Sewerage Infrastructure Procurement Methods Conventional vs Design Build

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SEWERAGE INFRASTRUCTUREP ROCUREMENT M ETHODS

C ONVENTIONAL VS DESIGN & BUILD

1st MALAYSIA NATIONAL SEWERAGE CONFERENCE 2013

JAB. PERKHIDMATAN PEMBENTUNGAN & MyWA

Presented by:Sr Nik Zainal Alam Hasan

Jabatan Kerja Raya


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1. G OVERNMENT P POCUREMENT P PRINCIPLE

PUBLIC ACCOUNUTABILITY

TRANSPARENT

BEST VALUE FOR MONEY

OPEN FAIR COMPETITION

FAIR DEALING

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2. P POCUREMENT STRATEGY

BESTOPTION

ConventionalApproach

Design & BuildApproach

D e p e n

d s

O n


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3a. C ONCEPT C ONVENTIONAL

4

Procurement

Conventional

Design & Build

1. Planning

2. Design3. Supervision

Construction,Completion,

Testing &CommissioningContractor

Appointment(SPP 2/2011)

Designer(In-house)

Responsibility

COC JKR 203/203A

Consultant


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3b. C ONCEPT DESIGN & BUILD

Procurement

Conventional

Design & Build

5

1. Planning2. Controlling3. Auditing

Design ;Construction;Supervision ;

Fittings;

Completion;Testing &

Commissioning; &Maintaining

Contractor

HOPT/HODT

COC PWD DB

Consultant

Responsibility


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Form theProject Team

ProjectBrief

Appointed byHead of Dept.

PrepareTender Document

COCDrawings

OpenTender

SelectiveTender

SiteBriefing(If any)

Pricing/Estimate

Closing &Evaluation

Financial

TenderClarification

(if any)

> 21 da

ys Validity = 90 days

LOA

1

2

3 4 5 6 7 8 TenderBoard/Nego

9

6

4a. P ROCESS - C ONVENTIONAL


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Form theProject Team

ProjectBrief

Appointed byHead of Dept.

PreparePre-bid Document

COCGovernmentRequirement

OpenTender

SelectiveTender

Pre-bidBriefing

Pricing/Estimate

Closing &Evaluation

TechnicalFinancial

TenderClarification

> 60 da ys Validity = 120 days

LOI

Pre-Q

Contractors Proposal

1

2

3 4 5 6 7 8 TenderBoard/Nego

LOA

9

Pre-awardClarification

Meeting

1011

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4b. P ROCESS - DESIGN & BUILD


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PlanningD.O. Approval

Design ProcurementMaterial/

Labour

Construction Testing &Commissioning

Defects

CPC

Conventional

Maintenance

Design &Build

Equipment &furniture

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4c. P ROCESS - C ONTRAST


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4. C HARACTERISTIC DESIGN & BUILD

i. Contractors Liability & Obligation

PLANNING

1 2

DESIGN CONSTRUCTION TESTING &COMMISSION

DEFECTS &MAINTENANCE

MATERIAL WORKMANSHIP

WARRANTY

2 YEARS

APPROVEDBANK

DESIGN WARRANTY = 5 YERAS

3 45

6

CPC

COMPLETION &Fit For its Purpose


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Kes Graevtes & Co. Contractors vs. ByanhamMeikle & Partners

The Engineer appointed by the Contractor todesign suspended floor sab under design &build contract.

However, a failure to the slab theContractor & Engineer gave reason that allattention & diligently care especially on design& construction to complete the works.

Court decided that: The Law does not usually imply a warranty that

he will achieved a desired result but only a termthat he will use reasonable skill & care. Thesurgeon does not warrant that he will cure thepatient nor does the solicitor warrant that hewill win the case but when a dentist agrees tomake a set of false teeth for a patient, there isan implied warranty that they will fit his guns

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Meaning of:Completion

Fit For its Purpose

Responsibility of theContractor:

1. To use his highestskill and knowledge

to fully comply toall requirementsand the obligationsas stipulated underthe Contract.

2. To carry out thework with due care,diligently andworkmanlikemanner


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Meaning of:Completion

Fit For its Purpose

Responsibility of theContractor:

1. To use his highestskill and knowledge

to fully comply toall requirementsand the obligationsas stipulated underthe Contract.

2. To carry out thework with due care,diligently andworkmanlikemanner

Kes Graevtes & Co. Contractors vs.Byanham Meikle & Partners (cont...)

Judgment by the Court that theContractor & Engineer are :

1. liable in their design through impliedwarranty; and

2. Completion of the construction worksmust be FITNESS FOR PURPOSE .

Therefore the Contractor is liable andmust comply as per the clientrequirement.


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Contractors Duty & Responsibility

Before Award

Appoint ConsultantsDesignSubmit the Proposal as per

pre-bid document/ needstatement

After AwardRevise DesignsDevelop details designs asapproval from P.D.Seeks Local Authority approvalManaging the Sub-Contractorsand/or SuppliesConstruct & CompleteSupervision & QualityAssuranceProgress Claim, VO s, EOTHanding Over, Cert. of FitnessDesign GuaranteeMaintenanceAs-built & manual

Attend to Defects 12


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ii. Contractors Consultants

Contractors responsible

1

Consultants

2

PlanningStage

Supervision &Completion

No replacementw ithout PDs Approval

Government

3Direct paymentthrough D.O.A


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iii. Project Director (P.D.)

Known as ProjectDirector (P.D.);Conventional = S.O.

As agent to theGovernment

Responsible theGovernments interestespecially Best value

for money

Manage & Administer the Contract:

Contractor comply with procedure &Contract obligation SCOPE, TIME & COST


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Before Award

Form the Project TeamPrepare the estimateIssuance of LOI (nego)Preparation of Conceptdesign & need statementPrepare Pre-bid documentTender ExerciseTender Evaluation &Clarification before Award

Issuance of LOACoordination with Employer

After AwardApproved ContractDocument & SigningProject MonitoringValuation & Payment

Managing the ChangesManaging the VO, EOT &ClaimsIssuances of CPC/CNCAccepts Handing Over

Verify & Approved the FinalAccountContract Closing

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P.D.s Duty & Responsibility


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4. C HARACTERISTIC DESIGN & BUILDContractors Duty & Responsibility

iv. Discrepancies

GovernmentRequirement (GR)

Contractors Proposal (CP)

1Discrepancyi

GR prevail

Technical & Quality >GR

ii

CP prevail without extra cost2

GR discrepancies

P.D.s decision & issueinstructions

3

CP discrepancies

InformP.D.

P.D. decide &Contractor to comply

without extra cost

Issue:Contractor not

inform & amend &

construct!!!


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5.

Advantage -Design &

Build

SinglePoint

Responsibility

SimplifiedContractual

Arrangement

Speed ofProcurement

Permits PriceCertainty

Products FitFor Purpose

Design Benefits

BetterBuildability/Constructability

ImprovedWorking

Relationship

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5. Advantage- Design& Build

Only Contractor is responsible for alltasks from planning to completion

Risk is transferred from theGovernment to the Contractor

Major management responsibilities aretransferred to the Contractor including

managing activities and ensuringbudgeting, scheduling and meetingsystem performance specifications

1. Single PointResponsibility

Only one party involve

Should problems arise, Government willonly recognise a single party i.e. theD&B Contractor

2. SimplifiedContractual

Arrangement

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Reduce total project time from planningto ultimate completion due tooverlapping design and constructionactivities

3. Speed ofProcurement

Lump sum price for all worksContractor shoulders the risk of hisestimate of the actual scope of workand the price quoted

4. Permits PriceCertainty

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Employer is guaranteed of the qualityand standards required of the finishedproducts

5. Products Fit ForPurpose

Reaping the full benefits of Contractorsinnovative and economically optimaldesign expertise

employer has a choice of options indesign

6. Design Benefits

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Since Contractor plays a majorrole in the design stage, hisexperience in buildability is put touse in realizing products that boastof innovation, efficiency inproduction and cost effectiveness

increased creativity in areas ofdesign, methods and materials

7. BetterBuildability /Constructability

Simple line of communication with theContractor, i.e. confined officially to thePD / PD Rep. and the Contractor

8. ImprovedWorkingRelationship

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6. Disadvantage-Design & Build


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X especially during post contract stage

X any changes made by govt. shall be at

cost and time premium

X cost of making changes is relativelyhigh

X no direct access to designers to issuechanges, all with Contractors consent

1. Little flexibilityto change

especially at tender stage

difficult to evaluate the relative merits ofcompetitive bids

may prolong tender evaluation

2. Difficulty inEvaluation

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o Contractors proposal requires:

preparation of design,specification &

financing proposals.

o To achieve this end, the Contractorneeds to engage designers, advisors,specialists etc. in order to submit acompetitive bid.

o These leads to high cost. It will be awaste if he is unsuccessful

3. Uneconomic Useof Resources

Some non-technical employer mayhave to appoint another set ofconsultants to take care of theirinterest, leading to pay anotherprofessional advisors

4. HigherProfessionalOutlay

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Some non-technical employer mayhave to appoint another set ofconsultants to take care of theirinterest, leading to pay anotherprofessional advisors

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Not a technicaldepartment

Conceptual DesignConsultant (e.g.

Architect; Engineer(C&S; M&E), QS; etc.

Govt.s Representative

Design & BuiltContractor

Sub-Contractor &Supplier

Design Consultant(e.g. Architect;Engineer (C&S;M&E), QS; etc

Legend:

Day-to-day InterfaceContractual Relationship

1

2



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Precise & concise requirements willlead to a complete and effectiveproposal from Contractor

may take longer time to prepare

sketchy requirements may lead tolonger clarification time before award

management responsibilities andOwners/Employers expectation mustbe explicitly outlined

unclear / vague requirements maycause ambiguities which leads todisputes and claims especially afteraward

5. EmployersRequirementsmust bepreparedcarefully

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o Minimum control over how the works

are done as works are concurrentlyongoing simultaneously with thedesign, more often than not Contractortend to practice `build first & designlater

6. MinimumEmployersinvolvement

Tendency of Contractor to ` design downto a cost or to do value engineeringwhich leads to changes with theintention to make as much profit as theycan, especially after award

7. Changes withthe intention

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Contractor has to face theconsequences if designers breach thedesign liability

professional indemnity insurance doesnot cover for `fit for purpose, soContractor is deemed to compensatethe Govt.

Employer will face more problems ifContractor ceased to exist

8. Problems withDesign Liability

leads to many misunderstanding andconfusion during implementation9. UnfamiliarisationTo Practitioners

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7. Option - C ONVENTIONAL OR DB?

Treasurys Circular Conventional

tender

Design & Buildtender

SPP5/2012

Meet Criteria?


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No. Description Answer Approach

1. Time for procurement &construction required shortertime period

Design &Build

2. Try to involve in during thedesign stage i.e. before the

selection of the Contractor

Conventional

3. Involve specialist as theNominated Subcontractor Conventional

4. Employer prefer to change theproject brief during designand/or construction stages

Conventional

5. Client & consultant able tosupervise project directly Conventional



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No. Description Answer Approach

6. The scope of work too complexand specialised expertise that isnot in the Department

Design &Build

7. Design of building / structure isdetermined by the equipmentsystem

Design &Build

8. Special projects to be completedin a short time due to the nationalinterest

Design &Build

9. Standard plan/design Conventional



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Sewerage Infrastructure Procurement Methods Conventional vs Design Build