Construction Management Procurement Route

Cinnamon Grand is the privately owned large hotel string in UK, they feature comfortable accommodation over the UK and are focused on preserving their wealthy history therefore they are incredibly passionate about the outlook with their hotel buildings. A recent period of bad weather and severe storms has resulted in three Cinnamon Grand hotels being significantly ruined in the southern east of the united kingdom. All damaged hotel complexes are positioned in prime locations around adjustments. The hotel management has decided to reconstruct the three hotels to a better quality than they were before with budget of Ј120 million in two phases.

I, Pattusamy Subramanian appointed as a primary consultant by the client (cinnamon Grand) for these projects, as a part of my role is to get ready a written report to your client to guide on the most appropriate procurement way for the aforementioned project.

Purpose of Procurement

A Person or Company commissioning structure projects will require an end product that will fulfill their needs as to form a quality and which they can taken ownership of the agreed time that they will obtain for a competitive price.

It is important that procurement decisions are justifiable based on recorded facts and research. Soundly established decision involve a thorough exploration of a variety of potential delivery models and procurement solutions to determine the strategy best suited to each job, by methodically checking out all available choices, jobs owners can ensure that opportunities for reaching increased value-for-money.

Client's needs

Client is very concern about the building features as they may have strategy of implementing neglected landmark complexes and bring them back again to their former impressive look. Consistent with client insurance plan on architectural value and appearance of the complexes, client will make investments a great deal of time, cost and work to ensure that reconstruction is definitely sensitive and will not bargain the dignity of the structures and services provided. Your client planned to carry out the reconstruction works in two stages as follow;

Phase 1: Requires the following areas to be paid by 28th February 2015 and able to start out work on 1st March 2014 (12months) and customer Organized to re-opening on 1st Apr 2015.

Roofs

Guest rooms

Restaurant

Swimming pool

Phase 2: the intension to improve opportunities for health and well-being of the visitors through new facilities. The next facilities will be recently designed under this phase.

Dance studios

Health and Fitness centre

Conference and assembly rooms

There are few tips need to consider from your client profile as follows;

Client very experienced in restoration of neglected Traditions building.

Client didn't have an in-house executive to be positively involved in this task design and structure.

Client needs to steer clear of the Project time and cost risks and looking for affordability.

Analysis of Procurement path options

There are four main key ways of proven procurement routes available, each of those involving different kinds of contract, contractual romance, information flow, jobs and duties with in the team. The Four key procurement routes are;

Traditional

Non-traditional

Design and Build

Construction Management

Management Contracting

4. 1 Traditional Procurement route

In the original approach, the workplace accepts that design work will generally divide from development, consultants are appointed for design and cost control, and the contractor is accountable for undertaking the works. This responsibility extends to all workmanship and materials, and includes all work by subcontractors and suppliers. The contractor is usually appointed by competitive tendering on complete information, but may if required be appointed previously by negotiation on the basis of partial on notional information.

Advantages

Accountability and Competitive equity as all tendering companies bid on a single basis.

Design lead and your client can have a primary influence which can aid a high degree of functionality and improve the quality in the overall design.

Price certainty at the honor of the deal.

Variations (changes) to the agreement are relatively easy to set up and deal with.

Traditional procurement route is very familiar on the market.

Disadvantages

Process time can take longer to create the full agreement paperwork. Tenders documents from an imperfect design can be produced but can lead to less cost and time certainty and may lead to disputes.

Overall project length may be longer than other procurement methods as the strategy is sequential and building can not be commenced before the completion of the design.

No input into the task design by the company because they are not appointed through the design level.

Risks

Cost risk is low due to lump sum contract.

Time risk is medium anticipated to fixed contract date however the same time company has right to claim expansion if time.

Quality/design risk is low as a lot of the works designed by consultant who's working for customer directly.

Suitability

Traditional procurement route is not suited to this project anticipated to virtually no time certainty.

4. 2 Design and Build Procurement route

Design and Build procurement service provider accepts responsibility for a few or all the design. There must be express reference to this in the deal, and the degree of design responsibility should always be set out as clearly as you can. Some design and build varieties limit the design liability of the builder to the normal professional work to exercise acceptable care and attention and skill. 3rd party consultants employed by the builder are therefore under a liability no higher than normal. In the event the contractor does not have in-house designers, which is usually the circumstance, and the company uses external consultants, their personal information should be set up before the tender is accepted.

The client's requirements might be mentioned briefly and simply, perhaps bit more than a site plan and agenda of accommodation. Alternatively, they may be a doc of several hundred webpages with precise requirements. The contractors type might be limited to taking a plan design given by your client and growing details and creation information. It is however better to specify in conditions of performance requirement alternatively than to prescribe in details, because this leaves the duty for design and selection with the builder.

With a design and build method, it's possible ensure a quicker start site, and the close integration of design and build can result in more effective development. Time, however, is needed by the client's advisor to prepare a satisfactory group of requirements, and time is needed to compare and measure the techniques from the rivalling tenderers. Once a deal is authorized, any changes by your client can demonstrate costly.

Advantages

Client has to offer with one company and reduces the necessity to commit resources and a chance to contracting designers and companies separately.

Price certainty is obtained before building commences as client's requirements are specified and changes aren't introduced.

Overlap of design and structure activities can reduce task time and improved constructability anticipated to contractors insight in to the design.

Disadvantages

Difficulties can be experienced by clients in preparing an satisfactory and sufficiently complete brief.

Difficulty in evaluating bids since each design changes, project program will vary between bidders, and prices for the project will be different for each design.

Client is required to commit to a concept design at an early on stage, often prior to the precise designs are complete and design liability is limited to the typical contracts that exist.

Risks

Cost risk is low anticipated to lump sum contract.

Time risk is low credited to builder fix the time and be focused on it.

Quality/design risk is high as the builder control the design limitation, the risks related to the capacity of the company to perform the work based on the look.

Suitability

Design and Build Procurement is most suitable for this task as it's giving time and cost certainty and company is likely for the all the risks.

4. 3 Structure Management Procurement route

In development management path, the construction administrator engaged to advise the workplace on fees basis. The employer directly require in the agreements with various specialist companies throughout the job life. The specilised companies are immediate communicating with workplace to get clarification and instruction as this process is faster than the other procurement methods.

The construction manager will be co-coordinating the look and development programs and ensures that the specialist deal deals were considered properly. Through these preparations, the employer reaches substantial risk, however the final responsibility for these issues may be hold on to the workplace, with respect to the form of agreement used.

Advantages

Potential time cost savings in overall tasks as the look and construction activities are overlapped.

Increased competition for development work credited to work presentation.

Improved constructability through constructor input into the design.

Roles, hazards and responsibilities are clear to all parties

Flexibility for changes in design.

Disadvantages

Price certainty is not achieved before final works packages have been let.

Informed and proactive client is necessary.

Client must definitely provide good quality brief to the look team as the design will not be complete until resources have been committed to the project.

Close control required promptly and information.

Client loses direct control of design quality which is influenced by the constructor.

Risks

Cost risk is medium as it is undiscovered until the last package has been let.

Time risk is medium as the responsible distributed by several trade companies works directly under client.

Quality/design risk is low as the hyperlink between consumer, designers and companies are close.

Suitability

Construction management procurement is not suited to this project credited to cost-free and time certainty.

4. 4 Management Contracting Procurement route

Management Contracting and Structure Management procurement routes are similar. The sole key difference is; In Management Contracts, your client getting into a contract arrangement with management company who, subsequently, contracts with the individual trade contractors. Your client pays the price of the works deals as well as a management payment for the management services. In Engineering Management, your client engaged construction manager on payment basis to set up trade contractors and monitor them and the average person trade contractors immediate contract agreement with the client.

The advantages, down sides and risks are similar as above explained in the building management.

Suitability

Management contracting procurement is not suited to this project anticipated to cost-free and time certainty.

Recommendation on appropriate procurement route

After appraise through the various ways of procurement routes, taking into consideration the client requirements, consumer resources, job characteristics, job budget, job quality, delivery time and risk factors, I would like to recommend the Design and Build procurement way can be an appropriate way for this project in this circumstances. The reason why to reject the other procurement routes are explained in detail above and the summery as follow;

Traditional procurement way is not suitable for this project anticipated to no time certainty.

Construction management and Management contracting procurement aren't well suited for this project anticipated to no cost and time certainty.

Task 2

Option A

Discuss the responsibility of Alexander builder to the employer for the excess cost that the workplace was required to incur because of being necessary to employ a more costly tenderer to carry out the construction task.

Scenario given in relevant to Alexander builder liability

The Alexander contractors returned the tender file to the employer with conditions that it's open for acceptance for six weeks. Upon concluding the soft review, the company establishes that the Alexander company is its preferred tenderer. However, prior to the employer can write to the service provider to simply accept its offer, the Alexander company had written to the workplace stating that it is withdrawing its sensitive.

Resolution

General guidelines in the contracts - There is no contract liability between the tenderer and the workplace until the letter of offer is accepted, in the mean time the tenderer may withdraw the sensitive anytime prior to the issuance of notice of acceptance. It demonstrates the Alexander builder may not be prone to the employer at the same time if the conditions of tendering point out any clause like tenderer not able to withdraw till stipulated time, then the Alexander contractor may be responsibility for breach of the sensitive conditions.

If there's a clause explained in the conditions of tender documents then both party have to appeal to court to stay disputes on the lose and injuries, judge will examine the truth with the data of facts and documents and use regulations clauses to make a decision.

Reference:

Support because of this belief result from the leading textbooks on contract regulation, such as Chitty on deals. In the 20 Seventh edition of this famous work, published in 1994, it is stated:

"The general rule is that an offer may be revoked anytime before it is accepted. The guideline applies even though the offeror has promised to keep the offer open for a specified time for such a promises is unsupported by consideration"

In support of the statement the case of Routledge v. Offer (1824) 4 Bing 653 is quoted where the defendant offered to buy a house presenting the plaintiff six weeks to provide a definite answer. It had been performed that the defendant was absolve to withdraw at any time before popularity event although six week period has not expired.

The consequence of this that in which a tendering period is very short tenderer sometimes hurry to submit a tender apparently safe in the knowledge they can check their figures once the sensitive is submitted, if errors are located, withdraw their tender anytime prior to approval.

Discuss the clerks of works capacity to issue a route as detailed in the given situation and its implications on the loss and bills incurred by the company.

Scenario given in highly relevant to clerk of works power

The contractor about to start to construct the pile caps they realized that the concrete quantities in the BOQ are wrong as the sizes of the pile caps had wrongly been moved from the design drawing in to the BOQ. The service provider re-calculated the quantities according to the pulling and found that the concrete work require 250 cubic meters rather than 160cubic meters shown in the BOQ. The contractor informed the Contract Administrator of the discrepancy on paper and copied to Clerk of Work. The Clerk of Work issued a Direction to construct the pile caps according to the drawing and ignore the amounts shown in BOQ. The Clerk of Works remarked that the payment would be made on physical dimension of the work.

Resolution

Clerk of Works is employed by the client and known as Site Inspectors, Site Supervisors or Building Quality Officials, monitor the complete site works for their client. The primary responsibility is to make certain that work is completed to the client's benchmarks, specification and agenda. In most cases, the specifications are ready by Architects or Engineer employed by the client. Clerk of works make sure that the correct materials and workmanship are used and that your client is given quality work and affordability. Clerk of works are either on site constantly or make regular visits, they need to be vigilant in their inspections, use agreement administrator approved drawings and written instructions as a reference point and everything works must meet up with the Authorities requirements and client standards.

In Scenario stated that the service provider did enlightened the deal administrator about the pile cap concrete volume discrepancies and Clerk of work issue directions to proceed the works according to drawing. The builder has also highlighted that must change the concrete curing method anticipated to upsurge in concrete volume level and limited company recourses as per original program. The deal administrator issued training approving this arrangement. The task was accomplished within four times as per agreement administrator approval with an increase of bills additional concrete volumes, incurred additional manpower and loss of time (Two times) credited to changes in concrete healing method. Hence, under the JCT conditions of contract, the company has complied with the agreement administrator instructions, which fall under modifications in relevant matters and the company allowed to assert losing and bills from the employer.

Reference:

(JCT Standard Building Agreement with Quantities 2005 Edition Revision 2 2009, Clause 3. 4)

Clerk of works are certified to issue directions to the builder. The course shall not valid unless confirmed by the contract administrator and concern instructions to the contractor within next 2days, the time frame of such verification shall be deemed the date teaching is given.

(JCT Standard Building Agreement with Volumes 2005 Edition Revision 2 2009, Clause 4. 23)

In the execution of this contract the service provider incurs or will probably incur direct reduction and expense for which he would be reimbursed by the payment under apt to be materially afflicted by any of the relevant things (See clause 4. 24).

Detail the possible promises with respect to the given scenario, the primary facts that may be contained in the promises and the contractual provisions open to substantiate the boasts according to the 'JCT Standard Building Contract with Quantities 2005 Model(JCT SBS05) Revision 2 2009. '

Scenario given in highly relevant to possible claims

Discrepancies in pile cap concrete quantities as per the design drawings, the work require 250 cubic meters instead of 160cubic meters shown in the BOQ.

Changes in concrete pile cap cement curing method due to the pile cap size and concrete volume increased set alongside the original program.

The first floor collapsed during healing of concrete. It really is partially anticipated to structural instability of the existing load bearing wall space. Contract administrator decided to replace the harmed ground flooring and repair the walls to carter for structural steadiness.

The company on several occasions has didn't pay interim obligations to the builder by the final date arranged in the contract.

Resolution

According to the JCT condition of deals (clauses 2. 14, 2. 15, 2. 16, 3. 14 & 4. 24), the company have notified the agreement administrator on the discrepancies in concrete amount and copied clerk of work. The Clerk of work given direction and eventually contract administrator released instruction to move forward. In this case the contractor has complied with the agreement administrator teaching and permitted to claim for the additional materials, flower, man power that used to complete the works. The additional works to be measure by standard approach to measurement and determine using routine of rates stipulated in the contracts.

References

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