WK1AM - Management Contracting

Question 1

Q1 Give a brief explanation of Management Contracting

Answer 1

Management contracting is a procurement route - in which the works are constructed by a number of different works contractors who are contracted to a management contractor.

Question 2

Q2 Give a brief explanation of Construction Management

Answer 2

Construction management is a procurement route in which the works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager (CM).

Question 3

Q3 How does Management Contracting differ to Construction Management?

Answer 3

Management contracting differs from construction management in that management contractors contract works contractors direct, whereas construction managers only manage the trade contracts, the contracts are placed by the client.

Question 4

Q4 Quickly sketch the contractual linkages for each of the 2 procurement routes showing members of the design team, Employer, management contractor, sub-contractors and any other parties required.

Answer 4

-

Question 5

Q5 For each route give 3 advantages and 3 disadvantages of each route trying to prioritise them.

Answer 5

Management Contracting –
Advantages –
• Good for complex or specialist projects
• Potential for cost saving
• Potential for time reduction – overlap of design and construction
• Design flexibility
Disadvantages –
• Not suited for inexperienced clients
Construction Management –
Advantages –
• Cost saving – Competitive tendering
• Quality – each area subcontracted to a specialist
• Design flexibility
Disadvantages –
• No single point of responsibility for delivery of the whole project

Question 6

Q6 Provide 3 scenarios of when to use each route.

Answer 6

• Large scale projects requiring an early start / specialist input
• When client wants to transfer risk but still retain some control over design
• Where price certainty before commencement is not key
Construction Management
• When clients are experienced – only require consultancy and management and not allocation of risk
• Where early start on site is key
• When flexibility is required in design, procurement and construction strategy

Question 7

Q7 How does Management Contracting differ to Traditional and Design and Build Procurement?

Answer 7

Management Contracting – Contract between MC and client in which MC contracts other trade contractors as sub-contractors and is responsible for their performance.
Traditional – Design, Bid, build – Design team is contracted, design goes out for tender, lowest price return wins, separate contractor for construction.
D&B – Both D&B are performed by one entity – single point of responsibility.

Question 8

Q8 State 3 advantages and 3 disadvantages of MC trying to prioritise them.

Answer 8

Advantages –
• Beneficial on complex/specialist projects – potential for highest quality
• Client can retain control over design – with expert contribution by the MC
• Some risks can be moved – risk, procurement and delivery onto the MC

Question 9

Q9 Provide 3 scenarios of when to use each route in relation to Time, Cost and Quality.

Answer 9

D&B – Where early start on site is required,

Question 10

Q10 What are the main risks to the Client?

Answer 10

-

Question 11

Q11 What are the different ways in which the fee can be calculated?

Answer 11

Fixed price lump sum –
Quantum Merit –
Competitive tendering and valuation -

Question 12

Q12 What are the advantages and/or disadvantages of the different fee calculation methods?

Answer 12

Fixed price lump sum –
Quantum Merit –
Competitive tendering and valuation – 
Advantages – Lowest price
Disadvantages – Price can be misleading