The Appraisal Of Procurement Routes Construction Essay

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Cinnamon Grand, herein referred as The Client, has engaged the services of HWY Engineering Service Pte Ltd, herein referred as Main Consultant, in assisting The Client for the reconstruction of three numbers of hotels located within prime locations of south eastern part of the United Kingdom which were badly damaged by the recent adverse weather condition.

'The Client' has decided to demolish and to re-construct the hotels in line with their policy of architectural significance and aesthetics of the buildings and to even higher and greater exclusive quality than its' pre-assessor.

2.0 CRITICAL ANALYSIS

To address identified critical decision but leaving flexibility for later consideration, a briefing with 'The Client' was held (1st Nov 2012) to understand and determine the requirements and specifications for further framework of the project (Peter and Catherine,1999,p.3).

2.1 Analysis of Client's Objectives

'The Client' owns a large hotel chain in the United Kingdom and is committed to conserve their rich heritage. 'The Client' are passionate about the outlook of their buildings and all shall be in line with their architecture policy as reputation of 'The Client' is build on its quality accommodation and service.

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The new hotels, shall be of better quality than its predecessor with state of the art, high tech multimedia facilities to attracted potential conventions to be held in the respective hotels.

The hotels shall be equipped with themed health and fitness centers with dance studios for its occupant and spas facilities shall be provided to enhance the experience for the hotels.

In order to reconstruct the damaged hotels to a better quality than before, 'The Client' has decided to obtain an additional financing of approximate £120 million on top of the budgeted allocation of £200 million of the reconstruction.

As a substantial amount has been invested, 'The Client' is very concerned with the possibilities of project delays during the construction phase in which the planned reopening schedule cannot be met and construction cost overrun beyond budgeted allowances.

The planned schedule timing is critical, price certainty for the construction works are also considerations for risk avoidance. Value for money construction is also considered given the current economic outlook.

Due to other projects that are ongoing by 'The Client' in other parts of United Kingdom, commitment by the 'The Client' in-house architectural and engineering team shall not be present for the new project.

'The Client' has, however, documented their requirements and specifications and passed all available information to 'Main Consultant' during the design briefing which shall form part of the main contract specifications.

Structural specifications and requirements that were not denoted shall be in accordance with all relevant British Standards.

The 250 rooms hotels (Skyfall Grand, Quantum Grand & Golden Grand) shall be launched simultaneously in two phases.

Grand re-opening dates with key facilities are being scheduled on 1st April 2015 and phase 2 commissioned dates shall be 15 months after the grand opening date.

2.2 Analysis of Project's Objectives & Issues

Other key issues which are crucial in analysis of the project's objective is the project construction timeframe as follows;

Phase 1

Phase 1 Start Date: 1st Mar 2014

Phase 1 End Date: 28th Feb 2015 Duration: 12 months

Completion of building, architectural finishes, roofs, guest rooms, restaurant, swimming pools.

Grand Opening of Hotel

Phase 1 End Date: 28th Feb 2015

Opening Date: 1st Apr 2015 Duration: 1 month

Implementation and deployment of hotel staff and facilities

Phase 2

Phase 2 Start Date: 1st Apr 2015

Phase 2 End Date: 27th May 2016 Duration: 15 months

Completion of dance studios, health and fitness center, conference and meeting rooms and other outstanding installation.

Understanding the client's objectives and requirements, it is possible to identify key issues pertaining to the procurement of the project. It allows for a clear definition, identification and consideration of the client's intentions.

These considerations shall be classified as follows;

2.2.1 Analysis of Project - COST

The budget allocated is a substantial amount of £320 million with an additional allowance of maximum 10% overrun of the budgeted figure.

Although there is a concern with price certainty of the construction cost, the allocated budget is at a comfortable rate based on the current construction index for building of these natures.

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Cost of construction per room with furnishing is estimated at £258,000 according to a Paul Moore for EC Harris report (2006,p.15) and given the economic outlook of Europe, value for money construction is anticipated.

2.2.2 Analysis of Project - TIME

12 months are allocated for the construction of the hotels in the first phase and the completion date cannot be revised due to the re-opening date are pledged with all authorities and patrons of 'The Client'.

Hence, phase 1 construction is of upmost importance and resources shall be mobilized to meet the completion date as delay shall compromise on the setting and deployment of hotel staff and facilities for the grand opening.

Phase 2 constructions shall begin after the opening date and for duration of 15months.

Complexity of the construction for phase 2, and working time limitations of phase 2 works (disturbance to existing hotel guest residing in the hotel shall be kept at minimum) is noted, however, possible delays are not anticipated based on past project of similar nature.

2.2.3 Analysis of Project - QUALITY

Quality of the project shall be of upmost importance according with 'The Client' company policy.

As specify in the objectives, excellent quality and finishes are stipulated and the hotels shall be exquisite due to 'The Client' rich heritage and repute.

New high technology facilities shall be incorporated in the hotels to further enhance the hotel experience and well being of hotel guests.

3.0 APPRAISAL OF PROCUREMENT ROUTES

The management of the design and construction process can be refer to the RIBA Plan of Work (Colin and Will, 2001, p.7) and as seen below;

RIBA Outline Plan of Work.jpg

Source: Riba Plan of Works, 2007

The traditional routes of procurement follow in sequence to the RIBA plan of work, however, new forms of procurement routes with the objective of making design and construction process more interactive (Colin and Will, 2001, p.52) emerge as the traditional procurement routes face problems and deficiencies.

3.1 The Traditional Procurement Route

2810160302003.png

Source: Nigel,C. and James,S. (2006)

The traditional route is most commonly used where services of design consultants are engaged for the design and a building contractor is appointed to carry out the construction works separately.

It allows for complex projects to be built and is a low risk option for price certainty as price and time frame for the construction works is normally determined at tendering stage. Risk increases when the design phase is rushed and information is not supply readily leading to variation claims from the main builder.

3.2 Non- Traditional Procurement- Design & Build

Untitled Extract Pages.jpg

Source: Heriot-Watt University (2011) ,p.11-5

This route involves the builder to be responsible for the design and construction of the project. It allows for price certainty and a faster process as both design and construction can progress at the same timing. However, it is not suitable for complex building and the output might not be the client's intention.

3.3 Non- Traditional Procurement- Management Contracting

MC.jpg

Source: Heriot-Watt University (2011) ,p.11-9

The client engages designers and the management contractor separately and the management contractor liaises between the designers and engaged individual specialist contractors to carry out the specific works. Price certainty cannot be assured as often construction starts before the completion of all design works. However, this signifies a shorter timeframe for the project.

3.4 Non- Traditional Procurement- Construction Management

CM.jpg

Source: Heriot-Watt University (2011) ,p.11-11

The difference of Construction Management is that it requires more client involvement as compared to Management Contracting as works-contractors are employed directly by the client instead. This suggests that only experienced clients are suitable for dealing with the works.

3.5 Non- Traditional Procurement- Private Finance Initiative -Partnering

parter.png

Source: Beverly A Wagner, (2003)

Partnering suggest that the client teams up with the industry and allows full control over the design and construction and managing the completed facilities. The initial cost is borne by the industry partner and duration of construction can be control as the industry becomes a stakeholder in the project. However, price certainty is not present as cost is shared between the partnerships and objectives between the partnerships must be mutual.

4.0 SELECTION CRITERIA

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From the analysis, the criteria for the design and construction can be illustrated as follows;

TIME

Crucial completion date

Short duration for construction works

COST

sufficient budget

value for money construction anticipated

Price Certainty

QUALITY

high quality output

reputation for building and service quality

high quality facilities

Procurement Strategy

The nature of construction projects involves risk which can impact the client's objectives and requirements differently and strategies should balance the risks that are anticipated against the project objectives (Constructing Excellence, 2004, p.2).

The selection criteria listed above; Cost, Time & Quality are interdependent and emphasis on one criterion will have a negative effect upon the others objectives (Constructing Excellence, 2004, p.2).

Hence, it is important to define which criteria are more important for the selection process.

5.0 RECOMMENDATIONS

Based on the analysis and criteria, Quality and Time are identified as most crucial importance to the successful completion as per the client's and project's objectives.

Management Contracting is recommended as the appropriate procurement route for the project.

Untitled Extract Pages.jpg

Source: Riba Plan of Works, 2007

The main factors for the chosen routes are as follows;

Absents of the in-house expertise, external specialist to managed

Potential time savings due to importance of completion datelines as concurrent progress is possible

Quality project brief was given resulting in high quality and complexity of building achievable

Slight price certainty as packages are release to sub-contractors appropriately

Design objectives are met easily due to close links between parties

Total Words Count: (1507)

*excluding headings and sub headings