Procurement and Contracting in the Repair of Uxbridge Water PLCs Flood Relief Sewer - Coursework Example

Procurement and Contracting In The Repair of Uxbridge Water PLC’s Flood Relief Sewer No. Procurement and Contracting In The Repair of Uxbridge Water PLC’s Flood Relief Sewer Procurement and contracting are extremely critical components of any construction project. The success of construction projects is dependent on the way the procurements were made, and contracts awarded. A good procurement strategy guarantees stakeholders that they will get value for their money. On the other hand, good contracting is necessary to ensure that projects are implemented according to expectations; these include quality, timeliness, and satisfaction. This article provides guidance on how Uxbridge Water PLC, a water and sewerage company should handle its procurement and contracting obligations as it seeks to repair an old flood-relief sewer line. Assumptions 1. Uxbridge Water PLC is a public company 2. Brunel University is a public institution Uxbridge Water PLC, hereafter referred to as UW, is a public company; hence, it is obligated to follow government approved procurement and contracting procedures. There are a number of factors that need to be considered in this case; i. The sewer line runs directly under Brunel University’s main campus. Uxbridge Water PLC must, therefore, involve the university in the project. This will be necessary to ensure that the development does not obstruct the university’s undertakings. It will also help the firm to avoid any legal challenges; the university could sue the company for trespassing, environmental degradation, or noise pollution if it is not involved in the project. ii. The lining technology that the company intends to apply for the repairs. iii. The period over which the project is to be undertaken. iv. The amount of work to be done, in this case, the length involved. v. The desires that need to be satisfied, including quality assurance and compliance with government regulations. Procurement The project will involve the procurement of construction material, equipment, and personnel. In addition, there may be other trivial resources required that will have to be obtained. The project has been pitted to cost £1 million; this is quite a large amount of public money; hence, it is crucial for UW to be able to account for every single cent of it. There are a number of procurement strategies that UW could opt to use. This section of this document provides an assessment of these strategies, making recommendations on their suitability for the project. a) Traditional Procurement If adopted, this model will have UW carry out all the necessary assessments and preparations for the project before inviting contractors to tender for it. This includes making designs of how the new lining will be implemented. This procurement plan will give Uxbridge Water PLC control over vital aspects such as quality, costs, and specification. This is brought about by the fact that the company will determine what the contractor does by coming up with the designs. However, the strategy leaves all responsibility for risks at the hands of the client; hence, UW should be prepared to bear any discrepancies that arise due to its designs and specifications. Despite the various advantages, this method will present to Uxbridge Water PLC there is some uncertainty over its implementation; the contractor is not consulted during the design process and yet their input is extremely critical to the success of such projects. b) Design and Build This strategy, unlike the traditional one, transfers all responsibilities for design and construction to the contractor. UW will have the responsibility of providing its requirements and preliminary design to the contractor, who will then take over the design, make improvements and adjustments to it, and finally implement it. This method has a number of advantages including: i. Risk is transferred from UW to the contractor ii. Uxbridge Water PLC achieves cost certainty right from the commencement of the project since the contractor is in charge of everything and at a fixed cost. Just like the traditional method, design and build also has its disadvantages: i. UW will lose control over costs and quality as it transfers the project to the contractor. This could turn out to be risky in case the contractor comes up with inferior designs or uses substandard materials, equipment, or construction principles. ii. The contractor has control over any changes that UW would wish to make to the specifications; he can either accept or reject the proposals, and in case he accepts them, UW should be willing to pay for the expenses associated with alterations. This strategy can be immensely rewarding if UW determines all its requirements at the onset of the project. This will eliminate the need to make changes in the course of the project. The company could also seek to retain the services of the Quantity Surveyor to help them monitor the costs of the project. c) Management Contracting This case is appropriate where the client’s main concern is time of delivery and quality control. The designing and construction run concurrently; meaning that the contractor takes a short time to begin his work. The contractor studies the design and breaks it down into sections. He then signs contracts to work on sections whose designs are complete. UW will be able to modify designs as the need arises, as long as they do not affect the sections that have already been worked on. Advantages that Management Contracting Presents to UW i. It will save the company time because design and construction can run concurrently. ii. UW can comfortably make a number of changes to the design There are, however, a few setbacks associated this method: i. The cost of the project can only be computed towards the end of the project, posing the risk of surpassing the £1 million limit. ii. UW will retain control of the design; hence, the company will be responsible for taking care of all risks. Whereas this method presents a good avenue through which UW could address the challenge of beating the set deadline, there is a significant risk of overspending. d) Construction Management Just like in management contacting, Chambers (2009) states that there is an overlap between construction and design in construction management. A construction manager is appointed to oversee the construction process. Using the design team’s input; the manager will define and oversee work packages. Individual contracts for the packages will then be entered into between UW and successful career contractors. UW will, therefore, retain some control over the project by managing the individual contractors. Advantages of Construction Management i. Once again, UW will retain control of the design; hence, put it in a good position to deliver quality work. ii. The time-to-delivery can be shortened by running the design and implementation phases concurrently. Challenges linked to Construction Management i. UW will have to deal directly with the individual package contractors despite the fact that it will have hired a construction manager. This means that UW will bear all risks; no risk is transferred to the contractor. ii. The project cost cannot be determined until the final stages. This is risky since the company’s budget only allows it to spend £1 million on the project. Considering the circumstances, it would be prudent for UW to go the Design and Build way. The company should prepare its requirements and specifications to avoid any last minute changes. This will ensure that it completes the project in time, and also within the £1 million limit. Contracting After deciding on the procurement procedure, UW PLC needs to identify a suitable contracting strategy for the project. The contract that UW chooses will depend on the procurement approach it chooses to use in the project. The Joint Contracts Tribunal, JCT provides different kinds of contracts to choose from; UW can select any of them, provided that it helps the company to meet its goals. The following are contracting techniques that demonstrate relevance to UW’s case: a) Lump sum contracting In lump sum contracting, the construction cost is fixed; hence its other name, fixed fee contract. It is typically used in situations where the requirements of the project have already been defined and specified such as in design and build procurement. b) Unit Price Contract This contract is dependent on the prices of the individual units that constitute the project. The overall project cost is, therefore, a summation of all the quantities needed to complete the project. The contract is also suitable where all units required can be identified, even if the exact number of each unit is unknown. UW can use this contracting method with any of the procurement methods discussed above. The company’s designers should identify all the units required in conjunction with the contractor. This data can, thereafter, be utilized in the setting of contractual terms and conditions for the project. Uxbridge Water PLC should conduct thorough assessments of the project, determine the requirements and specifications, set quality standards, and come up with appropriate designs for the project. These will be particularly helpful in deciding the procurement and contracting mechanisms to use. After settling on the procurement and contracting procedures, UW should follow the government approved tendering procedures to award contracts. The process should be above board; transparent, fair, and financially sound. List of References Chambers, A., 2009. Hudsons Building and Engineering Contracts. 12th ed. London: Sweet & Maxwell. Read More