You mentioned that the initial preferred contractor entered administration during contract signing. What specific financial checks did you implement to avoid similar issues with the second contractor?
I requested all contractors to provide their audited financial accounts so I could conduct a high level review.
Following this, I forwarded the financial information to the client and recommended they ask their in house or external chartered accountants conduct a Dun and Bradstreet check.
How did you present the options of engaging with the second-place contractor versus re-tendering to your client? What specific information did you include in your recommendation?
Executive Summary
Introduction
Analysis
Recommendation and Conclusion
Walk us through your process for developing cost plans across RIBA Stages 2-4 for the revised scheme. What were the key considerations at each stage?
I would attend the design team meetings across all stages so I could fully comprehend the increase in detailed design and what elements would need to be considered with this increase in design.
At each stage, my main considerations were how the increased detail in design would enable me to reduce my assumptions, therefore leading to a more accurate cost for my client.
The project scope changed significantly from the initial to the revised scheme. How did you manage the client’s expectations regarding these changes, particularly concerning cost implications?
As you would expect, the client was aware that the costs would increase with the development in scope.
To help manage their expectations and demonstrate where the increase in costs were occurring, I would present this in each of my cost updates so the increase could be accurately tracked.
This would also help identify any VE options should the budget come into question.
In your analysis of the two-stage tender approach, you mentioned it may be “less competitive” than single-stage. How did you mitigate this potential disadvantage to ensure value for money for your client?
During the tender stage, I stated to that contractor that this could be best managed by them tendering the second stage with an open book.
I then ensured value for money by market testing and benchmarking the contractors rates against our own in house data and other pricing books.
What specific measures did you put in place to monitor the contractor’s financial position throughout the revised project, given your experience with the first contractor?
During the pre-qualification stage, I requested the contractors provide their audited accounts so I could conduct a high level review.
Following my review, I forwarded to the client and recommended they undertake a full review with a chartered accountant.
How did you balance the client’s key drivers of cost certainty and programme certainty when recommending the two-stage procurement route?
Whilst the programme length was impacted by the introduction of a PCSA, it was ultimately deemed the best choice to de-risk the project further down the line and aid the contractor in providing a firm programme.
Cost certainty would be achieved through the early engagement and appointment of a contractor who could carry out opening up works in the PCSA period.
Your case study mentions that you presented cost plans directly to the client. What information did you include, and how did you communicate complex cost information to ensure client understanding?
My cost plans included an executive summary, my assumption and exclusions, a list of design information the cost plan was based on, a project summary which demonstrated the cost of each building element.
I ensured the client understood complete information by mitigating the use of any complex technical language and followed up each of my cost plans verbally and via writing
What factors did you consider when pre-qualifying potential contractors for the revised scheme?
The key factor I considered was the contractors suitability to the project.
I analysed this by asking them to submit relevant, similar experience to the proposed scheme along with their capacity to undertake the works.
Additionally, I requested that they submit their audited financial accounts so I could determine if their turnover was suitable for the project.
How did you approach the evaluation of variations and early warnings during the post-contract phase? Give a specific example from this project.
The contractor would either provide or be requested to provide their CP’s.
A specific example of this would be my approach to analysis the contractors cost for the revised WC finishes.
I would then analyse these in line with Clause 5 in the JCT and negotiate any items I felt were inflated.
My recommendation would then be issued to the EA for the agreement with the client.
You mentioned that “enabling works and opening up” was important to validate design. What specific risks were identified through this process, and how were they addressed?
A key risk which was identified was the loading capacity of the roof slab to facilitate the roof terrace.
This was addressed by the structural engineering providing a revised design which would be suitable for the loadings.
What were the key elements you included in your monthly cost reports to the client, and how did these evolve throughout the project?
My costs reports consisted of,
Executive summary
Cashflow
Cost breakdown
Assumptions and exclusions
Instructed and anticipated variations
Early warnings
Direct works
Provisional sums
Contingency
The cost reports evolved with the project to show the actual cashflow compared to the initial cashflow which indicated the contractors progress on site.
How did external factors (COVID-19, war in Ukraine) specifically impact your procurement strategy recommendations?
Both items made the materials market unsteady which was causing contractors to only fix their materials cost for small durations of time.
This is why the two stage approach was adopted, as it would allow the materials market time to settle prior to signing the main contract.
What were the main considerations when drafting the Employer’s Requirements for the revised scheme, particularly given the significant scope changes?
That the structure was clear and well set out and that all necessary technical elements were included.
The technical elements were particularly important as they needed to capture all elements of the additional scope.
It was also important to clearly show the contractors design portions so parties were clear on their roles.
Explain how you evaluated the second-place contractor’s tender submission for the initial scheme. What specific elements raised concerns about their suitability?
I reviewed the previous tender evaluation and highlighted items which had not been closed out in that period.
I collated these as items to be addressed should we decide to engage with them again.
Additionally, I checked that their audited accounts were still up to date and could be used as a base for assessment of their financial performance.
Reflecting on this project, what would you do differently if faced with a similar situation in the future regarding contractor selection and procurement strategy?
Overall, the project has been successful
Something I would do differently would be to analyse the market conditions further to ensure the procurement and contractor selection were appropriate.
What are the different types of insolvency?
Administration - Where an administrator is appointed who attempts to rescue the business and maximise return to creditors.
Liquidation - Where The company sells assets to pay off it’s debts. This can be either voluntary or compulsory.
Recievership - A receiver is appointed by a secured creditor (usually a bank) to recover money owed, often by selling assets.
Company Voluntary Arrangement (CVA) - A formal agreement between a company to repay its creditors overtime.
What is Shell & Core specification?
Where the building is stripped back to it’s frame.
This typically includes all finishes and essential services so the space is left as a blank canvas for a perspective tenant.
What is CAT A specification?
Where a space is fitted out with the basic office requirements, such as RAF, suspended ceilings and plasterboard to the internal face of the external wall or around columns.
It will also typically include basic Mechanical Services.
What are the differences between the JCT 2016 and JCT 2024?
Some key differences are that the 2024 suite of contracts includes provisions for the Building Safety Act compliancy and makes collaborative working a core contract requirement.
It also recognises electronic communication as the standard.
Additionally, the new contracts encourage contractors to provide sustainable alternatives.
What was the value of the PCSA period?
A total of £307 thousand pounds.
In your Case Study you note that you were dissatisfied with the quality of the technical submissions from the Contractors in the initial tenders, please can you elaborate on this? I appreciate it was before your involvement but how were they selected? Why were any of them recommended in this scenario?
TFT were generally dissatisfied with the phasing elements of the contractors submissions as they did not adequately consider the in use elements of the buidling.
The contractors were recommended based off a mixture of my firms previous experience with them and their scoring in the PQQ.
In the aftermath of the Covid Pandemic and the struggle to fix material prices, how might you deal with this contractually?
Fluctuation Option C
Advanced payments
Fixed price allowances
What were some key contract amendments in the main works stage?
Two of the key contract amendments were the ownership of the ER’s and the liability for the existing structure.
The amendments included the Main Contractor taking full ownership of the ER’s following a 6 week review period, which the contractor agreed to.
The second was to address a clarification the contractor provider at tender which was negating their liability on the existing structure.
We negotiated this with the contractor and agreed that following the opening up works and review of the reports and findings, they would be liability with the existing structure.
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Accounting Principles30
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