procument

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Procurement is the process that is used to deliver construction projects. The dictionary definition

states that procurement is 'acquiring or obtaining by care or effort'. Clients who have made the

major decision to build are faced with the task of procuring the construction works that they

require. This may be a daunting prospect, given the level of financial commitment and other

risks associated with the venture, the complex nature of construction and the possible perception

of the construction industry as one that frequently under-performs.

Although traditional procurement systems are frequently used, in recent there has been a

significant shift towards alternative strategies. The selection of procurement system depend on

the client¶s objective and end project, which have positive influence on the level of success

achieved by building projects. Here need to control the time and considered cost, variations,

complexity, quality, price certainty, responsibility, risk. So this procurement method is need to

construction project.

Project criteria

First of all we are divided to procurement systems according to project size. Drawing and

specification, Private investment, cost reimbursement and schedule of rates are commonly used

to small projects. The bills of approximate quantities, lump sum contract, design and build,

turnkey, management contracting and construction management contracts are commonly used to

large, complex projects. So we need to consider Bills of approximate quantities, lump sum

contract, Design and build, turnkey, management contracting and construction management

contracts for following factors.

Risk

When we selecting a procurement system, we need to mainly considered factor is risk. Some

procurement systems are client want to get risk, some are contractor risk. As a client, he want to

able reduce the risk. Because if he take more risk, he should be allocate more money for the

project and he has get responsible for the project. This project is constructing for public sector.

The client was provincial council. It is a government sector. They received grant forminternational lending agency, so they must be considered risk. If the risk is increased, money

allocation is increase. So client need to decrease the risk.

If we considering the risk taking factor, construction management, management contracting and

cost reimbursement procurement systems are highly risk for client. As well as design and build,

lump sum fixed price, bills of approximate quantities and schedule of rates procurement systems

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are client do not have much risk. So according to risk, as a client he can choose design and build,

lump sum fixed price, bills of approximate quantities and schedule of rates procurement systems.

Cost

Cost is another important factor is considered to make appropriate choice of procurement system.

In this project the provincial council expects to invest 200,000,000.00 for this project. So they

must want to know about project cost at the tender stage. There is several procurement methods

can estimate the project cost at the tender stage.

Following procurement systems are :

y Lump sum

y Bills of approximate quantities

Client control:

We need to consider client control factor also, when we choice appropriate procurement system.

If the client, control the total project he can design and managed the project at the construction

period. But he want take more risk. So better way is avoid totally managed procurement systems.

Management based procurement systems are totally managed procurement systems. As well as

client do not have any influence for the control project, he couldn¶t make any changes or

managed the project. The contractor have total control of the project, if their client want to any

changes in construction period, he do not have influence.

Design and build, Turnkey contracts are fully control for the contractor. Management based

procurement systems are totally control client.

When the project going on client must be want to control the project, but not totally. Because if

they any changes in design he can change.

So we can propose following procurement systems according to control

y Lump sum contract

y Bills of approximate quantities

These procurement systems both are have influence the design and managed. So clients also

control the project.

Time

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Another main factor of procurement selection is time. Because this project funding agency has

imposed time limitation for the availability of funds. So we need consider about project time

period. If we take more time to this project, we will have problem with funding agency. If we

take lump sum contract, more time required to complete the bidding documentation. So the

construction works will start later.

So, finally we can select Bills of Approximate Quantities procurement system for this

proposed hospital project.

Reasons for select

y Client Risk is medium.

y Time taken to the complete tender documentation is law

y We can estimate the approximate value of this project at the tender stage.

y Client can control the project also.

y This is a public sector project

Tender procedures

There are essentially three ways of selecting a contractor; through competition or by selection or

by negotiation. This will apply to any working arrangement, including strategic partnering,

which in the first instance requires the appointment of a contractor partner. Competition may be

restricted to a few selected firms or open to almost any firm that wishes to submit a tender. The

contractor options described later are used conjunction with one of these restrictions on tendering

arrangement for the procurement of public goods and works.

Open competition

Open competition, whereby, details of the project are first of all advertised in local or trade

publications inviting requests for tender documents, is not an efficient practice, and in

consideration of the guidelines above, is not a recommended practice. Whilst the approach

allows new contractors, or those who are unknown to the project team and the client, the

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possibility of submitting a price, the costs of tendering are high and the process of pricing the

items lengthy. Where selective tendering is adopted with a list of six tendering contracts, the law

of averages indicates that tendering costs for six projects will be absorbed in one successful

submission. In open competition, this waste is much greater, depending on the total number of

interested contractors, and is of course borne by clients. Some very reputable contractors may not

be interested in tendering in such conditions.

The use of open tendering may relieve the client of the obligation of accepting the lowest price.

This is because firms are generally not vetted before the tenders are submitted. Factors other than

price must therefore be taken into account when assessing tender bids. It is generally accepted

that a lowest price tender will be obtained by the use of this method.

Advantages of open tendering

y Unknown contractor can tender for the work

y

There is no restrictive list of renderers¶, which does not allow favouritism- a valid pointfor local authorities who are publicly accountable.

y There is no obligation to tender therefore all tenders received will be genuine.

y Open tendering secures maximum competition.

Disadvantages of open tendering

y Cost of tendering is expensive to the client who must bear the cost of reproducing

multiple copies of drawings, bills of quantities, etc.

y It is a lengthy operation requiring skilled estimating, the cost of which must be recovered

on the job by the contractors. The higher the proportion of unsuccessful tenders the

higher the cost to be recovered on the job.

y The wrong contractor can be chosen. Little may know about the contractors- their

records, experience, standard of workmanship, etc.

y The lowest tender may not necessarily be a ³bargain´ choosing a low tender may result in

Poor work

Poor organization

y A contractor may be awarded work for which he has little or no experience and which he

may be ill equipped to deal with.

y A contractor who has under-priced his tender to win the contract may try to recoup this

shortfall through claims or hard and unsupported bargaining on the final account.

Open tendering invites the contractors may be according to International competitive bidding

(ICB) or National competitive bidding (NCB). If the bidding is ICB, internationally bidders can

apply. If the bidding is NCB, only domestic bidders can bid.

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International Competitive Bidding (ICB)

The purpose of ICB is to give all prospective and qualified bidders adequate and timely

notifications of PE¶s requirements and to give them equal access and fair opportunity t competesfor contracts for required goods and services. Bidding opportunities must there fore be advertisedinternationally and all eligible bidders given reasonable possibilities to participate.

ICB may be the most suited method of procurement, for large projects under followingcircumstance;

y When the capacity of the domestic contractors, suppliers and service providers are

limited and the advantage of ICB is evident;

y

For Foreign Funded Projects, when the Foreign Funding Agency agreement requires thePE to resort to ICB procedures;

However, in the case of Works contracts in view of the development of domestic constructionindustry, the possibility of slicing the contract and following ³slice and package approach´ to

suit domestic contractors may be considered.

y When ICB is used domestic preference criteria shall be used

y For contracts for works to be awarded on the basis of ICB, a margin of preference 7.5 percentcan granted to domestic contractors.

y The bidding documents shall clearly indicate the preference and the method that will befollowed in the evaluation and comparison of bids to give effect to such preference.

National Competitive Bidding (NCB)

NCB is the competitive bidding procedure that shall be generally applicable for most

GOSL funded projects when the goods or works available within Sri Lanka at pricessignificantly below those n the international markets.

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Selective competition

This is the traditional and most popular method of awarding construction contracts. In essence anumber of firms known reputation are selected by the project team. Selective tendering may be

either single stage or two stage, depending on whether the full benefits of competition are desired

in which case (single stage tendering is used) or whether limited competition plus earlier

commencement of the works on site is considered advantageous (using two stage tendering).

Single stage selective tendering

Under this procedure, a short list is drawn up of contractors who are considered to be suitable

carry out the proposed project, the names may be selected from an approved list or panel

maintained by the client or may be specially chosen. The bidders submit two sealed envelopes

simultaneously, one containing the technical proposal and the other the price proposal, enclosed

together in an outer single envelope.

Initially, only the technical proposal are opened at the date and time advised in the bidding

document, and the price proposal remain sealed are held in custody by the purchaser. The

technical proposals are evaluated by purchaser and if the technical proposal accepted the price

proposal open and evaluated. If not that bidder rejected. The price proposal evaluated, and the

contract is awarded to the bidder whose bid has been determined to the lowest evaluated

substantially responsive bid.

Two stage selective tendering

In the two stage tendering, at the first stage bidders submit two sealed envelopes simultaneously,

one containing the technical proposal and the other the price proposal, enclosed together in an

outer single envelope.

Initially, only the technical proposal are opened at the date and time advised in the bidding

document, and the price proposal remain sealed are held in custody by the purchaser. The

technical proposals are evaluated and if the purchaser requires amendments or changes to the

technical proposal, such amendments and changes are discussed with the bidders. The bidders

are allowed to revise or adjust their technical proposal to meet the requirements of the purchasers.

At the second stage, to submit the modified bid proposal consisting of revised technical

proposals and supplementary price proposal based on the technical proposal. The original price

proposal and modified bid proposals are opened at a date and time advised by the purchasers.

Then evaluated and the contract awarded to the bidder whose bid has been determined to the

lowest evaluated substantially responsive bid.

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Advantages

y It ensures that only capable and approved firms submit tenders

Disadvantages

y The cost level of the tendered received will be higher.

Negotiated contract

The Negotiated contract method of contractor selection involves the agreement of a tender sum

with a single contractor. The contractor will offer a price using the tender documentation, and the

client surveyor then reviews this in detail. The two parties then discuss the rates that are in

contention, and through a negotiation process a tender acceptable to both parties can be agreed.

Owing to the absence of any competition or other restriction other that the acceptability of price,this type of contract procurement is not generally considered to be cost advantageous. It can be

expected to result in a tender sum that is higher than might have been obtained by using one of

the previous methods, although substantiation of the order of this is difficult to assert. Because of

the higher sums incurred public accountability and the possible suggestion of favouritism, local

government does not generally favour this method.

Pre-qualification

Prequalification is aimed at ensuring that only contractors and suppliers who have the requiredexperience, technical and financial resources bid for a contract. The prequalification process

basically consists of evaluating the available renderers¶ identified either by advertisement or

invitation, against some given set of criteria in order to find some group of firms who are all

considered competent to carry out the work and who are expected to provide an acceptable range

of process.

An obvious first step is to determine what the required criteria for prequalification are to be. At

the very simplest level the basic criterion is that the firms should all be at least competent to

undertake the work. In many cases, and particularly in the case of small contract or specialized

work, a number of contractors might be chosen simply on the basis of work tat they have done

before for the same engineer.

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Use of prequalification

Prequalification screened potential bidders and is designed to provide the following benefits.

y Unqualified bidders save the cost of bid preparation which results in lower overhead

costs to them and, therefore presumably lower bid prices n the long run, to the benefit of

the PE;

y Leading contractors and suppliers are more likely to bid knowing that competition is

confined to only those qualified. This is also to the benefit of the PE;

y The scale of interest by potential bidders can measure, affording the opportunity to revise

bidding conditions as necessary to develop adequate competition;

y The evaluation of only bids from qualified bidders may result in time and coast saving tothe PE, as well as a reduction of the threat of pressure being applied by marginally or

unqualified bidders for their low prices to be considered.

However, prequalification has some potential disadvantages

y It may increase procurement lead time, although this can be minimized by good

procurement scheduling.

y The PE is required to review all prequalification applications whereas with post

qualification, the PE would only review qualification of one bidder; and

y Names of all prequalified bidders are known in advance of bid submission, making it

easier for bidder collusion and price fixed to occur.

Pre-qualification Criteria

Pre-qualification shall be based exclusively upon the capability of and resources available with

the prospective bidders to perform the particular contract satisfactorily, taking into account their

y Experience and past performance on similar contracts;

y Resources available in regard to personnel, equipment and construction or manufacturing

facilities; and

y The financial resources at their disposal.

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Appropriate Tender Method

I recommended open tendering method, for this proposed hospital project. In open tendering we

can select international competitive bidding (ICB) method. Because if we select national

competitive bidding (NCB), the competition is less. Therefore we select ITB open tendering

method for this project. As well as open tendering give more competition, so bidders try produce

to lowest amount of high quality works. In the open tendering mostly select lowest bidders,

therefore client have more advantage from this method. In open tendering client can also select

genuine and high quality work produced bidders.

Tender documentation

The project manager is responsible for effective management of the tendering stage. The quality

of submitted tenders is usually related to the length of time given to contractors to prepare

tenders and the completeness of tender documentation. Contractors incomplete tender

documentation. Tender documents usually comprise the following.

y Invitation to bidBidding Procedures

y Instruction to Bid (ITB)

y Bid data sheet (BDS)

y Qualification Criteria

y Bidding FormsWorks Requirements

y Specifications

y Construction Drawings

y Bills of QuantitiesConditions of Contract and contract formsy Conditions of Contract

General conditions

Particular conditions

1. Invitation to bid

The bidding process for the contractor begins with the invitation to bid. Other similar documents

are the request for the proposal and request for quotation. The invitation to bid can be in the form

of a letter sent to a select group of contractors by the owner or by the engineering firm.

Alternatively, it can be publicly announced or advertised. A bid advertisement should have a

minimum advance notice of 30 days prior to bid advertisement issue.

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y The invitation to bid or bid advertisement will typically contain the general information

y Name of the project and a short description,

y Bidding document information; available date, time, location,

y Pre- bid conference or details identification meeting information,

y

Bid proposal submission date,y Type of proposal,

y Approximate contract amount,

y Approximate size,

y Project location,

y Licensing requirement

y Bid, performance, and payment bond requirements,

y Contractor prequalification requirement,

y Name of client

y Name of engineer, and

y Contract information.

2. Instruction to Bid (ITB)

This section provides relevant information to help bidders prepare their bids. Information also

provided on the submission, opening, and evaluation of bids and the award of contracts.

Purpose of an ITB is to:

y Inform the bidders the details about the clienty Describe work/goods/service to be procured

y Inform the bidders the eligibility, qualification and experience required

y Inform the bidders the validity and other requirements of the bid and bid security

y Inform the bidder¶s the composition of the bidding document

y Inform the bidders the factors that should be taken in pricing the bid;

This section generally provides necessary instructions related to following areas;

1. Eligibility criteria

2. Contents of the bidding documents

3. Instruction for the preparation of bids

4. Procedure of submission and opening of bids

5. Evaluation and comparison criteria

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6. Procedure in awarding contract

3. Bid data sheet (BDS)

This section consists of provisions that are specific to each procurement and that supplement the

information or requirements included in instruction to bidders.

4. Qualification Criteria

This section consists of necessary qualifications of the bidder to perform the contract. If the

bidder is pre qualified, it should contain continued qualification of the bidder to perform the

contract.

5. Bidding Forms

This section contains the forms which are to be completed by the bidder and submitted as part of

his bid.

Bid forms include letter of bid, appendix to bid and form of bid security etc.

6. Specifications

As the specification play an important role in the execution of work of quality works and it is one

of the legal document in the contract document. Specifications of a work are required to describe

the quality and quantity of different materials required for a construction work and is one of the

essential contract documents.

Thus a contractor can make a programmed to procure the materials required for a project and theowner can check the quality of materials conforming to the specification avoiding dispute with

contractor.

As the rate of a work is based on specification a contractor can calculate the rates of various

items of works in a tender with his procurement rates of materials and labor. Thus tender paper

without specifications of works is baseless, incomplete and invalid.

Specification is necessary to specify the requirements, tools and plants to be engaged for a work

and thus enables to procure them beforehand and specification is to verify and check the strength

of materials for a work involved in a project

7. Construction Drawings

Drawings show graphically in detail the work to be done. They are in the form of plans,

elevations, sections and details, and provide exact dimensions of the all the construction

elements of the work.

Different drawings are prepared for different purposes. The most common types of drawings are:

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y Architectural

y Structural

y Electrical

y Mechanical

y

Fire protectiony Hydraulic

y Landscaping

Because different parties are involved in the preparation of drawings, it is essential to ensure

their careful co-ordination. Many variation claims are raised by contractors purely of the lack of

co-ordination between the drawings and the specifications.

8. Bills of Quantities

Bills of Quantities contain a list of items of work which are briefly described (usually inaccordance with standard method of measurement 7). The Bills also provide a measure of the

extent of work and this allows the work to be priced. The work included in the item is defined in

detail by the rules in the Method of Measurement. The item descriptions are therefore shorthand

to allow the relevant rules of the Method to be identified. The measure may be a single item or

number, dimension (linear meter, square meter, and cubic meter), time (hrs, weeks) or weight.

Function of Bills

The Bills of Quantities may serve a number of functions as:

y A breakdown of the tendered price, with no contractual status, but providing information

for the selection from renderers;

y An estimate measure of the work for the tendered price, to be used to arrive at a revised

contract price once the actual quantities of work carried out are measured. This is the

remeasure form of contract.

y A schedule of rates as the contract basis for valuing variations in the work.

y A basis for measure of the value of work completed for interim payments

9

.

Conditions of Contract

This documents sets out the obligations and rights of the parties and detailed conditions under

which a sub sequent contract will operate. If a standard form, such as the FIDIC, JCT,ICE, etc, is

used it will not be sent out with the invitation to bid, it being assumed that the bidders will have a

copy or can readily obtained one.

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Conditions of contract are generally described as µthe general conditions of contract¶ and are

commonly available in standard contract forms. Most standard contracts allow for the inclusion

of additional µspecial conditions¶, which can be written into the general conditions or be an

annexure.

A final tender report is to include:

y An analysis of tenders against each predetermined key criteria which are to include:

o Method of deliveryo Costo Timeo Quality

o Teamo OH&S and IR

o VIPPy Ranking of tenders

y Subcontractor approval.

Procurement is the process that is used to deliver construction projects. The dictionary definition

states that procurement is 'acquiring or obtaining by care or effort'. Clients who have made the

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major decision to build are faced with the task of procuring the construction works that they

require. This may be a daunting prospect, given the level of financial commitment and other

risks associated with the venture, the complex nature of construction and the possible perception

of the construction industry as one that frequently under-performs.

Although traditional procurement systems are frequently used, in recent there has been a

significant shift towards alternative strategies. The selection of procurement system depend on

the client¶s objective and end project, which have positive influence on the level of success

achieved by building projects. Here need to control the time and considered cost, variations,

complexity, quality, price certainty, responsibility, risk. So this procurement method is need to

construction project.

Following chart illustrated the main types of procurement method

Procurement Methods

Traditional Procurement MethodAlternative Procurement Method

Based on Bills of Firm Quantities

Based on Bills of approximate

Quantities

Based on Drawings & specifications.

Based on a Schedule of rates

Standard Schedule

µAd hoc¶ Schedule

BOQ From Previous Contract

Based on Cost Reimbursement

Cost plus Percentage Fee

Cost plus Fixed Fee

Target Cost

Design And Built

Management Contracting

British Property

Federation System

Construction

Management

Project Management

Joint Venture

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The reasons why many building owners and developers considered that the traditional

procedures were no longer satisfactory were:

The rapidly spiraling cost of construction meant that large sums of money had to be

borrowed to finance projects.

High interest rates meant that the time occupied by the traditional procedures resulted in

substantial additions to the construction cost.

Clients were becoming more knowledgeable on construction matters and were

demanding better value for money and an earlier return on their investment.

High technology installations required a higher quality of construction.

Attention has focused on reducing the time traditionally occupied in producing a design and

preparing tender documentation, thus enabling construction work to begin sooner. Another

important factor has been bringing the contractor in at an early stage in the design of a project.

Under the traditional procedures, the contractor rarely played any part until the tender stage was

reached, after virtual completion of the design.

The main types of procurements methods uses in construction industry are as follows;

Design and Build


Construction Management

Project Management

Design and build

The term ³Design and Build´ refers to the procurement strategy that entails the contractor

carrying out the all work; such as the design works as well as the construction and completion of

the work. It is a form of building procurement whereby the contractor will design and construct

the project. A design and Build contract is one in which a single entity, usually a contractor

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assumes responsibility for the design in whole or in part and for the construction and completion

of a construction project.

In this method, the contractor is responsible for the design, for the planning, organization and

control of the construction and for generally satisfying, the client¶s requirements, and offers his

service for en inclusive sum.

This arrangement is used to minimize the project risk for client and to reduce the delivery

schedule by overlapping the design phase and construction phase of a project. Where the design-

builder is the contractor, the design professionals are typically maintained directly by the

contractor.

Design and Build Procurement Method Procedure

First of all, the client (or an architect on his behalf) preparing his requirements in as much or

as little detail as he thinks fit.

Then these are sent to a selection of suitable contractors each of whom prepares his proposals

on design, time and cost, which he submits together with an analysis of his tender sum.

After that the client accepts the proposals he is satisfied best meet his requirements and

enters into a contract with the successful contractor (tender)

Finally, the latter then proceeds to develop his design proposals and to carry out and

complete the works.

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Contractual links exist:

Between the client and the contractor;

Between the contractor and each sub-contractor;

Between the client and each of his independent advisers.

Advantages in Design and Build

Single point responsibility is provided, i.e. the contractor is solely responsible for failure in

the design and/or the construction. Because, totally the design and construction will be

carried out by the contractor.

Client

Quantity

Surveyor

Contractor

In- design Q.S

Eng. Consultants

In- design

Architect

In- design

engineers

Sub Contractors

Architect

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The client has only one person to deal with, namely the contractor, whose design team

includes architects, quantity surveyors, structural engineers, etc. (The client may use the

services of an independent architect and quantity surveyor to advise him on the contractor¶s

proposals as to design and construction methods and as to the financial aspects respectively.

Client may also appoint an agent to supervise the works and generally to act on his behalf to

ensure that the contractor¶s proposals are complied with)

The client is aware of his total financial commitment from the outset.

Close intercommunication between the contractor¶s design team and construction team

promotes co-operation in achieving smoother running of the contract and prompt resolution

of site problems.

Disadvantages in Design and Build

Variations from the original design are generally discouraged by the contractor and if

allowed are expensive.

The client has no means of knowing whether he is getting value for money unless he employs

his own independent advisors, on the other hand it is also increasing the cost of the project

additionally.

If the contractor¶s organization is relatively small, he is unlikely to be as expert on design as

he is on construction and the resulting building may be aesthetically less acceptable.

The selection contractorin design and buildingmethod should be based upon a brief of the

client¶s requirements. This brief should be carefully worked out by independent professional

advisors and coasted by them so that the contractors are tendering on that basis. It is an

expensive business for design and build contractors to tender in competition as each contractor will have to work out a design to suit the client and within the budgeted amount.


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The main characteristics of management contracting is that the management contractor does

none of the construction work himself but it is divided up into work packages which sub-let

contractors, each of whom enters into a contract with the management contractor. The

management contractor is nominated by the silent on the basis of the contractor¶s previous

experience or is selected by competition based upon on tenders obtained from a number of

suitable contractors for,

The management fees and

Prices for any additional services to be provide before or during the construction period.

The successful contractor will then enter into a contract with the client.

The management contractor¶s role consists of providing a construction management service on a

fee basis as part of the client¶s management team ± organizing, co-ordinating, supervising andmanaging the construction works in co-operation with the client¶s other professional consultants.

Further, he provides and maintains all the necessary site facilities, such as offices, storage and

mess huts and power supplies and other site services, common construction plant, welfare,

essential attendances on the works contractors and dealing with labour relation matters.

Following chart shows the normal pattern of relationship and indicates the lines of

communication between the parties in a management contract.

Client

Eng.

Consultant

Quantity

Surveyor

Management

Contractor

Work

Contractor 3

Architect

Work

Contractor 2

Work

Contractor 1

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A management contractor is selected using the following criteria:

Experience of management contracting.

Quality and experience of project staff. The management fee

Program and method statement.

An estimate of the site management and preliminary costs

Any comment on the estimated cost of the work given the other information available

A method statement giving outline proposals for carrying out the work, including a draft

list of work packages (sub contracts)

A draft contract program

Details of the proposed management team

A proposed typical sub contract form

Advantages

Work can begin on site as soon as the first one or two works packages have been

designed. Overlapping of design and construction can significantly reduce the time requirement,

resulting in an earlier return on the client¶s investment.

The contractor¶s practical knowledge and management expertise are available to assist

the design team.

Where the nature and extent of the work may be uncertain, as in refurbishment contracts,

the design of later work packages may be delayed until more information becomes

available as the work progresses, without extending the construction period.

The contractor, being part of the client¶s team, is able to identify with the client¶s needs

and interests.

Because works contracts are entered into close to the time of their commencement on

site, they can be based on firm price tenders.

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Disadvantages

Uncertainty as to the final cost of the project until the last works contract has been

signed.

The number of variations and the amount of remeasurement required may be greater than

on traditional contracts because of the greater opportunity to make changes in design

during the construction period, because of problems connected with the interface between

packages, and because packages are sometimes let on less than complete design

information.

The BPF System broadly follows the traditional procurement pattern but is different in the

following respects:

The client¶s representative, who is named in the contract, is in control in the role of

project manager, no architect, as such, being named in the contract;

The client¶s representative (unlike the architect under JCT contracts) may delegate anyor all of his duties to any number of persons or firms;

The pricing of variations will lead to more protracted negotiations between the client¶s

representative and the contractor where a bill of quantities is not used.

Some contractors may not be sufficiently competent in interpreting and developing

designs from conceptual information.

The use of one contractor in the design process inevitably brings in also those sub-

contractors with whom that contractor normally works, which may leave the client in the

position of feeling obliged to use those sub-contractors subsequently without

competition.

The dominant role of the client¶s representative could lead to contractors being

somewhat less than satisfied that they will be treated with the same impartiality as they

have come to expect from independent architects and quantity surveyors.

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Project management

Project management is not a procurement system in itself in that it does not include the site

construction process but only its general supervision. It has been defined as µthe overall planning,

control and co-ordination of a project from inception to completion aimed at meeting a client¶srequirements and ensuring completion on time, within cost and to required quality standards¶.

A number of project management organizations came into existence during the late 1970s and

1980s to meet the need for the management of projects which were becoming larger and

increasingly complex. Many clients do not have the in-house skills and experience necessary for

the successful management of construction projects and so need to employ an independent

project management company to do it for them.

Quantity surveyors, by their training and experience financial and contractual matters, coupled

with a detailed knowledge of construction processes, are well qualified to offer a project

management service, and a number of established quantity surveying practices have set up

associated companies offering such a service. Other groups of professionals, such as architects,

engineers and building and valuation surveyors, are also now filling this role.

The project manager, in effect, becomes the client¶s representative, with authority to supervise

and control the entire planning and building operation from acquisition of the site to completion

the project and settlement of the accounts. The service he provides is essentially one of planning,organizing and coordinating the services provided by surveyors and lawyers in relation to site

acquisition; the architect, engineers and quantity surveyor in relation to project planning and

design; and the contractor sub-contractors in carrying out the site construction work; but does not

include the carrying out of any of their duties himself.

Construction management

Construction management is not a procurement system in itself but is only part of the total

progress. It is professional consultant services to the client, provided on fee basis, with the design

and construction services being provided by other organizations.

The construction manager is responsible for the organization and planning of the construction

work onsite and for arranging for it to be carried out in the most efficient manner. The

construction work itself normally carried out by a number of contractors, each of whom is

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responsible for a defined work package. All the work packages together constitute the total

project. Each works contractor enters into a direct contract with the client.

It may be,

Direct payment of separate contracts

The construction manager engages trade contractors and suppliers on behalf of the client.

Latter, client pays the trade contractor or supplier directly and makes a separate

management fee payment to the construction manager.

Cost plus

The construction manager engages and pays trade contractors and suppliers on behalf of

the client. The construction manager is reimbursed for costs by the client, and paid an

agreed management fee.

Advantages

The construction work is more closely integrated into the management of the project

Close liaison between the construction manager and design manager leads to prompt

identification of and decisions relating to practical problems

Detailed design can continue in parallel with construction, work packages being let in

succession as the design of each is completed, thus shortening the project time

Privities of contract between the client and each of the works contractors provide the

client with a readier means of redress in the event of difficulties, such as delays, arising

Disadvantages

The client has one more consultant and a number of contractors¶ with whom to deal

instead of only one main contractor

The client financial commitment is uncertain until the last of the works contract has been

signed.

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If we evaluate the alternative procurement method which is most suitable for the above

project, we can come to following decision.

Management contracting

If we consider the management contracting method, in my point of view it is not suitable for the

project. Because, when we select the management contracting all the documents should need.

The management contractor is nominated by the client. He does none of the construction work

himself. But in this project design part should done by main contractor. For these reasons

management contracting alternative procurement method is not suitable.

Design and built

If we consider the design and built method, in my point of view it is more suitable than other

alternative methods. Because, in the Develop and construct contract the basic and main

procedure is the client (or an architect on his behalf) preparing his requirements in as much or as

little detail as he thinks fit. This procedure is in this project (a sketch plan has been prepared by a

designer for BCAS). The management is thinking the contractor will do his proposals on design,

time and cost according to the sketch plan and management requirements and also BCASmanagement early start of the works and wishes have the expertise and experience of the

contractor. This is also one of the processes of design and builds alternative procurement

method. For these reasons design and build alternative procurement method is most suitable.

Even though I select the design and build method, there are three categories in this method.

Therefore I have to evaluate the most suitable category to perform our project. Let us we see the

categories of the design and build.

Design and build method can split under the following heading

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Where the client has the design prepared to concept or scheme design stage and the contractor

takes on µfinishing off¶ the design and construction. The contractor may re-employ the original

designers to complete the design.

Advantages

Work can begin on site as soon as the first one or two works packages have been designed.

Over lapping of design and construction can significantly reduce the time requirement,

resulting in an earlier return on the client¶s investments.

The contractor¶s principal knowledge and management expertise are available on to assist the

design team.

Where the nature and extent of the work may be uncertain, as in refurbishment contracts, the

design of latter work packages may be delayed until more information becomes available as

the work progresses, without extending the construction period.

The contractor, being part of the client¶s team, is able to identify with the client¶s needs and

interests.

Because works contracts are entered into close to the time of their commencement on site,

they can be based on firm price tenders.

Disadvantages

Uncertainty as to the final cost of the project until the fast works contract has been signed.

The number of variations and the amount of re-measurement required may be greater than on

traditional contracts because of the greater opportunity to make changes in design during the

construction period, because of problems connected with the interface between packages aresometimes let on less than complete design information.

Develop and management

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'Design and management' system combines some of the characteristics of 'design and build'

with those of 'management'. A single firm is appointed, following a selection process that

may include some degree of competition on price, although this is not usually the main

selection criterion. The client will need adequate in-house skills or obtain appropriate

professional services in order to formulate his requirements and carry out his

responsibilities under the contract

Establishing the need to build

Determining the client's requirements

Selecting and inviting tenderers to bid

The contractor or contractors preparing their proposals for management, design,time

and cost

Evaluation and acceptance of a tender which becomes a contract

Management, design and construction of the works.

In this system the client enters into a contract with a design and manage contractor and

possibly a scope designer, while the design and manage contractor, in addition to his

contract with the client, will be in contact with consultants for design and/or cost

consultancy services and with works contractors who may number as many as 60 to 100

organizations. Alternatively, the client may enter into a contract with a design and manage

consultant who will be selected from one of the building professions and who will enter into similar contractual arrangements with a design and/or cost consultancy and numerous

works contractors. These systems offer. Advantages when factors such as timing,

controllable. Variation, complexity, quality level and competition are significant.

Final decision

Because, in the Develop and construct contract the basic and main procedure is the client (or an

architect on his behalf) preparing his requirements in as much or as little detail as he thinks fit.

This procedure is in this project (a sketch plan has been prepared by a designer for BCAS). The

management is thinking the contractor will do his proposals on design, time and cost according

to the sketch plan and management requirements and also BCAS management early start of the

works and wishes have the expertise and experience of the contractor. This is also one of the

processes of design and builds alternative procurement method. For these reasons design and

build alternative procurement method is most suitable.

Check for sustainability through the procurement cycle Once you get into a procurement exercise, you should check that sustainability has been taken into account

at each review stage or Gateway:

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