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Novating design team to a contractor

Content
  1. Synopsis
  2. Acknowledgements
  3. Chapter 1 - Introduction
  4. 1. 1 Benefits to Subject
  1. 1. 1. 1 Goals of Chapter One
  2. 1. 2 Rationale behind I nvestigation
  3. 1. 2. 1 Originality of Thought
  4. 1. 3 Subject Definition
  5. 1. 4 Survey Intention
  6. 1. 4. 1 Aims
  7. 1. 4. 2 Objectives
  8. 1. 4. 3 Hypothesis
  9. 1. 5 Summary of Research Methodology
  10. 1. 6 Summary of Main Conclusions
  11. 1. 7 Guide to the Report
  12. Chapter 2 - Books Review
  13. 2. 1 Introduction
  14. 2. 1. 1 Standard Aims
  15. 2. 2 Goal of This Books Review
  16. 2. 3 Material of Books Review
  17. 2. 3. 1 Description of Novation
  18. 2. 3. 2 Uses for Novation.
  19. 2. 3. 3 Substitute uses of Novation within structure.
  20. 2. 3. 4 When did novation become favored by Clients
  21. 2. 3. 5 Issues due to using Novation in structure.
  22. He continues to say that:
  23. 2. 3. 6 When is Novation Practical.
  24.  
  25. 2. 3. 7 Problems with the novation process.
  26. 2. 3. 8 The potential risks to the Service provider in the novation process
  27. 2. 4 Conclusion.
  28. Chapter 3 - Methodology
  29. 3. 1 Introduction to Methodology
  30. 3. 1. 1 Qualifications Studies
  31. 3. 1. 2 Design and Build
  32. 3. 1. 3 Novation
  33. 3. 1. 4 Interview
  34. 3. 1. 5 Questionnaire
  35. 3. 1. 6 Verification of Results
  36. 3. 3 Subject matter Selection
  37. The research study has followed the following steps taken suggested by Derek Swetnam21:
  38. Checking Feasibility
  39. 3. 4 Literature Review
  40. 3. 4. 1 Literature Review Functions.
  41. 3. 4. 2 Books Data Collection
  42. 3. 6 Limitations
  43. 3. 7 Negotiation
  44. 3. 8 Questionnaire
  45. 3. 8. 1 The Questionnaire to the Architect
  46. 3. 8. 2 Cross Reference point Questionnaire with a Rival Contracting Company
More...

Synopsis

Clients within the Building Industry choose to use the JCT Design & Build Agreement rather than other conventional procurements methods. Novation is an activity which allows Clients to oversee the first levels of design development of a job and then transfer the responsibility for the look to a Service provider after the contract has been awarded. By transferring the duty to the Service provider through novation your client takes bare minimum risk contractually while retaining an effect on project design from the original stages. This process transfers maximum risk to the Builder as he becomes in charge of all future design of a job and all earlier design completed until of a contract being awarded, this consists of any design mistakes.

Both Contractors and Designers must interact meticulously on any design and build job, but particularly if novation has occurred. For a project to be profitable and be completed on time it is essential that there surely is a good working relationship between Company and Developer.

Research to establish if the procedure of novation comes with an adverse impact on the working romantic relationship between Builder and Designer was conducted. The goals were to identify factors that may influence the working relationship of both parties and also to understand the views of both Companies and Designers about what affect novation is wearing their working romance. The targets of the research were to identify specific problems within the process of novation and recommend improvements to industry. To do this research in the form of a literature review, questionnaires and an interview with Contractors and a Creator was performed.

The report recommendations are aimed at Clients to hold more pre-contract conferences with Contractors not only Designers, and understand the conditions a Contractor uses when appointing a Developer to ensure compatibility between gatherings when in Design and Build deal together.

Acknowledgements

I would like to express appreciation to the next people and organisations because of their time, knowledge and support in helping the in the successful completion of this research project:

  • My final year Supervisor Dr Ron Craig of the Civil and Building Anatomist Dept of Loughborough College or university, for constructive criticism and direction throughout the process of developing the dissertation.
  • HBG UK Ltd for utilizing a lot of Commercial Managers', Design Co-ordinators', Legal Correspondents' and Personnel's amount of time in concluding the literature review and aiding in the data collection.
  • The Commercial Manager of the next Contracting Company questioned
  • The Architect questioned for his experience and thoughts of the procedure of novation.
  • Mr Andrew Moss for proof reading the final draft of the report and recommending possible modifications.

Chapter 1 - Introduction

1. 1 Benefits to Subject

The Design and Build form of J. C. T agreement (please see section 4. 0) has become popular with engineering Clients that utilize Contractors to construct new complexes and/or refurbish existing structures. The Author's research has shown that the percentage of contracts tendered for under a Design and Build form of J. C. T has increased over the last five years. In conjunction with this the traditional form of JCT agreement has reduced in acceptance with Clients.

In many conditions the designs which make up part of the contract between your Client and Service provider, under JCT Design and Build, are completed with a Design Team on behalf of the Client before the contract between your Client and Builder is made. To ensure that the Contractor who efficiently tenders for a project retains the look Consultant that your client employed prior to the contract being managed to get is sometimes essential for a customer to novate (please see chapter 5) the design team across to the Service provider. The purpose of this survey is to research into the problems, if any, with the process of novating a design team to a Service provider from your client and suggest solutions. This report will also fine detail the affects on the working relationship between the Contractor and the Custom, and how novation either aids or hinders the working relationship

1. 1. 1 Goals of Chapter One

  • To introduce the Dissertation subject matter area.
  • The reasons behind the research of this Dissertation.
  • To summarize the work carried out and a explanation of the items of the Dissertation.
  • Detail a proper designed hypothesis that the inspection will either show or disprove.
  • To summarize helpful information to the report, and introduce each individual chapter.
  • To fine detail the seeks of the report and the objective that must definitely be achieved to meet the aims.

1. 2 Rationale behind I nvestigation

The interest in to the exploration of "Are there always problems with novating a design team to a builder?" came about following the Author's industrial placement. While focusing on site for a Builder on a J. C. T. Design and Build contract where in fact the design team was novated it became noticeable to the writer that there were many dissimilarities of opinions between the Designers and the Contracting Company.

The primary items of controversy and disagreement between your Contractor and the look Team were the customers requirements. Inside the Author's experience there was a huge difference of view of how design changes and/or variations should be cured between your Design Team and the Service provider.

Whilst profit-driven Service provider seemed to always look for the least expensive and most affordable way of bridging any design problem; while the look Team provided the impression that these were more worried about the aesthetics of the design and the Clients design opinions as opposed to the buildability and cost.

Many design variants that were requested by the Client, or those pressured upon the Company were not always as the Builder had specified to the look Team. The Company experienced that his time was lost by the Expert not designing elements as originally specified. The working romance between the Service provider and the Custom appeared to deteriorate from the task start night out, until beyond the look completion stage.

After the Author had asked other associates within the Contracting Company about the novation of an Artist to the Contractor it became clear that the partnership between Contractor and Developer was similarly afflicted on other projects. The Author got discussions with your client of the job he was put on. YOUR CLIENT mentioned that more building work had been performed using the J. C. T. Design and Build form of agreement as this reduces the risk to the client and/or the individual funding the task.

The Author discovered that under Design and Build more risk was put on the Service provider, and this management techniques got to improve to appropriately control higher risk projects. He also realised that as more deals were being made under the look and Build form of agreement with the Designers being novated to be employed by the contractor a greater knowledge of the topic area would be beneficial to the Author in the management of Design and Build agreements.

1. 2. 1 Originality of Thought

The Author possessed discussions along with his Supervisor before commencing the research about the topic matter. A hypothesis was agreed upon that offered the Author opportunity to research parts of the process of novation in design and build contracting which have not previously been discussed in an undergraduates research project for the Supervisor. The process of novation being used in the look and build contract has recently recognition with Clients. The aim of the study is to establish if Companies and Designers have not yet fully modified to the change and advancements in the working marriage between the people must be made to ensure that they continue to be competitive and profitable.

1. 3 Subject Definition

Novation is a process in which [1]a agreement between get together A and party C is converted into a new contract between get together B and party C. This process can only be performed if all three parties concur that novation can take place.

A Deed of Novation[2] is often used to terminate a deal between parties A and B, and then create a fresh contract between parties A and C. You will find standard legal documents, bare deeds of novation, which are available as downloads from the web, for example at (www. citysolicitors. org. uk/legal_activities by 28/03/06).

A deed of novation has been used for quite some time before it became favored by Clients in the building design and build framework. It is utilized in the deal of manufacturing companies, where components made are used by other greater companies. For example, the purchase of a windscreen wiper company by a fresh owner whilst keeping the determination to an existing customer car company.

Novation has many other wider applications other than development; Porsche in their latest brochure[3] give you a novated lease for his or her new motor cars. In this case an Employee of your company (the lessee) signals a lease contract with Porsche (the lessor). A Deed of Novation, then given by Porsche, is authorized by Porsche, the Staff and the Employer. This then exchanges the duty for the repayment to the Company.

Novation is employed in a development context where in fact the romance between two get-togethers has developed over time and the intro of another or new get together is necessary. There then needs to be provision to contractually protect the existing parties in the partnership.

1. 4 Survey Intention

The intention of this report is to research how the working relationship between the Service provider and the Custom made novated to the Service provider from the Client could be increased to their shared benefit, and the advantage of the Client. However, the article may show that there surely is no improvement to be made, and that the process of novation as it presently stands is good.

1. 4. 1 Aims

  • To recognize clearly factors that may affect the relationship between the Builder and the Custom under novation
  • To find any undesirable characteristics that may cause an unhealthy working relationship between your Contractor and the Designer
  • To plainly understand the opinions of Designers and Companies that is associated with novation
  • To comprehend the attitudes of Designers and Contractors towards novation
  • To obviously understand this is of novation and the framework where it is employed within the construction industry
  • To identify any variations in behaviour between Contracting Companies towards novation under a J. C. T. Design and Build contract
  • To comprehend why Clients now prefer to use the look and Build form of contract rather than the Traditional deals they favoured to use
  • To identify why Clients within engineering novate the Design Team across to the Contractor

1. 4. 2 Objectives

  • To emphasize specific problems within the process of novation that will require improving
  • To investigate how the procedure for novation varies between deals and/or with varying Clients
  • To recognize differences between the Contractor's and Designer's thoughts and opinions of novation under the J. C. T. Design and Build Contract
  • To point out areas within development where it is necessary to make use of novation in Design and Build contracts
  • To guide the Contracting Companies of the very most economic way of owning a Design Team that has been novated with a Client
  • To identify if a Builder and Artist have an improved working romance, i. e. have a larger understanding of each others targets and needs, under a normal contract somewhat than novation under a Design and Build Contract

1. 4. 3 Hypothesis

"The working romance between Company and Developer is adversely afflicted by Novation. "

1. 5 Summary of Research Methodology

The strategy of the study for this task will take the form of the next; please start to see the methodology in section three for a detailed debate on the statement methods used:

  • A review of history and current books concerning the background of novation within the building industry.
  • An assessment of specific literature regarding the working relationship of your Contractor and Creator.
  • Discuss this is of novation within development, and where it is mostly found in the industry.
  • Design a questionnaire to distribute to a picked Service provider and a Artist.
  • Design an interview format and questions for a specific Contracting Company to answer about novation.
  • Design an interview format and questions following results of the previous interview to concern a separate questionnaire to another Contracting Company to analyse company variations.
  • Analyse results gathered in the interview to create a summary about the effect of novation in engineering.
  • Make recommendations or suggestions to the industry and Clients within the construction industry.

1. 6 Summary of Main Conclusions

The Author's completed research shows that there are ten factors that can adversely have an effect on the working marriage between a Company and a Artist under a novation agreement. The Author found through analysing an interview and questionnaires completed by two Contractors and an Architect that the reasons for novation having an adverse affect on the working romantic relationship of a Service provider and Creator were that:

  1. Enough time allowed for Builder to Sensitive is not increased
  2. The devotion of Custom to Customer remains evident after novation to the Service provider
  3. There may be usually a huge distance between your Designers hq and the project
  4. Insufficient design fees are allocated at the sensitive stage
  5. There can be an increased threat of problem in design
  6. There might have been a recently poor working relationship between your parties
  7. The Designer may be improper for the project
  8. The performance of the Developer is not constant throughout the process of concluding the design
  9. Novation is usually later or rushed from the Client
  10. There is an increased possibility of conflict between your two parties

The Author found that many of these factors were specific problems that could be related to the procedure of novation under a design and build task. Therefore, the results support the hypothesis of the study. However, additional research is necessary if the hypothesis is to be shown to be correct.

1. 7 Guide to the Report

    • Chapter One: Intro - This section presents the analysis and describes the hypothesis, target and aims of the research. It indicates the origin of the Author's desire for the subject, why the hypothesis was chosen, and details the technique that was implemented.
    • Chapter Two: Literature Review - This section examines the books research conducted by the writer. It is a study into the classification of novation, and represents where it is used within the building industry. This section details the existing view of the contractor in a novation contract.
    • Chapter Three: Strategy - This section of the report describes the methodology which was used to execute this research. It shows the way the information was collected. In addition, it includes the subject areas protected within the interview and the look of questionnaires which were employed.
    • Chapter Four: Design and Build Agreements - This section identifies the forms of J. C. T. agreement used and features the advantages and disadvantages to the Design and Build form of JCT agreement. It offers an release into Design and Build and details the variations between the Employers Requirements and Companies Proposals that are an integral feature of the Design and Build contract.
    • Chapter Five: Novation - This portion of the report represents in detail the uses of novation in just a construction context. It offers a description to the procedure of novation as used in a Design and Build situation. This chapter details the conflict of interest the Service provider and the Designers have a tendency to experience scheduled to novation. It illustrates the problems that may occur in the design, payment of design fees and the differing levels of the Consultant's performance.

 

  • Chapter 6:Analysis - This section of the report is the research of the questionnaires sent to Clients within the building industry and their Project Managers and the Designers. It analyses the interviews conducted with the contractors and extra information collected.
  • Chapter Seven: Finish - This portion of the report reveals the Author's conclusions based upon the conclusions within the analysis chapter of the record. It suggests solutions to the aims and objectives lay out in the release, criticises the hypothesis surrounding the report was established and highlights the possibility for further research.

 

Chapter 2 - Books Review

2. 1 Introduction

The literature review is a comprehensive analysis of all relevant articles, literature and publications to this research project.

Derek Swetnam[4] identifies the literature review as a report;

That is central to the dissertation and in all styles of work it includes a number of functions:

  • It demonstrates you have read greatly around your selected topic
  • It demonstrates your critical understanding of the theory
  • It acknowledges that work of others
  • It informs and modifies your own research

The Books review in this chapter is broken down into eight sub-headings. The chapter discusses the description of novation, then continues on to describe where novation is employed today both in and beyond your building industry. The literature review describes the procedure of a Custom being novated to a Service provider. The final section of this chapter discusses and analyses in what way the literature which is researched is relevant to the Author's research study.

2. 1. 1 Standard Aims

  • To breakdown the sources of the problem outlined in the hypothesis into logical stages.
  • To acquire and analyse earlier research and literature to further check out the subject area of this project.
  • To research any previously made tips.
  • Make recommendations which were concluded from a detailed books review.

2. 2 Goal of This Books Review

  • What's the information of Novation and in what context was it used before in structure?
  • Where is Novation used today beyond construction and what's its main purpose?
  • How many other uses are there of Novation within building other than a Custom being novated to a Service provider?
  • When have Novation of any Designer to Service provider become popular with Clients in the development industry?
  • Have there been issues with the novation of a Design team to a Contractor in the past?
  • When is Novation sensible in construction deals?
  • What exactly are the risks to the Service provider in the novation process?

2. 3 Material of Books Review

2. 3. 1 Description of Novation

David Janssens[5] explained that:

Occasionally, an Company may stipulate that the successful Company is to engage a number of of the Employer's consultants to complete the look and detailing of the job in the post-contract level. Such consultants have employment with Companies under 'novation contracts', i. e. a 'novation' arrangement is a new agreement in substitution of a previous agreement between your Expert and the Workplace.

Novation prevails when an agreement or agreement between two functions is likely to be broken and a third party enters to have the area the agreed or deal role of the get together which is leaving the contract or deal.

Novation can also exist when a alternative party enters into an contract or contract without the other party leaving.

Jeremy Hackett[6] explained that:

"Novation" is a legal idea, officially providing for the re-employment of any Expert by the Builder, within the contract agreement between the Employer and Service provider. Should the Company merely choose to re-employ the same those who have recently sat the other side of the interview stand from himself that would not be novation, but its effect would be virtually identical.

2. 3. 2 Uses for Novation.

Novation is not only used within the construction industry, the use of novation in rules is much more commonly used in the investing of processing companies. In such a context a novation arrangement maybe used by lawyers of the manufacturing company which intends to market to buyer whilst still retaining the same business customers. In this situation a customer of the business enterprise for sale would be novated across to the new buyer of the business enterprise, this means that the customer can always source whichever item the new buyer produces.

Ann Arbor[7] Stated that:

A medical center in Tx is taking electronic digital commerce beyond purchase orders and usage reports to adoption of digital agreement management. The earlier hospitals are able to sign up to take part in new contracts, the earlier they could access contract costs. Using the improved form management program, materials professionals can submit varieties online where suppliers can approve them, also online.

In this example a hospital in Texas is using the arrangement of novation over the internet to join up for new deals considerably faster than it could previously.

This has benefited materials managers the most because they are able to source cheaper or more quality materials from differing suppliers and transfer the contract they have with one distributor to another using novation.

2. 3. 3 Substitute uses of Novation within structure.

The section above discusses how different types of novation are put in place in areas apart from the construction industry. However, within the realms of structure there are a lot more uses for the novation contract to be utilized. The use of novation within structure has only been popular in the past decade roughly, the main reason for this is actually the benefits of the JCT Design and Build Contract which made the novation of Developer to the Builder easier for the Client.

Before the intro of Design and Build Agreement novation was within the same format it is available today in other sectors as stated above. If through the construction process a Client was unable to fund any further necessary works and there was a inclined buyer to stand in for the Client, it can be in the interest of the joining party to keep to use the existing Contractor. Easy and simple and least time consuming way to do this would be using the Novation contract.

The second manner in which novation took place in a engineering context prior to the introduction of the look and Build Agreement was if the Builder was suffering from financial issues or the relationship between himself and the Client has been irreparably afflicted in someway. If a situation like this happened it was beneficial for the Client to take on board a fresh Contractor by way of a novation arrangement. This removed the need for the remaining works to be re-tendered, and the chance that the Client would have to pay an excess for the works to be completed.

2. 3. 4 When did novation become favored by Clients

Jim Smith[8] stated that:

The choice of a procurement method is just about the single most important decision your client makes, other than the decision to generate. The various procurement methods can be defined, as described by Masterman (2002), under these three particular categories:

  • Separated and co-operative.
  • Integrated.
  • Management orientated.

In the previous few years and specifically within the past ten years the procurement options for contractors have been moving away from the more traditional deals as identified above.

The change to a procurement method which uses the next and third categories above has essentially been Client-driven; the key reason for this would be that the Contractor must accept a high level of risk if he is to tender efficiently for a job. As more design development has been shifted across to the Service provider it is becoming easier and less expensive for the Client to shift higher levels of risk to the Companies. THE LOOK and Build deal and all its modifications have expanded significantly to accommodate a Client's needs in recent times.

The Royal Institution of Chartered Surveyors (RICS) [9] in 2000 stated that:

Design and build and its variations have expanded considerably in the last decade. They have increased dramatically in the 1990s going from a 10 percent share during the 1980s up to a 35 percent talk about of the development procurement market, with management contracting declining to a ten percent share.

Chan stated[10] that:

21% of private Clients in the UK use the look and Build system, of which 42% commonly use Design-Novate and Create for their assignments. Design-Novate and Build has also been widely implemented in Australia and Hong Kong.

David Jaggar[11] Stated that:

The major features of design and build are that all the potential risks, both financial and period for conclusion, are used in the look and build service provider, with the client only working with one company, so eliminating the complexities and frustrations of dealing with a range of separate organisations. The procedure also overcomes the condition of the separation of design and building, so conserving overall time and allowing the design to reflect better buildability in the development solution.

The argument against this is that a Builder may be going for a higher ratio of higher risk projects. However, as a customer is off loading a lot more risk than that which was traditionally not possible before they are able to fund much more projects and indulge a lot more designers. The result of this would be that the Builder has more work to tender for and a higher chance of winning tasks as more tenders will be prepared.

2. 3. 5 Issues due to using Novation in structure.

Jim Smith[12] stated that:

There is extensive debate regarding the merits and demerits of the strategy which is fair to state that lots of design pros were unsatisfied about the approach, not least because there was a reduction in their own influence and independence. However, a valid view submit, which doubtlessly design and build suffered with in the 1980s, was that the grade of the ultimate building was often substandard and the role of design was devalued, as the look and build companies "shaped" the look to suit their unique methods of construction. More recent views from clients mentioned above indicate that these were satisfied with the quality of their completed design build jobs.

The Design Supervisor of a Contracting Company performs a critical role in the development of design to determine a agreement value for a task. The role will involve having the ability to balance cost and quality and time constraints in a framework. This is an essential skill for all those Design Managers or Task Co-ordinators. The Design Manager will continue to work carefully with the Commercial Administrator at the sensitive stage of a Design and Build agreement when novation of the Design team is being used by your client. It is crucial that both professionals work together to reduce the quantity of design and financial risk the service provider must complete the deal period if the sensitive submission is to be successful.

Allinson[13] expresses that:

The advancements in the structure industry, the carrying on specialisation of professions and the increasing application of alternate procurement methods have all contributed to the gap between design and management, however they also have emphasised the need for a design professional with management and scientific skills. The management of the process should ensure an effective and deliverable project

When Design and Build contracts first became extensively utilized by Clients in the 1990's Contractors tended to control the building works just as they handled traditional contracts. Here a Project Manager was in charge of the introduction of the engineering and concluding the exceptional design issues as well as resolving any building sites day-to-day issues. Project Managers were recognized by lots of other managers such as Services Engineers, Site Management and Quantity Surveyors.

Jim Smith[14] says that:

However, a single reporting source on all areas of design and cost hasn't always benefited your client, contractor or the project. Jobs have been organised in an exceedingly "smooth" composition with numerous lines of responsibility confirming right to the project director. The larger assignments would have over half a dozen separate factions straight beneath the job manager, like the above stated professionals, structure coordinators, documentation professionals, tendering coordinators, deal administration, project administration and job health basic safety and treatment (OHS&R). Used, this composition has became an inefficient and inadequate form of management on many assignments. . .

He continues to say that:

With the dominance of design and build deals, the management of the look and development of tasks is vital to allow successful procurement and fast monitoring. However, its weakness is in the management of design and cost during design development and the lack of knowledge of how to accomplish good design, to the expected quality and within budget parameters. The weakness is frustrated by the belief of the design cost control function having the single concentrate on "cost cutting" rather than on value execution.

The recommendations which a Service provider should follow before getting into an contract with a potential Consumer are talked about further in this literature review. A Contractor will have in house guidelines demonstrating how to interview and gain information from Designers to decide if it's worth investing the time, effort and expense in a task that if triumphed in, would lead to a greater financial loss.

If this technique is not conducted properly or if any high risk items are forgotten to be able to get a task a Contractor could find himself in courtroom so that they can redeem his financial deficits triggered by poor design by the Consultants.

2. 3. 6 When is Novation Practical.

Thomas and Skitmore[15] Declare that:

Design, Novate and Build contracts are more appropriate when:

  • The time for conclusion of the job is 'of the essence'
  • The budget for the job is fixed and further resources of funding are very limited
  • The project will involve special design and specialized requirements.

Procuring a construction job and building it within the time established, to come in on budget to ensure quality and also to decrease the risk will be the prime targets of your client. Despite increasing quality standards and the entire complexity of new building jobs, less time and money is being allocated to the design, planning and bidding stages of a job.

Novation of a design team is practical when your client is able to contract a contractor into recognizing more risk than he'd feel normally comfortable taking. Recent market conditions, low interest rates, fierce competition within Contracting and the benefits of the JCT Design and Build contract giving Clients the opportunity to novate Designers has allowed Clients to use novation with their advantage.

It is neither possible nor sensible for Employers to impose such a condition in all varieties of Design-Build, as the table, by Janssens[16] shows:

Novation of Consultants and different varieties of Design-Build.

Variety of Design-Build Comment

Develop and Build Most popular variety where novation is applied.

Design-Build Novation often recommended by Workplace, but

(Single-Stage Sensitive) Companies should take care.

Design-Build By classification novation is extremely hard.

(Two-Stage Sensitive)

(Design completition)

Negotiated Design-Build Possible, however in this case it would usually be considered a 'named'

& Design & Manage. Specialist, for the reason that the company would be improbable to

have already got into into an agreement with the Consultant.

Turnkey Novation wouldn't normally normally be applicable

 

2. 3. 7 Problems with the novation process.

Before a Builder accepts the imposition of an novated design team he should go through an operation of examining that both he and the Designers to be novated will be able to interact productively from the tendering aspect to the conclusion of the design and the conclusion of the engineering process. If the Contractor feels that the relationship between him and the Artist will not be a fruitful one then the Service provider may be better off declining the chance for tendering.

An option to this is for the Builder to approach your client and reach an agreement to waive the health of novation. This can be in the interest of the Client as well as the Builder in the long run; some Clients approached by a Service provider who also offer an alternative Artist have been awarded deals.

Before entering into an agreement of novation with a customer the Company must fulfill themselves that they can be able to have confidential access to the consultants to be novated through the entire tendering process. This can be difficult for the Client as key designs maybe completed to give financial profits to the Company. Usually more than one Company may tender for just one contract and the client could find a massive difference in cost and distinctions in the look evolution between Contractors tendering for just one project.

David Janssens[17] areas that:

In this example the company should seek answers to the following points, as a minimum:

  • There will be many proposals and details that the Service provider will want his Designers to consider, and so the Contractor must check on what agreements have been designed to allow time for such discussions.
  • How will any innovative proposals be stored confidential?
  • What will be the Consultant's attitude to Contractor's option proposals derived through the tender period, and can the Consultant anticipate to work-up such ideas?
  • Will the Specialist have the ability to spend sufficient time with the Company towards the end of the tender period for precise checks for problems and omissions, and assist with the risk assessment?

If a Service provider can satisfy himself that the tips above have been responded in sufficient details they may feel confident that risk has been allowed for and that a tender distribution could be feasible. If all the points are satisfied then the Company should be confident about entering into a novation arrangement with the Client.

2. 3. 8 The potential risks to the Service provider in the novation process

When a Custom is novated to a Company by a Consumer this brings much more risk than other procurement methods. Under novation it isn't your client that is in charge of the design of the project and the Company has not been in control of the design from the original stages. This boosts risk as it's the Contractor who's responsible to check on the designs of the project whilst under a deadline to come back a tender bid.

By using novation the Client can get the best of both traditional and design and build deals. The Client has control over the look at the original periods of the task and can form the look as he hopes as he'd in a traditional deal. But he also transfers the chance of design mistake and ensures better cost control with fewer variants, an integral feature of the design and build style of contract.

Thomas and Skitmore[18] describe the Companies' hazards in the novation process as follows:

  1. The novated Design Team's capability to perform
  2. The lack of Design Team's fees allocated to the post-novation phase
  3. Working relationships with the novated design team
  4. The timing of the novation.

2. 4 Conclusion.

Much research has truly gone in to the reading around the main topic of novation as this literature review shows. The launch of the look and Build Contract has benefited U. K. Clients within the building industry especially in the past ten years because of the use of the novation agreement.

Recently because of the competitive engineering market it has been the Contractors which have had to take responsibility for the majority of the potential risks which could have traditionally been the duty of your client.

A novation agreement between a customer and Contractor for the look team should in theory work; but it is the responsibility of the Contractor to firstly interview the Consultants that should be novated to him and ensure a fruitful working relationship throughout the task.

The books review implies that problems appear when there is a break down in communication between your Contractor and Artist resulting in designs remaining incomplete or not being developed in line with the Contractors budget. As nearly all risk is positioned onto the Service provider the Client could be likely to pay a little extra on the contract value as designs are incomplete by as up to 70%.

YOUR CLIENT has to expect a cost increase because of risk added to certain components of the construction. However, the purchase price should be lower than if the Contractor encounters an item that is not priced correctly or has not got the right amount of risk allocated, producing a financial damage for the Builder.

Chapter 3 - Methodology

3. 1 Introduction to Methodology

Here the Author has explained how the matter was chosen for the investigation. It also shows how the books information was collated to produce the books review which makes up the prior section. Below is the method that was used to acquire data and conclude the research.

The first stage was to perform a literature review (please see earlier chapter), this stands as the foundation for all the additional research conducted in this dissertation.

3. 1. 1 Qualifications Studies

The additional chapters of the backdrop studies are a fundamental element of the Author's research as they act as an extension to the literature review. This section also provides a detailed research into the two most significant the different parts of the hypothesis (i) Design and Build and (ii) Novation.

3. 1. 2 Design and Build

In the first portion of the background studies there is a description of the design and build agreement which is employed by Clients within the structure industry (please see chapter 4. 0). This chapter describes the dissimilarities between your design and build form of contract and other popular contracts employed by Clients including a explanation of the application of the health care and skill clause used in contracts. In this particular section the Author provides different uses of design and build from the point of view of a Client novating a design team to a Contractor and the when the Company has the selection of which consultant to utilize.

3. 1. 3 Novation

The second of the background studies viewed the novation facet of the proposed hypothesis (please see section 5. 0). Here is a description of what novation is and its uses in a design and build context within structure. The chapter describes the possible causes for a conflict of interest between your Contractor and the look team. It also says what issues may come up because of novation; especially in conditions of the job design, repayment of the look Team's fees and any changes in the performance of the look Team.

3. 1. 4 Interview

The Author decided to interview the Contracting Company about the subject of the dissertation because this would give an information in to the company that the Author will be doing work for after his level course is complete.

The interview questions were made of integral elements of the books review, and empowered the Author to acquire qualitative data to analyse the hypothesis. The interview was held with the Author's sponsorship company. The Contracting Company has already established several years experience at working with novation of the Design Team from a customer, and they also have maintained a higher percentage of Design and Build tasks over modern times, (please see physique 1. 0). The interview was held with both a Senior Commercial Administrator of 25 years experience and a Senior Design Manager of over 30 years experience in the development industry. The questions asked in the interview were designed to give the perspective from the Builder about the working romance between himself and the novated Design Team.

When a Client novates a Design Team to a Contractor it's the Contractor who will have to keep the largest majority of risk for the design and construction of your project, therefore the view of the Contractor about the situation is of up most importance. Time constraints of the study project supposed that it had not been possible to interview an Architect a comparable subject then mix research this with the Company.

3. 1. 5 Questionnaire

The Author chose that the Architect's judgment of the Contractor's reactions to the interview would be best made on the questionnaire. As mentioned above the writer decided to obtain the opinions of your Architect through questionnaire, this reduced visiting costs for the Author and allowed him to transport on the statement while the Architect completed the questionnaire. The questionnaire was sent to an Architect of over 30 years experience in design and one who is used regularly by the Contractor interviewed for design and build contracts. The Architect has experienced the procedure of novation both separately and with the Builder interviewed.

The questions which comprised the questionnaire were derived from the responses distributed by the interviewed Company. Desire to was to determine if the Architect was in agreement with certain areas of the Contractors commentary. Also the questionnaire was designed to choose any similar reactions between the two parties, to establish a style and a solution to any common problems.

3. 1. 6 Verification of Results

The results found in both questionnaire went back by the Architect and the interview with the Contracting Company were analysed to ascertain any common features and replies created by both gatherings. The similarities that were found were sent to a Senior Commercial Director at a new Contracting Company for his judgment of the results, also to ascertain whether there were similarities within the different company. The examination was completed by the Author to remove the likelihood that the results found from analysing the one Contractor and Architect were specific to that Contractor and weren't representative of the industry all together.

The Contractor was a local rival to the Author's sponsorship company and has large experience in dealing with novation and using the look and build form of contract.

The research data gathered was qualitative due to the type of the topic and the complete dynamics of whether novation under a Design and Build agreement is dependant on opinion of many professionals. It would be extremely difficult to measure the success or inability of novation from a quantitative aspect as both Companies and Designers might not exactly freely share economic data regarding the financial outcomes of an contract where the design team was novated to the Contractor.

  • To give a clear explanation as to the reason methods were used, and just why others were dismissed.
  • To evidently indicate the research methods like the books review and technique used at each stage of the research project.

3. 3 Subject matter Selection

Derek Swetnam[19] mentioned that:

Research is enquiring into some aspect of physical, natural or public world. It must be organized, critical, empirical and also have academics integrity.

The selection of this issue was derived from the Author's professional placement during the third 12 months of his course. THE WRITER observed whilst on site that the relationship between the Architect and Builder was a lot less cordial than other sites the Author had worked on in the past.

On inspection with both Contracting Company and Design Team it was discovered that this was both the Design and Build contract set up between Consumer and Contractor and the look Team have been novated across to the Company upon efficiently tendering for the job, before work had commenced on site.

It was this that led to the interest to investigate further this subject matter area. THE WRITER realised that the research undertaken needed to be completed in just a certain timeframe. This put great limitations on the amount of research that was possible in the predetermined time frame. Holt[20] explains that a lot of important that, this level of research has to be realistically possible within enough time frame

There were many restrictions which influenced this issue selection. The question of if the article name and idea was at all possible must be asked. David Swetnam suggests that [21]many ideas will have to be crossed from grounds of impracticability.

The research study has followed the following steps taken suggested by Derek Swetnam21:

Checking Feasibility

  • Is the job physically possible with time, distance and level of the task?
  • Can it be afforded? (50 letters and stamped resolved envelopes will definitely cost around 30)
  • Do you have, or can you rapidly develop the abilities needed to execute the research?
  • Will you be allowed to gain access to the recommended sites?
  • Can you get the necessary books?
  • Are there any ethical or moral problems to get over?
  • Will the topic stay 'live' over the period of the research?
  • Would you have the support of your Teacher and your co-workers?

This method of examining the feasibility of the analysis area is echoed by Holt. However, Holt[22] does discuss that the production of an dissertation is a circular in mother nature as the extract below shows:

3. 4 Literature Review

Derek Swetnam[23] areas that the literature review is a central part of the dissertation and in all styles of work it offers lots of functions.

3. 4. 1 Literature Review Functions.

  • It shows that you have read generally around your selected topic.
  • It shows your critical knowledge of the theory.
  • Acknowledges the task of others.
  • It informs and modifies your own research.

Reviewing literature is an important part of any research study, as this allowed the Author to sample earlier research published by others. Therefore aided the Author in forming an individual view of the chosen subject matter area. The literature review is the compilation and assimilation of the maximum amount of information as can be collected before a concise technique can be made.

3. 4. 2 Books Data Collection

Following selecting the subject subject and after the Author had determined upon a subject and hypothesis research into previous relevant books was necessary.

Step 1 - The Author initially sought out existing relevant literature using the Pilkington Collection at Loughborough College or university. This engaged using the internet search engine on the catalogue OPAC which is widely available at the school library. This technique further reduced the time taken for the research to be performed. This technique was implemented over every other as the writer was able to search for books by the specific Author, Subject or by using Keywords, many irrelevant catalogs can be taken away in this manner.

Step 2 - The second stage of the research the Author used the Metalib system again at the library at Loughborough College or university. The purpose of this research was to obtain more up-to-date information from specific legal and structure related publications and articles. This method of research yielded more research and information relevant to the topic than the procedure described in step one. The reason for this is that only key engineering industry literature was being searched rather than standard text books which cover a broader range of subjects.

Step 3 - THE WRITER concluded the books review by a comprehensive search for articles, publications and newspapers from around the world. This was completed by use of the internet, a detailed search of creating magazines, any development information and the Construction Managers Journal. Basic search on the internet engines were used such as Google (http//www. google. co. uk). However, these sources tended to give a broad result.

The Author found that the views and ideas of previous Writers about them and past Experts were more frequent in publications and articles rather than in books and newspaper publishers.

3. 6 Limitations

  • The study project accounted for three modules in the ultimate 12 months of the BSc Commercial Management and Number Surveying degree the Author is studying. Because of this the Author thought it was important to prioritise jobs. Efficient time management was necessary to compile the study job as well as doing all the modules to the best standards possible.
  • THE WRITER realised that there is not much books expressing thoughts of others in large wide-ranging subject text literature.
  • Most of the literature review was obtained from the articles found in publications sourced via the internet or using Metalib.
  • There were financial and expenses limitations as just a few travelling expenditures could be afforded by the writer. This is the main reason why the Author opted to send out a questionnaire to the Architect that could have under normal circumstances have been personally interviewed.
  • Due to the type of the topic and subject area the writer forecasted that information to support his hypothesis might not be freely distributed. This would be true of any situations that could happen between Companies and Designers.
  • Because of time limitations impose upon the Author it was only possible to interview his sponsoring company in a few detail. This information was cross research with an added major Contracting Company to establish if there are variations in view and/or management between your two companies.
  • Due to the small test of three experts one being interviewed and the other Company and Architect responding by questionnaire Hypothesis specific questions were asked. However, it will be difficult to say that the results found were correct of other or all Contracting and Design Organisations.
  • The results which were made only partly support the hypothesis owing to time and financial limits. Additional research must be completed to ensure that the results found by the writer either verify or disprove the hypothesis.

3. 7 Negotiation

Derek Swetnam[24] suggests that:

A ll research for dissertation takes a specific amount of negotiation to get access to information or interviews with professional.

He advises to check out these basic tips:

  • All marketing communications to be of a high standard and quality.
  • If possible check titles and statuses beforehand.
  • Be friendly but formal
  • Explain what you want to do.
  • Offer to make results available if possible.
  • Work to their time constraints, not yours.
  • Cultivate your genuine status.

3. 8 Questionnaire

The questionnaire was directed to be clarified by:

    • An Architect who may have experience of doing work for a Builder under novation

The Author made a decision that the questionnaire would be the most well-liked method to obtain research information from the above resources alternatively than interviews. The main known reasons for this are the time and cost of research, and because the Author had developed lots of associates and interactions during his time in industry. It would be easier to distribute a questionnaire to a preferred Architect in which a return of information could be assured.

Some commercial marketing organisations like the Readers Digest offer free reward draws but still get low replies to the question asked. When creating a questionnaire basic consideration must be produced before even the first question is written.

Derek Swetnam[25] expresses that:

Remember a low rate of come back may have research significance and needs to be reported. You will be lucky if you reach a 70% rate of response on privately gathered questionnaires, and postal ones may be as little as 10%.

An effective questionnaire should be well structured and requires good planning and a standard design.

Robert Patterson[26] suggests that:

The Goal of creating effective questionnaires is not to help experts avoid embarrassing inquiries like that of the supervisor. More important, the target is to prevent researchers from requesting terribly designed questions and administering faulty questionnaires.

The method employed by the Author to construct the questionnaire was to see the questionnaire from the recipient's perspective.

  • Would the individual reading and concluding this be interested and co-operative in filling it in?
  • How could the receiver be urged to answer all the questions set and give the maximum information?

Oppenheim[27] shows that:

Decisions on research techniques must be summarized and fall in to the five teams shown below:

  • The main kind of data collection, interviews, postal questionnaires, items analysis of information and observational techniques.
  • The method of approach to respondent (Sampling selection, sponsorship, express reason for research, period and length of questionnaire, confidentiality and anonymity.
  • The Build-up of question series or modules within questionnaires and the purchasing of questions.
  • For each adjustable, the order of questions within each component, using approaches like a funnelling
  • The kind of question to be used; for example 'closed' question with pre coded answer categories versus free response questions.

The Author designed the questionnaire following the recommended format by Oppenheim[28]:

  • Length - Keep questions short in length, no sentence should be over twenty words long.
  • Avoid double barrelled questions - Keep questions simple, straight forward, clear and understandable.
  • Avoid Proverbs
  • Avoid dual negatives - this will cause confusion.
  • Don't Know / Not suitable - do not give options never to respond
  • Simple words should be utilized - Acronyms, abbreviations, jargon and technical terms should be avoided.
  • Beware of the dangers of double utilization.
  • Some words are notorious because of their ambiguity.
  • All closed down questions should start their lives as available ones.
  • Beware of leading questions - Usually do not assume anything
  • Pay attention to the details - i. e. font size of the writing.

There are many advantages with mailing out questionnaires in the post, the main ones are as follows:

  1. 1. Avoidance of any bias that could result from an interview situation.
  2. 2. Ability to research a wider range of men and women who respond.
  3. 3. You will see a lower cost of digesting the info that is gathered.
  4. 4. There will be no traveling costs incurred to get the research.

However, the Author decided to maintain telephone interactions with the professionals eager to complete a questionnaire and contracts were made that the questionnaire was to be emailed to them and then came back by email. This led to a faster come back at a much smaller cost, resulting in greater moment open to process the data gathered.

3. 8. 1 The Questionnaire to the Architect

    1. Would you agree or disagree that the four factors above will be the significant factors that increase risk to the Company & Creator when the Custom has been Novated to the Company?

This question is the same as question one in the interview questions posed to the Builder. The goal of this question is to establish whether or not the Architect that completes the questionnaire agrees with the above statement, also to validate the Author's research completed in the literature review.

    1. Does having less fees open to the Creator have such a sizable impact on the performance of the Designer for the job?

This question is employed to establish whether too little fees open to the Designer towards the end of the design has an effect on the Designers outcome and performance throughout the duration of the task. This question is utilized to cross research question three of the interviewed Contractor.

    1. As the Creator for the task pre-novation, would you think that your primary aim is to satisfy the Client not the Company with your designs post-novation?

The question was created to determine if the Artist sees the Client as the main way to obtain information for designs to be complete, or any variations that require to be produced, as opposed to the Contractor.

    1. Do you value the thoughts and opinions and selection of design elements of the Client on the Company even after novation?

The Reason for this question is to discover if the Creator would still want to take instructions about design and standards from the Client rather than the Company, even after novation has occurred, if so for what reasons.

    1. In your opinion are there pretty much conflicts between the Designer and the Contractor because of novation?

The Reason for this question is to mix reference the information given by the interviewed Contractor in question six. It'll build the Designer's perspective on the amount of dispute that occurs because of novation.

  1. Are the aims and needs of the Client pre-novation completely different to the Contractor's post-novation?

The reason for this question is to find if the Artist understands fully that there is a notable difference in the needs and seeks of the Client pre-novation and the Company post-novation. This question gives the Designer's opinion of the novation situation.

3. 8. 2 Cross Reference point Questionnaire with a Rival Contracting Company

    1. Would you concur or disagree that the four items above will be the significant factors that increase risk to the Builder & Artist when the Custom has been Novated to the Builder?

This q

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