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The University of Salford and especially the department of Built and Environment desire to create a new state of the art development on the existing campus by replacing an older building with a new one. As a subsequent of that the existing structures on the proposed area must be demolished. This action should take place before the construction will be set in motion. The new structure will contain lecture theatres, meeting rooms, extensive classroom and studio facilities, office accommodation, laboratory accommodation and finally learning resource units. Following the completion of the structure some external works to the surround area will also be necessary to take place. Regarding all the above the most suitable procurement method and strategy for design and the construction should be recommended including main forms of contract.
As the main consultant to the Client I have to take into consideration and rank the priorities about the quality, cost and time needs. The Client emphasises on sustainability and requires the building to be carbon neutral with the highest visual and qualitative standards. Furthermore the budget for the whole project is also estimate to be £20 million and at last, 1st of August 2012 is the essential date of achievement because of the University's necessity to accommodate the new academic year. Taking into account the above information we can visualise the 3 parameters in a chart as you can see bellow.
This is a theoretical approach of the most far-fetched acceptable solution. The completion time is the most undeniable factor for the success of the project as well as the quality of design and structure must be high as possible, always compared with the available budget. If the acceptable quality can be reached with less cost than the estimate 20 million would be fine, but the opposite situation is unacceptable.
Procurement assessment criteria
The majority of Clients will prefer the highest quality building as fast as possible, in a very low price. That situation does not happen often because normally these aspects are in contrast between each other. The three aspects cost, time and quality are interrelated. For example if a Client asks for a high quality structure, that will increase the cost and may also raise the need of time for completion. Taking into account the above as it also tried to visual upper to the chart it is obvious that the goal is to achieve a balance between them after ranking the project needs (criteria) and set up priorities.
Based on the need of the Client time is important for the client as the university want to use it at the next academic year.
Furthermore the building must be carbon neutral and also high aesthetic design.
Regarding the scenario for the cost of the project it can be seen that the amount is already prearranged. It includes except the construction works all the other as demolition, external works and statutory and professional fees.
In every project simple or not there is a part of risk. Because of the nature of this project different construction procedures must be implemented. To avoid risk the jobs must be given to professional contractors or teams and also use the most appropriate procurement method.
The procurement criteria are more specific described below:
This factor is the most essential in this project and also very important in general when a new project construct. In this case the reason is the nature of the building (University facilities) and Client (University) but commonly this is due to the reason that there is a direct relationship between time and cost. The contract period is from 23rd of April 2010 until 1st of August 2012.
Although, the project indicates more efficient materials and technologies to achieve a carbon neutral building and a very high aesthetic design, the areas that will be enclose in the building have not any special aspects than any common building. As a result of the above it arise that the complexity of the project is at a medium degree.
The quality of the building is important because of the aspiration of the University of Salford to become greater and also because of the aims they put to be on top of Universities rank in UK and be also recognized internationally. The quality of the building is also important because of the great sense of responsibility that the university has, to the people who chose and will choose it between many others to study. To achieve that, the University add as a requirement the building to be carbon neutral. That means that every material will be in a high quality level without unhealthy aspects producing carbon monoxide. In addition, the quality of workmanship must be equal to the high aesthetic design the design team will produce.
The cost of the whole project is certain, the estimate of which is 20 million. Moreover the above budged indicates all the construction works including the demolition and the external works and also statutory and the professionals fees that indicate design fees, construction / contracts fees, financing costs that the client owes and at last management fees. As the amount is set at 20 million the design of the structure and the selection of materials and energies have to fit on that, giving also space to the most suitable procurement method that it will be chosen.
The completion of the project on time is the most critical criterion. However the completion in comparison with cost comes first. There is not a big concern on that for the Client because of the standard amount of the available budget that the contractors must manage. It can also provide a significant answer to them, when the design schedule will be in progress and certainly when the design completes. Finally it will be more secure if it can manage to choose / contract experienced contractors for the works of the project.
Management and Accountability:
In general the management and the accountability can be made in two ways. Firstly from Clients with experience that they can take the responsibility of the project and as a result they save money. Secondly give a part or whole management of the project to consultants. This method is better for the University of Salford because of the nature of the organization and also for the avoidance of any risk it can occur.
The most common types of risk are those indicate with the three main aspects (quality, cost and time) that are crucial for every project. Initially the quality risk for the Client can be seen when the quality of the result of the project does not represent what the Client agreed with Design and Construction team. Secondly the cost risk occurs when the cost of the project at the completion is bigger than the budget and finally time risk that shows up when the project is not ready on time. All these types of risk can be avoided using suitable and specific conditions in the contracts signed between Client and Contractors. For example in this case the most crucial is the completion of the project on time because the University want to use the building for the next academic year. To avoid the time risk the Client can add a condition to the contract for getting every day after the deadline a big fair enough amount from the Contractors as compensation until the completion of the project.
Procurement available options
Moreover considering the analysis of the basic parameters it should be proper to familiarize with the four more suitable methods of procurement: price in advance, design and build, construction management and management contracting.
Traditional Procurement Strategy
Initially the Price in Advance (traditional method) is ordinary use from Clients that doesn't have experience or have limited experience in construction. In the current case the University of Salford administration doesn't have huge experience in construction so this method seems to apply. This method has a very low risk to the Client only in design part as it is the only part indicating and corporating with the design team (contractors). The cost and the duration of the whole project are also fixed previous from the client so for the success of the project it depends on how the strategy will implement. Although the nature of this procurement method schedule, to minimize the risk at the design part, has as a result to slow down the procedure.
Revising the above for the traditional strategy, the design part must be finished before any tenders take actions in a competition and let the main construction contract. Therefore if not at all or minimum changes occur on that part, then a reasonable and certain cost can be determined before the actual construction procedure begins.
This method can be used in this case because of the characteristic of the Client (University Administration) as inexperienced in construction but although must be consider the slowness of the procedure when in this case the number one priority is time. Attempting to speed up the procedure, producing tender's documents before the design part complete, increase the risk of a fault estimate at cost and time. This can bring Client and tenders to a very difficult situation that the only solutions can be provided would be expensive.
Moreover the majority of Clients with experience in the construction area, found this method not good enough for large projects where the completion of the process is very essential. (Masterman 2002)
Design and Build Strategy
Design and Build is a fast way procurement method. The construction part can be started before all the design details come to end. This is under contractor's responsibility and risk, giving the opportunity to safe time. The responsibility and risk for the two parts of the project (design and construction) is taking over for a single contractor in return of a fixed price lump sum.
There is also an alternative way (Develop and Construct) that is basic the same. It differs only at the beginning of the process when Client employs a design team to advise and prepare the design concept. The concept design delivers to contractor to produce the detailed design and start with the construction works. From that point until the end of the project the contractor has the whole responsibility and the risk of the project, which takes off some control from the Client.
Changes in the structure after the contract has been let are usually more expensive if someone compares with other methods. This is not a big disadvantage if you take in mind the advisors design team which has the responsibility and it will keep out the Client from such a situation. The role of the advisors design team can execute many professional people working to the School of Built and Environment of University saving that extra cost and also reduce the risk of the project.
It is essential for the Client before sets this type of contract, to produce clear and fully answers about the brief, performance of the project and quality specifications for all the important requirements. If the contractors don't receive exact requirements, the Client has to supply them performance specifications at tender period.
Frequently the Client as previous mentioned employs a design team (advisors) to produce some introduction design of the project, the brief and tender documents.
This method gives the opportunity to the Client to compose a contact to its own range and although it doesn't have a big part in the design development and procurement process, using the knowledge and skills of the advisors team can present to the design team and build contractor a very high level brief to finally produce a high aesthetic structure with special elements.
Another advantage of this method, excluding time saving as previous wrote, is that Client has to make a contract with only one firm. This firm has the responsibility and takes the risk from everything, from the beginning of design process until the end of the project.
Finally something that in most cases may be a disadvantage in this case matches perfectly. The bids for each contractor will be based in a different design which every bidder has to produce, so the Client can select the most pleased approach on its own brief criteria and considering budget and quality. The only disadvantage for the Client is that comparatively the companies which offer both design and construction services are less. Because of that, University must do a very careful selection taking also in mind that to build a structure with the requirements they need, they need also an experienced company. (Masterman 2002)
Construction Management Strategy
Management Contracting Strategy
Source: Turner (1997) Building Procurement (2nd edition)
Source: Masterman (2002) Building Procurement Systems (2nd edition)
Source: Masterman (2002) Building Procurement Systems (2nd edition)
Revising the above methods and taking also into account the nature and scale of the employer (University) and project it can be preferred the "price in advance" or "design and build" as the most appropriate procurement method. In contrast "management" requires for the employer to take almost all the risk and also have greater and more active role in the project. To carry out the risk requires experience in construction and also permanent supervision for the completion of the work. These requirements are not meted in this case. Furthermore "cost reimbursement" and "partnering / alliancing" are methods where they find frequently use in other types and scale of projects and also have bigger risk for the employer than the two preferred.