurement
-Stage 2: concept / outline spec aligned to budget
-Stage 3: testing concept, more detail with engineering information to ratify assumptions
-Stage 4: detailed design, cost plan done here depends on procurement strategy e.g may not be required in D&B
Each stage requires client approval of cost limit, explanations of changes, record transfers from risk allowances/cost targets
Allows client to determine if the project is affordable and cost target for each element is reasonable
———
-Stage 1: project brief, budget, site information, procurement strategy
-Stage 2: prepared once the scope of work is fully defined and key criteria specified, architectural concept/outline specification is set and aligned to budget (cost limit), and by end of stage the client approves this budget before proceeding to next stage
-Stage 3: develops on this by testing/validating the architectural concept, going in more detail of the same elements from stage 2 by making design spatially coordinated with engineering information (outline specification), RATIFIES assumptions made at stage 2, cost checking of significant cost targets, NOT about adjusting architectural concept
-Stage 4: detailed design to construct, Whether a cost plan done here depends on procurement strategy e.g one might not be required where design and build contract strategy is selected
Each stage requires client approval of cost limit and explanations of changes made. So essential to record and transfers to and from risk allowances or adjustments to cost targets. These stages allow the client to determine: if the project is affordable, the cost target for each element is reasonable/up to date/not been exceeded.
Design Economics
Deptford Green
How would you advise on making sure the budget (cost limit) aligns with the cost plan?
Summary:
-Establish clear project scope to prevent scope creep
-Develop realistic estimate/cost plan budget as detailed as possible, and allocate a contingency budget (but not too high as to make project infeasible)
-Regularly compare actual expenditures against the allocated budget of each element that aligns with the project’s objectives
-Record any transfer between cost targets and reductions in risk allowances.
-Conservative risk allowances which can then be reduced
——-
Budget must not be too low, but also not with too much contingency to make it seem unfeasible.
QS produces order of cost estimate which is a ballpark figure, but can include different budget scenarios eg pipe routes
Original budget includes conservative risk allowances which are reduced as risks become clearer with more information
Split budget into elements and do regular comparing of these planned costs against budget, which allows any cost increases to be balanced by transfer between cost targets and reductions in risk allowances.
Design Economics
Deptford Green
What was established in the Stage 4 cost plan?
Summary:
-Prepare all information to construct
-Agree cost limit before tendering
-Procurement route important influences who produces final information, eg client BOQ or contractor activity schedule
-Or if D&B then this whole stage could be done by contractor
——
-Preparation of all information to construct
-Agree cost limit with client before tendering such becomes pre-tender estimate
-Prepare BOQ/Activity schedule
-Review tender returns
Procurement route important at this time as influences who has ultimate responsibility for producing final construction information
Whether a cost plan done here depends on procurement strategy e.g one might not be required where design and build contract strategy is selected
Design Economics
Chesterton Farm
Summarise the cost planning information at Stages 2 and 3
Summary:
Stage 1 - GIFA/M, general elements
Stage 2 - unit rates for sub elements… site surveys, scope of facilitating/temporary works, initial construction strategy, basic plans/elevations, layout pipe connections, existing utilities, foundation layouts, temporary works methodology
-Stage 3 - unit rates in more detail eg materials….: cost checks against targets, final confirmation of all of above including detailed information on washouts/valves/foundations/temporary works/flood remediation
Stage 4: technical design detail on water boosting station, complicated connections, bridges
——-
Stage 2: condensed list of elements, GIFA, project brief, site information/surveys, procurement strategy, programme/key milestones, scope of facilitating/temporary works, initial construction strategy (buildability/access/logistics), pre-construction information, basic plans/elevations, layout pipe connections, existing utilities, foundation layouts, temporary works methodology
Gardner: outline mechanical services (design proposed at this stage) -
Construction tech
Stage 3: cost checks against pre established cost targets, final confirmation of all of above including detailed information on washouts/valves/foundations/temporary works/flood remediation
Stage 4: based on technical designs/specs, provides reference for
Some TW jobs go to Stage 4 eg for detail on water boosting station, complicated connections, bridges
Note: For Project X the contractor took project from Stage 2 to 3 mostly as could be done on an activity schedule basis, just the complicated connection detail done to stage 4.
Stage 1 - GIFA/M, general elements
Stage 2 - more detailed elements
Stage 3 - materials with unit rates
Design Economics
Chesterton Farm (stages 2 and 3)
Deptford Green (stage 4)
What are the estimate/cost plan elements?
Summary:
Facilitating works
External works
Pipework - Connections, Thrust blocks
Substructure - foundations
Superstructure - Water boosting station, Water pumping station (sewage)
Main contractor preliminaries/Method related charges
Project and design team fees estimate
Risk allowance
———
“I advised on NRM 1 for most things eg: facilitating works (ground investigation), external works (demolition/site clearance), excavation, substructure, superstructure, roof, contractor prelims, design fees, risk allowance…… and advised on CESMM4 for civil (water) elements like: pipework, ancillaries,
BOTH used for bridge eg structural metalwork/slab used NRM 2 but CESMM4 for culvert, parapet,
Note: excavation/earthwork actually sufficient in NRM 2 so don’t need CESMM for that
More detailed:
Facilitating works (CESMM ground investigation) - Toxic/contaminated material removal, Demolition works
External works (CESMM demolition/site clearance) - site clearance, preparatory groundworks, access road
Pipework - Connections, Thrust blocks
Substructure (Earthworks in CESMM4 - Split by surface type
Substructure - foundations
Superstructure - Water boosting station, Water pumping station (sewage)
Main contractor preliminaries/Method related charges
Project and design team fees estimate (Stage is a percentage then more detailed analysis on Stages 2 and 3)
Risk allowance
Design Economics
Chesterton Farm
How did you advise on the cost implications of the water pumping station and pipe route?
Summary:
Stage 2
1 Client’s route would require: more land clearance per m2 (GIFA) manholes/washouts as longer route
longer programme/prelims, longer access road.
2 I advised passing under services cheaper despite deeper excavation in some points after producing excavation unit cost per m3 at greater depth using HISTORIC DATA
3 Unit rates on steep graded areas, (moling) would provide a cost saving. Although it’s more expensive per m to excavate, it provided programme saving as less prelims/temp works
4 Reduce bends to reduce need for larger WBS. I then calculated general cost of strip foundations/walls
5 unit rates from historic data of: excavation m3, bulk materials like imported topsoil, crushed concrete and hazardous material removal
6 more thrust blocks needed as more turns
7 Predict main contractor’s prelims costs
Stage 3:
1 thrust block unit rates for work/concrete/curing time, access road unit rate for tarmaccing, facilitating/external works.
2 detail on washouts/valves/manholes and advised in more detail on complicated connections
3 produced unit rates temporary works: design (per day), lots to hire (per m and support columns per nr), for a long time (wks), large excavations (m3), preliminaries on extended programme (wks).
4 Foundations by m, formwork, depth, material disposal, thrust blocks
5 more detail on specific sequencing, firm programme, construction strategy (resource efficiency)
6 produce more detailed unit rates using excavation under differing surface types, backfill, disposal
——-
Note: WBS used GIFA in Stage 1
-Stage 2: Current route wanted to avoid existing services. I advised this would require: more land clearance per m2 of GIFA, more manholes/washouts as longer, longer access road, longer programme/prelims, more land permission… as it goes around existing services. I recommended that passing under them would be cheaper overall despite needing deeper excavation in some points after producing excavation unit cost per m3 at greater depth using HISTORIC DATA
-Stage 3: updated average number of manholes from previous stage to actually seeing how many on drawings and taking them off with UNIT RATES. Same with thrust block with unit rates for for work/concrete/curing time, access road unit rate for tarmaccing, facilitating/external works..
-Stage 2: For WBS was able to measure general meterage of strip foundations, general number of pumping equipment
-Stage 3: Foundations by m, formwork, depth, material disposal
-Stage 2: provided general advice with unit rates on steep graded areas, moling/directional drilling would provide a cost saving. Moling more expensive per m to excavate but provided savings elsewhere
-Stage 3: produced unit rates of costs of temporary works in terms of: extensive design (per day), lots to hire (per m and support columns per nr), for a long time (wks), large excavations (m3), preliminaries on extended programme (wks).
-Stage 2: Pipe route can use contours to utilise more areas of gravity sewer than pumped rising main - historic data per
-Stage 2: I advised on general pipe route depending on depth, pipe diameter, length, connections, surface type
-Stage 3: detail on washouts/valves/manholes and advised in more detail on complicated connections, Each turn of pipe will require more thrust blocks and design fees
-Stage 2: unit rates excavation by m3 historical data
-Stage 3: produce more detailed unit rates using excavation under differing surface types, backfill, disposal
-Stage 2: unit rates from historic data of bulk materials like imported topsoil, crushed concrete and hazardous material removal
-Stage 3: unit rates from bottom up
-Although large pipe diameter has more flow, it is more expensive and deeper excavation required, and more fencing
-Stage 2: predict main contractor’s prelims costs against per m pipe work, m3 excavation, GIFA WBS
-Stage 3: more detail on specific sequencing, firm programme, construction strategy (resource efficiency)
Note: temporary works under main contractor’s preliminaries / time related charge in NRM1 / CESMM4 but TW pay for these
Design Economics
Chesterton Farm (stages 2 and 3)
Quantification
How did you advise on measuring /calculating the NRM 1 stuff?
Summary:
-I advised on NRM 1 for most things eg: facilitating works (ground investigation), external works (demolition/site clearance), excavation, substructure, superstructure, roof, contractor prelims, design fees, risk allowance…… and advised on CESMM4 for civil (water) elements like: pipework, ancillaries,
BOTH used for bridge eg structural metalwork/slab used NRM 2 but CESMM4 for culvert, parapet,
-Note: excavation/earthwork actually sufficient in NRM 2 so don’t need CESMM for that
-Prelims:
Stage 1 - historic data
Stage 2 - individual items such as general staff, fences, general construction strategy
Stage 3 - specific staff, plant, firmed length of fences/mats
-I used NRM 1 AND CESMM4……
NRM 1 more substantial for more general things and CESMM4 for more civil specific things like plant
-Note: I DIDN’T FOLLOW ELEMENTS EXACTLY LIKE NRM 1 see FLASHCARD
——
“I advised on using CESMM4 for pipe work and ancillaries.. and NRM 1 for everything else (and for elemental structuring), however in some cases used NRM 2 as NRM1 lacked some detail on site investigation eg trial pits
From NRM2
-Trial pits > maximum depth (m)
Water boosting station:
Substructure: Foundations - Stage 1 originally perimeter from historic data, stage 2 specific m of strip foundations with unit rate
Superstructure: slab for equipment (m2),roof (m2), pipe risers (m), walls (m2) - Stage 1 was GIFA but stage 2 was m2 per wall with a unit rate determined by wall thickness,
Fittings: pumps (nr), motors (nr), skid mount (m2)
Foundations: Initially done on GIFA, then m2 of foundations, then m of specific foundations
Roof: Initially m2, then more detailed with soffits, fascias, trusses (however under ‘frame’ element)
External works e.g site clearance
Unit rates calculated by:
-Vegetation clearance = m2 for site area x UNIT RATE
-Preparatory groundworks > removing old manhole concrete n = item/nr x UNIT RATE
-Preparatory groundworks > filling in old manholes = item/nr for (before backfilling) x UNIT RATE
-Access road > surface type > width x UNIT RATE
——
Contractor’s preliminaries
Stage 1 used historic data from similar projects.
Stage 2 considered individual items such as general staff required, fences (based on excavation length), general
Stage 3 focused on: specific staff required (+ developed construction strategy), specific plant, firmed length of fences/mats
For contractor’s preliminaries I used NRM 1 AND CESMM4……
NRM 1 more substantial for more general things like staff site accommodation/IT, but CESMM4 better for more civil specific things like plant for (boring, pipe laying, paving) and temporary works (traffic diversions, dewatering, formwork etc)
Note: I DIDN’T FOLLOW ELEMENTS EXACTLY LIKE NRM 1 - SEE OTHER FLASHCARD WHICH SHOWS ITS A MIXTURE OF NRM1 and CESMM4
Note: put TEMP WORKS here as these are TW’s cost and not in contractor’s prelims like NRM 1 says
Design Economics
Chesterton Farm (stages 2 and 3)
Quantification
Carterton Growth (stage 4)
How did you advise on measuring /calculating the CESMM4 stuff?
Summary:
Work classifications:
-I (pipework)
-J (fittings and valves)
-K (manholes and pipe ancillaries)
-Y (grouting for abandonment)
Measured using: CESMM 4
Pipework
Work classification I
Clay, concrete, iron, steel, MDPE, HDPE (m) > 200-300, 300-600 > maximum depth 1.5, 1.5-2, 2-2.5 etc
Work classification J (fittings and valves)
-Materials (see above) > bends, junctions, branches, tapers, bell mouths etc > diameter
-Valves (nr)
Work classification K (manholes and pipe ancillaries)
-Manholes (nr), brick, in situ concrete, pre cast concrete > 1.5-2m, 2-2.5m depth etc
Class Y - Grouting abandonment - m3 with unit rates including plant needed, labour, concrete mix (material), capping
Design Economics
Chesterton Farm
How did you advise on the resource efficiency of the construction strategy?
Summary:
(Due client additional pipework and changes to WBS pump layout / finishes)
-As improving construction strategy sequencing would have big effect on all time sensitive items eg plant/labour
-Do connections simultaneously, although more expensive will reduce programme
-Put select plant (diggers) on either side of railway tracks as couldn’t pass, reduces prolonging duration despite higher initial cost
-Above reduced traffic management costs as less time of road closure needed
-Also reduced temp works hire costs due to simultaneous working of connections. Also saving cost by setting up/taking down temp works at same time, reducing delivery/collection fees.
-Originally doing open cut but advised on Moling technique used for slope up to the railway track where gradient is high. Although had higher base unit rate per m but would save on earthwork support, duration (and so less labour/prelims)
———-
(Due client scope additions of additional pipework and changes to water boosting station pump layout / finishes)
Because the plant and labour durations can be applied to all elements so improving construction strategy sequencing/improving programme will have big effect across all elements. The cost overruns were not attributed to any particular element.
I advised to:
-Do connections simultaneously (TIME). This will reduce programme duration and overall staff/labour costs (COST).
Original sequence: Connection 1, lay pipe, Connection 2. Changed to: Connection 1 & 2 (same time) then lay pipe
-Put select plant (such as diggers) on either side of railway tracks as couldn’t pass (BUILDABILITY), reduces prolonging duration (TIME) despite higher initial cost
-Overall reduced duration from above subsequently reduced traffic management costs. I also advised that
road closure costs took a high proportion so less time needed for road closure due to reduced programme.
-Overall reduced duration from above reduced temp works hire costs due to simultaneous working of connections 1 and 2. Also saving cost by setting up/taking down temp works at same time, reducing delivery/collection fees.
-Moling technique used for slope up to the railway track where gradient of site is high. Originally going to do open cut up to railway track. Moling (directional drilling) had higher base unit rate per m but would save on earthwork support, duration (and so less labour/prelims) so provided saving in this circumstance.
Must be in line with the health and safety strategy
ACHIEVED BY
Speaking to people
-K998: How to advise a client to know how long to allocate to activity - refer to project managers/designers/engineers for advice, use previous data e.g
Design Economics
Chesterton Farm
What is the construction strategy?
Summary:
-Aspects that affect buildability,logistics, health and safety (eg moling was safer)
-Site access, plant, steel or wood frame, reviews of supply chain
———
A strategy that considers specific aspects of design that may affect buildability/logistics of constructing a project or health and safety aspects (eg I considered the moling (directional drilling) as safer)
Can include eg: site access, accommodation locations, reviews of supply chain/sources of materials, choice of frame (steel or concrete), installation of larger items of plant
Design Economics
Deptford Green
What was the budget estimate for?
Essentially creating a Stage 1 order of cost estimate
High level estimate to create a benchmarked value to compare against future cost plans and agreed tender
Design Economics
Deptford Green
What was this project?
Summary:
-Publicly funded wastewater pipe extension in central London (client is local authority)
-Wider infrastructure framework
-
Wastewater pipe extension for Greenwich council (publicly funded)
Tendered with wider infrastructure framework (incumbent framework only used for non public jobs if want speed )
publicly funded jobs are job with:
-Developers who are local authorities
-TW reinforcing its own network (no developer) and paid by customer bills
Design Economics
Deptford Green
What is the estimating hierarchy used at Stage 1?
Asset type: Water pipe / sewer > Gravity/Rising main > Location (Thames Valley / London) > Specific location (Greenwich)
Elemental Unit: Pipe Diameter > Material > Excavation depth > Open Cut/Moling > Surface type
Refined: Connections, Valves, Washouts, Manholes (amend otherwise will use average per m)
Design Economics
Deptford Green
How did you advise on normalising the elements of comparable historic projects?
Summary:
-Adjusted for proportion of work done in carriageway for pipe cost per m, backfill, disposal, reinstatement
-Average number of connections , washouts and if deviated from average
-Remove any costs for design fees as is procured traditionally
-Specific plant and staff costs
-Adjust for programme
-Facilitating works: filtered projects further for ones in urban area, then adjusted for current project’s m2
-Removed compound costs as no space/permission but had to coordinate materials delivery so added a 10% delivery fee to materials costs and % increase to programme
-Traffic management also adjusted
-Amount to be abandoned adjusted
-Extra activities of inserting pipe into old
——-
I firstly looked at the comparable schemes and used them to create elemental unit rates based on the characteristics of Deptford Green.
-Facilitating works (ground investigation) cost per GIFA)
Site:
-Uncultivated field (green field) site
-Crop field
-Brownfield site
-Urban….. Deptford Green was urban site so used projects in this environment as a basis, considering the surface type, traffic management …
Compound:
No space, so removed compound costs. But had to take into account coordinated materials delivery so added a 10% delivery fee percentage to materials costs and % increase to programme which also increases costs
Enabling Works
Took data from other urban jobs and determined proportion of work in carriageway for material disposal, what backfill was required, what reinstatement was required, dewatering required
Topsoil strip to easements and compound, Fill with MOT type 1 backfill, Dewatering at connections 1 & 2, Replace topsoil set aside for reuse
-Pipe cost per m
Took data from other urban jobs and determined proportion of work in carriageway when calculating average cost per m
Average number of connections and manholes, (and valves, washouts if known), and if it deviated from average
Amount to be abandoned, adjusted to amount abandoned in Deptford Green to include in pipe cost per m unit rate
Deptford Green extra activity of Cut in to existing PVC pipe, insert pre prepared pipes, valve and adaptors temporarily re-connecting to existing PVC main
Amount of thrust blocks and deviation from comparable scheme
Specific plant
Differences in gangs
-Staff costs
Adjust for different staff
Adjust for programme
Remove any costs for design fees as is procured traditionally
-Contractor’s prelims
Adjust for programme
Adjust for site area (GIFA)
Adjust for urban area/site constraints
–
Assumptions: estimates based on no special site investigation/environmental issues, average excavation depth in relation to pipe diameter, no delivery delay, no access delay, assumed verge is free of services (until surveys confirm)
Qualifications: added more than average number of manholes
Exclusion: No allowance for Flow Management of Existing Sewer, as Thames Water to Supply Tankering to isolate flow to
Design Economics
Deptford Green
How did you advise of the adjustments made for inflation?
Summary:
-Advised using BCIS All-In Tender Price Index rather than General Building Cost Index as is based on ACCEPTED tenders like this project (not just cost of obtaining eg labour/materials) so incudes risk etc
-GBCI is a COST index (measures changes in costs of resources purchased by constructors).. but we want a TENDER PRICE index (measures changes in prices at ‘commit to construct’ stage) like All-in TPI
———-
Advised on the use of BCIS All-In Tender Price Index rather than General Building Cost Index
Indices can be:
-Tender (like TPI) which measures changes in prices at ‘commit to construct’ stage after agreed tender. Used for COST PLANS
-Cost (like GBCI) which measures changes in costs of resources purchased by constructors at any point
TPI is based on complete buildings (measuring the trend of contractors pricing levels in accepted tenders at start of construction) to update cost of project or obtained price from one time period to another in a budget/cost plan.
Can also be used to forecast future tender price inflation from budget base date to when tender is expected to be agreed.
TPl more volatile/erratic/dependent on market conditions than GBCI
BCIS General Bullding Cost Index (GBC|)
measures the change in costs to the contractor for obtaining their input costs of labor and materials. This index tracks the trend of contractors pricing levels in accepted tenders, providing a more tailored reflection of inflationary pressures specific to the sector.
General Building Cost Index measures
average cost from all buildings from a basket of labour, plant and materials (the contractors Internal costs of cotaining these inputs) This is a COST index (so more specific) while TPl s a TENDER (price) index (more broad eg including risk)
There are other subdivision indices like BCIS steel frame index
Both indices forecast 5 years ahead
There is also BCIS PAFI for individual work categories but not used by TW
Design Economics
Deptford Green
How did you advise of the adjustments made for current trends in construction costs?
Summary:
(Index, risk, labour, materials, performance bonds, sustainability)
-All-in TPl more volatile/dependent on market conditions than GBCI due to:
-Contractor’s raising risk premiums due to market uncertainty
-Therefore aversion to single stage tenders
-More selective due to high demand for infrastructure contractors
-Inflation of materials highest since the 70’s
-Increase in labour cost (primary inflation driver) exacerbated by skilled worker shortage and Brexit, especially in water/infrastructure with unsociable hours and uncertainty in news
-Lots of insolvencies since 2010 which increases inflation eg ISG went into administration.
-Performance bonds are becoming more challenging/expensive to obtain. This increases inflation and destabilises contractor supply chains.
-Shift towards sustainable materials which cost more
-As long as cost of borrowing remains elevated, construction output is likely to suffer continuing declines.
—————
-All-in TPl more volatile/erratic/dependent on market conditions than GBCI. TPI 2.3% increase in Q4 2024, faster than GBCI due to risk (see below)
-All-in TPl increase due to: demand drives costs and there has been high activity of projects in infrastructure lately driving up demand, contributing to inflationary pressures on infrastructure materials and labour.
Material inflation also highest its been since the 70’s.
Wages are primary driver of inflation as weekly earnings in construction growing at a rate of 4.4% annually, exacerbated by ongoing shortage of skilled workers
- All-In TPI also increased due to: contractors raising their risk premiums (included in TPI) to mitigate potential challenges from the high levels of market uncertainty (especially on single stage tenders). Contractors remain risk-averse and selective about the projects they bid on.
Been lots of insolvencies with most since 2010 which increases inflation. And a few months later ISG went into administration.
Performance bonds, which insure client against contractor default, are becoming more challenging and expensive to obtain. This increases inflation and destabilises contractor supply chains.
-Increase in labour cost due to shortage, especialy in water/infrastructure with unsociable hours and uncertainty in news
-Shift towards sustainable materials which cost more
-As long as cost of borrowing remains elevated, construction output is likely to suffer continuing declines.
-As inflation is becoming more volatile, inflation/price adjusment clauses are becoming more common again
Design Economics
Deptford Green
What the pricing levels/elements you broke the budget estimate and agreed tender values down into?
Pricing Levels
-Base Cost (plant, labour, materials)
-Contractor Cost (risk, overheads/management fee, prelims)
-TW Costs (internal staff eg design, commercial, PM.. and external consultants eg design/tunnelling)
-All-In Cost (TW overheads and risk)
Elements
-Cost categories (plant, labour, materials, site based staff, GI)
-Risk
-General procurement
Design Economics
Deptford Green
What key variances did you advise on between the benchmarked budget estimate and the agreed tender?
Summary:
Additional costs of:
-Site investigation due to contaminated land
-Slight changes in pipe route
-Contractor had higher risk allowances due to market volatility and unproven pipe route.. and materials costs higher (both higher than predicted by TPI
-Third party costs of Greenwich Council not approving compound so lack of space, leading to coordinated delivery of materials which caused programme delay
-Also Greenwich Council park closure fees
-Programme extension - long lead materials
-Extra power supply
-Specialist valves
-Increased costs subsequently increased overhead percentage
———-
Additional costs of:
-Site investigation due to contaminated land
-Changes in pipe route
-Contractor had higher risk allowances due to market volatility and unproven pipe route.. and materials costs higher (both higher than predicted by TPI
-Third party costs of Greenwich Council not approving compound so lack of space, leading to coordinated delivery of materials which caused programme delay
-Also Greenwich Council park closure fees
-Programme extension - long lead materials
-Extra power supply
-Specialist valves
-Increased costs subsequently increased overhead percentage
Quantification
Why did you advise NRM 2 for excavation in Carterton Growth and CESMM4 for excavation in Schedule of Rates new rate?
Summary:
-NRM2 better description more specific to foundation excavation, larger increments
-CESMM4 better description more specific to pioework excavation, smaller increments accounting for specific variances of depth you get in water, emphasis on surface type, and work classification GIVES ITS OWN SECTION rather then mixed in substructure
——-
NRM2 better description structure for foundation excavation (m3) (bulk/foundation excavation > not exceeding 2m deep, 2-4m, 4+ in 2m increments*)
CESMM4 better description structure for pipework excavation (m3) (general/foundation excavation) > topsoil, rock, artificial etc.. maximum depth 0.25-0.5, 0.5-1, 1-2 etc*)
So in Carterton Growth I actually used both (NRM 2 for WBS foundations and CESMM4 for pipe work)… and on SOR I just used CESMM4 as only pipe work
Note how CESMM4 has more detailed depths (better for varying depths of utilities/TW work), and emphasis on surface type. Excavation is also its own separate section which suits TW work better.
Construction Tech
Barlby Road
How did you advise on the cost implications of pipe strengthening techniques?
Summary:
Advised that;
-Trenchless Pipe Relining (resin) would provide lowest cost per m (£250) for small <250mm pipes because although a high upfront costs would reduce excavation and therefore lower overall dost and shorter programme
(done To allow greater water pressure from extra capacity)
-For larger pipes I advised Slip lining: although required more excavation, due to lather diameter I advised it was cheaper on these straight pipe runs with long meterage. (unit rate of £300 per m)
-Pipe replacement: near pile foundations and for main trunk main I advised that needed to to INCREASE DIAMETER SIZE, most expensive (£500-3000 per m) option but cheaper than alternative to divert pipe route
-Carbon fibre strengthening (barrier pipe) throughout due to corrosion risk
-Pipe route diversion a possibility but advised would be more expensive than these measures
———
-Advised on possibility of diverting pipe route
-If not, advised on need for Trenchless Pipe Repair (pipe relining) as this will allow a greater water pressure from extra capacity required without causing damage. I advised on a unit rate showing cost per m (£250), I advised that although a high upfront cost, it would save cost in long run as don’t need to excavate as much , also providing programme benefits as quicker. It is best used under hard surface types eg carriageway so I advised to use it for this as excavation costs more for these, but advised it could only be for pipe diameters up to 250mm - for larger diameter then below must be used:
Slip lining:
Cheaper per m (£150) but doesn’t take into account excavation costs where a bit is required at end of each straight run (can’t go round bends)
Pipe replacement: if don’t divert pike route then will need some replacement near pile foundations and to INCREASE DIAMETER SIZE to increase flow capacity, most expensive (£500-3000 per m depending on diameter), partially funded by TW
-Carbon fibre strengthening (barrier pipe) throughout due to corrosion risk as near industrial area
-Pipe strengthening not required if contractor doesn’t divert pipe
Construction Tech
Barlby Road
How did you advise on the cost/programme implications of network capacity upgrades?
Summary:
Cut out connection:
-more expensive (£3-4k) due to costs of shut, slower installation, night working, time to drain down/depressurise, programme configuration
-But in this project will be most cost efficient to reduce excavation as can be done in tight spaces and large pipes as UPF needs big equipment. So even though UPF cheaper, I advised that due to amount of connections required, cut outs all done at once (with one shut) would be cheaper
-Client could change pipe route to use all UPF’s but that option would be more expensive too
-Also necessary near development eg piling as stronger connection
-Necessary in high pressure water as UPF has risk of leakage in these systems
UPF:
-cheaper (£2-3k) and quicker so used when it can, but can only be down in select circumstances eg:
-where there is sufficient space.
-not a high pressure water
-needing a vertical pipe connection, or area
-where don’t want to shut water (eg hospital), providing pipe doesn’t need high pressure
-This is because single ‘dead end’ or double line stops (2 UPF’s needed) can be used
-Increased pressure from development also required more thrust blocks
———
Studies said more capacity needed to cope with development, so in addition to increasing pipe diameter (see other flash card), the following was also required:
Cut out connection
-increases capacity
-more expensive cost per connection, (£3-4k) due to:
-cost of shut from council
-cost of slower installation delay
-cost of night working
-cost of time to drain down pipe/depressurise
-cost of programme configuration,
-benefit is can be done in tighter spaces
-provides better connection and sometimes is required
Under pressure connection
-increases capacity
-cheaper than cut outs
-only option if want vertical connections from above pipe,
-cheaper £2-3k as quicker
-no drain down time/depressurisation
-no extra costs of programme configuration needed as no shut, quicker than cut out hence cheaper
-less working space needed so good in tight spaces
-cheaper as less excavation
-don’t need to shut off pipe if use line stop (see below) so good if can’t get shut or near eg hospital
-provide the best connection as replacing the pipe, and so necessary near areas of development eg piling
-actually cheaper for large diameter pipes
-has to be used in areas of high water pressure (the main section of this project) as UPF has risk of leakage in these systems
In relation to UPF: Single line stop can be used if a ‘dead end’ pipe and just cost of shutting off one/a few properties. A double line stop doesn’t require any shit as a bypass can be created, but requires cost of 2 UPF’s
Single or double line stops can be used in conjunction with pipe strengthening techniques (see other flashcard)
Increased pressure from development also required more thrust blocksu
Construction Tech
Barlby Road
Why did you advise on the need for a district meter?
Summary:
-Due to increase in capacity (and lots of properties to be billed) measure pipe performance to ensure coping in terms of pressure/flow capacity
-Lots of little pipes with potential for leaks, so DMA captures this by monitoring total water flow against sum of individual water readings
-can regulate/control the pressure to reduce leakage
-Lots of properties to be billed so ensure accurate billing (usage matches billing amount)
——
-Due to many small service pipes with lots of potential leaks, feeding lots of houses which will be billed. Also need to measure water usage to ensure capacity is not being overwhelmed by looking at unusual flow patterns - particularly beneficial for large building complex/developments where hard to pinpoint leaks and need to monitor/manage water consumption, or in areas with water scarcity and developments like this need lots of water
-Ensure accurate billing of customers
-District meter can also measure pressure conditions and flow rates so need to ensure these are being maintained after extra capacity of requirements of new development to assess pipe performance
-As well as measuring, valves installed can regulate/control the pressure - reducing leakage if it is occurring
Distric meter detects leaks by monitoring total water flow into the district metered area (DMA) and comparing it to the sum of individual water meter readings in area. If there’s a significant difference then indicates there is a leak and it can be pinpointed by measuring different areas within it.
Construction Tech
Barlby Road
What above ground surveys did you advise were required?
Summary:
-I spoke to designers and advised the options to either change pipe route (design fees) or undertake surveys (with fees) eg:
-Pipe/manhole spill analysis (before and after to see if has caused more leaks)
-Line & level (before and after to see if changed horizontal/vertical alignment
-Monitor impacts of: vibration, ground movement/strain (before and after)
-CCTV survey (camera inspect pipes)
-Trial pits/boreholes for soil type and hazardous material detection (before only)
———-
When an asset cannot be diverged or relocated, an impact assessment is required to ensure consequences of works are ‘as low as reasonably practicable’ to TW assets. Impact study is costs of assessing this with surveys and designer fees. Client can choose to divert or carry on with surveys
-I spoke to designers and advised the client in an understandable way the options to either change pipe route (design fees) or undertake surveys (with fees)… can also make requisitions become diversions (although this was already a diversion)
-Pre work surveys: spill analysis, CCTV survey, manhole survey, trial pits (soil type), boreholes (ground conditions eg hazardous), line & level (original alignment)
-Post work surveys: spill analysis, line & level (check horizontal/vertical alignment of pipe) - these confirm assets have not been compromised
Also surveys by monitoring impacts of: vibration, ground movement/strain during and after works
Construction Tech
Barlby Road
What client activities did you advise could require an impact study?
-Demolition
-Dewatering
-Pile foundations (and standard strip foundations to some degree)
-Heavy loading
-Tunnelling / directional drilling (moling)
-Large excavations
… adjacent or over TW assets.
Client will require additional approvals for building over or within 3m of TW’s pipes. Buildings should avoid being directly above trunk mains
Construction Tech
Barlby Road
What physical impact did you advise the client their activities could have on TW’s assets?
Summary:
-Pipe alignment / stability
-Cause leaks / flooding
-Reduce water flow
-Reduce length of life
-Compromise operative safety eg subsidence/striking other utilities
——
-Affecting pipe stability
-Causing leaks and subsequent flooding/water wastage
-Do not reduce whole life value of assets eg damage (see above), loss of capacity/downgrade (eg affecting water flow and causing reduced service to customers)
-Damage to adjacent property
-Compromised safety of operatives such as subsidence and striking existing pipes/other utilities
-Inhibit ability to maintain or repair assets
Construction Tech
Barlby Road
Why did you advise on Electro Fusion instead of Butt Fusion in terms of cost/programme implications?
Summary:
-Although electro fusion slower and shorter life span
-Most of work was in a very tight space*, so the unit cost per m on this occasion was much cheaper as butt fusion would have required a lot of excavation/high cost
-Electrofusion could join different graded/thickness old pipe to the new pipe (being replaced), without extra expensive equipment/labour and time so CHEAPER
-Also, electrofusion worked best on small diameter pipes and this project had lots of little ones….. So butt fusion better for straight/simple stretches of pipe and smaller diameter pipes/fittings
-I did whole life costing and worked out unit rate per m for Electrofusion (last up to 50 years), would still be cheaper than Butt Fusion (70 years) due to length of pipe/excavation required
-Electrofusion also easier to repair anyway
- As Butt Fusion requires a welding rig, generator and shelter, while Electro Fusion needs just a collar
———-
-Although Butt Fusion is much quicker and provides a better connection, most of the work being undertaken was in a very tight space and would have required a lot of excavation/high cost, so I advised on electro fusion. This is because Butt Fusion requires a welding rig, generator and shelter, while Electro Fusion needs just a collar
-Electrofusion could join different grades of pipe together (eg MDPE to HDPE) as some pipe was being replaced. It can also accommodate different wall thicknesses. If used but fusion would need specialist equipment/labour (adding cost and programme length) or replace the entire pipe run with HDPE
-I did whole life costing and worked out Electrofusion (which can last up to 50 years), would still be cheaper than Butt Fusion (up to 70 years) by taking into account the above points in relation to the amount of length of pipe required.
I calculated cost by creating a unit rate per m using historic data and multiplied by length of pipe scheme.
-Therefore, butt fusion better for straight/simple stretches of pipe
Note: Client is responsible for SHARED SUPPLY pipes (that feed multiple properties) within their property boundary, TW for mains and supply pipes to single properties. See OFWAT
Construction Tech
Lambeth College
What was the value engineering process?
Summary:
-Stage 2, contribute to concept
-Part of DfE rebuild programme. Original college demolished and rebuilt.
-Achieve early design and cost certainty
-Gardner provide drawings/programme advice
-Bespoke building with challenging location and follow Disability Discrimination Act / Build. Regs Part M.
-Design input to maximise space, follow Part B (fire safety) for kitchen/labs, absorb external heat to eliminate need for fossil fuelled central heating (Part F)
——
-Client wanted design for input at RIBA Stage 2.. concept being set which could be slightly amended with Gardner input by being progressed on basis of maximising efficiencies.
-From the outset Gardner helped by providing drawings to improve programme.
-Aim to FINALISE DESIGN EARLY to achieve design certainty = cost and programme certainty
-Gardner collaborated with client (main contractor) and DoE (funder)
-Determined that a bespoke building was needed due to challenging location, and accessible to accommodate student’s educational needs with focus on layout in compliance with Disability Discrimination Act / Building Regulations Part M.
-Mechanical ventilation importance to maximise space, and ensure kitchen/labs in compliance with Building Regulations Part B
-Facility must also generate renewable energy, and absorb external heat for circulation within the building, eliminating need for fossil fuelled central heating. So needed precision manufacturing to ensure an efficient system that did not compromise building’s highly insulated and tight building envelope
Procurement
Wendover Road
Why did you advise on a traditional route?
Summary:
-Well developed do scope, so client happy no variations
-Client happy to take design risk
-Quality must be controlled due to reputational risk
-Met public procurement by easier comparison of tenders and demonstrate VFM
-cost certainty with like for like comparisons as contractors all pricing from same design
-also able to speed it up with infrastructure framework
———-
-Well developed scope, so client confident they cost won’t increase through variations
-client happy to take design risk as happy with design
-High profile stakeholder: imperative that design control was maintained by TW/client as high profile HS2 works (reputation as risk)
-Moderate programme requirements: not necessarily met by Traditional but single stage tendering AND within infrastructure framework provided this speed (as latter didn’t require PQQ’s etc)
-Public procurement: Easier to compare like for like tenders and demonstrate value for money through competitiveness, eg in design and build you can’t compare different designs as well and justify eg choosing the most expensive even if it’s the best
-Cost certainty (especially for public procurement)
-Clearer cost comparison between tendering parties and since the prices are based on a specific design there will be greater accuracy as well as price certainty.
Contract Practice
Colindale Gardens
What was in the Key Date condition?
-State contractor had to complete access road to the CONDITION that it was useable for local authority to use.
-Condition must be carefully drafted, clear and accurately reflects employer’s requirement..
-Access road must meet minimum width, provide safe access to further phase of works (due to site constraints), and have a safe bearing capacity for heavy vehicles for local authority to undertake work
-Decided by Project Manager
Contract Practice
Colindale Gardens
How did the CE save significant delay cost for the client?
-By reducing the CE from 5 weeks to 3 weeks (albeit reassessed as 3.5 weeks) the cost of of gangs/prelims for that time was saved by the client
-The ground conditions being harder delayed the entire project
-Larger plant would be needed for the whole 5 weeks otherwise
-The delay was based around lots of time related costs
-Also reduced the delay damages claimed by local authority
Contract Practice
Colindale Gardens
How did the CE reduce the client’s exposure to delay damaes?
The client had a 2 week buffer period between that the programme could slip between when the access road was planned to be completed and when they would incur delay damages
So as a 3.5 week delay occurred, they had to pay 1.5 weeks of delay damages.
But could have been 3 weeks if the contractor claimed 5 weeks of delay for the ground conditions
Construction Tech
Barlby Road
What was the below ground survey?
Capacity study (TW assessment impact on network eg how many extra pipes/water to feed development)
Construction Tech
Barlby Road
What design changes did the client make after your recommendations?
Summary:
-Slight change of house strip foundations
-Change road location as constant car traffic above pipes will cause wear
-Smaller plant for site clearance and demolition
-Construction strategy change location of dumping material
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-Change location of some strip foundations for houses
-Change road location as constant car traffic above pipes will cause wear and tear on pipes below ground
-Change location of plant and Smaller plant for site clearance and demolition
-Moving large excavations
-Dewatering required regardless
-Following surveys the client can once again choose to divert or do pipe strengthening measures. Network upgrades needed regardless and determined by the capacity study
Construction Tech
Lambeth College
What are Modern Methods of Construction?
Summary:
techniques that move away from traditional on site activity to favour off-site manufacturing and standardized processes to improve efficiency
Pre-manufactured
-3D structural chassis
-2D structural walls/roof
-Components (bespoke - trusses, pile caps)
-Non structural (pods, M&E equipment units) ** GARDNER
Practices that reduce labour/improve productivity:
-Traditional improvements (metal roof sheets, brick slips, pre-cut walls) ***GARDNER
-Site process led improvements (wearable exoskeleton, new plant technology, VR, drones)
Additive:
3D printed (structural or non structural)
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Pre-Manufactured:
-3D structural systems (eg structural chassis either internally fitted out like McDonalds, or not fitted out)
-2D structural systems (eg flat panels for floor/wall/roof with insulation and internal/external finishes
-Components (these are more bespoke and not systematised eg staircases, screw piling and pile caps, roof trusses/spandrels)
-Non structural (eg podded bathrooms, M&E equipment units, non structural walls) *** THIS IS GARDNER
Practices that reduce labour/improve productivity:
-Traditional improvements (eg large metal roof sheets, easy installation jointing like brick slips which are thin bricks used as cladding, pre-cut walls with easy jointing features) ***THIS IS GARDNER
-Site process led improvements (eg wearable exoskeleton to reduce muscle damage, new plant technology, augmented reality, drones)
Additive:
-3D printed (structural or non structural)
Construction Tech
Lambeth College
Why did you advise on pre-manufactured structural walls?
-I advised on the inclusion of pre-cut parting walls to allow pipes to go to next room/damper/access door to reduce on site cutting time
-Also pre-cut ceilings for louvre connections
-Walls with fixings in place for AHU’s
-They were ‘closed’ structural panels with insulation in them
Note: structural doesn’t necessarily mean load bearing
Construction Tech
Lambeth College
What pre-manufactured structural walls and ceilings/floors did you advise?
And why did you advise them?
Summary:
‘Open’ Structural Panels
-Pre assembled walls with pre cut walls to allow ducts to pass through walls and to fix access doors/dampers and fixings for AHU’s
-Pre-cut ceilings for louvre connections
Closed structural panels
-Pre assembled wall panels with eg pre fitted insulation, internal services, doors
-Flameshield fire protection panel walls for kitchen/labs and with pre-cut fire and smoke dampers
-Apply to the light steel internal walls and infill (external) walls
I advised on these because:
-This would reduce on-site cutting time to reduce programme prelims and labour costs
-Respond to labour skills shortage
-Provides better/more consistent quality as constructed in factory conditions, allowing a precision fit for certain duct sizes
-Improved safety as less need for working in tight spaces/with hazards
-Just jointing needed to be done to focus on no air leakage and better air flow/distribution
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Open structural panels - pre assembled wall framework which are later fitted with elements:
—I advised on the inclusion of pre-cut light steel internal walls to allow pipes to go to next room/damper/access door to:
-Reduce on-site cutting time to prove construction programme benefits and reduce preliminaries
-Better/more consistent quality as constructed in factory conditions, allowing a precision fit for certain duct sizes
-Just the jointing that needs to be done to focus on no air leakage and better air flow/distribution
-Improved safety as less need for working in tight spaces/with hazards
-Respond to labour skills shortage
-Also pre-cut ceilings for louvre connections and walls with fixings in place for AHU’s
Closed structural panels - pre assembled wall panels with eg pre fitted insulation, internal services, doors
-Flameshield fire protection panel walls for kitchen/labs and with pre-cut fire and smoke dampers
-Apply to the light steel internal walls and infill (external) walls
Note: structural doesn’t necessarily mean load bearing
Construction Tech
Lambeth College
What are the downsides of MMC?
Summary:
-High initial cost
-Difficult on old buildings/refurbs/inflexible design
-Can be programme delay if not done in early design stage as often need all parts manufactured early
-Need specialist skills to apply it and facilities to create it
-Hard to demonstrate cost savings
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-Requires high initial cost outlay
-Requires considerable skill/knowledge and facilities to do it
-Hard to demonstrate cost savings to client eg how much quicker programme will be
-Not easy to do on old buildings/refurbishments, or if design is inflexible/doesn’t lend itself well to MMC
Construction Tech
Lambeth College
What were the pre-manufactured structural walls/ceilings made of?
Summary:
-steel internal structural (load bearing)
-Light steel stud internal partition walls (non load bearing)
These both are:
-Light as possible
-Fire resistance
-Floors/ceilings which utilise ‘composite construction’ of steel decking with in-situ reinforced concrete topping.
-The decking allows mechanical services to be integrated into the floor/ceiling while the concrete slab provides fire resistance
-Decking size larger (suspended ceiling) in kitchen/labs for space for more services.
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-Light steel infill walls (external)*
-Light steel stud internal walls
Internal walls built using double leaf log light steel to ensure maximum fire resistance,sound reduction, and insulation
Infill (external) walls also provide thermal insulation as the insulation material is placed outside the steel frames to create a ‘warm frame’, which reducesthermal bridging.
*Infill walling are the panels in between the floors of the structural frame, which are non load bearing. They provide support for the cladding system and resist and loads
For the floors/ceilings, I advised on utilising the ‘composite construction’ of steel decking with an in-situ reinforced concrete topping. The decking allows mechanical services to be integrated into the floor/ceiling while the concrete slab provides fire resistance
Combine metal decking and a concrete slab, and good for integrating services into metal decking while ensuring fire resistance with concrete slab.
Decking provides a large ‘suspended’ ceiling void for the mechanical services. In heavily serviced areas (kitchen/labs) void depths of 1000 to 1200mm. For less heavily serviced areas (classrooms) it is 800mm
Construction Tech
Lambeth College
What was the alternative to having MMC? And when would you recommend using it?
Summary:
-Mechanical systems adapted to design after client has finished it
-Or used for old/refurb buildings where don’t have control over design
I would recommend this when:
-Client would need to have a lower upfront cost as won’t need to manufacture it all at once, so suitable if cash flow ossues
-On tight programme (or not considered MMC in an early enough design stage)…as MMC will need it all to be manufactured at start (causing delay), while MMC can spread the manufacture over a longer period
-Used where complicated design that needs precision engineering.
(However Lambeth College of central core with ‘fingers’ was simple for MMC)
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-Have the walls/ceilings without being pre cut and so the ducts and mechanical systems are adapted to the building later on.. could be more costly as the earlier you integrate mechanical services into the design the bigger the impact/cost saving
-Adapting ducts to client design after they’ve finalised it
-Equipment systems eg AHU’s are wired in situ - but this is better for old/refurb buildings where don’t have control over design
I would always advise of MMC if have control over design
Construction Tech
Lambeth College
What duct systems did you advise on and why?
Summary:
-MEP risers: columns measured to slot into building throughout all floors with openings for each floor
-Design the horizontal system (on walls/ceiling) as a whole so each floor slots on top of each other which connect to MEP service risers
-Walls cut to fit the exact specifications of a structure to ensure a perfect fit e.g duct size.
Why:
-Reduce on-site cutting time to reduce programme prelims/labour
-respond to labour skills shortage
-Better quality as Manufactured in controlled factory conditions.. ensures adherence to industry standards
-Improved safety as less need for working in tight spaces/with hazards
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-MEP risers - columns measured to slot into building throughout all floors with openings for each floor
-Pre-set ducting routes in ceiling which connect to MEP service risers
-MEP horizontal modules in basement
Design the system as a whole so each floor slots on top of each other
Pre-fabricated duct systems
Advantages:
-Precision Fit: walls cut to fit the exact specifications of a structure to ensure a perfect fit e.g duct size.
-Reduce on-site cutting time to provide construction programme benefits and reduce preliminaries and labour
-Optimised Performance: in factory before installed on site, results in precision fit of systems in terms of floor or walls, better air flow/distribution, improved indoor air quality, and enhanced energy efficiency (Just the jointing that needs to be done to focus on no air leakage and better air flow/distribution)
-Consistency and Quality Control: manufactured in controlled environments, which ensures consistent quality and adherence to industry standards. This can lead to fewer defects and better overall performance.
-Improved Safety: reduces the amount of on-site work, especially in tight spaces/near hazards, leading to fewer hazards, injuries and disruptions.
-Respond to labour skills shortage
Construction Tech
Lambeth College
How did you advise on equipment systems?
Summary:
-Systems are pre-fabricated/wired/commissioned/tested so cheaper for specialist commissioner to do off site…. more transport cost but less in situ labour
-Walls with pre-set fixtures and wiring for AHU’s/MHVR’s
-M&E equipment units on pre fabricated plant skids that are in a modular format and then easily slid into position
These provide systems that are: factory tested, Controlled off site assembly for quality/ not affecting other site activities, saves on complicated installation on site, small footprint and so fit in tight spaces, portable design so easy to transport, efficient design with focused connection points to reduce duct needed, accessible layout to allow easier maintenance,
-Pre-set manifold system ‘pods’ for ovens to fit against (kitchen), or toilets, showers (bathroom), lab gas taps
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-Systems are pre-fabricated, pre-wired, and pre-commissioned / pre-tested so cheaper for specialist commissioner to do it off site…. more transport cost but less in situ labour
-Walls with pre-set fixtures for AHU’s
-M&E equipment units on pre fabricated plant skids* to allow them to easily slide into position and also already in a modular format to be designed and slotted into position. Expensive to design construct but provides: quality design done in factory conditions, already factory tested, save on the very complicated/detailed installation on site, easy to transport, small footprint, Small footprint and so fit in tight spaces/ easy to transport/reduce duct needed, accessible layout to allow easier maintenance
Used in specific locations eg: basement/plant room, roof, kitchen to maximise air flow and heat supply/extraction .. and ensure fire protection
-Pre-set manifold systems for ovens to fit against (kitchen), or toilets, showers (bathroom), lab gas taps
-Gardner not only doing mechanical part but also the framing of systems outside/inside the walls and wiring inside the walls for AHU’s/MVHR.
-System designed in accordance with client’s drawings/plans and can determine exactly where to cut and fit vents. All that has to be done on site is simple connection between rooms/floors with limited floors
*Plant (modular process) skids are systems contained within a frame it to be easily transported (skid mount). Can contain complete systems or combine smaller ones. Sometimes called “a system in a box.” They provide:
-Portable design as in self contained units/frames
-Easy to transport
-Small footprint and so fit in tight spaces and easy to transport
-Pre design can focus connection points into one area, improving efficiencies, needing less duct and make connections easier
-Controlled off site assembly for quality and not affecting other on site activities
-Factory tested off site
-Accessible layout – with a center hallway, and major pieces of equipment placed around the edge of the frames, allowing easier maintenance
Skids are not always appropriate. If individual process parts are large and cannot reasonably be contained within the frame of a modular process skid
Construction Tech
Lambeth College
How did you advise on adapting to existing concept design?
Summary:
-Works well in new buildings with standard designs and layout.
-Central core/atrium with ‘fingers’ coming off it, lending itself well to MMC. Eg labs, library, canteen.
-Adapting to existing light steel infill walls (client put externally on building) by including insulation and system
-Long span roof structure to prevent lots of columns within building. Ducts can be incorporate within the elongated openings of beams. Shared BIM model with structural/steel contractor
-Have ducts/wiring can be integrated throughthe down-stand beams in centre of building
-Suspended ceiling on existing frame of building to allow integration of ducts, particularly in kitchen. Balanced out with a shallow floor system to maintain same room height
-Ceiling is steel decking, used with in-situ reinforced concrete slab to utilise ‘composite construction’. Decking allows services to be integrated into the ceiling while concrete slab provides fire resistance.
-Advised on programme sequencing eg steel-framed buildings allow early commencement of services installation.
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-Works well in new buildings with standard designs and layout. Custom better for existing buildings.Is part of the Department for Education’s (DfE) rebuild programme. Original college demolished and rebuilt.
-Project has a central atrium with areas coming off it, lending itself well to MMC. Different school departments e.g labs, library, canteen. Like a hospital
-Adapting to the light steel infill walls (external) by including insulation and system
-Long span* roof structure to prevent lots of columns within building. Ducts can be incorporate within the ‘holes’ of the beams
Adapted to the existing concept design
some services have had to be accommodated within the beam’s depth, via a series of bespoke holes. “Having a BIM model to share with the steelwork contractor BHC and all of the other team members meant that we could avoid clashes and provide sufficient room for services.”
Long-span cellular beamsprovide for freedom of service distribution and major ducts can be located through elongated openings.
-Of the columns that there are (more in the centre and outside of building), the ducts/wiring can be integrated throughthe down-stand beams
-Suspended ceiling on the existing dimensions/frame of building to allow integration of ducts, particularly in kitchen. Balanced out with a shallow floor system to maintain same room height
Ceiling comprised of metal steel decking, used in conjunction with in situ reinforced concrete slab to utilise ‘composite construction’. The decking allows mechanical services to be integrated into the floor/ceiling while the concrete slab provides fire resistance. The decking provides a large ceiling void for the mechanical services. In heavily serviced areas (kitchen/labs) void depths of 1000 to 1200mm. For less heavily serviced areas (classrooms) it is 800mm
The frame incorporates deep voids, of 600mm in the theatres, to accommodate the large amount of necessary services. These service zones are achieved by the SHALLOW BEAM depths provided by thecomposite design.
-Advised on programme sequencing. I advised that a major benefit of steel-framed buildings is the early commencement of the services installation/resulting commissioning period. Increasingly, prefabricated service modules and plant-rooms reduce installation time and the resulting improvement in the quality of healthcare projects.
-Advised on programme sequencing:
A “rapid dry envelope” which is the construction method where exterior walls of a building are quickly erected using lightweight materials like steel framing, allowing for early enclosure of the building and enabling internal fit-out work to begin much sooner compared to traditional building methods that require longer drying times for masonry walls. Basically means creating a weatherproof building shell rapidly, allowing other trades to access the interior quickly.
Theintegrationof the mechanical, electrical, water and specialist services in a healthcare building is essential to its successful operation. For the engineering services, these include -Vertical and horizontal servicesroutes, -Adequate ceiling space for service distribution
-Use of off-site prefabricated service modules.
*Long span solutions generally refer to structural designs and materials that allow for large, column-free spaces in buildings and structures, offering flexibility and efficiency
Construction Tech
Lambeth College
Why did you advise on light steel internal walls? and what were the alternatives?
Summary:
** steel walls** provide
-Speed of installation
-Provides better fire resistance
-Easier integration of services as thinner members
-Suitable for high humidity areas eg bathrooms and basements. Lambeth had lots of these
-Lighter than wood, so easier to handle and transport to site / to heights
-Stronger and more durable/resistant, offering longer term structural integrity.
-Flexibility of design
Alternative was timber, which is:
-Cheaper
-Transmit less sound (so for steel GARDNER had pre fabricated acoustic insulation
-Timber retains heat better (so for steel GARDNER had pre fabricated thermal insulation)
-Timber easier to install as steel needs specialised tools and techniques, but GARDNER had these
-Looks better
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Light steel wallsprovide:
-Speed of installation
-Flexibility of design
-Durability: Steel studs are resistant to rot, warping, and insect damage, offering long-term structural integrity.
-Fire Resistance: Steel is non-combustible, providing enhanced fire protection.
-Uniformity: Steel studs are consistently straight and uniform, reducing waste and simplifying installation.
-Suitable for High Humidity: Steel stud walls are ideal for areas with high humidity, such as bathrooms and basements. Lambeth college had lots of these
-Lighter: Metal studs are lighter than wood studs, making them easier to handle and transport.
Alternative was timber, which is:
-Timber studs cheaper than steel studs
-Timber transmits less sound (so for steel GARDNER had pre fabricated acoustic insulation
-Timber retains heat better (so for steel GARDNER had pre fabricated thermal insulation)
-Timber easier to install as steel needs specialised tools and techniques
Construction Tech
Lambeth College
How did pre-manufactured items help circumnavigate site constraints?
Summary:
-Could coordinate delivery easier/earlier on without delivering it when needed (difficult due to central London location)
-Didn’t need to store materials on site
-Less traffic management for large deliveries and cranes
-Allow more space for other activities to take place
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-As didn’t need to store materials in this inner-city location (Vauxhall).
-Could carefully plan logistics - deliveries in line with programme sequencing, reducing waiting times. As a busy site in central London, our schedule of works needed to fit with the wider development and minimise disruption.
-Made traffic management easier to plan/schedule
-Assisted in dealing with off-site materials issues
-Crane management plans
Construction Tech
Lambeth College
How did you navigate the disadvantages of pre-fabricated manufacturing?
Summary:
-Can take longer overall due to longer design period and having items manufactured. But if planned early enough can reduce the on-site construction time (and so reducing prelims)
-Higher transport cost but off set by less installation time/cost on site
-Design must lend itself well to pre-fab
-High initial cost, so I provided report on how programme savings made. Client cash flow has to be sufficient
-Need knowledge to apply it and facilities to create it, Gardner had this
-Hard to demonstrate cost savings
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-Can take longer overall, with a longer design period as it includes incorporating detailed duct into main design and then having to design and manufacture the items themselves. However I advised that once on site, the cost and programme benefits will offset this due to reduced in situ labour and preliminaries
-Higher transport cost however advised this would be set off by less installation time/cost on site
-Focuses on specific components rather than entire systems, which may not be suitable for all projects. I advised that as Gardner were involved early on in project, a significant cost/programme impact could be made. The design also lended itself well to pre-fab
Construction Tech
Lambeth College
What are HVAC systems?
Summary:
-AHU (Air Handling Unit): collects air from outside, filters it, heats or cools it, distributes it to building… Can be supply or extract.
So controls temperature
-MVHR (Mechanical Ventilation Heat Recovery): extract stale air eg from bathroom/kitchen, air passes through a heat exchanger that recovers heat, fresh air brought in from outside and uses that recovered heat from the heat exchanger to distribute back into building
Continuously removes stale and circulates fresh.. so improves air quality and reduce energy costs.
MHVR does both air refresh and heating, but AHU does better heating
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In Heating, Ventilation, and Air Conditioning systems, the network of ducts is the part of the system that is responsible for distributing the conditioned air throughout a building, thus ensuring comfort and improved air quality.
AHU (Air Handling Unit)
A large box that controls a building’s ventilation, air quality, and temperature.
Can be supply or extract (or both)
1-Collects air from outside or from the building’s return ducts.
2-Filters air:The air passes through filters to remove dust/other particles.
3-Heats or cools air:The air passes through heating or cooling coils to reach the desired temperature.
4-Distributes air:The conditioned air is distributed throughout the building through ductwork.
5-Repeats:The cycle repeats.
MHVR (Mechanical ventilation with heat recovery)
Continuously circulate fresh air into home while removing stale air. They improve indoor air quality and reduce energy costs.
1-Extract stale air eg from wet rooms like bathrooms, kitchens, utility rooms.
2-The extracted air passes through a heat exchanger that recovers heat.
3-Fresh air is brought in from outside, filtered, and passed through the heat exchanger to warm it.
4-The pre-warmed air is supplied to non wet rooms eg living rooms/bedrooms.
MHVR improves air quality, reduce dust mites/mold/fungus, reduced energy costs as reduces amount of energy needed to warm your home,
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Difference:
AHU is larger system that controls and conditions air within a building, including heating and cooling
MVHR is primarily focused on providing fresh, filtered air by exchanging heat from outgoing air to incoming air, making it more energy efficient for ventilation purposes, but with limited heating and cooling capabilities compared to a full AHU;
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MVHR systems are more ENERGY EFFICIENT design than traditional HVAC systems, as they use a heat exchanger to recover heat from the outgoing air.
-
Unit size —The size of unit will be dependent on size of building. If too small then won’t meet demand, if too big then lots of wasted energy
Construction Tech
Lambeth College
How did you calculate the cost and programme benefits of MMC items?
Summary:
-For MMC approval I did a VFM exercise to justify its inclusion against traditional build
-MMC: Used supplier data to calculate expected cost/duration to manufacture (more than standard)
-As well as transport, delivery (less than standard as less frequent)
-As well as internal historic data to determine average labour duration for JOINTING of each item X by current labour rate
-Non MMC: used same supplier data for manufacture and adjusted for extra testing, precision costs
-used internal historic data from non MMC jobs to determine average costs for each fixed item/per m item which was then multiplied by the items/length in new job
As well as internal historic data to determine average labour duration for INSTALLATION of each item X by current labour rate
-The overall difference was programme saving
-0.5% more expensive but 23% programme saving*, important as ensures finishes before school year starts
I also adjusted for:
-Despite high upfront costs, due to being installed in winter, I used historic data to estimate 10% less productive labour during this time. So doing MMC in factory and transported/craned in to inside building. Provided a 5 day saving on 10 week programme
-Also, In winter the daylight hours reduced by 1.8 hours a day, so saved 90 hours over 10 week programme
-Needed to meet programme before next school year, MMC reduced need to work Saturdays (10 in 10 week programme) which cost 20% more, so saved 2 full days of cost)
*such as: installing vents, installing horizontal/vertical duct per m, cutting holes, fixing, pre wiring systems, installing suspended ceilings…
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For approval to use MMC I did a value for money exercise to justify its inclusion against traditional build:
-Increased upfront costs…. but due to time of install (winter), used historic data to predict 18% less productive during this time. This would not be an issue reduced as MMC protects from bad weather as manufacturing done inside and simply transported/craned in to inside building. So over 10 week install programme it saved 9 days (18%)
-In winter so the daylight hours reduced by 1.8 hours a day, so over the 10 week install programme it saved 90 hours
-Needed to meet programme before next school year, MMC reduced need to work Saturdays (10 in 10 week programme) which cost 20% more, so saved 2 full days of cost)
For:
Plant skids
Pre cut holes
Service risers
Horizontal ducts
Pre fixed walls
Pre wired systems
Suspended ceilings (steel decking)
I calculated costs of reduced activities and labour on site:
-Used historical data to determine average amount of labour hours doing activities on site, such as: installing vents, installing horizontal/veryical duct per m, cutting holes, fixing, pre wiring systems, installing suspended ceilings…. Then multiplied by CURRENT rate of these activities including delivery/labour etc (like in quantification level 2)
-Then spoke to supplier on the MMC methods to get their data on: expected hours to complete per the parameters above, plus design fees, plus transport/delivery
-The overall difference was programme saving
Plant skids harder to compare
-0.5% more expensive but 23% programme saving*, important as ensures finishes before school year starts
Take into account of estimate the reduced labour (time) and prelims (e.g less scaffolding) even though increased factory costs
Construction Tech
Lambeth College
How did you ensure performance specifications were met?
Summary:
-All tested in supplier factory. Eg tested insulated panels to reduce heat loss and running costs
-Fewer vehicle movements to site reduced congestion/emissions
-Precision factory manufacturing reduced waste
-HVAC system designed/tested to meet Building Regs Part F and meet BREEAM ‘excellent’ standards
-Systems such as rainwater harvester for toilet flushing and an air-to-water heat pump in roof for heating
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Labs needed specific environmental conditions/performance requirements needed a custom duct system. The flexibility in design and material choices can ensure the ductwork meets stringent standards and operational needs of the building.
HVAC operations account for over 25% of a building’s energy use, so meeting efficiency standards vital
To ensure their safety and reduce the risk of infection,a dual-pressure HVAC system with the ability to switch from positive to negative pressurewas implemented in the unit.
Tested insulated panels to reduce heat loss and running costs
The greater precision of offsite construction reduces air permeability which means less energy is required to heat the building, generating lower carbon emissions.
Fewer vehicle movements to site reduced congestion in the residential area and carbon emissions.
The process of manufacturing the building offsite at generated zero waste to landfill.
Designed to meet BREEAM ‘excellent’standards and has ecological features including a rainwater harvester for toilet flushing and an air-to-water heat pump.The pump is self-contained on the building’s roof and provides domestic hot water for the under-floor heating system.
With the requirement for specialist facilities, we sourced and delivered a range of equipment and fittings including full science department furniture and a fume extraction system,
Project Finance
Eversholt Street
What needed to be done after the new main clashed with the sewer? And what costs would be incurred?
Reconfigure the main by increasing its height.
Costs will be for: redesign, programme delay (prelims/labour), new materials
Project Finance
Eversholt Street
Why did you advise that the gangs be retained on site?
Summary:
-Demob/remob costs estimated £64k due to: large amount of prelims, labour and plant on site (also WEEKLY hire), access issues so higher costs, plant collection/delivery,
Open excavations to be protected in central London location, reapply for road access permits/water shuts
-Plus contract allows for 3 days standing time prior to demobilisation
-I calculated that 2 weeks of standing would still be cheaper
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I produced an estimate that demobilisation/remobilisation costs would be £64k due to:
-Large amount of labour on site
-Large amount of large plant on site that was on WEEKLY hire
-Higher costs due to location such as length of time to demob/remob, access issues, higher cost of plant/labour, higher cost of plant collection/delibery
-Large amount of open excavations that need to be protected from public, especially due to central London location
-Large prelim hire cost eg site cabins/welfare
-Need to reapply for road access permits and water shuts
-Establish access roads
-Demobilisation and Remobilisation
Plus contract allows for 3 days standing time prior to demobilisation
The gangs were left ‘standing’ for a few days while redesign took place
Project Finance
Eversholt Street
What did you advise following the redesign?
Summary:
-Half way through redesign: order new materials once known and contact council to coordinate shut
After redesign:
-PM issue instruction immediately to prevent further delay (better than delay to do PM assumption and still a risk of overpaying)
-Bring in more labour to increase excavation speed, reducing overall delay
-Engage staff to coordinate testing/chlorination for when pipe is expected to be finished
This was a CE under 60.1(1) (instruct change to the scope )
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-PM to issue instruction immediately to pass over existing sewer
-Order new materials/extra fittings
-Bring in more labour to increase excavation speed, reducing overall delay on site
-Contact local council to coordinate water pipe shut
-Engage staff to coordinate testing/chlorination for when pipe is expected to be finished
This was a CE under 60.1(1) which is a PM instructing something that is a change to the scope
Project Finance
Eversholt Street
Why would the compensation event be based on forecast?
Summary:
-Dividing date is when instruction is issued, so all costs after this is forecasted (not actual)
-If the CE has a sensible estimate and risk/time allowance, then payment based on this
-But if Contractor took longer than they should have, PM can disallow costs he felt were avoidable. But have to PROVE IT.
-So Contractors incentivised to work efficiently to mitigate losing out financially
-Contractor COULD delay notifying the CE so more is assessed as defined cost. However won’t necessarily benefit contractor as can delay cash flow
————-
-Because the dividing date is the date the instruction is made. And all costs after this date should be forecast cost. NOT actual cost - even if assessing after it happened (clause 63.1)
If the Contractor took longer than they should have, then PM can assess it to the cost they believe they should have achieved, not what they actually spent.
If the Project Manager can determine that a reasonable estimate with a sensible allocation for risk would have been only six days, then that is what they should base their assessment upon. So PM can disallow costs he felt were avoidable. But have to PROVE IT.
It is intended that Contractors would therefore be incentivised to work efficiently and competently for compensation event works, to mitigate losing out financially if the actual cost incurred might end up more than what was a reasonable forecast
Contractor COULD delay notifying the CE so more is assessed as defined cost. However won’t necessarily benefit contractor as can delay cash flow
Note: Under Clause 14.3: the PM can instruct change to scope and under clause 27.3 the contractor has to follow it, so can’t wait until quote has been accepted / hold programme to ransom. CE’s are assessed as if contractor acted promptly and won’t have completion date extended beyond them acting promptly
Project Finance
Eversholt Street
What was the issue with the compensation event being based on forecast?
Summary:
-Immediate instruction prevented further delay, but difficult for contractor to determine accurate price and duration to construct the new main
-So likely contractor will include a significant time risk allowance to account for risk of underpricing it… would be difficult for PM to disprove it wasn’t calculated on sound principles due to the CE’s uncertainty
-Other option was PM assumption but I advised against this as discussions/obtaining information on site to make one would cause delay AND could overpay the risk anyway. So decided to instruct change in scope immediately to prevent any delay and go off contractor’s estimated cost. If it was excessive then we would challenge it
—————-
-As following the re-design, how long it will take the contractor to construct it will be quite uncertain, and so determining an accurate price will be difficult
-Therefore it is likely the contractor will include a significant time risk allowance to account for risk of underpricing it… and in accordance with NEC would be difficult for PM to disprove it wasn’t calculated on sound principles due to the CE’s uncertainty
-This NEC mechanism prevents a win-win scenario for client, so if actual defined cost of the CE is lower than the contractor’s forecast, then the contractor’s due amount is NOT REDUCED as it represents the contractor’s risk they took. But similarly contractor can’t get more costs if they have underpriced.
-However I advised that even taking the hit of this risk would be cheaper than demobi/remob. If it was higher then would definitely be able to prove contractor had not proceeded efficiently
Note:
A PM’s assumption could be stated but this would add staff costs to resubmit/assess new CE if proved to be wrong
Note:
Didn’t use PM assumption (like did in contract practice) as easier to predict
Project Finance
Eversholt Street
How did you produce the risk/CE estimate of the clashing main?
Summary:
I did my own estimate of delay costs, this comprised of TWO CE’s:
-CE 1 (halt works + redesign) = while instructing to halt works/retain gangs on site, included a PM assumption for CE.
So contractor (CE) costs for estimate based on assumed 1.5 weeks delay. So calculated this delay based on labour/plant/prelims for this amount of time…
-also spoke to designers and added in expected redesign cost (in estimate but NOT CE)
-CE 2 (new pipe) = after instruction to immediately change scope…produced an estimate for the EXTRA COSTS of the new main such as materials, and EXTRA TIME it would take between old pipe route and new. And did same again by calculating labour/prelims/plant costs.
-Then got values from agreed activity schedule and took this off as CE is only for EXTRA TIME/COST
———
-Before redesign I spoke with designers on how long they expected it to take and produced a daily rate based on their fees
-After redesign I calculated the cost of the redesign using actual (committed cost) reports (like the impact study)
Then I did my own estimate of costs to anticipate what the contractor would allow for and include in the cost reports, this comprised of TWO CE’s:
-When advising to retain gangs on site, I advised on the instruction to stop works with a PM assumption* it would be 1 week, only a 4 day delay occurred but in accordance with NEC the contractor was paid 1 week. I calculated the estimate for this based on the contractor’s labour/prelims for this week. This formed the risk estimate for CE 1.
Note: only a 1 week delay occurred but 1.5 weeks paid.
-For CE 2, I then produced an estimate for the EXTRA COSTS of the new main such as extra material costs. I also calculated how much EXTRA TIME it would take to do the new pipe route in comparison to what it would originally take to estimate the labour/preliminary/plant costs.
This time was calculated by having a discussion with the PM, contractor and using historical data
-Then got values from agreed activity schedule and took this off as CE is only for EXTRA TIME/COST
*I did this PM assumption as would be unreasonable/impossible for contractor to forecast for an instruction to stop works
Project Finance
Eversholt Street
How did you advise that the risk allowance was insufficient for the redesign standing time and new main installation?
Summary:
-Identified risk on risk register and noted my estimate of the 2 CE’s (£37k) was significantly higher than the risk allowance (£6.87k)
-It only took into account 3 days of redesign fees.. and not for the standing time/extra materials due to the risk occurring post-contract
-I then advised that residual cost would be funded from general contingency budget (10%) for UNFORESEEN risks
———
-I identified on the risk register (for FORESEEN risks) a ‘change in scope/pipe route to address operational requirements/issues that were addressed in the brief ’ - risk owned by client
-My estimated risk value for the 2 CE’s was significantly higher then the one allowed for in the risk allowance
-This only took into account 3 days of redesign fees.. and not for the standing time/extra materials due to the risk occurring post-contract
-Risk allowance
Probability is 20%
Cost Impact is:
Best case (£17k)
Most Likely Case (£34k)
Worst Case (£52k).
Average of these is £34.33k
So risk allowance is 25% x 34.33 = £6.87k
This is the forecasted value in cost report
-I then advised that the residual cost would need to be funded from the general contingency budget for UNFORESEEN risks (risk allowances are for predicted risks identified in risk register)
-TW contingency percentage is usually 10%, sometimes 15%, and even 20% during covid.
-Typically advise 15% contingency in the feasibility stage, 10% during the elemental cost planning stage (getting quotes in) and 5%on award of contract”
——-
Note:
Risk analysis = IDENTIFY (qualitative), SET COST (quantitative)
Risk management = MITIGATE or RESPOND if risk develops
Without the information from risk analysis, risk management cannot occur
Project Finance
Eversholt Street
How did you advise on accepting the contractor’s quotation?
Summary:
-Accepted the forecasted value with a time risk allowance as it was based on sound principles forecasted from ‘dividing date’
-Put risk/CE value in cost report and when quotation came in I clearly distinguished the two
-Following acceptance of quotation I updated the estimated risk/CE cost with this accepted value
-I advised against a PM assumption as discussions/obtaining information on site to make one would cause delay AND could overpay the risk anyways. So decided to instruct change in scope immediately to prevent any delay and go off contractor’s estimated cost. If it was excessive then we would challenge it
———
-Had to accept the forecasted value with a time risk allowance as it was based on sound principles forecasted from ‘dividing date’
If the Contractor has done the work and the PM has not yet agreed the quotation*, the PM can not take out risk elements of the quote that were reasonable but did not actually happen
-When the valuation being claimed by contractor is different to the valuation prepared by the client QS (me), then it is good practice to record this difference of opinion within the cost report.
This quotation provided a ‘worst case’ in the cost report.
-I reported the contractor’s quotation value as a forecasted value in the cost report, clearly distinguishing between
anticipated CE’s and confirmed CE’s
*PM has 1 week to assess validity and if they agree then can instruct a quotation (PMI). So this scenario happens if work takes less than a week and PM is slow
Project Finance
Eversholt Street
What are the NEC change control timescales?
Contractor CE notification:
-PM has 1 week to assess - reject or instruct
-After 1 week, Contractor can notify and PM has another 2 weeks,and if still no response is deemed to instruct quote
Quotation:
-Contractor has 3 weeks to submit quotation
-PM has 2 weeks to respond, and if still no response then contractor can notify. If still no response after another 2 weeks then quotation is deemed accepted
-If PM does respond they can either instruct contractor to resubmit quotation, notify they will make their own assessment, or accept.
Project Finance
Eversholt Street
Why is it good to get CE agreed as quickly as possible
Summary:
-Firm values in cost report rather than forecast
-Promotes good project management, collaboration, minimal disruption
-Helps cash flow for both parties
-Captured in correct reporting period
-Save staff resources
———
-Firm values in cost report rather than uncertain forecasted values
-Helps cash flow on both ends as know how much is being paid/coming in
-Want costs to be captured in correct cost reporting period to inform client:
Maximum process length from contractor CEN: 10 weeks.
Could go through this whole 10 week process and CE isn’t even agreed.
-Promotes a collaborative relationship and good project management with minimal disruption to project, and promoting transparency
-Saves staff resources by not prolonging its implementation
Project Finance
Eversholt Street
How did you advise on the release of contingency any why?
Summary:
-Released progressively: pro-rata against percentage completion of programme
-Reallocated funds under the ‘employer change’ section of cost report
-Done to facilitate cash flow for both parties. Ease it for contractor in spirit of NEC collaboration, help client so don’t have to expend whole amount in one month
-When expending the contingency I: ensured all stakeholders were informed, clearly documented reasons, amount, date
———
There are two accepted methods of reporting general contingency (Costs incurred and forecast for which no other provision was made in the budget)
1- General risk allowance maintenance method - after expending what is accounted for in risk allowance, the remaining balance should be maintained throughout the remainder of the project.
2- General risk allowance progressive release method - after expending what is accounted do for in risk allowance, the remaining balance be progressively reduced pro-rata on an agreed basis against either percentage completion of programme or percentage completion of cost
I did second one to facilitate cash flow for both parties
Ease it for contractor in spirit of NEC collaboration, help client so don’t have to expend whole amount in one month
When expending the contingency I:
-Ensured all stakeholders were informed
-Clearly documented the reasons for the release, amount, date
-Reallocate the funds appropriately (under the ‘employer change’ section of cost report… note that the % at construction will be low as reduced as project progresses ). How contingency is reported is agreed with client at outset
Project Finance
Radley College
Why was the client constructing multiple projects with the same contractor?
Summary:
-Concurrent works in same area (College) but separate connections
-All summarised in a separate development cost report
-Different funders
-All target cost projects
————
Concurrent works in Radley/Abingdon area
Separated projects as different funders eg Radley College (private) and highways works (public - local authority) and didn’t use development cost report as in separate location
Note: all of these projects were target cost as have to be otpions C,D,E,F because only these have forecast options to the next assessment date in AFP’s
Project Finance
Radley College
How would you advise on cost reporting for different procurement routes?
Summary:
-This project was traditional, so design was included in INTERNAL part of cost report (and pre-contract section)
-Costs then reported against elements (such as: internal staff, Construction (broken down into elements), contingency
-In traditional a higher percentage of design development and employer change risks…. construction are same
-May be budget owner reports for clients that do the ‘contestable services’ work themselves and ‘Non-contestable services’ they have to do
-In D&B, if target cost then extra section for design costs (supplemented by timesheets), if activity schedule its included in activities costs
-No design risk and also lower contingency budget as no design changes
-MC/CM routes: have tracking of costs for each works package
-Detailed tracking of costs for each works package with budget holder reports (cost responsibility owner).. that feed into main one
-More frequent cost reporting eg every 2 weeks
———
-This project was traditionally procured, So client/TW did design and reported these internal (and external consultant) design fees to client under pre-contract costs section
-Costs then reported against elements (originally) such as: internal staff (PM, Commercial, Design), Construction (Facilitating works, external works, pipework, substructure, superstructure, Main contractor preliminaries), contingency
-There is a higher percentage of design development and employer change risks as client is doing design….construction risks should be same
Design and build
-If a target cost then would have extra section for design costs, supplemented by timesheets
-If activity schedule its included in activities costs - design costs are incorporated into the overall contract price
-Includes variations/changes from design process - but won’t include pre-construction design costs as unlike traditional it is already designed
-Won’t include design risks as this is contractor’s responsibility, lower contingency budget
TARGET COST ALSO MORE DETAILED REPORTING
—
Management Contracting/Construction Management routes:
More frequent cost reporting eg every 2 weeks
-Budget holder reports: cost reports prepared for the elements of the construction works under the control of individual budget holders
(Eg a specific designer/building services engineer/structural engineer). Ownership of cost responsibility is important
Budget holder cost reports are supplemental to a construction cost report as they only report costs within a budget holder’s responsibility.
Eg at Thames Water:
Can have Independent self-lay providers (SLPs) ornew appointment variations (NAVs)which could be more cost-effective, offer more flexible timescales and installation of multiple utilities.
These can only do ‘contestable services’ eg installing or diverting water mains and making service connections. ‘Non-contestable services’ such as riskier work have to be done by TW eg pipe connection location/size for MORE COMPLEX JOBS
Basically the SoR jobs can be done by a SLP, but all the big projects I worked on were non-contestable so SLP can’t do them
Project Finance
Radley College
How did you identify that costs were being misallocated between projects and difficulty in identifying cost overruns?
Summary
-Generic cost from other projects allocated to this project eg fixed part costs and staff/transport that needed to be pro rated
-Could not identify cost overruns due to broad elements and inaccurate cost against corresponding target cost values
——
-Generic costs from other projects with ledger details of other projects were being allocated to this project, such as fixed third party charges eg utilites and council… also costs that have just been allocated to this project but should be PRO RATED such as staff transport, commercial management costs
-Could not properly identify cost overruns as the actual project costs aren’t accurate… I compared the costs that came in against the corresponding
target cost values
Project Finance
Radley College
How did you advise that the value of work done fell behind on-site progress and forecasted the outturn cost to exceed the budget?
And how did it differ from original format?
Summary:
-In its original format, I could only take the overall ELEMENT totals and compare against OVERALL project progress (calculated by progress of all activities)
-Hence why I advised on splitting costs into relevant activity
Following this, I did same process as level 2:
-VOWD calculated by progress of each activity against activity cost
-Then compared with corresponding amount applied
-Can then forecast using percentage done eg if 50% done and £6,000 applied you’ll expect £12,000 compared to original tendered value of £10,000
————
I calculated the VOWD of what had actually been completed on site by:
1-Measure: eg 2x2x2 = excavation volume of 8m3 done
So if we need 16m3 for activity then its 50% done
2-Value: get tendered quantity (£10,000) of that activity and multiply by 50%. So £5,000 is the VALUE of work done for (e.g excavation within Connection 1)*
-These costs can then be compared against corresponding cost applied against activity (£6,000) to see that the progress is £1,000 behind
I plotted on a graph (linked to accepted programme) to determine actual progress v costs
The graph only showed one side of story: that costs were exceeding progress. So I then used the AFP file to see WHY this was happening. And also visited site to see for myself the progress
I ADVISED ON CLEARER ALLOCATION OF COSTS AGAINST EACH ACTIVITY as costs were just being dumped against target cost and so difficult to accurately calculate VOWD
3-Can then forecast using percentage done from activity schedule eg if 50% done and £6,000 applied you’ll expect £12,000 compared to the original tendered value of £10,000
-The more the activities are broken up into smaller ones the easier it is to assess VOWD and also helps contractors cash flow
*Easier for BoQ as will have rates to multiply quantities against to get value. For Activity schedule you’d want it broken down more into smaller activities eg amount of excavation under each activity (like at TW)Why activity schedules better on smaller projects as hard to track progress on bigger ones
Option C (open book) is harder to measure progress than Option A (which pays on completion of activities and is either 0 or 100%)
On Option B), it is measured against actual quantities done, so probably a bit easier actually rather than getting activity schedule % (although that will have quantities too)
Another example:
Jan-23
Activity: Install Pipework
Original duration: 5 days
% Complete: 65%
————————–
(Tendered cost: £3,500)
————————–
VOWD: 65% x £3,500 = £2,275
Repeat above for all activities e.g excavate, thrust block to get e.g:
VOWD: £4,215
VOWD: £2,050
————
Total VOWD: £8,,540
This will be the VOWD plotted on graph for Jan-23
Project Finance
Radley College
How did you advise on changing cost reporting regime?
Summary:
-Originally elements only (same as cost plan)
-But I advised on allocating each cost an ACTIVITY and COST COMPONENT
-Activity: allowed VOWD to be calculated much more accurately by comparing activity progress with COSTS APPLIED PER ACTIVITY. Also allowed more detailed forecasts per activity. Not originally possible as open book accounting doesn’t allocate cost against activity like you would get in option A
-Useful when lots of activities and potential chances of costs overrunning
-Cost Component: allocate every cost to these to have clearer record of where
certified actual AND CE costs have overrun against target cost under the
‘Construction Costs’ section. Better than broader elements eg substructure, pipework etc
-Had to go back a couple of reporting periods to update costs to allocate each item an activity and cost component
-Advised on linking contractor’s ledgers directly to cost report, creating a fusion with AFP to ensure every cost accounted for.. as were finding costs in AFP did not match separate cost report due to multiple projects
————
Originally could only see costs split by elements eg internal stuff, facilitating works, external works, pipework, substructure, superstructure, Main contractor preliminaries,contingency …. Based on cost plan
But I advised on categorising the costs by:
1 Activity
-I advised on a clearer allocation of costs against each activity as costs were just being dumped against target cost and so difficult to accurately calculate VOWD. I advised that this would help the client track progress by comparing applied costs against actual progress.
It would also produce a more accurate FORECAST OUTTURN COST as if applied costs are broken up into each activity then can simply forecast each cost against its % complete (see other flashcard)
The more the activities are broken up into smaller ones the easier it is to assess VOWD (and also helps contractors cash flow).
This addressed the issue of ‘open book accounting’ used on options C, D, E, F and I advised that although it couldn’t accurately allocate cost to all sub activities, just a bit of extra work could allow costs to be at least allocated to main activities eg: connection 1, pipework, substructure
Implement allocating item to an activity when high risk/lots of potential costs or parts of project that could overrun
2 Cost Component
Allowed a clearer record of where the cost overruns under ‘Construction Costs’ rather than the elements listed above.
Cost overruns could then be closely targeted such as plant, labour, subcontract etc to target where cost overruns were occurring
Had to go back a couple of reporting periods to update costs to start of construction to allocate each item an activity and cost component
—
I then advised on linking the contractor’s ledgers directly to the cost report, creating an AFP/cost report fusion to ensure every cost accounted for.. as were finding costs in AFP did not match separate cost report due to multiple projects
By making sure each item had an allocated cost component, these could then be linked to the live summary page which had allowed a comparison between the target cost, CE values, actual cost, and certified cost
Project Finance
Radley College
What do cost reports do?
Summary:
-For client to understand CURRENT and FORECASTED financial status of project
-To allow them to make informed decisions on variations, mitigate risks, value engineering… and see progress
———-
-Enable the client to understand the current financial status of the project (i.e. what has been spent),
-The projected financial status (what will be spent by the end),
-The risks to the project.
By providing the client with this information, it gives them the opportunity to:
-make informed decisions to instruct variations
-mitigate potential risks
-meet their own deadlines
Project Finance
Radley College
What specific costs did you advise were outside of the cost reporting period… and under the incorrect cost component?
Summary:
-Plant hire costs forecasted beyond assessment date .. identified due to new breakdown and VOWD
-Subcontract costs misallocated to labour (commanding higher fee).. identified due to new breakdown
-Material costs much higher compared to target cost value as orders intended for all jobs only allocated to this one
-Same as above with expenses
———-
1 Contractor not forecasting correctly:
They included forecasted values of anticipated plant hire and labour rates for duration of project which was beyond the next assessment date and shouldn’t be included. Only incurred actual cost should be included
Note: this forecasting is only on options C/D/E/F.
2 Could identify that material costs were much higher compared to target cost value eg: contractor makes orders for materials that spread across multiple jobs, and expenses.
According to contract these costs should have been allocated pro rate according to each project’s tendered value
- Valid costs but were being misallocated to the labour category (which commanded a higher fee) rather than subcontract costs which had a higher rate.
I audited the subcontractor quotes
Lots of specialist ground reinstatement works (so lots of subcontracted work)
Fees:
This allows fees to be calculated:
7.5% - Subcontract, Materials, Plant, GI
11.3% - Labour, Site Management, Overheads
Project Finance
Radley College
How did changes to the cost reporting regime facilitate auditing?
-Allowed a cross sectional audit that covered all cost components
-Targeted/more detailed audit of where cost overruns had occurred
-Can also see activity costs that are causing cost ovveruns eg excessive labour so increase in auditing in labour allocation sheets
Quantification
SOR New Rate
Why did you advise on a new rate?
Summary:
-Dayworks not suitable as should be used when scope of works cannot be defined, or no comparable BOQ rate.. eg emergency/unforeseen work
-But works COULD be defined, just the quantity that couldn’t be, so I advised on remeasurable rates
————-
————-
Currently using dayworks which is best used when scope of works cannot be defined, or if no comparable rate in BOQ/SOR such as emergency/unforeseen work.
Therefore dayworks was not providing value for money.
But in this case the works COULD be defined, just it was the quantity that couldn’t be, and so I advised on remeasurable rates
Quantification
SOR New Rate
Why did dayworks not provide value for money?
Summary:
Extra cost incurred:
-TW staff cost assessing dayworks.
-Contractor paid for time they work, so DOES NOT ENCOURAGE TO WORK QUICKLY/EFFICIENTLY
-Risk of scope creep as site setup rate includes all mobilisation costs and day works was including some labour costs for this, hard to distinguish
-Paying for plant/temp works on weekly hire rate even if 1 day of work
-High risk percentage (20%) as contractually treated as ‘additional works outside of rate card’
-More supervision from PM, increasing cost
—————
Because extra cost was being incurred by TW such as:
-TW staff - cost of time spent of TW staff assessing dayworks.
-Lack of Cost Control: since workers are paid for time they work, it DOES NOT ENCOURAGE CONTRACTOR TO WORK QUICKLY/EFFICIENTLY
-Risk of scope creep - the site setup rate already include for ALL mobilisation costs even if setting up works for deeper than 1.5m depth….. so there is risk of contractor including the labour time for these activities in their dayworks calculates
-If paying for plant as dayworks (e.g temp works), the minimum hire rate is 1 week… so have to pay even if 1 day job.
-High risk percentage (20%) as contractually treated as ‘additional works outside of rate card’
-More supervision from PM, increasing cost
Quantification
SOR New Rate
What was the original dayworks process for assessing extra over excavation?
Summary:
-Defined cost plus a percentage for overheads and profit eg:
-Firstly determine dimensions (this won’t change)
-Assess Labour: name of staff, job, activity done..… duration x framework
-Assess Plant: type (eg excavator, hoist/harness), quantity, duration, rate
-Assess Materials: fencing, mats, temporary works (earthwork support)
-Traffic Management used
-Disposal fees (subcontract)
————
Dayworks
Where contractor is paid for specifically instructed work. NRM2 says: the method of valuing work on the basis of time spent by the contractor’s workpeople (labour), the materials used and the plant employed.
Generally used when work cannot be priced in the normal way. E.g
-Unforeseen obstructions are encountered during ground works
-When work is instructed for which there are no comparative rates in a bill of quantities.
Two basic options as to how daywork rates can be priced:
Option 1 – a percentage addition Prime cost to which a percentage is added for overheads, profit and incidental costs.
THIS IS THE OLD WAY^
Option 2 – All inclusive rates are quoted at tender. These include an allowance for overheads and profit,
THIS IS THE NEW WAY^
Original process
-Firstly determine dimensions (this won’t change)
-Then assess Labour: name of staff member, job, activity done..… duration x framework rate to determine overall cost.
-Assess Plant: type of plant*….. quantity, duration, rate to determine overall cost
-Assess Materials: fencing, mats, temporary works (earthwork support)
-Then measure extra Traffic Management used
-Disposal fees (subcontract)
*Examples of plant could be: larger excavator, hoist to lower man into ground/harness,
Quantification
SOR New Rate
What costs did you pay as actual cost?
Summary:
-Temporary works
-As nature/scope could not be properly defined until fully designed as each one is bespoke.
-So could not have one rate as too many variables eg depth, soil strength/type, width, can be 2D (just on one side) or 3D (a trench) so could be measured as m,m2, m3
-Actual costs quick and easy to determine as invoice provided
————
I recommended to pay temporary works on a cost reimbursable basis
Because nature/scopeof theworkto be carried out could not be properly defined until fully designed as each one is bespoke. So could not have one rate as too many variables such as depth, soil strength/type, width, can be 2D (just on one side) or 3D (a trench) so can’t have a single rate as could be measured as m,m2, m3
Actual costs quick and easy to determine
A fixed price cannot to be estimated with sufficient accuracy to ensure a fair and reasonable price is obtained.
And can get clear subcontract breakdown from invoice after
Quantification
SOR New Rate
How were the rates split up?
Summary:
-Split by: Surface type, extra volume m3 (<5, 2-5, 5-10, 10+)
Calculated by:
-Durations: rate reduces as depth increases
-Multiply by labour rate (same)
-Multiply by plant rate (higher for Surface C… as already have plant on site). Also higher for eg clay soil type in London harder than softer chalk in Wiltshire
-Multiply by plant rate: increases as depth increases
-TM: increases for Surface C (in road) and depth bending (longer closures)
-Muckaway: increases for clay
-If hard rock then cost reimbursable/daywork
Rates determined by:
-Labour: framework gang rate x different durations
-Plant: Build up of expected plant e.g higher rate for larger excavator
-TM: expected TM from previous jobs e.g road closures if surface C, longer hire if m3
———-
Split by:
Surface Type: A, B, C
Extra Volume: <5m , 2-5m, 5-10m
COSTS PER 1M3
So 6m3 would be first 5 at one rate and 1 at the next rate
Costs made up of:
Start by determining durations:
0.5-1m - 0.3 days per m3
1-2m - 0.2hrs per m3
2-5m - 0.2hrs per m3
Reduced due to economies of scale
Then multiply by rate:
Labour:
Surface A, B, C - same gang rate of £563
Multiplied by durations above per extra m3
Plant:
Surface A - low plant rate
Surface B - higher plant rate
Surface C - higher plant rate
0.5-1m - low plant rate
1-2m - low plant rate
2-5m - higher plant rate
TM:
Surface A - low TM
Surface B - low TM
Surface C - high TM (as in road)
0.5-1m - low TM
1-2m - medium TM
2-5m - high TM
Materials: see other comment
Muckaway:
Surface A, B, C - same rate of £121 per m3
-Risk: Same % (6.2%)
Note: If hard rock found then cost reimbursable/daywork
Rates determined by:
Labour: framework gang rate
Plant: Build up of expected required plant e.g higher rate for larger excavator
TM: expected TM from previous jobs e.g road closures if surface C, longer hire if m3
I also discounted the option of agreeing a new rate for every diameter of every surface type/barrier pipe or not/mains or servs.. and same with connection type.
Quantification
SOR New Rate
What did you advise to measure using CESMM4?
Summary:
-To build up costs for earthworks and time-related charges
EARTHWORKS
-Excavation
-Imported fill: Bed and surround (m3), Type 1 (m3), Temporary reinstatement (m3)
-Muckaway: Non hazardous material (m3) 14% likelihood weighting, Hazardous material 86% likelihood
-Enabling works: eg basic form work, Fencing (m)
-Facilitating works: Rate has to produce 1 rate that allows for all non-hazardous jobs (86% weighting) and hazardous jobs (14% weighting), so used historic projects
-Also did weighting for Permanent reinstatement (m3) 95% likelihood and Special reinstatement 5% likelihood
Rates determined by
-Labour: framework gang rate x different durations
-Plant: Build up of expected plant e.g higher rate for larger excavator
-TM: expected TM from previous jobs e.g road closures if surface C, longer hire if m3
TIME-RELATED CHARGES
for plant and labour
——-
To build up costs for earthworks and time-related charges
EARTHWORKS
Rate has to take in all of below e.g producing 1 rate for each surface type/depth that allows for all non-hazardous jobs (86% weighting) and hazardous jobs (14% weighting)
Imported fill:
-Bed and surround (m3)
-Type 1 (m3)
-Temporary reinstatement (m3)
-Permanent reinstatement (m3) 95% likelihood weighting
-Special reinstatement 5% likelihood weighting
Muckaway:
-Non hazardous material (m3) 14% likelihood weighting
-Hazardous material 86% likelihood weighting
Take into account formwork (m2), fencing (m)
—
TIME-RELATED CHARGES
for plant and labour
—
Note:
NRM2 better description structure for foundation excavation (m3) (bulk/foundation excavation > not exceeding 2m deep, 2-4m, 4+ in 2m increments*)
But CESMM4 used because it had better description structure for pipework excavation (m3) (general/foundation excavation) > topsoil, rock, artificial etc.. maximum depth 0.25-0.5, 0.5-1, 1-2 etc*)
CESMM4 has more detailed depths (better for varying depths of utilities/TW work), and emphasis on surface type. Excavation is also its own separate section which suits TW work better.
Quantification
SOR New Rate
What did you advise to measure using framework data?
-Traffic management (eg surface type C will need signs and traffic lights but A and B will just need a lane closure and signs) the items are then multiplied against different durations depending on surface type / depth band
-Gang labour rate (but multiplied against different durations depending on surface type / depth band)
-General plant rates, but would need to adjust as this is for EXTRA OVER excavation
Quantification
SOR New Rate
What were the values of these new rates?
Summary:
Approximately £280-360 per m3
<5m2
Surface A - £340
Surface B - £360
Surface C - £380
5-10m2
Surface A - £320
Surface B - £340
Surface C - £360
10+m2
Surface A - £300
Surface B - £320
Surface C - £340
Quantification
Carterton Growth
Why did you advise on using a bill of quantities for the entire works?
Summary:
-There was sufficient time and design already at Stage 4
-Cost certainty as know the quantities contractor will price against, so just need their rates. Also, won’t be CE’s if everything captured accurately
-Produce a detailed pre-tender estimate for cost certainty
-Also helps both parties’ cashflow as will know how much they’ll pay/get paid… and helps client by having more regular payment flow - preventing contractor front loading and activity schedule (which has no provision for part payment)
-Easy to compare like for like tender bids where can easily spot anomalies/overpriced items/errors.
-All parties have same clear understanding of specs/drawings to prepare ACCURATE tenders to meet client requirements
-Easy remeasure differing quantities than originally envisaged with element of cost certainty (as opposed to less certain ‘actual cost’)
-Therefore makes interim payments easier to measure
Cons:
-For items which contain multiple elements of work built into a singular rate, it can be difficult to assess the % of work complete
-Slower to produce BOQ
—————
In SOE: to provide cost certainty from a lump sum price and allow an easier comparison of tenders
-Cost certainty provided as know the quantities the contractor will price against, and now just need their rates. Also cost certainty as won’t be compensation events if everything captured accurately
-Produce a detailed pre-tender estimate for cost certainty
-Easy to compare like for like tender bids where can easily spot anomalies/overpriced items/errors.
-Above provides transparency in the tendering process
-Sets clear specifications of tender to ensure contractors meet the client’s objectives/requirements
-All parties have same clear understanding of requirements to prepare precise/ACCURATE cost estimates
-As BOQ already produced then tender process is be quicker (although the entire process to produce the BOQ is longer)
-Easy to price if differing quantities than client originally envisaged (though they will incur this unforeseen cost)
-Greaterflexibilityforallpartiesintermsofcashflow as once work done both will pretty much know how much they’ll pay/get paid
-A more regular flow of payment, eg not paying loads up front if activity schedule is front loaded.
Cons:
-For items which contain multiple elements of work built into a singular rate, it can be difficult to assess the % of work complete
—
Note: There was sufficient time to prepare a BOQ and Design was developed to RIBA Stage 4…. TW tend to design to this level and use BOQ’s for complex jobs like this with water boosting stations, bridges etc (designs for these done by external consultants but TW take off the drawings for estimate)
As opposed to Phase 1 of Cherry Tree Lane in Contract Practice which was Phase 3 and so did lump sum but with activity schedule)
Traditionally procured so client produced their own design - wouldn’t do a BOQ if contractor wasn’t designing it
Quantification
Carterton Growth
When would you advise NEC Option B (BOQ) over Option A (Activity Schedule?)
Summary:
-Design enough advanced to determine quantities/approximate
-A correct BOQ provides lower price than contractor produced acfivity schedule
-Choice is about how well the items/quantities can be defined and if Client happy to take risk on potential CE’s due to changes/omissions
-So if price can’t be produced very accurately then option A will give more cost certainty (although for a higher tender price as will be more risk).
-Option B if need a regular flow of payment, eg not paying loads up front if activity schedule is front loaded. As Option A has no provision for part payment
———
-If can determine quantities/approximate quantities, a BOQ will produce a cheaper price than activity schedule.
-Choice between option A and B is about how well the items/quantities can be defined and where the Employer wants the risk to sit. Risks/omissions in BOQ is client risk and paid as CE’s, so if it can’t be produced very accurately then option A will give more cost certainty (although for a higher tender price as will be more risk).
-Ultimately determined by where client want risks to sit.
-A more regular flow of payment, eg not paying loads up front if activity schedule is front loaded. This is because Option A has no provision for part payment, if there is an issue with completing an activity, no payment is made until the activity is completed.
Quantification
Carterton Growth
How can Option B be used?
Summary:
-Almost as SoR where you know nature of works but not extent
-So, interim payments based on the percentage of completion of each BoQ item
-Re-measurement alone is not a CE, but is one when changes unit cost (clause 60.4) -Note: Option D NOT re-measurable as once tender agreed is paid on defined cost
——
-Option B can be used almost as SoR contracts where you know nature of works but not extent. E.g for repetitive work like track laying, flood defence.
-Works are re-measured, so the Contractor gets paid for the quantity of work they do for each item based on tendered rates.
-Therefore, interim payments based on the percentage of completion of each BoQ item, in line with the contract payment.
-Re-measurement alone is not a CE, but one arises when the difference between the final total quantity of work done and the quantity stated in the bill of quantities causes a change in the defined cost per unit of quantity (clause 60.4)
Note: Option D builds up target cost with bills of up quantities then after that, interim payments paid on defined cost basis - so it is NOT re-measurable
Quantification
Carterton Growth
When should you use Option A (Activity Schedule)?
Summary
-When design not developed enough to produce BOQ but well-defined enough scope that contractor’s cost can be estimated
-When client wants to pass quantification risk to contractor as it is down to Contractor to produce Activity Schedule so any errors/omissions in quantities is their risk
-Not enough time to produce BOQ
-Non complex jobs usually
-SImplify payment process by paying for completed activities rather than on output of work completed.
-When project’s focus is on the completion of specific work activities rather than the quantity of materials or work
-Gives greater cost certainty than Option C as payments tied to completion of activities.
Downsides:
-No provision for part payment, no payment is made until the activity is completed even if issues
——-
-Non complex jobs usually
-Projects with a well-defined scope where the contractor’s cost can be easily estimated (but not enough to produce BOQ)
-Not enough time to produce a BOQ
-When client wants to pass quantification risk to contractor. Option A it is down to the Contractor to produce the Activity Schedule and therefore any errors in quantities or omissions altogether will be their risk, so client do this when they don’t want to take risk of quantities changing
-Activity schedules simplify payment process by paying for completed activities rather than based on the output of work completed. Easier to measure when an activity is completed rather than the output of work completed on an option with a BoQ.
-When the project’s focus is on the completion of specific activities rather than the quantity of materials or work
-Gives greater cost certainty than Option C as payments are tied to the completion of activities.
-Higher price than if accurate BOQ produced
Downsides:
-No provision for part payment, if there is an issue with completing an activity, no payment is made until the activity is completed.
Quantification
Carterton Growth
When to use Option C (Activity Schedule)?
Summary:
-Complex projects
-Scope not fully developed so client’s risk appreciate is to share cost if goes over budget
-Encourages collaboration and cost control when scope uncertainty
——-
-For more complex projects where the scope isn’t fully developed so client can share cost if goes over budget (but also lose half the profit)
-Well developed enough scope that the contractor can break down the project into activities and allocate costs.
-Encourages collaboration and cost control when scope uncertainty exists.
Quantification
Carterton Growth
Why did you advise on approximate quantities for the pipework?
Summary:
-In works information stated they were approximate quantities to prevent CE claims that works information had changed
-Used when not possible to prepare firm BOQ at time of tender eg exact quantities not yet known. Will however result in more variations and so less cost certainty
-If changes unit rate then is a compensation event under 60.4 (Option B only)
————
-I firstly advised to state that the pipework is an approximate quantity to prevent claims of a CE that ‘the works information had been changed’
-Used on projects where not possible to prepare a full/firm BOQ at time of tender eg if design is relatively complete but exact quantities not yet known. Will however result in more variations and so less cost certainty
-If changes unit rate then is a compensation event
Note: JCT has an ‘Approximate Quantities’ contract which is its version of a re-measurable contract (like NEC Option B)
Quantification
Carterton Growth
What is the difference between a BOQ (where you remeasure quantities) and a Schedule of Rates?
Summary
-BOQ when know quantities.
Quantities only
-SOR when don’t know quantities and include risk.
Rates to be used against quantities
——-
-BOQ typically used when detailed design has been prepared and can get precise quantities.
-SoR used when quantities cannot be determined, so are pre-set rates for work that hasn’t been defined yet and applied when the quantities are known.. so they contain risk in them
Quantification
Carterton Growth
How does NEC deal with the BOQ quantities being significantly than the actual quantities?
Summary:
-NEC clause 60.4 states that if quantities change and cause the PRICE of the ENTIRE CONTRACT VALUE to change by more than 0.5%, then the BOQ rate would no longer apply
-Instead, that particular item is assessed as a CE using Defined Cost to pay the extra quantity, rather than the original BOQ rate.
-So if quantities increase the cost per m, the defined cost should actually be cheaper for client. Similarly, if quantities decrease then by economies of scale the contractor will probably incur a higher cost per m
-I advised that the project was 1.2km and so unlikely to change by more than 0.5% (60m)
———
-If a quantity/approximate quantity turns out not to have been a realistic estimate of quantity actually required, this may be a change under NEC, Clause 60.4 ‘changes to quantities within the BOQ’.
For small changes in quantity, the Contractor is simply paid the unit rate identified within the BOQ multiplied by the measured amount they do.
However, if there is a significant change in the quantity, it is unfair for either party to be tied to that rate.
The clause states that if the quantities change and cause the PRICE of the ENTIRE CONTRACT VALUE to change by more than 0.5%, then the BOQ rate would no longer apply
Instead, that particular item is assessed as a compensation event using Defined Cost to amend the unit cost, rather than the original BOQ rate.
Note that it is NOT the quantity that has to change by more than 0.5% but the entire overall price
For example, if contract sum is £100k, 0.5% would represent a line item changing by more than £5,000. So just say we needed 20 metres of pipe at £2,500 per metre, then if the actual quantity was in between 18 and 22, then the BOQ rate would apply.
If there was eg 30m, then the first 22m would be paid at the £2,500 rate and the remaining 8m would be assessed as CE using defined cost (schedule of cost components).
So if the contractor undervalued original rate and can prove it costs £5,000 per m then will be able to get that for the last 8m under the CE. Similarly if they’ve overpriced then could only get a lower rate. Also, if quantity is drastically reduced and contractor needs to increase rate due to eg economies of scale with mobilisation/equipment etc, then can get higher rate as defined cost
In this case, I advised that the project was 1.2km and so unlikely to change by more than 0.5% (60m)
Note: I advised to state that the pipework is an approximate quantity to prevent claims of a CE that ‘the works information had been changed’
Quantification
Carterton Growth
How does procurement route affect choice of pricing option?
-If doing traditional you would want Option A or B (lump sums as have control of design). Also Option C if less developed design
-If doing design and build then this would fit better with Option A or Option C (lump sum if happy with employer’s requirements and target cost if less defined)
Not option B as can’t produce a BOQ for design and build
Quantification
Carterton Growth
How did you advise on the pre tender estimate?
-Took off quantities
-Produced unit rates based on historical data (developed in cost plans)
-Added descriptions for exact details of work
-The quantities and descriptions (not unit rates) became basis of tender documentation issued to contractor
Quantification
Carterton Growth
How did you remeasure the quantities during construction?
Summary:
-Measured the actual quantities of work with PM during site visits applied this against the tendered rates in the contractor’s tender
-Contractorpaid for the actual work they have done.
———
Rates are provided in the contractor’stender aspartof thepriced approximate bill of quantities.
Then I measured the actual quantities of work with the PM during site visits to measure/confirm their length and applied this against the tendered rates in the contractor’s tender
Thecontractoris paid for the actual work they have done.
Procurement
Wendover Road
What is the single stage tendering process?
Summary:
-Must ensure design well developed, a realistic budget set, and risks considered.
-Best when project has tight deadline (as quicker)
-Best when don’t need ECI (as design and construction fully separated)
-Generally used with traditional procurement
-Can take up to 10 weeks for tender submissions, further 4-8 weeks for tender award, depending on project value. Two stage will have extra 4-8 weeks
———-
Design development and construction process are separated, which can lead to increased risk of design compared to two-stage
Must ensure the design has been developed to a high standard, a realistic budget has been set, and risks have been considered before tendering.
If your project has a tight deadline or limited complexity, this route is not the best option because it takes much longer to award a contractor.
Single-stage procurement can take up to 10 weeks, with there being a wait time of roughly one to two weeks per stage of the initial process. From then, tender to award will take between four to eight weeks, depending on project value.
Procurement
Wendover Road
Why didn’t use Management Contracting or Construction Management procurement?
Summary:
Didn’t use … because:
MC
-Project didn’t need design flexibility as not lots of sections, no cost certainty until all packages let
-Poor cost certainty as not until all packages let (but traditional provided this)
-Also poor cost certainty as cost reimbursable
Unique:
-Client needed close quality control (reputational risk) but MC does the tenders
-Needed cost control for public procurement (client paying for the MC’s expertise)
CM
-Project didn’t need design flexibility as not lots of sections, no cost certainty until all packages let
-Poor cost certainty as not until all packages let (but traditional provided this)
-Also poor cost certainty as cost reimbursable
Unique:
-Required high admin/involvement (as subcontracts direct to client) which was unsuitable for inexperienced client
——-
Management Contracting:
-Inexperienced client (requires a high level of involvement)
-Cost control paramount.. Management contracting can be more expensive than traditional procurement routes, as the client is paying for the management contractor’s expertise and overhead… If cost control is a primary concern, a traditional procurement route might be more suitable.
-While management contracting offers design flexibility, this project did not have this and changes could lead to cost ovveruns
Construction Management:
-Cost certainty prioritised
-Inexperienced client (requires a high level of involvement)
Procurement
Magdalen College
Why didn’t use Management Contracting or Construction Management procurement?
Summary:
Didn’t use … because:
MC
-Poor cost certainty as not until all packages let (but D&B provided this with all packages done at once by 1 contractor)
-Also poor cost certainty as cost reimbursable
Unique:
-Less client quality control as MC does tenders (did two stage so they COULD have some control)
-Client did not want responsibility for design
CM
-Client did not want responsibility for design
-Poor cost certainty as not until all packages let (but D&B provided this with all packages done at once by 1 contractor)
-Also poor cost certainty as cost reimbursable
Unique:
-Wanted SINGLE POINT OF RESPONSIBILITY with no design coordination issues (not managing lots of different subcontracts)
-Inexperienced client so didn’t want to manage all subcontracts),
-Client did not want responsibility for design
————
Why didn’t use Management Contracting procurement?
-Inexperienced client: this route needs high client involvement (although in this route the MC does coordination of SC’s and so takes this risk…. the client is still responsible for design - which they did not want) Still overall less risky than CM though.
-Poor cost certainty, although its quick (as construction can begin before the design is finalised) this means poor cost certainty as costs are not finalized until all packages are let. Conversely, design & build provides this.
-Poor cost certainty also as MC tenders works
-Poor cost certainty as cost reimbursable,
-Although MC contributes to design and splitting it into packages,, the client retains control and cost certainty isn’t provided
Why didn’t use Construction Management procurement?
-Client wanted a SINGLE POINT OF RESPONSIBILITY due to integration of works
-Inexperienced client: in this route the client needs an experienced team to monitoring progress of all different SC’s. Client also has control of design - which they didn’t want
-Poor cost certainty, although its quick (as construction can begin before the design is finalised) this means poor cost certainty as costs are not finalized until all packages are let. Conversely, design & build provides this.
-Poor cost certainty as cost reimbursable,
-Speed was not the main driver - quality and cost was
Procurement
What are the differences between Construction Management and Management Contracting procurement routes?
Summary:
-MC: Client employs design team but SC’s are employed to the MC
-CM: Client employs design team… and SC’s also are direct to the client (managed by CM on fixed % fee)
-Both are quick
-Neither good for cost control
-MC better for multiple specialised packages, CM for flexibility as have control
————-
Construction Management - Client employs design team to design building and construction manager on fixed % fee to manage subcontractors. But the SC’s are direct to the client.
Management Contracting - Client employs design team but this time the SC’s are employed to the management contractor.
CM is often used for large and complex projects where the client wants to retain control of the design while benefiting from the expertise of a construction specialist.
(Less risky)
Both:
Each package of work starts as the design and specifications related to that element are completed. This provides more flexibility to focus on the proper delivery of key elements later in the construction process
Project Finance
Radley College
Tell me more about how splitting applied costs in AFP into sub activities helped to forecast outturn cost?
Summary:
-By splitting applied costs into activities you can compare it against the corresponding completion % for each activity to see costs applied v progress
-You can then produce a VOWD based on this and then forecast the outturn cost
-Originally open book accounting did not provide activity breakdown, so could only forecast by getting an OVERALL % as you cannot distinguish costs for each sub activity
————-
If all applied costs are split into activity then you can do this:
-I got all the completion %’s for each sub activity
-Then got the applied costs against these activities to produce a forecast. Eg:
If 50% done and £6,000 applied you’ll expect £12,000 compared to the original tendered value of £10,000
—-
If the open book accounting does not provide this breakdown, then forecast is done by getting an OVERALL %. complete based on programme eg:
-Getting the completion %’s for each sub activity (as normal)
-But this time, comparing it with the original durations to produce an overall % complete of programme , eg:
Pipework 5 days at 65% = 3.25
Excavate 3 days at 85% = 2.55
Thrust block 1 day at 10% = 0.1
————————
So out of original 9 days we are 5.9 days complete. So overall % complete is= 65.6%
-The current applied cost was £13,640. So if we are 65.6% done, the forecast outturn cost is £23,982.42
…. This is more complicated and less accurate.
So in normal open book accounting, for forecasting costs you have to do an OVERALL % complete (rather than each sub activity) as you cannot distinguish costs for each sub activity as they aren’t linked to activity schedule
Procurement
Wendover Road
How did you advise that there would be enough time to choose a traditional route?
Summary:
-Historical data of typical time of procuring through infrastructure framework (3 months) rather than 6 months of external tender
—————
-Historical data of typical time of procuring through infrastructure framework (3 months) rather than 6 months of external tender
-Using outline programme, I determined the areas which could benefit from ECI to constrain programme eg temporary works design, approx 15% of programme subject to this and so this could be overlapped if contractor got in early
Procurement
Wendover Road
How did you advise that traditional procurement & infrastructure framework would meet public procurement?
Summary:
Traditional
-Easier comparison of tender as clear design intentions
-Easier to draft scoring criteria
-D&B difficult and time consuming to justify best option if most expensive
-Bids have to assessed individually (not against each other), can’t guarantee this with different solutions in D&B
Inf framework
-Already met public procurement standards for PQQ, timescales etc.. so can skip that stage
-Competitiveness as tender between 3 contractors instead of 1 (incumbent)
————-
-Traditional = easier comparison of tender
Clear design intentions so can easily compare … so easier/quicker to draft scoring criteria.
-D&B time consuming to justify best option if most expensive
Bids have to assessed individually and not against each other, can’t guarantee this with design and build where different designs
-Infrastructure framework = provide competitiveness
Already met public procurement standards for PQQ, timescales etc.. so can skip that stage
Element of competitiveness as tender between 3 contractors instead of 1 (incumbent)
Note: when traditional TW essentially act as a design consultant
Key differences NEC and JCT
NEC Summary:
-Time bars, programme contractual document
-Focus on collaboration eg early warnings
-Flexible risk allocation with risk register
-Target costs possible and therefore open book accounting (good audit trail)
-Change control deals with cost/delay simultaneously, JCT EOT (time) and loss&expense (cost) separately
-Flexible design liability eg not full design and build
-doesn’t use provisional sums, expected to price for all risk.
——
-NEC more emphasis on good programme management with strict time bars to ensure regular update to programme (a contractual document) kept updated with CE’s. In JCT more focused doing it all at end for and has a contract administrator that focuses on processes/procedures/payment administration which can lead to a contractual/process led and us & them attitude.
-NEC is simpler to read
-NEX less adversarial with collaboration like early warnings, JCT doesn’t really focus on stopping it and just deals with the contractor’s claim for time/money once it’s happened.
-NEC used for complex infrastructure projects and public sector projects due to good audit trail (see below)
-NEC contractual obligation to submit EWN’s to facilitate collaboration and encourages an EWN REGISTER
-NEC deals with change control time/cost in one CE. JCT uses EOT (time) and loss & expense (cost) which are separate so an EOT does not guarantee disruption costs for contractor.
-Due to constant update of programme, a ‘rolling’ (cumulative) final account should be produced
-NEC doesn’t use provisional sums, expected to price for all risk.
-NEC more flexible specific design liability. JCT more specific in that contract is either Traditional or Design & Build.
-NEC more flexible payment arrangements e.g target cost, JCT has fixed price only although introducing one in 2024
-NEC has open book policy (defined/actual costs) where JCT required contract sum analysis.
-NEC’s more flexible distribution of risk through a risk register for who is best able to manage it. JCT uses traditional employer/contractor allocation of risk to specific parties, doesn’t have risk register, and client only responsible if a relevant event/matter occurs.
E.g JCT says unanticipated ground risk is contractor’s so not a valid variation but NEC allows potential allocation to client (TW does this)
Procurement
How does traditional / design and build work with TW?
If traditional, client can do contestable design work which is basically everything, TW have to do non-contestable work in specific scenarios eg sensitive wastewater areas
In normal traditional, client gets consultants to design building, so TW essentially are the consultants
Contract Practice
Colindale Gardens
Why did you amend the route of financial recourse?
Summary:
-If condition not met by Key Date then contractor ADDITIONAL COST of either 1.Carrying out works themselves or 2.Client getting other to do work.
-So client not compensated for delay to completion as it’s not actual work, but are paid ADDITIONAL COST ONLY
-So I amended to be able to claim key date delay damages and not just cost to do work.
-PM assesses cost within 4 weeks of condition met.
-Key date delay damages would be the sole remedy, and couldn’t charge original additional works cost on top or completion delay damages at same time
——————
-Needed to be able to claim liquidated damages and not just costs
-If key date met then the Client does NOT take control of works (as would happen in Sectional Completion) and so contractor still has duty to insure those works (Clause 30.3)
-If PM decides condition not met by the Key Date then contractor pays Client ADDITIONAL COST (Clause 25.3) of either 1.Carrying out works themselves or 2.Client getting other to do work. PM assesses cost within 4 weeks of when condition is met. Client not compensated for delay to completion as it’s not actual work, they are paid ADDITIONAL COST ONLY, so I amended contract to be able to claim these delay damages.
Also has to be costs from SAME PROJECT
-Did advise that the amended delay damages would be the sole remedy, and couldn’t charge additional cost of works on top of it, neither could charge delay damages for the key date and full completion simultaneously
So Key Dates are intended to give recovery where work is needed rather than time is lost. So in most situations I would advise the client to consider the CONSEQUENCE of failure to meet a certain date. If the consequence is work-related costs then choose key dates, if time lost then sectional completion
Main differences NRM2 and CESMM4
Summary:
NRM2
-Better for preparation of BOQ (with descriptions) while CESMM4 more suited to the measurement/value as at TW didn’t really do BOQ if only pipework
-Breaks work down by elements eg substructure while CESMM4 breaks into work classification eg excavation, pipework which uses a flexible coding system to mix sections/add new items
-More emphasis on detail and rigid measurement while CESMM4 more inclusive/flexibile of different measurement methods eg temporary works could be measured as per m, fixed price, or time related charge
-More general building. doesn’t mention pipe work while CESMM4 is civil as work
-Description better for foundation excavation, larger increments. CESMM4 emphasis on surface type and smaller increments
**CESMM4 **
-Work classification provides a clear breakdown/clarity on different areas in tenders/BOQ. Eg GIVES ITS OWN SECTION to excavation rather than mixed in substructure which is useful for TW
-Emphasis on excavation surface type
-Flexibility of different measurement methods eg temporary works could be measured as per m, fixed price, or time related charge
-More inclusive/simpler and more flexible for measuring variations
-Better description more specific to pipe excavation, smaller increments accounting for specific variances of depth you get in water
-Coding system to identify separate category items helpful when mixing/integrating measuring works,
-Allows inclusion of extra work items by making coding iterations.
-Incorporates rules and regulations for measuring elements of major civil engineering projects
-It allows for the pricing of all temporary works which do not form part of the final construction.
-CESMM continues to update its versions to accommodate new technologies
————
See word document
Note how CESMM4 has more detailed depths (better for varying depths of utilities/TW work), and emphasis on surface type. Excavation is also its own separate section which suits TW work better.
For contractor’s preliminaries I used NRM 2 AND CESMM4……
NRM 2 more substantial for more general things (prelims) like staff site accommodation/IT, but CESMM4 better for more civil specific things like plant for (boring, pipe laying, paving) and temporary works (traffic diversions, dewatering, formwork etc)
Contract Practic
Cherry Tree Lane
Why were the works split into separate contracts?
-Phase 1 Diversion, Phase 2 Reinforcement
-Couldn’t be one contract as Phase 1 was activity schedule and Phase 2 was defined cost (with enabling works)
-phase 1 more certain so needed lump sum, Second phase was less certain and so needed target cost
-phase 2 would utilise risks known from phase 1
