Case Study Key Issue 1

Question 1

18. How would you go about re tendering.

Answer 1

a. I would first create a shortlist of contractors by issuing out expressions of interest and getting feedback, with the hopes of having between 3-4 tenderers. I would then issue the tender information, in this case as soon as possible, ensuring that they all had the same times, and sufficient time, in which to price the works.

Question 2

19. Why was a negotiated procurement route selected? What were the advantages and disadvantages?

Answer 2

a. A negotiated procurement route was chosen because the clients priority was speed to start construction, it was also with a trusted contractor that the client preferred, this allowed earlier onboarding of the contractor to the project.

Question 3

20. How was the contractor chosen?

Answer 3

a. Previous satisfactory work carried out by contractor and myself, locality to the region, experience delivering similar schemes

Question 4

21. Why was an Intermediate Building Contract selected over say a JCT D&B?

Answer 4

a. As the client wanted to retain control over the architectural design elements, but also wanted a standard contract for medium and regular sized construction projects, that are straightforward in nature, it contained all of the relevant clauses.

Question 5

22. You mention the risk was handled through effective partnership, but what were the underlying risks and what methods were put in place to combat these?

Answer 5

a. There was a risk that the contractor could take advantage of being the only tendering contractor and price this into the tender return. Therefore, this was mitigated by the contractor providing 3 quotes on all major packages. quotes were also interrogated in detail, and large measured items cross checked and remeasured where there was dispute.

Question 6

23. At what RIBA Stage was the contractor brought in to assist and advise on design of the M&E?

Answer 6

a. For the M&E design it was stage 3, for the rest it was stage 4.

Question 7

24. You mention that the costs returned were 28% higher than the cost limit - where were the biggest variances seen?

Answer 7

a. The MEP works constituted most of this, as additional AHU’s were added into the scheme, this further led to the addition of the plant deck (originally priced as an upper floor by the contractor), which added further price.

Question 8

25. What is a plant deck, and how is it constructed?

Answer 8

a. It is a timber structure built and resting on timber stilts which sits and spans across multiple or a single room, above the ceiling. It is used to bear the weight of mechanical and electrical plant when it is unable to be hung from the higher roof structure due to it not being structurally sound enough.

Question 9

26. You mention that selecting a single contractor reduces cost certainty, but what could you have done to combat this and ensure that costs were fair and reasonable?

Answer 9

a. I requested the contractor provide 3 quotations for the main works packages, such as MEP, joinery/carpentry, finishes, and FF&E

Question 10

27. What is VFM?

Answer 10

a. Can mean multiple things, best out of budget, best value per pound for the client

Question 11

28. You mention general inflation in the period being a cause for an increase in cost limit - should you not have included for inflation in the period within your estimate?

Answer 11

a. There was a 2 month allowance in the original cost plan for inflation, based on an assumed tender and construction period.

Question 12

29. How did you calculate inflation?

Answer 12

a. I utilized the BCIS building cost indices, using the present day and future date as two points in time, dividing the future by the present minus the future, to give me a percentage to apply to the bottom line.

Question 13

30. What were the VE items that reduced the costs and were any of the options proposed by you?

Answer 13

a. I made some minor proposals to the design team for consideration so they could then put forward and advise on. For example from experience on other schemes similar in nature with this client, I was aware that the data cabling could perhaps be substituted from CAT6A to CAT6. I noted that the contractor had proposed £13k for a banksman to be on site during construction, and proposed the question to the client and design team if there was ana alternative, to make use of the new recently erected fencing.
b. Large VE items included the change from an upper floor solution, to a simple plant deck solution to carry the weight of the mechanical plant.

Question 14

31. What is the risk of VE?

Answer 14

a. Lose sight of purpose, and start omitting important design aspects
b. Could have an impact on whole life cycle costs

Question 15

32. Did your cost plan originally not contain tender inflation and risk allowances?

Answer 15

a. At the time it was unknown when the project would be tendered, therefore 2 months of inflationary uplift was included and any addition was noted as excluded.
b. I included total contingency in the form of NRM risk allowanced at a total of 10%, as even at that time the design was at stage 3 with no more foreseeable changes.

Question 16

33. When you went out to tender a year later, did you advise the Client that a cost plan would need to be updated since so much time had lapsed?

Answer 16

a. I advised the client I should create a pre-tender estimate based on the updated design, prior to getting tender returns back.

Question 17

34. Option 2: Reducing scope? Is this omitting in its entirety or would these works need to be carried out at a later stage?

Answer 17

a. These are omitting the works altogether from the project, for example omitting cork wall boarding which was purely aesthetical, which could then be added back in future months as a client direct expense, not falling under the main project budget

Question 18

35. Did you advise on design elements

Answer 18

a. I didn’t advise on the design of the project, and I know to not do this as this doesn’t fall under my scope of services, and my companies PI cover does not cover liability for construction design.

Question 19

36. What is the difference between CAT6 and CAT6A?

Answer 19

a. The difference is the data speed that the cable can carry, this produced a saving but both cables still serve the same purpose of data transmission. it is cheaper material.

Question 20

37. How much was the saving for the value engineering.

Answer 20

a. Total saving made was £153k inc scope reduction and negotiated items. (all part of same register)

Question 21

38. Did you advise the design changes?

Answer 21

a. I didn’t advise on the design changes, however I made proposals, and areas of focus as I knew where the main costs were in the design and tender return. I then negotiated costs of these changes with the contractor, and advised on suitable allowances for any provisional sums.

Question 22

39. How did you assess the contractors submission?

Answer 22

a. I requested 3 quotations from the contractor on the packages of works to ensure commercial value. I also used rates from other recently tendered similar projects, and projects the contractor has worked on.

Question 23

40. How do you successfully negotiate?

Answer 23

a. Prepare in advance and highlight areas which perhaps seem erroneous or unreasonable, then hold a meeting where items are ran through, and substantiation is either requested or costs are asked to be lowered or altered, where I would back these up with my own data collection.

Question 24

41. You had a 3-week tender period, and knew the costs would come back higher, why didn’t you produce another cost plan, or a PTE during the tender period?

Answer 24

a. Clients internal sign off procedures were monthly, so if I produced a cost plan, it would not have resulted in a change due to the timing of reporting.
b. The cost plan was based on the assumption of a competitive tender, but it was eventually negotiated due to timescales, it was widely accepted by the business this would incur increased costs.

Question 25

42. Was it in your scope of services to produce a PTE?

Answer 25

a.    No, it wasn’t agreed to produce a PTE on this project originally, and as before when I advised the client to produce one, they opted not to. Maybe on a larger project this would have served well, but this was a fast paced environment.

Question 26

43. Ok but you did one for Southport fit out?

Answer 26

a.    Yes, there was more time to produce the cost plan on this project, and the budget was able to be revised and revisited due to separate funding pots (north compared to south). This was timed it to take advantage of client approvals in the month, to achieve additional funding.

Question 27

44. Why weren’t you proactive in doing the VE prior to tender submission if you knew there were issues?

Answer 27

a.    Prior to tendering one of the key cost drivers was the storage of mechanical plant, as the specification had changed substantially. I advised the client that a structural engineer should be approached, to deduce if the previous assumption of hanging the plant from the roof is still feasible. The structural engineer was appointed and carried out a survey and produced a drawing for a plant deck option. This was then communicated the contractor post tender (the drawing was only produced at the end of the tender period) b.    I had requested the architect and MEP engineer produce a log of all design changes that have elapsed in the months prior, to deduce if they were all required. c.    It was also only known where the main cost differences between the cost plan and tender return where, when the tender was actually returned.

Question 28

45. It seems you have been a passenger throughout the tender process and have not demonstrated client care.

Answer 28

a.    I advised the client throughout the project of the risks involved with expediting a project. b.    I advised the client to go down a competitive tender route to achieve cost certainty. c.    I advised the client I should produce a PTE and review the projects cost limit in line with design changes and inflation. d.    Advised the client to carry out a VE and scope reduction exercise in which I led the workshops and facilitated the discussion, achieving a significant cost reduction of the project, eventually achieving the project under budget. e.    Due to my advice around acceleration of works, the project was achieved to the tight timescales, and the practice was able to move in prior to Christmas.

Question 29

46. If programme was a key driver, surely option 2 to re tender wasn’t an option?

Answer 29

a.    Although the practice had to move in early January, the question was asked if this could be pushed back some weeks. b.    Programme was not the only key driver, however, when the project came back over budget this became a key driver. There was little time to re tender.

Question 30

47. What are unknown risks?

Answer 30

a.    Ones where works aren’t yet known to be able to estimate cost, such as potential for asbestos in a building, or underground services.

Question 31

The tenders were received over budget, was this purely due to inflation? Did you allow for any inflation on your PTE

Answer 31

In my PTE i allowed for inflation to mid point of construction as it was previously assumed, this was only for a couple of months however, as the delay was not known at the time.

Question 32

How many tenders were received? Did you do any engagement with contractors prior to the tender process?

Answer 32

Due to the tight timescales only one contractor was entered into negotiations with. An EOI was sent out to 3 contractors initially who fitted the requirements, however only one promised delivery of the scheme at such tight timescales, and were able to immediately tender the scheme

Question 33

Can you talk me through the process of ensuring the return was value for money and market rate?

Answer 33

I ensured VFM by comparing rates to previously submitted tenders as well as in house cost data, in addition to comparing to rates from this contractor specifically. For large items where they changed from the cost plan, i did do some re measurement to ensure the quantities were accurate.

Question 34

Can you talk me through how you achieved the negotiated savings on the OH&P and M&E works?

Answer 34

Planning, friendly, collaborative, making them aware we look to reduce cost of scheme.

Question 35

What was the inflation in 2022?

Answer 35

Around 7% for that period, impacted by global events (Ukraine Russia war)

Question 36

Why would implementing VE increase programme, is there an example?

Answer 36

For example changing specification of materials could warrant longer lead in times

Question 37

What changed with the shaft wall linings?

Answer 37

It was designed previously as an insulated double walled partition essentially, instead battens were nailed to the wall and plasterboard affixed to this, with insulation in between, and with a cheaper supplier. The architect reviewed the proposal and deemed it acceptable

Question 38

Option 4 was to enter negotiation, is this not standard practice?

Answer 38

It can be seen to be standard in a sense, however this was a more direct approach to negotiation, and could have impacted on contractor relationships, or added time to the programme as the contractor would need sign off on items. Everything had to be weighed up.

Question 39

What were the key issues using a different decoration subcontractor? Why didn’t the contractor use them initially if they were better value?

Answer 39

I requested 3 sub-contractor quotations from each main package of works. The contractor used a decorator he knew and had experience with, but wasn't local to the area, so charged much more. the alternative was a similar service but local.

Question 40

How much contingency and inflation did you include in our cost plan?

Answer 40

It was envisaged the tender would happen soon so 1% was included for inflation, along with 10% for contingency

Question 41

How did you decide on the procurement route, and come to the conclusion there was no time for a competitive tender?

Answer 41

I undertook an analysis of the programme with the project manager and assessed the critical path.

Question 42

What is VE?

Answer 42

Analysis of materials and specs used to potentially provide cost savings while keeping or improving the quality of design.

Question 43

Is practical completion the correct term?

Answer 43

No, it should be date of completion

Question 44

Does the contractor have to comply with acceleration or instructions?

Answer 44

No, as this is the result of the clients imposition so can have reasonable objection. Client can then get someone else to do these works and charge this to the contractor

Question 45

What is loss and expense?

Answer 45

Direct loss and consequential loss by the contractor for delaying works, it is a relevant matter, and can be a relevant event if its a delay. (where he can prove it)

Question 46

What is a variation?

Answer 46

Alteration of the design, quality, or quantity of works.

Question 47

How do you value a variation?

Answer 47

Use rates in pricing schedule Fair rates and prices Approximate quants, use the rate dayworks

Question 48

Do you have to use the rates in the contract?

Answer 48

If the extent of works is of similar character and nature yes. if not then a fair allowance based on the contract rate should be made.

Question 49

You say you managed risk through partnership, but did you employ risk management techniques?

Answer 49

Meetings, risk register, contractual design risk allocation, completing the design prior to contract execution, clear transparent comms with contractor