Recommended Procurement Method
Management and Recommendations
This report was requested by Director of Campus Development Department of the University of Worthington due to a construction of a new student amenity building
The purpose of this report was to advice on the selection of procurement method for the construction and the management of risks during the construction and comment upon the appointment of consultants and contractors.
The traditional contractual arrangement is a well-known procurement method. This is the most commonly used method of procurement. It is well definite on time such as the certainty of completion date. It is also suited with high quality project.
The appointments of a wide range of professional consultants can provide a proper design and management services to a client. In addition to consultants, contractors and sub-contractors also play important roles which are containing detailed knowledge of specific construction technologies for fabrication.
Having discussed about general contracting and its appointment, it is recommended that the general contracting would be the most suitable route due to its good control on time, cost and quality. In addition, consultants, such as architect, structural and building services engineer, quantity surveyor, etc., would be incorporated in the design team due to their professional identities. A main contractor and several specialized sub-contractors would be included in the production team due to their high productivity and reliability.
The report is prepared for advising a suitable procurement route for the University of Worthington for the construction of a new student amenity building formed part of an integrated campus development plan.
The main aims of the report are to suggest procurement method and explain the reason why. This report also contributes to foresee and resolve the risks client would come across during the construction period.
Subsequently, this report suggests some sorts of consultants and contractors for the University of Worthington to appoint. Then, this report explains why those consultants and contractors should be integral in the project team and how they should be chosen in order to achieve the success of construction.
It has been assumed that no design team has been appointed at this stage. An outline budget estimate based on schedule of areas has been prepared. The design team will be appointed directly by the client for developing the entire tender document including design drawings and specification prior to going out for tender.
At this stage, the design was not completed. The University of Worthington has only received an outline budget estimate for the construction cost based on a schedule of areas.
As a higher education image in the city, the University of Worthington wants a high quality amenity building
In order to construct a high quality amenity building, the University of Worthington assures the quality at all cost. However, the University of Worthington has adopted the previous outline budget estimate.
The University of Worthington has only expressed its concern on completing the construction on timely completion. Therefore, there is no rush for early completion.
This section identifies the different strategies and their advantages and disadvantages.
There are mainly focuses on three procurement paths used in the construction industry, each having its own variations: traditional, design and build and project management.
Consultant-led Contracts - Traditional Contractual Arrangements
It is the whole process of selecting the contractor to carry out the work (tendering), and adopting some suitable approach to determine the price or in some cases the pricing method for the work
Contractor-led Contracts - Design and build
An arrangement where the Employer employs a Contractor to design and build the project. All the design work, management and construction are carried out by the Contractor.
Client-led Contracts - Project management
Project management is defined as ‘the overall planning, control and coordination of a project from inception to completion on time, within cost and to the required quality standards’. It is therefore designed to take care of the client’s interest from a user or a developer’s point of view.
Recommended Procurement Method
Traditional method is established very well and all parties involved the project including the client are understands the role of each party.
Under traditional contractual arrangement, there are different types of traditional contract. They are mainly divided into lump sum contracts, measurement contracts and cost reimbursement contracts. In our consideration, lump sum contracts with measured bills of quantities will be recommended and explained in detail.
Undoubtedly, lump sum contracts with measured bills of quantities have all the prerequisites to succeed in construction. The contractor agreed to construct the works for an agreed sum of money based on a set of contract documents which involves firm bills of quantities and complete set of design drawings that describe the proposed building fully. Those documents and information are provided to all interested construction organizations which could be selected by the client to price the work in the form of competition with others. The competitiveness minimizes the potential awarded contract sum, thus, it is a favor in client’s view.
By considering the aesthetic requirement raised from client, this method allows for sub-contract packages in order to ensure the quality of design input from a specialist sub-contractor interior fitting out sub-contractor. Therefore, client’s brand image can be obtained.
Furthermore, the design is sufficiently advanced to prepare the bills of quantities and with readily formulated drawings. Since there is no rush for early completion, the design team has enough time to review the design until perfect and predict the completion date on an accurate basis. Clearly, the chosen contractor only focuses on finishing all the works before completion date and obtaining the quality of work stated in the contract document. Thus, it provides good quality and time control throughout the construction process.
As every tenderer receives identical information at tender stage, therefore, each of them will be pricing on the same basis by using identical quantities and descriptions. This method is effective in order to avoiding exceptional low prices from a contractor, who may has different point of views on his own method of measurement or own assumptions.
Uniformed bills of quantities could reduce the analysis time due to easy comparison. By shortening the time for contract award, the most valuable contractor could be awarded in lower cost.
A very important issue of construction contracting is risk management. There are full of risks whatever at pre-contract or post-contract stage.
In this project, the building works are complex in design and the traditional procurement method means the separation of design and construction Due to the lack of input from the construction industry at the design stage, the potential ability of contraction shall be weakened to contractor. The contractor may issue to alter the method statement related the design. Thus, the client may be exposed to claims related to design and constructability issues. In this part, the client could reduce his risk by transferring it to the contractor. It is because the unit rates of relevant work items used in the bills provide a basis for the valuation of variations to the design and will have a good cost control.
On the other hand, although the drawings and specifications have all the information for constructing a building, they are not the reliance to ensure high quality building but upon the contractor’s instruction on site.
However, traditional method is a documented control system that acts upon the tender documents and bills of quantities as evidence of quality. Client could state his perspective or standard definition of quality in the tender document clearly. Therefore, client has the final legal recourse when the contractor fails to do that.
Management and Recommendations
The University of Worthington ensure that the main contractor and all the sub-contractors are backed up by financial guarantees and bonds as further substantiations for their competence of carrying out the work.
The consultant teams should be careful in the use of variations clauses to improve the building design.
It is important to use a contractor or sub-contractor on a basis other than lowest tender such as a proven track record for good work to ensure no defects after handover.
The issue of regular financial report is an effective method for controlling the cost. By updating the financial statement frequently, the estimated final cost could be predicted at any time during construction period.
After investigating the traditional procurement method, it was found that traditional method is the most suitable way to be adopted in this project and would meet all the demands of the client.
It is important to consider the potential problems become real and emerge from the inception of the construction to the completion of the construction. Clearly, the risks of using traditional method have been taken into account. The solutions were also discussed.
By appointing different professional parties for different purposes, those consultants and contractor with a wide range of skills could assist to construct the new building which is in favor of client’s interest.
Apart from the appointment of different parties, it is also important to choose suitable parties based on a number of criteria by using two stage selective tendering. Technical and commercial factors were some criteria which have been taken into account.
Therefore, this strategy is very suitable for clients who wish to minimize their exposure to the risks of over spend delays or defects.
Ukur Bahan (2007) Contractual Arrangements and Documentation. Available at
[Accessed 14 December 2010]
Comparative Analysis of Design & Build and the TraditionalProcurement methods in Lagos, Nigeria
University of Reading BSc C:\Users\CK Kong\Pictures\studymatlogo.gif
Assignment 1 Module Code: F207CP
Prepare a separate report explaining in detail to the employer what his role in the procurement process will be.
Appointments of Consultants
Appointments of Specialist Contractors and Supplier