The Village Hall -The Selected Procurement Route - Assignment Example

The Village Hall Name Institution Date Task 1 Procurement Routes Procurement is the entire procedure for acquiring goods as well as services from external sources. It involves making the decision of the acquisition strategy for the products and services by way of reviewing the requirements of the employer and attitude to risk. Such requirements include quality, design responsibility and time (RICS 2013, p.1). A procurement route enables the correct selection of a suitable construction contract. Bury Port Community Council requires an acquisition route that will cater for the refurbishment of the village hall. They need an acquisition route that provides for the new design requirements for extending the construction to have a youth club, computer facility, and small library. The selected route should provide adequately for the costs and time of the building project. In this case, the committee would like to add stage lighting when finances are available after completing the major construction work. There are various procurement routes that the committee at Bury Port Community can choose to implement their proposed construction project. They include traditional, design and build, construction contracting and management contracting. Traditional Design The traditional procurement route involves a completion before the starting of the tendering process. The client has full control of the quality, cost, and specification of the project. However, it takes a longer time to complete the project design. The principal/client retains the risks of design conception as well as any unforeseeable conditions including mistakes and omissions in the design (Gould 2005, p.5). The client may also not benefit from the input of the contractor after completing the design. The contractor also shares come risks, but the greatest are taken by the principal/client and the success of the contractor as well as the Design Team. The traditional procurement route is suitable for the employer to ensure the maintenance of the quality and specification control. There is cost certainty when accepting the tender. However, this procurement route is not suitable for the client since one bears the greatest risk and ensures cost control during the building project works (Advanced Procurement for Universities and Colleges 2009 p.9). The responsibility for design and production of the project are separate in the traditional procurement route. It utilizes a lump sum method of allocating costs and expenses for the project. After appointment by the client, the contractor appoints the professional consultants. The financial risk assumed by the contractor extends to the construction of the project as per the clients design for the agreed sum and period of the contract. The administration of the building contract is undertaken by the architect, project manager on the behalf of the client/employer. Projects that take the fixed (lump sum) usually have a contract that is developed based on a fixed price lump-sum (RICs 2013, p.4). The lump-sum is the amount the employer/client pays the contractor to carry out the construction activities described in the contract. However, the contract has a possibility of altering when particular circumstances occur. It allows for fluctuation clauses for claiming increased costs of material and labor. It is an indication that the traditional final contract may not be the fixed price lump-sum as stated in the contract. Design and Build Procurement Route It involves the procuring based on design and build whereby the contractor takes the entire responsibility for designing and constructing the project. A client will select this procurement route to ensure the risk of whole design and construction project lies on the contractor. The responsibility of the contractor will depend on the terms and conditions during the making of the building contract (RICs 2013, p.5). The D&B procurement route requires the principal to appoint the contractor based on a single construction contract. Here, the two parties agree on a fixed price lump-sum availed by the client to the contractor to perform the design and construction work. The contractor appoints the professional team including the structural engineer, the architect, and the buildings services engineer (Gould 2005, p.7). The contractor also appoints the sub-contractors to fill in the construction roles. The contractor takes the risk of the project design and construction as per the sum and contract period of the contract agreement. The contractor can use various D&B approaches in executing the project. Here, the contractor can interpret the needs of the client and proceed with the project until its completion. Other situations require the contractor to receive the specifications for the project design and construction from the employer. The contractor then completes the project design using a proposed design team involved in the project. The contractor then assumes the design and construction responsibility for the project (Gould 2005, p.8). Construction Management It is a procurement route that involves the client employing a design team/professional consultants as well as a construction manager for managing, programming, facilitating collaboration and coordinating the design and construction activities at a fee (RICs 2013, p.5). The professional consultants undertake the designing of the project. The manager makes arrangement for the employer to appoint trade contractors with whom to enter into trade contracts that are later administered by the construction manager. The project manager is responsible to the principal in providing the efficient performance of the construction management services. However, the manager does not have the duty of the design and construction of the project. Such tasks are carried out by the trade contractors and the professional consultants (Gould 2005, p.12). The construction management procurement route offers several advantages and disadvantages to the client. It has the advantage of reducing the time take for the building. However, the disadvantages are many compared to the benefits. The Construction management procurement route increases the chances of overlapping of the design and construction and the CM approach. There is no certainty of the price until the time of letting the design and construction through the trade packages. The client must be involved with every step of development. The CM is not a suitable procurement route for project owners without experience or have insufficient internal resources (RICs 2013, p.6). Management Contracting A management contracting procurement route is one where the client engages a management contractor to take part at the beginning of the project at an early stage. The management contractor contributes to the design expertise and managing the building construction. The MC does not undertake the construction work, and his work is only managing the project for a fee. The fee is an addition to the construction costs by the managing contractor (Advanced Procurement for Universities and Colleges 2009, p.6). The MC takes the duty of employing and paying workers for the contract to undertake the actual construction work. Management contracting is different from construction management because it involves sub-contracting all the project works. Here, the client and trade contractors enter into separate trade contracts directly. Engaged directly by the employer, the professional consultants take the role of designing the project even though the works contractors can perform some of the isolated parts of the design (Advanced Procurement for Universities and Colleges 2009, p.7). The MC has a direct responsibility to the employer for failing to manage the contract or breach of the management contract. He is also responsible for the violation of works contract to the extent of recovering damages from works contractors. The management contracting procurement route does not involve a fixed price lump-sum contract. The MC gets a prime cost for the work performed as per the management contract. The MC gains an additional fee for managing the contract. The fee can be lump-sum of a percentage of the prime cost. Here, the contract between the MC and the employer is a prime cost contract or a cost reimbursement contract (RICS 2013, p.7). The Selected Procurement Route The traditional (lump-sum) procurement route is most suitable for adoption by the Bury Port Community Council committee in constructing the project. The reason is that the committee specifications on the design and construction of the project work suit a fixed price lump sum for execution. The committee will have control of the costs and design specifications. After appointing the contractor, the council will pay a lump-sum and leave the contractor to take the duty of selecting the professional consultants and carrying out the construction works. Type of Contract The procurement route is based on a traditional (lump-sum) contracting. The best type of contract for the procurement route is a JCT contract that accommodates construction works like remodeling and refurbishments of buildings such as leisure facilities like the village hall. JCT contracts have different types of standard form construction contract applicable for the traditional lump-sum contracting. In this case, the appropriate contract for the construction works at Bury Port Community is the NEC3 standard form of a construction contract. In this type of contract, the employer and the client enters into an original construction contract but allows for flexibility clauses to select one of the pricing options such as lump-sum and target cost. It has different provisions to deal with the matters of delay, limitation of liability, key performance indicators and partial completion (Advanced Procurement for Universities and Colleges 2009, p.14). Bury Port Community Council wants to refurbish the village hall and add several new sections to the building. An original contract between the client and the contractor that allows for various clauses to accommodate pricing options is most applicable. The committee wants to use the collected amount to renovate and extend the building for a youth club, small library, and computer facility. In case, money is found, they need to add stage lighting. Therefore, a contract that allows for pricing options is highly suitable for this construction project. In this scenario, the NEC3 Engineering and Construction Contract Option B: Priced contract with bill of quantities applies to the JCT traditional contracting procurement route. Task 2 In the JCT Contracts, the traditional contracting requires an agreement with provisions for performing the necessary works. The case of Bury Port Community Council to take actions for reducing noise requires including the additional contract requirements to the original contract. Using the original construction agreement, the employer will provide the contractor with the changes that required in the design as extra works for execution. The principal will give the contractor the drawings with the bill of quantities. It will help in defining the extra works to be carried out and the contract sum to cater for the additional works for the project. Specification or work schedules will also be availed to define adequately the scope as well as the quality of work and degree of complexity (Dunn 2012, p.9). The NEC3 Engineering and Construction Contract Option B: Priced contract with bill of quantities, gives the contractor activity schedules with the changes activities of the accepted plan. The employer presents the revised activity program to the project manager for acceptance. Assessments for change in prices are then conducted and recommendations made for the compensation of those events. Therefore, at the end, the contractor payment will be done according to the completed activities. A priced contract with activity schedule will be done to provide the required project specifications and costs for the construction project (Watermeyer 2013, p.2). References Advanced Procurement for Universities and Colleges, 2009, Guide to Procuring Construction Projects, Available from: < http://www.apuc-scot.ac.uk/docs/Guide%20to%20Procuring%20Construction%20Projects%2029-6-11.pdf> Dunn, M, 2012, JCT Contracts: An Overview, Rex Procter and Partners, Available from: < https://www.architecture.com/RIBA/Assets/Files/Part3docs/April/Spring%20Lecture%20Notes%20UK/JCTcontractoverview-MichaelDunn.pdf> Gould, N, 2005, Standard forms: JCT 2005, NEC3 and the Virtual Contract, Fenwick Elliot, Available from: < http://www.fenwickelliott.com/files/nick_gould_-_standard_forms_jct_2005_nec3_and_the_virtual_contract_matrics_paper.indd_.pdf> RICS, 2013, Construction contracts for use with the most commonly adopted UK procurement routes, RICS draft guidance note - Appropriate contract selection (1st edition). RICS, 2013, Procurement, Tendering and Contract Selection, RICS draft guidance note - Appropriate contract selection (1st edition), Available from: < https://consultations.rics.org/consult.ti/appropriatecontractselection/viewCompoundDoc?docid=5228692&sessionid=&voteid=&partId=5230292> Watermeyer, R, 2013, Activity Schedules in the NEC3 Engineering and Construction Contract, Infrastructure Options, Briefing Note NEC3#2. Read More