Contractual Procedures and Procurement 5 CONTRACTUAL PROCEDUDURES AND PROCUREMENT FOR CONSTRUCTION AND THE BUILT ENVIRONMENT Name Course Professor University City/state
Added on 2021-04-21
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Contractual Procedures and Procurement 1CONTRACTUAL PROCEDURES AND PROCUREMENT FOR CONSTRUCTION ANDTHE BUILT ENVIRONMENTNameCourseProfessorUniversityCity/stateDate
Contractual Procedures and Procurement 2Table of Contents1.Task 1: Client Needs..........................................................................................................................41.1.Task 1.1: Client needs for construction projects.....................................................................41.1.1.Functionality........................................................................................................................51.1.2.Safety...................................................................................................................................51.1.3.Quality.................................................................................................................................51.1.4.Speed or completion time....................................................................................................51.1.5.Cost......................................................................................................................................51.1.6.Risks....................................................................................................................................51.1.7.Aesthetics.............................................................................................................................61.1.8.Sustainability.......................................................................................................................61.1.9.Regulation (policies)............................................................................................................61.1.10.Others..................................................................................................................................61.2.Task 1.2: Procurement Arrangements.....................................................................................61.2.1.Traditional procurement method..........................................................................................61.2.2.Design and build..................................................................................................................71.2.3.Public private partnership (PPP)..........................................................................................81.3.Task 1.3: Contractual arrangements for common forms of contract....................................91.3.1.Unit price contract...............................................................................................................91.3.2.Lump sum contract..............................................................................................................91.3.3.Cost plus contract...............................................................................................................101.3.4.Incentive contracts.............................................................................................................101.3.5.Percentage of construction contracts..................................................................................101.3.6.Others................................................................................................................................102.Task 2: Business Expansion to Procurement Services..................................................................102.1.Task 2.1: Current trends in procurement practice...............................................................102.1.1.Management contracting....................................................................................................102.1.2.Construction management..................................................................................................112.1.3.Partnering and alliancing...................................................................................................112.1.4.Private public partnership..................................................................................................112.2.Task 2.2: Current issues associated with procurement and contractual procedures.........112.2.1.Climate change..................................................................................................................112.2.2.Sustainability.....................................................................................................................11
Contractual Procedures and Procurement 32.2.3.Technology........................................................................................................................122.2.4.Lean construction...............................................................................................................122.2.5.Building information modelling.........................................................................................122.2.6.Ethics.................................................................................................................................122.2.7.Risk management...............................................................................................................122.2.8.Transparency......................................................................................................................122.2.9.Cooperation and collaboration...........................................................................................122.2.10.Big data and AI..................................................................................................................132.2.11.Innovation..........................................................................................................................132.3.Task 2.3: Advantages and disadvantages of international procurement methods..............132.3.1.Joint venture.......................................................................................................................132.3.2.Strategic Alliancing...........................................................................................................143.Task 3: Proposal for Quick Completion of Steel Project..............................................................153.1.Task 3.1: How to sequence design and construction in terms of procurement...................153.2.Task 3.2: Roles and responsibilities of the parties involved in a typical procurement contract.................................................................................................................................................173.2.1.Client.................................................................................................................................173.2.2.Architect............................................................................................................................173.2.3.Engineers...........................................................................................................................173.2.4.Specialist consultants.........................................................................................................183.2.5.Quantity surveyor (QS)......................................................................................................183.2.6.Contractor..........................................................................................................................183.2.7.Subcontractors...................................................................................................................183.2.8.Suppliers............................................................................................................................183.2.9.Legal counsel.....................................................................................................................183.3.Task 3.3: Purpose and activities of organizations involved in procurement of construction and built environment sector..............................................................................................................194.Task 4: Explanation of Financial Report.......................................................................................204.1.Task 4.1: Implications of being ahead of or behind completion schedule...........................204.1.1.Implications of being ahead of completion schedule..........................................................204.1.2.Implications of being behind completion schedule............................................................214.2.Task 4.2: Comparing project costs at different stages..........................................................214.2.1.Pre-contract costs...............................................................................................................214.2.2.Tender costs.......................................................................................................................22
Contractual Procedures and Procurement 44.2.3.Final account costs.............................................................................................................224.3.Task 4.3: Contractual measures to ensure quality compliance............................................225.Task 5: Contractual Arrangement with Subcontractors and Suppliers......................................235.1.Task 5.1: Contractual arrangements used with subcontractors...........................................235.1.1.Nominated contractors.......................................................................................................235.1.2.Named contractors.............................................................................................................245.1.3.Domestic subcontractors....................................................................................................245.2.Task 5.2: Types of contractual arrangements used with suppliers......................................24References................................................................................................................................................25
Contractual Procedures and Procurement 51.Task 1: Client Needs1.1.Task 1.1: Client needs for construction projectsClients are very important stakeholders in any construction project because they are the ones who come up with the idea, specifications and finances of the project. A construction project is usually considered to have failed if clients’ needs are not met. In this context, needs are basicallydesires or requirements of the client in a particular project. The needs of clients are usually the same regardless of whether they are public or private clients. All other stakeholders (including contractors, consultants and suppliers) should make efforts to ensure that the needs of clients are met. Some of these needs include:1.1.1.FunctionalityFunctionality is a very crucial need not only to the client but also to the final users of the structure[CITATION Sot14 \l 1033 ]. Clients need buildings and structures that can perform the intended function effectively. This need is usually attained during design stage of the project where the dimensions, layout and orientation of the structure are decided[ CITATION Who16 \l 1033]. The need can also be met by ensuring that the structure is designed and built in accordance with required performance standards.1.1.2.SafetyThis is another essential need of clients for construction projects in both private and public sectors. Clients want structures built to be safe for use throughout their lifetime. This need is attained during design (create proper designs), construction (use suitable materials, equipment and personnel) and operation (use it for the intended purpose) stages. One way of achieving it is by ensuring that all stages of the project are done in accordance with relevant engineering and building codes and standards.1.1.3.QualityAll clients want the project to be delivered to the highest quality level possible. This is important in getting value for the money used in the project. Quality is needed in all stages of theproject, from start to finish. It can be achieved through use of good quality materials, advanced construction equipment and tools, qualified personnel, good workmanship and close supervision.1.1.4.Speed or completion timeClients always want the project to be completed within the stipulated period or earlier than planned. Those in construction industry understand that failure to complete a project with anticipated time has cost implications. This need has to be met in design and construction stages of the project – complete the designs on time and finish construction activities in accordance with the program. Other strategies to help complete the project on time include planning for foreseeable delay conditions (such as bad weather), preventing or minimizing possible delays and proper planning for material supply and task allocation. 1.1.5.CostAll clients, regardless of whether from public or private sector, want their projects to be completed within stipulated budget. They want the contractor to provide accurate estimates at thestart of the project (not underestimation or overestimation) and ensure that all expenditures are monitored properly and minimized where possible. After design and construction, clients also want the structure to be easy and cost effective to operate and maintain (consume less water and energy). This need is important in all stages of the project.
Contractual Procedures and Procurement 61.1.6.Risks Clients also need all possible risks to be minimized at every stage of the project. They want involved stakeholders to identify, analyze and prevent or minimize all risks. They also want every stakeholder to take full responsibility of risks allocated to them[ CITATION Bar111 \l 1033 ]. These risks include technical, financial, environmental, logistical or socio-political risks[ CITATION Men172 \l 1033 ]. The risks are very costly in construction projects hence must be minimized or avoided[ CITATION ElK17 \l 1033 ].1.1.7.AestheticsClients also want a structure that is memorable and appealing to the public[ CITATION Gil16 \l 1033 ] because aesthetics has a great impact on final users’ perception[ CITATION Wan08 \l 1033 ]; [CITATION Yar16 \l 1033 ]. This need is important in design and construction stages. Aesthetics relate to building aspects such as shape, color, material usage and composition[ CITATION Jen16 \l 1033 ]. It has become very critical in today’s construction projects than before[ CITATION Hoo16 \l 1033 ].1.1.8.Sustainability Climate change has become a global problem and clients are very keen on the issue of sustainability[ CITATION Des10 \l 1033 ], which aims at improving resource efficiency of the project[ CITATION Aka12 \l 1033 ]. As a result of this, clients want their projects to be sustainable. They want the project to serve the intended function effectively for longer, and to be easy and cost effective to use/operate and maintain. This need is in all stages of the project. 1.1.9.Regulation (policies)Clients also want the project to be completed in accordance with relevant construction regulations or policies. This requires stakeholders to ensure that they deliver the project within applicable legal framework[ CITATION Hel171 \l 1033 ]. This need is important especially in designand construction stages of the project.1.1.10.Others There are also other needs of clients for construction projects including, but not limited to: effective communication, collaboration, working relationships, flexibility, maximization of benefits (such as tax reliefs) and accountability.1.2.Task 1.2: Procurement ArrangementsThere are different types of procurement methods used in construction industry. Each of these methods has advantages/strengths and disadvantages/weaknesses. The three main procurement methods are:1.2.1.Traditional procurement methodThis method is also known as general contracting or design bid build (DBB) method. It is theoldest and widely used procurement method in construction industry. In this method, the client appoints a design team comprising of an architect, designer, engineers and quantity surveyor to prepare the details/scope or tender of the project (including design proposals and final drawings).After preparing the tender, tenderers or contractors are invited to bid. The client, together with her team, uses particular criteria to select the most suitable bidder or contractor to execute the project. The contractor is usually chosen through competitive tendering. Once the tender is awarded, the contractor becomes responsible for executing it under the supervision of the client’s
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