Contractual Procedures & Procurement for Construction & Built Environment : Report
Added on 2020-07-23
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Contractual Procedures & Procurement forthe Construction & the Built Environment
Table of ContentsINTRODUCTION.......................................................................................................................................1PART 1 GENERAL CONTRACT ADMINISTRATION...........................................................................14.1 Explaining the implications of being ahead of or behind schedule for completion............................14.2 Comparing the project costs regarding pre-contract, tender and final accounting stage.....................34.3 Evaluating contractual measures or provisions to ensure contractor’s work compliance with quality requirements............................................................................................................................................45.1 Analyze and describe current contractual agreements for nominated, named & other type of subcontractors..........................................................................................................................................55.2 Evaluate the types of contractual arrangements used with suppliers..................................................6CONCLUSION...........................................................................................................................................7REFERENCES............................................................................................................................................8
INTRODUCTIONHong Kong Construction sector has gained a well reputation in the economy by rapidconstruction of high-quality apartments, buildings and commercial buildings. According to therecent economical report, it earned a gross value of HK 4.2 $ million (Building and constructionindustry in Hong Kong, 2016). The constructors are using modern techniques i.e. reclamation,design & build and other methods. The industry classified construction activities into threecategories i.e. commercial, residential and industrial. Build Project Construction Private Limitedis an experienced general contractor in HK who called tenders for the proposed constructionproject of a hi-tech commercial building in Central. The report here aims at analyzing thelegalities, procurement process, techniques & roles and responsibilities of the parties engaged incontractual procedure. The report lay emphasizes upon addressing pre and post contractadministration issues for the completion of proposed building construction under GeneralConditions of Contract for Building Works (GCC), 1999. PART 1 GENERAL CONTRACT ADMINISTRATION4.1 Explaining the implications of being ahead of or behind schedule for completionThe fundamental principle of Earned Value Management (EVM) is that the value of workcompleted must be exactly equal to the budgeted amount (Fleming and Koppelman, 2016)Earned value schedule variance analysis identifies that whether a project is ahead of or behindthe schedule for the completion purpose. Schedule variance (SV) compares and analyzes thedifference between work completed with the planned or proposed schedule (Wang and et.al.,2016). It is computed by subtracting the earned value with the planned value of the project byBuild Project, can be stated as follows:SV = EV – PVHere, positive variances reflects that project is ahead of schedule means if Build Projectexceeds the earned value of the project by the proposed or planned value then it tells that theconstruction work of hi-tech commercial building is ahead of its designed schedule (Tsang andet.al., 2017). Alternatively, completion of work before the actual date targeted or decided1
indicates ahead of program. In contrast to this, if the planned value is above the earned value ofthe construction work completed then it showcase that project is behind of schedule, also calleddelay with the negative SV. Being a contractor, it seems essential for the Build Project to monitor and track theschedule variances so as to ensure on-time project delivering. For instance, if a project is plannedto be completed within a year at a cost of HK$900,000 and within a month, it is expected toexecute and finish 15% work. After a month, project manager completed 10% work, then SV canbe computed as follows:SV = EV – PV= ($900,000*10%) – ($900,000*15%)= $90,000 - $135,000= -$45,000 (Behind of schedule)Let us assume 20% work completedSV = ($900,000*20%) – ($900,000*15%)= $180,000 - $135,000= $45,000 (Ahead of schedule)For the proposed work, ahead of schedule is good that showcase that Build Project hadcompleted greater quantum of work in comparison to the expected or planned. However, on theother side, at the same time, it is essential to look at the cost variance (CV) so as to make it surethat the completed construction activities did not overrun the budget (Lipke, 2017). Conversely,behind of schedule is mainly caused by the contractor’s default, disruption from the employerand others. In the stated case scenario, delay in site hand-over by 2 month, lack of supply ofrequisite quantity of material, delayed completion of glazing work to curtain wall and inclementweather are the reasons for behind the schedule. Therefore, project manager has to make plansand rationalized corrective decisions so as to bring it back on the track and assure thatconstructing work is going in line with the planned schedule (Lipke, 2017). According to HKSAR GCC 1999, being a contractor, Build Project may increase the rateof progress by extending working hours at site, increasing resource availability & altering the2
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