My company, i-PM Consult Sdn Bhd has been appointed as Development and Project Management Consultant by the client, Blue Diamond Realty Sdn Bhd for a new township project, in which will take 18 months to complete for the Phase 1 with GDV of RM300 millions.
As a Managing Consultant, I am required to lead a team of professional members consists of architects, engineers (civil & structural and mechanical & electrical), quantity surveyors and others specialist consultants. It is important for me as leader to ensure the whole project completed within stipulated time, budgeted cost and desired quality.
I will suggest design and build as the suitable procurement method for this fast track project in order to ensure that the whole project will be completed within the stipulated time, budgeted cost and desired quality.
I will discuss:
The duties of a development and project management consultant as project leader,
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The most suitable procurement method for the above fast track project,
The contractual relationship between all the parties involved in project,
The challenges faced in implementing fast track procurement project.
The duties of a development and project management consultant as project leader
Project management consulting is when an independent contractor with experience in project management is hired to perform a specific project. This contractor often holds project management (PM) designations that provide assurances of the level of education and experience at the appropriate level. All project management consultants have a minimum four-year undergraduate degree and at least two years industry experience.
There are different types of project management consulting, depending on the industry, the skill set required and the project to be completed. Project management consulting in construction requires professional engineers or architects, with many years senior project management experience in the construction industry. Extensive reference checking is standard before hiring a project management consultant.
In the software industry, project management consulting is used to provide temporary support when implementation or migrating software. Their expertise and experience is typically with that particular product. The educational background is more varied with this type of project management consultant, with a minimum undergraduate degree in computer science or business.
In project management consulting, the consultant is to be responsible for the successful completion of the project within a specific time frame and on a specific budget. In project management consulting, the firm defines the deliverable items, benchmarks and timelines. It is the responsibility of the hiring department to ensure that the scope is properly defined.
People who go into project management consulting have a combination of expertise in the specific industry or software product and the ability to manage people. Excellent communication, negotiation and administrative skills are necessary to successfully coordinate a group of people to achieve any goal. Project management consultants are usually hired for complex, large-scale projects and must have above average skills in these areas.
Project management consultant always acts as the project leader of a construction project. The figure below shows the relationship between the Project Management Consultant and all parties involved in the construction project.
The services provided by a Project Manager vary according to the project and the client's specific requirements, and may include, but are not necessarily limited to the following responsibilities and duties which are listed in a typical project sequence. The schedule of services to be provided by the Project Management Consultant may be typically divided into three phases, as discussed in the following section.
General Services Stage
The basic objective of the Project Manager's services under this Agreement is to arrange the design and construction of a facility which -will adequately meet the Client's requirements as reasonably appropriate of quality, function, cost, time and durability.
Except where otherwise required, the Project Manager shall with the cooperation of the Client, become familiar with the Client's project needs and resources, reach an understanding of the terms of reference for the project and establish for the
Client's approval all relevant criteria and performance objectives which shall serve as a basis for the project brief. The Project Manager will compile the basic project brief and as the project proceeds will augment this with specific details to be obtained from various Consultants. Briefing material is to be clearly explained to the Client and approval obtained before proceeding with any relevant stage of this commission.
General Nature of Service
Always on Time
Marked to Standard
The Project Manager undertakes as follows:
To translate the Client's requirements into a project brief and programme of work covering all aspects of the project from inception to completion and commissioning.
To define all management and technical functions and establish their boundaries.
To ensure that systems and procedures for carrying out the project are properly applied throughout the project.
To establish the roles and responsibilities of all parties to this project clearly and co-ordinate them so that individually and collectively they are enabled to carry out their tasks efficiently.
To ensure that progressive review takes place of the scope, cost, programme and quality of all aspects of the project.
To assess changes promptly and make recommendations where necessary.
To assess the status of the work at regular intervals, trace causes of deficiencies and take and expedite corrective action.
To report on a regular basis and keep the Client fully in formed on all aspects of the project.
To establish project accounting procedures and cost controls, which are capable of being audited, and to cover all phases of the project.
The Project Manager will report in writing on a monthly basis to the Client who is to be kept fully informed on all aspects of the project. Reports will include:
expenditures against budget and estimated cost at completion.
progress compared against programme in terms of work completed and works yet to be completed.
required modifications to programme and budget.
design and construction changes.
all other matters critical to the project and to the interests of the Client.
The Project Manager will prepare overall and detailed cost plans for the entire project with cost requirements that fall within acceptable limits and are realistic and achievable, and will constantly monitor cost performance.
The Project Manager will prepare overall and detailed programmes for the entire project with time requirements that fall within acceptable limits and are realistic and achievable, and will constantly monitor time performance.
General Organisation of Project
The Project Manager shall set up an effective project management system designed to take into account the size, nature, complexity, scope and purpose of the project.
Employment of Others by Project Manager
The Project Manager may from time to time employ such other persons as the Project Manager thinks fit to assist him, with the prior approval of the Client, such approval not to be unreasonably withheld, to provide the services referred to in (3.2.1) General of the Agreement. Such other persons will be required to have the necessary security clearance.
Project Design and Construction Stage
The Project manager should monitor quality and production of schematic designs, illustrated by preliminary sketch drawings and/or reports. The Project
Managers also required in providing indicative estimates of cost.
The Project manager should monitor quality and production of developed designs including as appropriate developed sketch drawings, models, reports, advice or designs of architectural and specialist services. The Project Managers also required in providing time program and estimates of cost.
The Project manager should monitor quality and production of documents sufficient for the calling of tenders and/or negotiating Contracts including as appropriate, coordination and integration of various Consultants' work. The Project
Managers also required in providing estimates of cost.
In this respect the project manager should closely monitor some of the process which will be discussed in the following section.
(i) Calling and Reporting on Tenders
Call tenders and/or negotiating Contracts in conjunction with or on behalf of the Client.
Analyse and advise in respect of tenders received.
Organise preparation and execution of contract documents.
(ii) Administering the Contract
Administer quality of the Contract including inspection of the Works by the various Consultants as appropriate. Issue contractual certificates for quality compliance, payments, variations, cost adjustments, extensions of time, Practical
Completion and other matters included in the building contract and, where appropriate, authorise on behalf of the Client.
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The project Manager should closely manage cost performance.
The project Manager should closely manage time performance.
Project Handover and Commissioning Stage
Unless otherwise stated, the Project Manager will assist with or arrange for handover of the project in a state of readiness for occupation upon practical completion of the construction contract.
Unless otherwise stated, the Project Manager will provide and arrange management assistance in the explanation and utilisation of systems and equipment, initial start-up and testing, adjustment and balancing, consultations to and training of personnel.
Post Construction Documentation
In this respect the project manager are required to:
arrange provision of "as constructed" drawings showing location of services and the like including any significant changes made in the work during construction, together with any other data as appropriate.
arrange provision of maintenance and operational manuals for buildings, finishes, services, plant and equipment.
arrange provision of all records of testing, compliance and approval.
provide taxation depreciation schedules.
Defects Liability Period
The project manager should monitor the performance of the completed building during the defects liability period of the construction contract and ensure that reporting of defects and attention to rectifications is thorough and punctual and of minimum disruption to the Client and occupants of the building.
The project manager should resolve the final accounting for this project including all variations and claims and report to Client.
The project manager should arrange for a Final Certificate to be issued upon satisfactory completion of the Contractor's contractual obligations.
From the literature review, it can be noticed that there are three major stages that requires the services of Project management Consultant: general stages, project design and construction stages and project handover and commissioning stage. The list of services that should be provided by Project Management Consultant as been discussed can be viewed in figure below.
Schedule of Services to be provided by Project Management Consultant
The most suitable procurement method for the above fast track project
Procurement method is the method that industry organizes itself for construction project because there are too many parties in a construction project. Besides that, procurement method is a route of obtaining the eventual engineering and construction contract to realize the project objective.
In this fast track project, I am appointed as a consultant manager and given RM300 millions and within 18 months for completion. I think the most suitable procurement method for the above fast track project is design combined with construction method in the category of 'Design and build' method. Thus, I will suggest this method to the client. The reasons are as below.
Firstly, 'Design and Build' method is always better than 'Design separated from construction' method in terms of time or we regard efficiency. I'm given only 18 months which is not more than 2 years to accomplish a building construction work. By using traditional method it is quite impossible to achieve an Rm300 millions work in such limited time. In 'Design and Build' method, the design does not need to be finalized before some of the work can commence. This brings the meaning of we can straight construct while some part of the design has come out. This will be a very efficient method if there is less variation.
Besides that, the reason choosing this method is because we have got a confirmed and huge financial commitment, we can estimate and manage everything with the constant amount. However, client who only has small amount of financial resource is not suitable of using this method. The reason is 'Design and Build' method is like a package procurement method. All the parties such as Architects, Quantity Surveyors, Engineers, Consultants, Contractors, Sub contractors, Supplier and etc are in the control and management of main contractor. Therefore, efficiency and quality will result in money. If the client provides an insufficient or unstable financial resource, the whole construction progress will be delayed and in dilemma situation. Thus, with such confirmed and stable financial commitment, we can actually ignore the above matters and be confident with this method.
Lastly, in 'Design and Build' method, there will be healthy competition in between contractor and contractor. In this procurement method, client and professional adviser have the authorities to choose the contractor who is qualified enough for hold their job as main contractor. Thus, a contractor will simply lose his job if he is not competent enough with each other. As a result of healthy competition, timescale will be reduced and the quality of the project will be increased. This is a big advantage for client and can be considered as one of the reason supporting this procurement method.
The contractual relationship between all the parties involved in project
The figure below shows the contractual relationship between all parties involved in design and build method.
In design and build method, the main contractor acts as the client's agent to manage the design and construction process. Therefore, client can directly communicate with the main contractor. All the design and trade contracts are direct with the client. Meanwhile, design team and subcontractors are under the control of main contractor only but not with the client. However, design team and subcontractors have direct contractual link with client but not the main contractor. Besides that, design team has direct communication routes with Works Contractor.
The primary difference distinguishing design-build from traditional design-bid-build projects is that the design professional is not the owner's representative, and is instead the contractor's teammate. It is also a package-modern procurement that being used for today's construction project as trend. Design professionals have contractual incentives to perform their services in a manner to achieve the design-build team's goals, which are not always in the owner's best interests. The design professional may have a disincentive to call the owner's attention to difficulties with the construction work. Also, the design professional may value such factors as cost and construction logistics over other design or technical criteria of importance to the owner, such as life-cycle performance.
The existence of a team comprised of contractor and architect/engineer raises unique legal contractual issues. If the design or builder is not already a single entity, do the contractor and designer form a single entity to contract with the owner, and if so, should the entity be a joint venture, corporation or limited liability company.
The challenges faced in implementing fast track procurement project
In my opinion, I think that there are many challenges in implementing fast track procurement method because every method has its own pros and cons. And thus, improve the cons may result in perfection. I had eventually distributed the challenges into few stages that are time, cost, quality, efficiency and responsibility.
Firstly, it will always be the challenges of time. If I were the project manager, fail to complete the whole construction work within the stipulated time, will have to take the responsibility for the losses which will cause to client. 'Time is gold' so I must always be concerned about the time and to control the time wisely.
Besides that, due to fast track procurement method may not be that sequential, we sometimes will have to include additional over-time work. This scene of additional over-time work always happens to accelerate the work. This will be tougher to all the parties compare to traditional method's team. They likely have to double up their speed. However, time and quality must be equivalent though the work is being accelerated.
Secondly, it will be the challenge of money. If the client could not provide sufficient finance in the stipulated way, the construction process will be corrupted and in dilemma, we as the project manager may face losses too. Therefore, client who has small amount of financial resource is not suitable of using this fast track procurement method. The financial resource from client must be huge and stable. Besides that, we will have to manage the cost brilliantly so that the cost shall not exceed the budgeted cost of client.
Thirdly, it will be the challenge of quality. As I mentioned above, time and quality must be equivalent. Although time is always the main element to be concerned of, we have to maintain the quality of the project as well. The satisfaction of client for the quality we give will eventually affect the reputation of company. Therefore, we must be careful in every single event of the construction and provide the best quality to client.
Fourthly, comes to the challenges of responsibilities. In Project Management method, we are responsible for all the design and construction work of the building. Meanwhile, we are responsible to mange and instruct the design team and the construct team. Thus, we shall not be irresponsible for our obligation. We must clearly understand our obligation and wisely execute it.
Besides that, we are key role person of communication of all parties for the project. We are responsible to understand the client's requirement, communicate with the design team, and coordinate with the works contractor and suppliers. Therefore, we are also the main key role of success. If the communication among all parties is unimpeded, the efficiency will be improved drastically.
Lastly, there are many unforeseeable problems occur every day during the construction process. We must be experienced enough in order to complete our tasks perfectly by using fast track procurement method. Else, everything will be in a either mess or failure. Therefore, many problems will be faced and to be solved during the construction process. If we were not experienced enough, we are not qualified to hold the job as a Project Manager.