Traditional and D & B Flashcards
710 What is traditional procurement?
Traditional procurement separates out the design and Construction. The Client has all the design work carried out upfront so the that the contractor bids for the work on a complete (or almost complete) design.
* Key points:
* The design is completed before tender. The contractor is appointed to build what the designer specified.
* Contractor tender is based on a complete design (with exception to the CDP)
* Assuming no significant design changes construction costs can be determined with reasonable certainty before works begin.
* The employer retains the design consultants during the construction. The designers prepare any additional design information and review any CDP.
711 What are its key advantages?
The key advantages are:
* That the Client retains control over the design and specification of the project.
* Cost certainty can be given before the start of construction unless significant changes are made by the Client
* The risk of cost overruns rest with the contractor
* As the design is fixed the tender returns should all be on the same basis
* Minimises the built in contractor risk premium that you get with a design and build
712 What are the key disadvantages?
The key disadvantages are:
* Overall project duration may be longer as the design is carried out upfront therefore taking longer to get the project on site (no opportunity to overlap design and construction).
* Zero to limited buildability input from the contractor may lead to issues.
* Design risk retained by the employer
* The Client must retain a designer to check the work is being carried out to the design therefore two points of management, contractor and designer.
713 Where might traditional procurement be appropriate?
- Where the Client wants to retain full control over the design
- Where cost certainty is required
- Where completing the project quickly is less important that cost and quality
Design and Build (D & B)
714 What is design and build?
This is a procurement strategy where the contractor is responsible for all of the design and construction of the project. The employers design team may be novated over to the contractor or they may appoint their own designers. Design risk is transferred to the contractor.
715 What are its key advantages?
The key advantages are:
* That as the design and construction are overlapping that the overall programme may be shorter. Quicker start on site.
* That as the contractor is engaged earlier and carries out the bulk of the design work there will be more input in terms of buildability
* After the designer novates over the Client will not have to manage them. Single point of responsibility
* The design risk transfers over to the contractor and the contractor still has the construction risk.
* Provides more cost certainty than traditional procurement
716 What are the key disadvantages? (201)
The key disadvantages are:
* The Client ultimately loses some control over the design of the project. The design will only be as good as the employers requirement/ spec. Employer has less control over finish.
* Can be more difficult to compare tender returns
* That the Client may have to employ another party to ensure that the works are built to their outline design specification/ performance specification/ ER
* Changes can be costly
* Cost certainty less than with traditional procurement
* The Contractor will build risk premiums into their price
717 Where might D & B procurement be appropriate?
- Where the Client has more of a priority for the shortest overall duration for the project as design and construction overlap
- Where retaining design control is not a priority
- Where there is a complex design that would benefit from ECI to aid buildability
- Where the Client wishes to transfer design risks to the contractor
- Where the design is fairly straight forward, for example building a warehouse, the Client can have outline plans and GA`s prepared, tender the works to the contractor and let them start the construction while they carry out the detailed design.
718 What additional insurances might be required for a D & B contract?
Design liability insurance such as PII.
719 What are the Employers requirement (ERs)
This is an expression of the employers requirements used to describe the documents produced by the Client which will set out performance specs, drawings, initial designs etc. This is what the contractor will base his design on.
720 What are the contractors proposals (CPs)
Are prepared by the contractor and are the response to the ERs and will set out a more detailed design based on the ERs which will require further development throughout the project.
721 Which procurement route poses the least risk to the Client?
D & B. As the Client transfers the risk of the design over to the contractor.
722 Why does the Client usually pay a premium for D & B at tender stage?
Because the Client is transferring risk for both design and construction to the Contractor. The contractor might price something at tender stage which once the detailed design has been carried out ends up costing more.
723 Under a D & B who executes the design for the contractor?
The contractor can undertake the design if they have the in house capability. Usually a designer will undertake the design, they are often novated over as the Clients original designer but sometimes a new designer can be brought in to carry this work out.
