Methods of procurement and types of contract

BUSINESS
PROCUREMENT AND
CONTRACTUAL
PRACTICE
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Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1..................................................................................................................................3
Methods of procurement and types of contract...........................................................................3
QUESTION 2..................................................................................................................................5
Law of torts..................................................................................................................................5
QUESTION 3..................................................................................................................................6
Provision of contractual delays....................................................................................................6
QUESTION 4..................................................................................................................................7
Golden principles of FIDIC.........................................................................................................7
Evaluate the three factors for the contracts..................................................................................8
QUESTION 5..................................................................................................................................8
Multi-tiered dispute resolution mechanisms................................................................................8
Principles of NEC contracts.........................................................................................................9
Contribution of Donoghue and Stevenson to the tort of negligence...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
In accordance with the construction business as well as for large commercial projects,
procurement tends to be an essential process of collecting a specific products and services. In
fact, it is a way of allocating an effective design and contractual responsibility for the given
projects. Sometimes, the contractors used to organize the entire works as well as at the same time
take entire responsibility as a key professional consultant. However, it entirely relies on the
experience, market knowledge and resources that are used by the project manager during the
construction period (Thai, 2017). Therefore, this project intended to provide specific information
regarding the types of procurement methods along with the type of contracts needed to be use by
the Jim Akis Khan during the time of developing the houses. Moreover, discussion regarding
various torts of legislation that are involve in this process are also been mentioned effectively.
Apart from this, provision of handling delays, FIDIC, NEC principles are some highlight of this
report.
QUESTION 1
Methods of procurement and types of contract
According to the given case scenario, it has been seen that Mr. Jim Akis Khan was
looking to develop one of his land for the construction of 4units of 3-bedrooms terraced houses.
However, they don’t have any specific ideas about the procurement of their property. It has been
analysed that procurement is considered as one of the valuable factor in the overall success of the
contraction projects. It a key throughout the entire project during both design and construction
stages as well as it depends solely on the experience and other vital resources that are going to be
used by the project managers (Naoum and Egbu, 2016). Being a senior legal advisor, it is crucial
to guide Jim Akis on the most reliable procurement methods along with the type of contract
which is more suitable and sure for the Khan project. Here are some essential methods:
General contracting: It happens to be the traditional procurement method which is used
by the contractors to build the design that has been provided by Jim Akis khan. The contractor is
only liable for construction and not for the structure. The price of often depend on a bill of
quantities provided by the employer that is quantifies, so far as possible, every factors of the
work is considered effectively. However, this method of contracting is most popular as well as
favors most employers along with the contractors to gain a lot of experience.
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Justification: This particular method tends to offer huge advantage to Jim Akis khan of having
an independent professional in the role of the contract management monitoring of their project.
Further, the route offers certain price certainty in case the design has been fully scoped out
subsequent to the construction. However, it would also give Akis khan huge control of the design
by controlling the design team.
Design and build: It comes in different form, but is typified through the contractors by
taking both design and construction liability. In fact, with the proper integration of D&B
contracting the contractors tends to develop the design and start constructing the building based
on a set of requirement which was provided by Jim Akis khan (Chasey, Maddex and Bansal,
2012). However, this procurement methods is highly common and shares the benefits that is
more suitable to the Akis Khan along with the contractors that have opportunity to gain good
experience from this project.
Justification: By using this particular method, Jim Akis Khan can get a single point of role by
the contractors and capability to increase the construction work on the right track. However, it
would eliminate that adversarial condition, increase project delivery and develop a strong team
motivation because of single point of responsibility. Therefore, this method is more suitable for
the Khan to begin the construction of their houses.
Types of contract
It has been seen that the building process tends to be legal bound with the certain legal
obligation that can provide proper security to the Jim Akis Khan. Therefore, they need to get
involved in the certain contract so that chances of mistake and capital losses could be controlled.
Here are some contracts that are more suitable:
Lump sum contract: It is known as a traditional means of procuring construction as well
as still considered as most general form of construction contract. In this, a single lump sum cost
for all the activities is been agreed before the construction starts (Edwards, Irani and Sharif,
2012). It can assist Jim Akis Khan to deal with the uncertainty because the actual price which is
involved in the project can easily be analysed unless the changes are been made to it. Apart from
this, it carry certain allowances those are useful in reducing the risks to the contractors, because
in case the cost incurred maximum the risk can only be dealt by buyer.
Cost-plus contract: These type of contractor are generally related to the contractors who
gets paid for their expenses plus and decided profit involve in the construction project. It is
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