Business Procurement and Contractual Practice

Business procurement and contractual
practice
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Table of Contents
Question 1........................................................................................................................................3
As senior manager advise him procurement method and types of contracts...............................3
Question 2........................................................................................................................................4
Discuss four types of civil tort in construction phase of project and remedies...........................4
Question 3........................................................................................................................................5
Critically evaluate provision in three forms of contract and how they are handled....................5
Question 4........................................................................................................................................6
a) Discuss golden principles of FIDIC........................................................................................6
b) Evaluate three factors for selection of types of contracts........................................................7
Question 5........................................................................................................................................7
a) Discuss principles of NEC contracts.......................................................................................7
b) Discuss contribution of Donoghue and Stevenson to tort of negligence................................7
REFERENCES................................................................................................................................9
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Question 1
As senior manager advise him procurement method and types of contracts
Procurement refers to obtaining of goods, services, etc from third party or external vendors. It is
essential to select a proper method so that materials can be occupied at low cost and quality is
also maintained. Besides that, there are various other factors as well which needs to be take into
consideration such as risk, quantity, etc. so, basically procurement method depends on type of
contract. Similarly, as per case study of Mr. khan there are different types of methods available..
they are as follows (ALABI, 2018 )
Open tender – as name shows this method allows companies to openly bid for tender. But there
is intense competition in it. the bidding is done on cost and on low cost company bid is selected.
Restricted tender- it is also known as selective tendering method as here, there are only few
number of companies that are allowed to bid for tender. Thus, the bidding is done on basis of
cost fixed by service provides.
Request for proposal- it is a type of method in which company review proposal sent by client
and after analyzing it company give response. Usually, it is time consuming process as there
are various stages to be covered in it. at first stage only financial info is sent.
Request for quotation – the method is simple as there are limited suppliers and their quotation
are selected. Thus, after reviewing it on basis of cost and terms and conditions quotation is
finalized.
Thus, in Mr Khan case, open tendering method is suitable. This is because as he is not
having any knowledge in it. here, contractor can be allowed to bid for tender. So, by analyzing
the lowest cost tender mr khan can select it. besides that, he can engage with contractor and
design interior of building. With that it will be easy for him to proceed in systematic way
(Baranovsky, Tkachenko, and Zelenitsa, 2020). Moreover, he can do planning with supplier as
this is a large project so cost can vary. Along with it, there are different types of contracts as
well which needs to be selected in construction project. The contract must be suitable as per
client needs. Thus they are mentioned below (4 common types of construction contracts, 2016,)
Fix price- here, contract of overall project is fixed. But there are some benefit and penalty
included in it as well. generally, in this scope of project is fixed and there is high risk for
builder. The terms and conditions are specified clearly.
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Cost plus- in this method cost of project consists of direct and indirect cost. The project scope is
not fixed.
Unit price – it is a type of method in which unit price of project is set while bidding. So, when
project scope is changed the prices are modified as well.
Time and material contract- the method is suitable when project is small. In this owner and
contractor agree of indirect and direct cost to be incurred on daily rate.
So, in case study of Mr khan unit price contract method is suitable. This is because it
will enable in fixing price of each house. Also, if khan wants to construct only 3- 4 house then
project scope is modified. So, on basis of that unit price can be changed. Furthermore, it will be
useful for him as he will get overview about how much each house will cost. Alongside, there
is chances of risk is for both owner and contractor. So, in this way it becomes easy to manage
risk and completing project on time (Israel, and Curkovic, 2020).
Question 2
Discuss four types of civil tort in construction phase of project and remedies
In a construction project there are various kind of issues which care faced. This highly
impact on project. Similarly, owner may face tort issue that can led to rise in cost of project.
Basically, tort refers to causing harm or injury to others. Thus, in this case injured person may
sue other party in legal way to cause damage. So, there are plaintiff and defendant in tort case.
The law state that whether any liability needs to be paid by party for causing injury or not. In
addition, it also state what type of compensation is to be paid. There are 4 element in it that are
duty, breach of duty, cause and injury. However, civil tort is common in construction. Besides
that, there are various types of tort which can occur. They are specified as below: (Types of tort,
2019)
Negligence- this is a type off tort in which there is careless damage done. The omission is
made due to which a person guide on some consideration which regulate human conduct. In this
there is breach of duty done by owner. Due to carelessness damage is done and this leads to
impact on project as well. hence, there is breach of duty of care in it (Mchopa, 2019 ).
Nuisance- in this there is unlawful interfere of land with another person. This may include
certain rights with neighbor land. It is known as nuisance. This is categorize into 3 that is
public, private and statutory. Private nuisance occurs when individual claims to occupy his or
her. For that there must be substantial proof. It will restrict in interfere of land. Generally, it
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