Heriot Watt University Hwu Construction Essay

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This is a report for the proposal of selection on procurement routes for the new development of Auditorium. HWU is an internationally recognised university with global networks and this new auditorium development shall be an iconic development for HWU as it will held international conferences and meetings.

Generally this report is divided into 3 main sections which are identification of client needs and project objectives, critical analysis of potential procurement routes to be adopted for the new development and reasons pertaining to the chosen procurement routes. Lastly but not least, conclusion with future recommendation towards this report on proposal of procurement routes.

2.0 Introduction

Heriot-Watt University (HWU) has been established since 1821 with internationally renowned of education provider and cutting edge research, leading them to be one of the top universities in United Kingdom in providing experts in business and industrial. According to the 2012 National Student Survey, HWU has been ranked to be 1st in Scotland and 4th among universities in United Kingdom.

Besides on the ranking, HWU has been globally known as the world leading research centre in the areas of science, engineering and business. In addition, HWU has created one of the kinds of "Heriot-Watt Research Park" which actively collaboration with the industry and working closely with companies in setting up their own research within the campus (Edinburgh).

According to HWU, their operation has expanded around world which delivering degree programmes to 11,800 students across 150 countries and HWU is the 1st university has set up an in Dubai International Academic City where they provide education service to student across the Gulf and beyond. Recently, HWU has successfully secure a premises in Putrajaya , Malaysia as to develop a new campus in providing undergraduate and postgraduate programmes to students across the South East Asia and beyond.

3.0 Client's Business Needs

From the client's background, their specific business needs is not only providing top notch education services to the students across the globe but being one of the competitive universities in the world leading in research and industry collaboration.

Generally, HWU demands for latest technology implementation on their operation in order to stay competitive and ahead in the education industry. It is clear that this shall imply with the significant need of high quality technological requirement on such implementation.A strong infrastructure plays an important role in ensuring all the campus are well-communicated with a strong notion in delivering same quality teaching exactly similar to UK campus even the other campus is located at another region.

Besides that, HWU reputation towards all these years of establishment is very important and it is a great demand to them in creating uniqueness and outstanding breakthrough in order keep them stay competitive and leading in the industry. For example, Heriot-Watt Research Park is a good example of unique development by HWU. This clearly shows that HWU is consistently planning for an iconic development within the campus not only to have efficient infrastructure but better image in gaining global positioning.

4.0 Project Objectives

The main criteria of the project have been listed out as followings:

200 seats capacity

High specification technology multimedia theatre with air-conditioning

Comfortable tiered seating that provides excellent visibility

Full size interactive screen and computer driven presentation facilities

Suitable for conferences, lectures and presentation

4.1 Time Milestone

In terms of strategic point of view, early completion of this project is required as the client may need the new Auditorium in attracting students around UK region as well as Europe. Besides that, clients may wish the duration of the construction period to be shorter as the residues from the construction activities may affect the university operation such as noise interruption while having classes or lectures, dust and dirt from the construction sites, temporary diversion of road access in the existing campus and etc.

Besides that, the data from the HWU official website showing a strong figures of increase of student in UK campus which tickles them in having a new auditorium as to fulfill the demand of venue for lectures and presentation needs. Without the auditorium, HWU may face difficulties in arranging lectures or academic presentation and jeopardizing their service quality.

4.2 Cost Milestone

In terms of cost aspect, the new auditorium development will incurred a high development cost as it need to be designed with high specification of building acoustic and M&E services in meeting HWU quality commitments to the end user. No doubt cost is a critical aspect to HWU but it should not overlook by cost constraints in delivering a modern auditorium with facilities of multimedia theater.

Although, cost constraint can be overcome by lowering the specification of the design but this will deviate from initial notion of the development. Therefore, cost cannot be considered the 1st priority of the project objectives but it must be monitored and controlled efficiently in order to procure the right design and solution to meet the requirements

4.3 Quality Milestone

Based on the client's brief, it shows that client understand well on their needs of the building. From this point, client involvement towards the design and selection of M&E system are relatively strong as they are the end user. This also shows the level of complexity of this development is considered high as client need a unique design which involves a series of design development on aesthetic and sound engineering.

In addition, the M&E system for the auditorium might be sophisticated which requires a series of specialist to design and install the system. All these complexities require high coordination and management in order to ensure all the works being carried out properly.

Relationship of Key Milestones

Cost

Quality

Time

Project Key Milestones

5.0 Potential Procurement Strategies for HWU New Auditorium

Generally, there are 3 potential main procurement strategies for this new auditorium development. Analysis on the potential procurement route is in conjunction with the client's risk capacity and the nature of the development which has direct link to the key milestone. Below is the diagram on the potential procurement strategies.

5.1 Traditional Method

The traditional route can be carried out either in single stage or two stage tendering. As the design consultants are usually hired by the client with a fee package or percentage of total construction cost. The mode of payment to the contractor on the completed works can be remeasurement or lump sum basis. Contractually, consultants and main contractor enters into agreements with client individually (Brian. G et al, 2011)

Contractual Link

Lines of Authority

Single Stage Tendering

This procurement method is delivered within a sequential process which starts from full design production, preparation of tender documents, tender exercise, tender analysis and construction begins. There is no overlaps of activities occurs in this procurement method as it requires full design from the designers. Subsequently, cost consultant will produces the tender documents based on the full design before release it for the tender exercise (Brian. G et al, 2011).

Two Stage Tendering

This procurement method comes in when there is a requirement of early involvement of contractor for the project before the whole design is completed. Early inputs on buildability and planning info from the contractor on project is to create a more feasible and practical building design. Therefore, it comes with a two stage of design which 1st stage of design is released for the tender exercise and contractor will be appointed based on competitive price. Subsequently, appointed contractor together with design consultant enters into 2nd stage of design to work out on the detailed design and it works concurrently with the construction stage (Brian. G et al, 2011).

5.2 Time, Cost and Quality - Traditional Method

For time aspect, traditional often incurred a longer period as compared to other types of procurement as it requires the complete design from the designers only tender exercise can be carried out. Somehow, two stage tendering is quicker than of one stage tendering as it does not require the full design on appoint the contractor and detail design will have more input from the contractor and works concurrently during the construction stage. As for cost, it may prove to have more cost certainty on the project where contractor pricing based on design's complete design. However, initial cost commitment on the design may arise with issue with buildability and often changes at later stage leading to additional variation. Eventually, the required quality and functions of the project are achievable in this route as design is completed in accordance to client's requirement before release for tender exercise.

5.3 Design and Build

The fundamentals of this procurement system is when client wish to have a single point of responsibility which contractor requires to design the overall building and comes together with construction of the building. The design and construction responsibilities are only lies on one organization. The potential routes are novated design and build and develop and construct.

Contractual Link

Lines of Authority

Novated Design and Build

According to Brian.G et al (2011), it is common for the client to engage consultant to carry out the conceptual design which to facilitate the tender documents preparation. As the design and build contractor is appointed, the novation of the design shall take place to the successful tenderer in order to take full responsibility in producing the detailed design and sometimes the initial appointed design consultant by client may novated as well to the design and build contractor. Usually the tender document will include the novation agreement to make known to the tenderers on the terms and condition upon award. The appointed contractor shall be responsible on the total design of the project including the initial stage of the conceptual design even it is carried out by others.

Develop and Construct

Somehow, this procurement route has a slight different from the novated design and build where the client's consultant produces the detailed brief of the project and sketchy conceptual design to form as the tender documents for the tenderer to bid (Brian. G et al, 2011). Eventually, the tenderer requires to further develop on the conceptual design including detailed design and selection of materials with specifications for proposal. This often adopted by the clients who want to have the detailed design at the initial stage before it goes to the competitive bidding prices. In addition, such client will have its own in house consultants which see advantages of having same consultants with past experience on similar project.

5.4 Time, Cost and Quality - Design and Build

Eventually, time aspect in this procurement is quicker than traditional routes as design and construction stages are overlaps and integrated relying on one party only. Such arrangement promotes better communication channel among the designers and constructors as all under the same organization. Eventually, this procurement route allows the contractor to promote a better cost certainty to the client at the initial stage if the client's requirement is comprehensive and no major deviation during the construction stage. (Brian. G et al, 2011). Theoretically, design and build route is mainly meant for simple and not complex project as the quality requirements are relatively lower as compared other route. However, Brian.G et al (2011) did argued that current experience shows that there are prestigious, large and complex projects adopted design and build route if on client's requirements are captured and delivered accordingly.

5.5 Management Method

The existences of this procurement route are due to the demand of complexity, diversity and standardization of building techniques which demands for the involvement of specialist contractor (Brian.G et al, 2011). This route is specifically deals on growth in size of the project, meeting time and cost targets by using management approach to the process.

Management Contracting

As depicted by Malcolm.P (1995), management contracting is a route that the tenderer is bidding for his services in managing the building processes, collaboration with design team, and assistance on the project planning and consultation on construction method. Usually the appointment of management contractor is done early stage of the project stage even the design is yet to be completed. Upon award, management contractor will source and engage work package contractors under management contractor in executing the contract obligations. Eventually, management contractor is reimbursed with a management fee based on the works completion by the work package contractor.

Contractual Link

Lines of Authority

Construction Management

However, construction management routes have slight differences with management contract as works contractor are directly engaged by client and construction manager requires managing them on behalf of the client. Therefore, the construction manager has no contractual obligations towards the works contractor but he/she need to perform his core duties diligently. Usually this route is recommended to the client who has experience in construction and willingly to join in the construction process planning (Malcom.P, 1995).

Contractual Link

Lines of Authority

5.6 Time, Cost and Quality - Management Contracting & Construction Management.

Practically, management contracting does have time advantages as it allows for early start on site and reliable predictions on planning as it derives from the relevant specialist of the trades. Theoretically, management contracting route has a high tendency to cost more than traditional method as the final cost is uncertain which creates disadvantages to client's budget. However, it may works differently from the typical perspectives as it promotes buildability to the design and more competitive tender bidding towards the work packages which leading to potential cost savings. In fact, saving time is more than equivalent to saving cost as well as prolongation of project period leads to additional cost. Most important, it does promotes good quality achievement as it promotes buildability, better construction method and economical design from specialist.

Meanwhile, construction management does share the similarities with management contracting except the works contractors are directly engage by the client. This may turns out to be a nightmare to the client as they are committed to appointment of work contractor at the early stage without knowing the final cost of the works. Precisely, both of these routes does comes a benefit to client as client is responsible towards the payment to all the works contractors and it may improves the cash flow management of the project and contractors as opposed via main contractor.

6.0 Strengths and weakness on the procurement routes

Criteria

Traditional Single Stage

Traditional

Two Stage

Novated Design & Build

Develop & Construct

Management Contracting

Construction Management

Types of projects

Small to large, but not complex

Small to large (early involvement of contractor)

Applicable from medium to large project; as client want single point of contact

Applicable from medium to large project and client wants to control on the design

Practical for large and complex project only; experienced client

Practical for large and complex project only; experienced client

Time

Slowest

Quicker than single stage

Very fast route, if only design agreement is quick

Good speed achievement; if only competent scope design team and D&B contractor

Overlaps procedure, good speed achievable

Overlaps procedure, good speed achievable

Cost

Final cost achieved at early stage (if full design done)

Final cost achieved before proceed to 2nd stage

Cost certainty can be achieved once price and scheme design are firm

Cost certainty can be achieved if only no major changes towards the scope design

Work starts based on cost plan estimate only

Work starts based on cost plan estimate only

Quality

Good quality achievable

Good quality achievable

Quality solely depends accuracy of client's brief

Quality solely depends on scope designer

Good quality achievable but speed may influence with possibility

Good quality achievable but speed may influence with possibility

Flexibility of change

Limited, possess to variation

Minimal, allowance in the contract

Not flexible to adapt any changes

Only flexible during the design stage but not contractor's development design stage

Adaptable to changes during on-going of project

Adaptable to changes during on-going of project

Risk

Shared to all parties

Shared to all parties

D&B contractor take all the risk

D&B contractor take all the risk; only after the initial design stage.

Risky than traditional route

Most risky route; require experienced client

Table 1: Adopted from Malcom. P (1995) Summary of Choices

7.0 Recommendation & Potential benefits

In my opinion, the most suitable route for the auditorium project is management contracting route by through the series of analyzing client's needs and potential routes. Having such recommendation is due to the nature of the project infuse with complexity relating to high aesthetic requirements, acoustic consideration and high tech multimedia system. Therefore, specialist contractors are required for such job as their input on design in terms of buildability, value engineering and real competitive bidding on specialist. As matter of time, it able gives a more realistic timeline as programmes from specialist are consider more reliable as the they are more familiar than others in performing the specialist works.

Although, this procurement routes does not provide client the final cost certainty but it does promote potential cost saving through the enhancement of buildability which reduce all the potential errors or changes at later stage of construction and specialist contractors has more sound knowledge in performing cost saving or value engineering towards the works. Therefore, this is a good tool in terms of cost control as client has ability to step in even in construction stage in having changes for better value (if the changes are constructive).

In addition, I would like to recommend client to appoint a project management consultant (PMC) in managing the stakeholders of the projects as they have only internal facilities management team which might not sufficiently competent to manage the group of consultants and contractor. PMC usually monitors performance of the consultants and management contractor plus represent on behalf of the client in delivering the needs of the project.

8.0 Conclusion

Each of the procurement routes has its strength and weakness that suits various types of projects and if only it is appropriately used. Therefore, the decision of adopting any procurement route has to be linked to client's background, business needs and project objectives. Although, having the right procurement route is essential in achieving client needs and objectives but it does requires efforts and good working relationship among the stakeholders in working as a team.

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