Procurement

Question 1

Name some procurement methods

Answer 1

Traditional
Design and Build
Management

Question 2

What are the key features of traditional procurements?

Answer 2

• Design process is separate from construction
• Client is responsible for administrative matters (usually appoint a CA except in D&B)
• Speculative risks are balanced between parties (more in clients favour on lump sum)
• Used on lump sum, measurement or cost plus

Question 3

Benefits of traditional procurement?

Answer 3

• Client retains total control over design, which benefits quality
• Degree of cost certainty as lump sum, though client takes risk on design and quantification
• Simple evaluation of tenders as they’re on a like for like basis

Question 4

Disadvantages of traditional procurement?

Answer 4

• Longer to start on site as it is a sequential process where the design needs to be fully completed and then the bills of quantities need to be produced
• No single point of responsibility -risk with the client for design and quantification
• No opportunity to harness the expertise of the contractor in respect of buildability

Question 5

What are the key features of d&b procurements?

Answer 5

• Design & construction in a lump sum
• Matters relating to administration are in the hands of the contractor
• Speculative risks largely with the contractor

Question 6

Benefits of design and build procurement?

Answer 6

• Quicker start on site as the design and construction periods can overlap
• Priced before construction starts. Can enable reasonable amounts of cost certainty
• Single point of responsibility for design, quantification and construction therefore reduced client risk
• Expertise of contractors can be harnessed in respect of buildability

Question 7

Disadvantages of design and build procurement?

Answer 7

• Quality can be affected as the client loses some control over the design and the contractor may take the cheapest route to meet the ER’s
• Post-contract change is more difficult to price -a lot depends on the level of detail in the CSA
• More difficult to evaluate tenders as bids may be on a different design basis to one another

Question 8

What are the key features of Management procurement

Answer 8

-Overall design is responsibility of the client’s consultants and contractor is responsible for defining packages of work and managing them
-Appointment of management contractor is negotiation or tender. They then competitively tender works packages
- Client is responsible for administrative matters (CA)
- Management contractor cannot award extensions in time without approval of CA

Question 9

Benefits of management procurement?

Answer 9

• Client retains design control
• Detailed design can be progressed in parallel to construction work (early start etc)
• Design changes can be made through construction (providing it is not abortive to already let work packages)
• Low risk for design and quality

Question 10

Disadvantages of management procurement?

Answer 10

-No certainty over costs - final costs not known until last work package is let
- Speculative risks are largely with the client “trust, goodwill and in-house expertise”
- Higher risk for costs and time