"The key of thrust of achieving the excellence is the delivery of best value for money. This is not the lowest cost but the best balance of quality and whole life cost to meet the users' requirement."
The objectives of successful projects are not only in the terms of the time, cost and quality but the factors such as selection of appropriate technology, skills, employment creation, use of small medium and micro enterprise, environment friendly design.
This reaches proposed to determine the building procurement systems and the best procurement system suitable for a new Motorway Services Area (MSA) in the north of England along with the proposal for future projects by scenario taken in mind.
Part1: 1 of the report deals with attainment of Client's objectives for the project. It gives entire idea about the project along with introduction to Motorway Services Area (MSA) in the north of England. Work schedule as per Client and need for project is given in this part. Talking about Client's objectives, it focuses on primary parameters such as Cost, Time and Quality along with factors like Risk and Responsibilities, Sustainability and future Relationship interest.
Part 2: The appointment of contractors or consultants to design, construct and/or maintain a building or asset requires specialist knowledge and experience, involving technical and contractual issues specific to the construction industry are mention over here in this part along with their responsibilities till the completion and maintains.
Part3: focus on the different procurement methods such as traditional method, design and built method, construction management and partnering considering the importance of Cost, Time, Quality factors of procurement strategy
Part 4 selection of strategy plays important role in any project, same thing is done over here along with the justification. How partnering is suitable to achieve the project objective and Strategic Partnering is recommended for future projects.
Baytree plc is a dynamic retail and leisure group that is currently investigating the feasibility of a development proposal for a new Motorway Services Area (MSA) in the north of England.
B. Existing operations: -Two other MSAs in the UK.
-Number of mid-range hotels.
-Small number of multi-sport clubs, agricultural interests.
2. Project Brief
The proposed new MSA on the M7 motorway in an area of outstanding natural beauty at Salteroyd in the county of Yorkshire along with the site in an area of Special Scientific Interest (SSI) .With intention to incorporate as many environmentally sensitive design and construction features as possible into the Salteroyd proposal.
Current Scenario states that Baytree plc entered into the agreement to acquire land subject to approval of planning commission.
Need of the Project
Providing an opportunity to stop and take a break in the course of their journey in Sustainable and eco-friendly environment facilitating important road safety function to road users.
The client reviewed sustainable and eco friendly practice for the purpose of determining the appropriate strategy to be pursued to cater for road user requirements as well as surrounding environment.
Baytree plc is pioneering group in the field of Sustainable and Eco-friendly construction with existing MSA and Commercial Development.
MSA Salteroyd is Unique and Innovative Project for Baytree plc.
2.3 Work Schedule
M7 motorway Salteroyd
Service Area - retail, restaurants and WC facilities etc.
Petrol Filling Station (PFS)
with associated kiosk
Long Goods Vehicle (LGV)
Motorway slip roads - inbound and
Pedestrian bridge access to
New Build Budget Hotel (75 bedrooms)
M7 motorway Salteroyd
Mirror facilities AS ON the Northbound site
Motorway slip roads - inbound and outbound
TABLE 1 : Work Schedule
3.1 Project success criteria
Success should be evaluated to objective and measurable criteria established at or soon after the project's foundation. The Foundation of the project success is the management of the project and equally that of stakeholder expectations.
Project success is really means delivering on time and on budget to most of the customers?
The recent research conducted by Baytree Plc found that construction practice varies considering projects, climate change agenda; reduce CO2 emissions, consumers selective buying decisions as regards the mechanisms used to provide service areas and the nature and extent of involvement by private agencies.
Baytree's intended vision of Sustainable Development regularly measure and report standard project success criteria through enablers for a successful project as below -
1. Clear and consistent strategic direction, with active backing of Baytree's leadership who actively sponsored the project at their respective governance levels.
2. Ongoing communication with key stakeholders, through a managed and structured process, to maintain their support throughout process of project and in future.
3. Employ an integrated and flexible team structure that can evolve its skills over the procurement cycle.
4. Be prepared to take on the challenge of multiple bidders by developing clear rules of engagement and empowerment of the project team with a well-defined mandate.
5. Outcome-based pricing reduces pricing risk in periods of fluctuation(current scenario of recession).
6. Strategic aims which capture the wider issues LIKE sustainable developments, effective procurement system including financial aspects of the project to customer as well as for client.
7. Delivering a significant step-change in the market's commercial position can be achieved, but only through a well structured competitive process.
8. Reacts well to clear, consistent and good quality documentation where risks are equitably allocated, the standard of service is well-defined and achieving market response where commercial position is reasonable.
9. Invest in a procurement support model if the solution is multi-dimensional with many possible solutions. Such models enable complex analysis to be undertaken quickly and presented in high-quality graphical terms that will assist in conveying issues to client and stakeholders.
The construction commitments and success criteria for Baytree plc bring together the seven key areas vital to delivering construction projects on time, safely and to budget to achieve a better industry.
Health and Safety
Commitment to People
Exceed current best practice
3.2.1. Project Objectives
The Baytree plc operates in an environment of change and sustainable evolution in construction which states project objective as -
Competitive drivers in the market influence the need to continuously improve to remain in their prominent positions in construction of MSA, Hotels, Clubs and Commercial Constructions.
The drivers for all are to at least meet the client, customers and sustainable objectives through delivering project that is more efficient, effective and economic.
Projects that increase satisfaction by completing these earlier than expected, improve the range and quality of products by recycling of waste material, use of natural resources which reduce the costs of the project. This also attracts the customers who have selective buying power in terms of cost, quality and sustainability.
3.2.2. Client objective
Clients in recent years have also begun to place an emphasis on sustainability and focusing more on the whole life costs. Identifying clear objectives in terms of -
- Primary Perspective
- Secondary Perspective
- Other perspective.
Focus on business outcomes
Progress toward goals and success criteria.
Measure by tracking milestones
Variance from projected completion dates.
Delivering value for money
Measure by tracking the amount of effort and money expended
Procurement transaction costs
Realization and control costs growing complexity, huge and growing amount of information and number of transactions, actors, components, regulations
Increased revenue generation
Open dialogue and positive behaviors
Using best practice appropriate intervention
For Baytree plc project objective are no longer being determined in terms of time, cost and quality only. Other factors such as transfer of skills, employment creation, use of small; medium enterprises and customer satisfaction play an important role in determining project objective and success.
Able to / want to manage several consultancies / contractors
Appropriate management link parallel activities instead of integrating their tasks.
Risk and Benefit:
Performance improvement :
Provide performance improvement across the project which can be relate to use of Key Performance Indicators will provide the project with objective (OGC,2009).
Continuous improvement within / from project to project.
Benchmarking In theory therefore, benchmarking is a very simple process involving a clear pattern of thought: Who does it better? -How do they do it better? -How can the company benefit from this knowledge?
Portfolio Management for existing as well as future developments.
Use of suitable Procurement method:
Deliver significant savings through procurement
Increase the impact of procurement decisions on local Economies
Achieve sustainable procurement, realizing benefits to local authorities, their partners and also society and the economy.
Sustainable building design and construction for all its future developments by Creating sustainable communities and a fairer world:
Protecting natural resources and local materials
Reuse of waste material and construction to achieve a low carbon
Application of supply chain
Process Management Optimization and Enhanced Supplier Performance Visibility
Encouraging research development and innovation time to time.
Commissioning process and handover into operation must be seamless
Win-win situation for all of the parties who are involved.
Motorway Rest Areas must provide all road user facilities like parking, fuel, emergency vehicle repairs, cash operated telephone, free toilets and hand washing facilities, access and facilities to children and disabled people etc., providing 24hr services.
Statutory developments Plan
Prospective trends in development
3.3. Procurement Issues
Baytree plc is partially experienced client(Assumption) in providing the facilities of MSA and related commercial developments. Recent market research explains the need of sustainable design and construction which consequently results in new approach to procurement selection. Based on the experience in existing projects of MSA, new approach to MSA Saltroyd and vision for future MSA projects Baytree identified Noticeable and Hidden Procurement Issue.
Noticeable Procurement Issue
The suppliers bargaining power. And length of time it takes to recognize the right supplier
The client's representatives must clearly understand and implement leadership principles
safety and indemnification
Complexity resulting out of Litigation & High costs
The time required to correct problems that occur when a supplier is not in agreement
Technical knowledge and skill & commitment to management of quality skill & commitment to management of cost
The activities of existing competitors.
The development of long-term relationships
The creation of an environment which allows for the resolution of issues during project procurement.
Client decision on transfer of risk or to control the risk
Hidden Procurement Issue
Selection of exact procurement system based on -
completion deadlines ( known for Phase I and Uncertain for Phase II )
cost of construction ( Certain, Phase I- £19M , Phase II-£15 .)
adequacy of design and construction ( sustainable development )
quality of materials and workmanship
liability for defects
Exact Qualifications as Selection Criteria for procurement system.
Minimized Decision Making in Selection Process / approval chains.
Agreeing client/consultant/contractor deadlines to achieve fast-track procurement.
Definition and differentiation of Risk, Clarification and Value Added Options
Contract Management for Procurement
Lack of visibility into supplier performance.
The inability to locate pricing agreements for specific suppliers
Developing supplier chain relationships in order to satisfy a client's construction needs.
improved skills of development and empowerment;
The use of performance measurement tools for value,risk management and whole life costing.
4. Appraisal of Potential Procurement Systems
4.1 Procurement -Definition
According to Masterman (2001) client satisfaction is of upmost importance and hence the selection of the most appropriate procurement methodology is vital since it governs the success of the project within the client's desired objectives; failure to select an appropriate procurement approach is now well recognized as primary cause of project failure.
Lenard and Mohsini (1998; p.79) defined: "Procurement is a strategy to satisfy client's development and/ or operational needs with respect to the provision of constructed facilities for a discrete life cycle."
4.2. Choice of Construction Procurement System
Variety of procurement methods is available for acquiring a design and construction facility. Choice will largely determine after assessing the -
4.3. Principle for Procurement Selection
According to review (HA, 2005) published its first comprehensive Procurement Strategy which included ten principles which were to be applied to all road user services and procurement activity.
Early creation of delivery team : Early contractor involvement for more scope in innovation, better risk management, and forward planning of work
Integrated and incentivized supply chain : Integrating the supply chain with its specialist knowledge, incentives for innovative ideas to give best value solutions.
A competitive and sustainable supply chain : Maintaining a good quality supplier base motivated and incentivized to work with the Agency.
Clear points of responsibility, no unnecessary layers of supervision : Clarifying roles and responsibilities to reduce contractual interface problems, eliminating resource wastage from unnecessary layers of supervision.
E-procurement : To make tender processes, communications and performance measurement more efficient.
Selection of suppliers on the basis of best value : Identifying the Aspects of quality which add real, affordable value, using reality checks to Confirm quality submissions and promises.
Fair allocation of risks : Risks will be allocated to the party best able to Manage them and the agency will accept risks where suppliers are prepared to work, manage them and control the consequences.
High quality design : Design solutions will be based on whole life value.
Performance measurement with continual improvement targets : Establishing a long term plan of client improvements under the Construction Clients' Charter to confirm benefits in the form of time and cost Savings, reduced defects and accidents, and improved whole life value.
Collaboration : Clients working together to achieve better value and more effective delivery of services to customers
Apart from this Baytree plc need some more consideration when developing the procurement strategy as:
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Effective evaluation processes to appoint the consultants and contractors.
Avoiding waste and conflict through both the use of team working.
Whole life costs and sustainability to meet user needs.
4.4. Commissioning of Consultants
As it is important to prepare a project brief detailing aims & objectives, scope & performance standards; quality, cost and time parameters etc. Subsequently consultants and/or contractors brief needs to be prepared indicating services required, responsibilities, terms of engagement etc.
The various consultants engaged on a project will have their own individual contracts with the person who employs them. Under the normal arrangements this will be the client (or employer as referred to in the JCT forms) but where a consultant is involved as a part of a design and build arrangement then the contractual relationship may well be with the contractor and the consultant.
Commissioning of consultant is step by step process once objective is finalized.
Commissioning of Consultant is on the basis of following-
Pre-selection -Qualification -.Key criteria for short-listing -Selection - Terms of engagement:
Identified consultant for Baytree plc as -
4.5. Overview - Building Procurement Systems
Figure : Alternative procurement routes for clients in the construction industry Source Harris and
McCaffer (1996) and Franks (1998).
5. Appraisal of Procurement Systems
Appraisal -Â According to Wales Assembly Government, Appraisal is"The process of defining objectives, examining options and weighing up the costs, benefits, risks and uncertainties before a decision is made. Considering Baytree plc success criteria and objective procurement systems analyzed as -
Design and Build
5.1 Design and Build
C:\Documents and Settings\Mausam\Desktop\New Folder\design n built.jpg
Morledge et al. (2006; p.116) tell about Design and Build that it is a fast track strategy, wherein construction can start even before full detailed design in complete.
Masterman (2001) also describes it as a package deal, calling it an integrated system where one organization, generally a contractor, takes all the responsibility of managing the design and construction of the project.
This method of procurement involves the contractor being responsible for design as well as construction, it can be suitable for:
All clients, including inexperienced clients (most suitable) and those requiring distance from the project.
Although most suitable for inexperienced client, suitable for MSA Saltroyd which is unique and innovative project (assumption) till date for Baytree plc. The Design-Build approach gives the client a single point of contact. However, the client commits to the cost of construction, as well as the cost of design, much earlier than with the traditional approach. (Construction Excellence-2004) need only blocks also in the next digram inside box suitability achieved , need
Suitability for Project
One if the major point where Design and Build comparatively scores less, it has been widely believed that Design and Build project lacks quality and it is also because of limited control over detailed design. However, it can be suited if brief is carefully studied and also presence of skill based boards on the project
If client's requirements are properly mentioned beforehand and no major changes are likely in the project, price certainty is achieved. If client changes the project scope time and again, it can be expensive.
Due to the integration of design and construction phase, the speeding of the project happens leading to completion of project within set amount of given time, hence giving it an edge over traditional procurement method
Advantages for Baytree's MSA Project
Baytree plc include vision in same line projects along with timely completion of MSA Phase I in 2012 so time and speed of construction majorly forms the biggest additional point here.
Because of above mentioned factor, the faster project generally means cheaper project and more economic with sustainable developments and designs.
Sole responsibility means lesser headache to Baytree plc considering the fact to deal with one organization. Leading to better communication and concentration in the whole project phase considering sustainability and economic construction with ongoing and future projects.
Disadvantages for Baytree's MSA project
Recent Market Research has change the criteria for Baytree plc in conventional practice of construction which leads initial difficulty for preparing a detailed brief and strong concept design for choosing able contractor.
Baytree plc agreed to construct sustainable and economic construction in future so high cost of tendering is another point as similar prototype construction every time.
In case of variations are also considered expensive as Baytree always innovate new techniques and environmental friendly in construction.
Comparisons of tenders are equally difficult in Design and Build.
5.2. Construction Management -
Figure 4: Construction Management- Morledge et al. (2006; p.113)
As elaborated in Constructing Excellence (2004) Construction Management is similar in concept to Management Contracting. Contractors are contracted directly to the client and the construction manager manages the process for the client on a simple consultancy basis.
Construction Management requires constant involvement by the client so it is really only suitable for experienced clients.
CM enables the designer to design, the CM to manage the trade contractors to produce the elements and the Client to direct the project for which he is ultimately responsible.
Suitability for Project
If during early stage, a good discussion with all the parties involved and also including the advance details coming in the project can be well thought of; a very economical, speedy and good quality finish product can be achieved.
Need to achieve
Suitability achieved This one has uncertainty of price and generally causes more profit to contractor in most of the cases than the client. Though in Construction Management; client has direct contact with work package contractors, hence can control over costs issues to some extent.
Saving potential for the project as the overlapping of design and construction processes; even early input from the contractors involved makes unnecessary difficult work easy to follow later during construction.
Fast tracking of projects which enables fast-track construction.
Advantages for Baytree's MSA Project
As Baytree plc form requirement of Design and Construction for both project (MSA -Northbound, Southbound), contractor's expertise available to design team in crucial pre construction period.
Detailed design can be well thought of as well as degree of variations throughout the project, although it can go spectacularly wrong.
Specific deadline for the project is 2012 for phase I. So early start on site, fast track procurement is available by adopting such technique ensuring preconstruction phase properly designed.
This system is Suitable for technically simple or complex projects where speed, quality and cost are important. Sustainability which is the theme of MSA Salteroyd.
Low risk for the Construction Manager as high cost is involved in such types of Projects.
Baytree plc has existing two other MSA in UK along with other commercial developments which make them responsive client for adopting such Procurement system.
Disadvantages for Baytree's MSA project
Uncertainty of price remains problem to some extent to Baytree plc as direct involvement is not involved in design and Construction.
As a Client, Baytree PLC needs to be informed and active to operate such procurement strategy.
Lot is also dependant on issues like trust and mutual agreement as involvement of consultant and contractor is still uncertain because project has new parameters/ objective involved this time.
Masterman (2001) has elaborated partnering on these three fundamental elements:
All the parties involved in the project, or series of projects, including subcontractors and suppliers, work together in partnership to ensure that mutual project objectives are met by improving the performance of all the participants.
Methods of problem resolution are agreed at the commencement of the project.
Every effort is made by all of the participants to ensure that the performance of the project team is continuously and measurable improved.
A set of strategic actions which embody the mutual objectives of a number of firms, achieved by co-operative decision making
1st generation - project based
2nd generation - a series of projects for one client
3rd generation - building a virtual organisation
Benefits result from:
reducing waste, finding savings, developing more efficient processes, better designs, new technologies, more effective working i.e. delivering more for less
First generation partnering
Second generation partnering
Table 2: Comparison between traditional, 1st and 2nd stage Partnering; Source: Benett and Jayes (1998)
C. The Construction Industry Board- CIB (1998) has provided definition of Partnering as:"Partnering is a structured management approach to facilitate team working across contractual boundaries. Its fundamental components are mutual objectives, agreed problem resolution methods and an active search for continuous measurable improvements."
Partnering can be divided into
1. Project Partnering
2. Strategic Partnering- a series of projects for one client
D. Application of strategic partnering is different from project partnering. The latter always targets the achievement of partnering goals and project performance, while the former opens the scope for the continuity of the reciprocity between involved parties (Barlow et al., 1997; Winch, 2000). In considering this, the authors therefore suggest that strategic partnering be considered as process-oriented, and project partnering as result-oriented
E. Suitability for Project
In Westminster University Report; Barlow et al. (1997) suggests that three out of five clients have claimed about improvements in construction quality.
Continuous improvement by transferring experience from one project to another
No need or requirement for re-bidding of each individual project
Studies have showed that partnering results in lower cost than traditional methods.
Due to reduced design times, early start on site and short construction periods has made partnering a less time consuming procurement method
F. Advantages for Baytree's MSA Project
All the three main objectives: Cost, Time and Quality can be well achieved for Baytree.
Second generation partnering: Strategic Partnering has specially achieved the mentioned objectives of MSA Project of Baytree plc as continuous improvement, sustainable developments with current scenario of market and environment.
With existing projects of MSA Baytree plc repeat of good practice learned on earlier projects.
More communication and fewer disputes reduced confrontation as number of consultants/contractors in MSA Saltroyd are more through effective channel from construction to completion stage.
Positive point to those clients like Batree plc who have similar projects coming up in the future, giving more scope for continuous improvements in cost and quality.
H. Disadvantages for Baytree's MSA project
MSA Saltroyd is considered as continuous improvement project for existing and future projects of MSA. Accordingly some disadvantages as studied in Wood (2005) reports about the relationship between the clients and the contractors and difference aroused on cultural and economic issues.
-Issues like trust and honesty are not easy to obtain and takes time.
-Risk/ reward sharing is appropriate method but still proof of disproportionate risk sharing.
-Confusion over contractor's margins to be kept high or low.
6. Appropriate Procurement Strategy
Benett and Grice (1990) emphasized the importance of procurement by saying that the choice of the most appropriate procurement strategy has been widely recognized as a major decisive of project success.
Newcombe (1992) further added that the selection of the procurement path has much more deeper meaning than simply establishing contractual alliance.
6.1 Procurement Selection
6.1.1 Partnering - New Direction for Baytree plc (MSA Saltroyd Project)
Ronco, W. and Ronco, S. (1996) states that "Partnering is an organized effort to improve communications in design and construction projects. If designed and implemented well, it can improve project communications, profitability, and quality while reducing costs, conflict and exposure to litigation."
Jacob Norvig Larsen (2007 ) states insight into Partnering as - a certain way of organizing collaboration in construction projects characterized by - dialogue, trust, openness, early inclusion of all partners, shared goal, shared economic benefit and shared activities to facilitate dialogue and trust.
Baytree plc and its MSA Project is involvement of number of different consultants and contractors. To meet complex business needs, effective leadership and consistency in operation is primary agenda for project procurement through partnering which further explained by David Mosey(2009) as " A revolution in procurement and project management and collaborative system for achieving the successful planning, design and construction of any project". Also Procurement Outsourcing Model would give the right path for Business objective.
Figure 1 - Procurement Outsourcing Model Source- Procurement and Partnering Workshop(April,2008)
Consideration of Baytree's existing MSA project and future development plans in UK, people (customers) and relationships (consultant and contractors) partenrshil plays important role in long run aspiration of Baytree Success criteria.
As Finlay (2009) suggests that Frame working- partnering should be viewed as a long term relationship with the supplier community, working together to deliver sustained, and ongoing improvement. It is about applying the principles of Constructing Excellence to reach the achievable target of 10% improvement in productivity each year Balanced make and buy decision for client and contractors.
6.1.2 Key players in Partnering for MSA project
Integration of the client/consultant/ contractor team
Agreed project processes with supporting Key Dates Schedules
Efficient communications and avoidance of claims/disputes
Incentives to perform
Early appointment of main contractor
Sufficient price certainty and appropriate design detail
Appointment conditional until construction phase ready to proceed
Clear understanding of client/consultant/ contractor roles and responsibilities
Agreed process for appointing specialist suppliers/subcontractors
6.1.3 General benefits of partnering system of procurement
Baytree plc has a desire to create longer term relationships that encourage research, learning, improvement, mutual benefit .The process will only continue on the basis of demonstrable good performance.
Benefits of early contractor/consultant appointment:
Contributions to design
Early value engineering to ensure build ability/affordability
Client influence over specialist subcontractors/suppliers
Full pricing information
Control over pre-construction phase activities
Incentives to perform:
Early contractor appointment
Reduced costs = increased profit/ fees
Value engineering = shared savings
Agreed targets = increased/decreased rewards
Prospect of additional projects = always the biggest incentive
6.1.4 Affirmative benefits of partnering system of procurement:
Partnering provides an opportunity to provide better value for money in the delivery of major projects.
More efficient use of procurement resources will result from procuring a number of separate contracts "in one go".
More efficient procurement will enable contracts to be awarded earlier providing inflation based savings
Savings from more efficient working practices and economies of scale during scheme construction
Agreed solutions for benefit of project
It is clear that as construction partnering evolves, Baytrr plc (client) appreciate the benefits it can bring about as visualized. Some of the positive messages are highlighted below:
Partners will have a better understanding of key client issues and priorities.
A defect free building on with consistent construction quality.
produce a better and more sustainable building with lower running costs.
Better use of resources with greater activity which adds value to the project.
Know which constructor they will be working with at a very early stage.
Projects can commence on site and hence be completed in early period.
In a such long term project of Baytree plc for contractors/consultants which operate in an economic uncertainty(recession), the benefits of partnering with a regular client are of immense value and should act as strong incentive to perform well on all projects as -
Guaranteed long term project work if performance standards remain high without tendering every time.
Sharing of savings with the city council
Appreciated member of the team
Contributors to the local economy
Paid actual cost plus tendered overhead and profit
Conception and Design Phase:
Benefits to project owner
Benefits to design consultants, project architect, engineer and consultants
Reduced exposure to litigation
Lower risk of overrun- time, cost
Better quality product
Potential for time and cost reduction
Efficient resolution of problems
Lower administrative costs
Better opportunity for innovation (value engineering)
Greater opportunity for financial success
Reduced exposure to litigation
Reduced exposure to document deficiencies by early identification of problems and their resolution
Enhanced role in decision making and problem solutions
Reduced administrative costs are eliminating defensive case building
Greater opportunity for profit through equity involvement as stakeholder
Benefits to project contractor
Benefits to sub contractors
Reduced exposure to litigation
Expedited client/ design decisions
Better overall time and cost control
Lower risk of overrun- time, cost
Lower overhead costs
Greater profit potential
Enhanced repeat business
Reduced exposure to litigation
Improved cash flow under contract
Equity involvement improves
Opportunity for innovation and value engineering
Involvement in decision making avoids costly claims
Reduced overhead costs
Better and more reliable programming
Greater profit potential
Enhanced opportunity for repeat business
Table3 : Table of benefits to stakeholders through Partnering; Hellard (1995; p. 42)
Office of Government Commerce; OGC (2007) elaborates why strategic partnering is worth doing which can be totally related with Project at Saltroyd. It says that:
Long term collaborative relationships (Strategic Partnering) can promote better value for money by encouraging clients and contracors to work as an integrated project team -
Quality- improvements in design, more economical including major issues like health and safety performance, also measurable targets for sustainability.
Cost- minimization of the need for costly design changes, also risk of costly disputes.
Time- a timely way of construction.
Also identification of incentives to deliver definite improvements in the quality of construction and reductions in time and whole life cost.
Barlow and Jashapara (1998) relate organizational learning with construction partnering while DeVilbiss and Leonard (2000) view partnering as the foundation to a learning organization.
Baytree plc is retail and leisure group, concentrating on construction sector in long run through MSA and related commercial developments. So strategic partnership will prove beneficial..
Added advantage with CAT 3 developed by HA as a decision making tool for understanding, control and implementation of Strategic Partnering.
Risk and reward sharing. A critical success factor for team benefit.
Defined roles and responsibilities for design and construction.
Open book accounting with rigorous auditing.
These Strategic Partnering arrangements typically last for the period of 3-7 years.
The Proposed MSA(Phase I ) has deadline 2012 excluding (Phase II) and Baytree plc has plan for two more MSA in next five years. This makes the sense for HA report (2000) which states that "Partnership approach based on long - term relationships - moving form short-term project partnering arrangements to long-term relationships for the retention of skills and better resource and work programming."
Repeat good practices learned on earlier projects can further improve and target on achieving something better next time. Strategic partnering offers good value for money, but at the same time no procurement options is perfect in all respect. For partnering arrangement to be successful, all parties must be committed to making the relationship work with timely check of performance just to ensure the strategy is achieving what it was set up to do. Workshops can be really helpful in knowing the team members well, discuss about project and during various stages of project at both Phase I and Phase II.
A procurement strategy which can achieve this well enough is Strategic Partnering.
The Deming's model help to attain continuous improvement in strategic partnering in MSA Saltroyd and subsequent project as -
OGC,2007) states in report that,Strategic Partnering can deliver significant savings, of up to 30% in the cost of construction.
Result of above discussion questionary and aapendics no. strategic partnering will prove efficient for this project.
The choice of an appropriate procurement arrangement is a major determinant of project performance.
A vision of more environmentally responsible developments and constant growth in future gives insight of Baytree plc. The project MSA at Saltroyd, Northen England itself is divided in two Phases of which Phase I carries through till 2012, and fact cannot be neglected that such projects are already on a line of expansion coming up in future from the Client, considering expand of the group over the coming years.
A procurement strategy which fulfills such criteria of delivering time and again along with basic and important objectives of Cost, Time and Quality with complete Value for Money along with factors like Risk and Responsibilities, Sustainable construction should be chosen. The one effective procurement system which comes close to delivering all the requirements and bringing total win-win situation for all the parties and involved in the project is Strategic Partnering.
Office of Government Commerce, OGC (2007) states that Partnering offers good potential to enhance the value for money of construction.
The effective way for a successful project delivery through Partnering lies in the fact that all the parties involved in the project are committed to focus and achieve the goal and make the alliance work in the long run.
Barlow, J., Cohen, M., Jashapara, A. and Simpson, Y. (1997) Towards Positive Partnering: Revealing the Realities in the Construction Industry, Bristol, The Policy Press
Bennett, J. and Grice, A. (1990) Quantity Surveying Techniques: New Directions Oxford, BSP Professional.
Bennett, J. and Jayes, S. (1998) The Seven Pillars of Partnering: A Guide to Second Generation Partnering, London, Thomas Telford.
Bennett J. & Jayes, S. (1995) Trusting the team: the best practice guide to partnering in construction, Thomas Telford.
Construction Industry Board (CIB). 1997:Partnering in the Team, A report by Working Group 12 of the Construction Industry Board. London: Thomas Telford.
Dr David Mosey (27 March 2009) Creating a successful contractual
framework for partnering, CCI Twilight Seminar SEPT 09, Manchester
DeVilbiss, C.E. and Leonard, P. (2000): Partnering is the foundation of a learning organization. Journal of Management in Engineering, ASCE 16 (4), 47-57.
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General terms for the appropriateness of each procurement strategy
Section 3 - Construction Procurement Model (NOV-2005)
Appropriateness of Contract Strategy
Private Finance (NPD model)
Design and Construct
Pre construction price certainty
Avoid prohibitive cost of change
Technically advanced or highly complex building
Single contractual link
Need for design team to report to sponsor
Desire to transfer complete risk
Facility to recover costs direct from contractor
Contractor input to economic construction
Y appropriate N inappropriate
Procurement System selection, Bennett and Grice(1995)