Construction And Building Procurement

This report highlights the theme of insolvency, capture unethical practices by subcontractors that contribute to it well and legal measures in place to curb its prevalence. It also presents a critical analysis of UAVs, providing a review of its applications and existing gaps that are worthy of research. Additionally, the report presents the EMV assessment of a hospital construction project in Queensland and assesses the interested contractors in the public procurement tender to establish the “Best Value” contractor deemed to have the lowest “selection score”.

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CONSTRUCTION AND BUILDING PROCUREMENT
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Part 1
Question 2 of Part 1: (I) Insolvency of Sub-Contractor at Critical Phases of a Project
The construction industry has some of the most sophisticated processes that prerequisite
all partners to combine their efforts in order to facilitate the success of a project. Notably,
insolvency is one of the crucial aspects that have a profound impact on the outcome of a project
as it spreads across the entire supply and delivery chain. It is believed to be a major contributor
to the significant decline in the success of most construction projects. Though the market plays a
role, the risk of insolvency is heightened by other factors that are often under-looked. Thus, the
purpose of this report is to highlight the theme of insolvency, capture unethical practices by sub-
contractors that contribute to it well and legal measures in place to curb its prevalence.
Moreover, it seeks to sensitize on the importance of well-coordinated joint-effort by all involved
parties.
The methodological approach is desk-based qualitative research and relies on relevant
publications which give a detailed explanation of the sequential activities and the coordination
between all entities involved in the contract. Accordingly, the structure of the report utilizes a
“Bow-Tie” approach, which is one of the most widely used responsibility management systems
that relate the variant elements to their environments. The scope is bound by four principals:
identifying, assessing, controlling and recovering. These aspects strive to address all the
requirements of every process in order to identify instances of insolvency. Consequently, the
report posits that the general structure of the construction sector during inception to the
actualization of a project is highly dependent on the balance of power in contractual agreements.
This is often complicated by the high number of contractors and subcontractors.

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Essentially, the report notes the role of each entity in ensuring delivery of consistently
structurally sound projects that adhere to functionality and serviceability requirements.
Insolvency can translate to profound financial losses for the venture, as it represents the interest
of an appreciable number of players. For instance, the Government of Australia indicates the
difference in the sub-contractual relationships amongst the sub-contractors considered to be the
primary workers on site (2015, p. 11-20). Further, the pyramidal structure of the construction
industry does not have a defined flow network which contributes to insolvency. Either way,
insolvency can directly lead to a cash crisis such that there is not much money flowing to meet
the project’s requirements. This is often aggravated by poor record keeping which is a primary
contributor of insolvency in the execution of a project.
As such, companies with high borrowing always find themselves in a financial
breakdown as they try to stay afloat, eventually resorting to liquidation. Accordingly, it is
important to establish the role of the sub-contractor in instances of insolvency to legally
determine who will bear damages and to what degree. Modern development in existing research
gaps has created an operative framework bound by the law which controls construction activities
and forms a negotiating structure in handling disputes that arise on site. In summary, the
increased awareness on the roles of each player as outlined by the contract has made it possible
to identify, assess, control recover from potential issues hindering efficacy in delivery as well as
the growth of the construction sector. Additionally, the development of legislation governing the
theme of insolvency has improved the construction sector appreciably.
Question 2 of Part 1: (II) SWOT Report for Unmanned Aerial Vehicle (UAV)
The technological development of UAVs commonly referred to as drones have developed
from the contemporary military applications to recreational, commercial and scientific research,

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gaining access to public use. This sudden interest has been coupled with advancements that have
incorporated various features suited for the purpose of the task. Unlike other aircraft, UAVs lack
a pilot on board and are operated from a ground-based controller which relays commands to the
devices. Similarly, the devices are designed based on aerodynamic principles and can be
controlled by humans or an algorithm of computer commands. Accordingly, the purpose of the
report is to present a critical analysis of UAVs, providing a review of its applications and
existing gaps that are worthy of research. As such, the methodological approach to the task
utilizes the format of a Strength, Weakness, Opportunity, and Threat (SWOT) layout, clearly
capturing all the elements of the technology as far as its advancement is concerned.
The report utilizes prior scholarly and scientific research in the field, exploring the
existing gaps and providing solutions to challenges that face UAVs. The first strength aspect of
UAVs is that their complex design allows them to execute tasks that pose technical difficulties to
human capacity. For instance, they are highly used for surveillance activities especially in areas
that limit human reach. The design of the vehicles integrates several components that allow it to
perform advanced functions such as providing attack advantages in high-risk missions, providing
intelligence in battle, research and development of complex phenomena and logistics involved in
delivering cargo. In addition, the sensors allow the device to detect targets autonomously during
inspections which can be used to avoid collisions and for establishing assurance. UAVs also
integrate actuators which controls the revolution of motors structured into the propellers and
engines.
As indicated, the vehicles constitute cameras with a wide degree of freedom, which
ensures effective relay of video feedback. This feature has enabled the technology to be
embraced in photography works. Similarly, UAVs comprise different autopilot software with

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diverse capabilities that affect transmission. The main weakness facing the technology is the
legal framework surrounding its operation in different countries given that the technology is
relatively new. At such a technological era, many manufacturing companies are shipping drones
to different areas of the world. The issue of licensing the usage of these devices is still a
significant challenge that requires countries to embrace development while also ensuring safety.
Given that the technology is susceptible to crime use, it is essential to develop a framework of
regulations which define wrongful use which could lead to legal action.
The technology is one of the most promising research avenues, based on its general
reception and its impact in various segments. Mass production of drones has diversified into
different applications, forming the platform of developing devices whose functionality suits the
intended task. Moreover, the technology has attracted scholarly and scientific interest in recent
years, and the discipline has received extensive funding from various institutions. For instance,
the technology is widely being tested as a research mechanism in inspecting wildfires. The major
threats facing the technology is security vulnerabilities whereby the device has in the recent past
been used to stream feeds and deliver lethal payloads intended for malicious acts such as
terrorism. Additionally, the devices are subject to hacking and if severe, they may end up
providing their source codes or tools. Nonetheless, this can be improved by strengthening the
encryption of private networks.
Part 2
Question 1 of Part 2: Risk Management Report of Construction Project in Queensland
The expected monetary value (EMV) is a quantitative figure indicative of the amount of
money one can save or spend as defined by the possible outcomes of the parameter being

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investigated. Additionally, the management technique can be used as a tool for establishing the
likelihood of occurrence of different outcomes based on the risk assessment. The report presents
the EMV assessment of a hospital construction project in Queensland. The first parameter is
excavation and groundwater infiltration risks. The optimistic category indicates a probability of
0.15 possibility which will increase the cost by ten thousand dollars translating to fifteen hundred
dollars. The ‘most likely category presents a probability of 0.5 coupled with the expenditure of
eighty thousand dollars which gives an EMV of forty thousand. Lastly, the pessimistic class
indicates a probability of 0.35 and an expense of one hundred thousand dollars translating to
thirty-five thousand. Thus, the total EMV for this parameter is seventy-six thousand and five
hundred dollars.
The second parameter constitutes geotechnical risks of substructure where the first
category has a probability of 0.25 and expenses amounting to $200 thousand which translates to
fifty thousand dollars. The second category indicates a probability of 0.4 equating to $650
thousand which consequently translates to $260 thousand. Similarly, the last category has a
probability of 0.35 with expenses amounting to $900 thousand giving $315 thousand. Therefore,
the total EMV for this parameter is $625 thousand. The third parameter explores the weather-
related risks of superstructure construction. Rain is known to increase costs and the probability
that it does not rain is 0.25 translating to $100 thousand expenses. This yields twenty-five
thousand. The second category indicates the likelihood that it will rain for fifteen days is 0.45
and will result in expenses worth $200 thousand, thus relaying ninety thousand dollars. The last
category indicating a rain period of 45 days has a probability of 0.3 associated with expenses
amounting to $400,000 which gives a value of $200 thousand. The total EMP value accumulates
to $315 thousand.

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The fourth parameter is interior and exterior finishes. Category one has a probability of
0.3 and an outcome of $100 thousand contributing $30 thousand. Category two indicates a 0.3
probability of rework and changes amounting to $150,000 which gives a value of forty-five
thousand. The last category records a probability of 0.4 and a cash amount of $200 thousand
which gives the figure eighty thousand. Thus the total EMV value amounts to $155 thousand.
Labor union and related problems are the fifth parameters and the computed EMV in category
one amounts to one thousand six hundred and fifty dollars. Category two amounts to seventeen
thousand whereas the last category totals to approximately eighty-two thousand and five hundred
dollars. As such, the total computed EMV totals to approximately $102 thousand. The last
parameter is inflation on the overall project cost, subject to the central bank rates and economic
growth indicated by the provided base points in all categories.
Question 2 of Part 2: Public Sector Procurement
Accordingly, the Design-Build-Maintain (DBM) system is a form of a project delivery
mode whereby the client solicits bids from structural experts who assume the role of design,
construction of the project, its operation and maintenance schedule. In general, the delivery
technique places the entire project under one contractor responsible for developing and
maintaining the finished project. In contrast, the main contractor may engage sub-contractors but
they bear the overall responsibility of the project. Consequently, the purpose of the report is to
assess the interested contractors in the public procurement tender to establish the “Best Value”
contractor deemed to have the lowest “selection score”. Essentially, it seeks to describe the
competitive offers presented by different contractors through a series of mathematical
computations.

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As such, the methodological technique relies on the client’s “best-value” formula which
provides that the selection score of a contractor’s proposal is given by the summation of the
pricing for maintenance (PM), pricing for design and build (PDB) and “Time Value (TV)”
penalty for adjusting DB divided by the sum of technical score for maintenance (TM) and
technical score for design and build (TDB) represented by the equation: ¿. Thus, the formula
strategically assesses the six prequalified DBM contractors Alpha, Beta, Gamma, Delta, Theta
and Rho. Notably, Alpha incurs a time penalty of four days which translates to $800 thousand
and a corresponding score of 20,139.77. On the other hand, Beta translates to a score of 20,
601.41. Gamma incurs a time penalty of twenty days which translates to $4.4 million, and a
selection score of 48, 398.69.
Delta too incurs a time penalty of twenty-nine days which translates to $6.38 million and
a selection score of 60, 433.52. The proposals of both Theta and Rho are completed within the
required time thus do not face any penalty charges. Hence, their selection scores are 24, 814.356
and 19, 625 respectively. Accordingly, the report establishes that Rho is the best value DBM
contractor as they present the lowest selection score. Nonetheless, due to the closeness in
selection score between Alpha, Beta and Rho, the report considers using the “Best and Final
Offer” procedure. This approach would create a competitive environment which would be
optimum in providing an optimum cost both to the client and the contractors.

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References
Duwadi, S. (2010). Buildings and Infrastructure Series: Aging Infrastructure—Roles and
Challenges. U.S Department of Homeland Security, pp.3-9.
The government of Australia (2015). Insolvency in the Australian Construction Industry. [ebook]
Government of Australia, pp.11-20. Available at:
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/
Insolvency_construction/~/media/Committees/economics_ctte/Insolvency_construction/
b02.pdf [Accessed 30 Sep. 2018].