Design and Build Contract in Project
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The term ‘procurement route' considers all the activities undertaken by the client or client's representative, whether this is a sole decision or a decision made with the help of other parties, such as the various consultants or in some cases even the contractor, towards the goal of developing a construction project that the client is ultimately happy with. There are various procurement routes, which can be categorized into three main procurement route contracts, a Traditional contract, a Design and Build contract, and a Management contract.
A Traditional contract benefits in cost and quality, but at the expense of time. It is not the fastest of methods, and with this procurement route it is desirable to have all the information at tender stage. It is basically straightforward, but complications can arise if the client requires that certain sub-contractors are used. With this procurement route the client requires certain standards to be shown or described, but the client is wholly responsible for achieving the stated quality on site, and controls the design and variations to a large extent. It has certainty in cost and time before commitment to build, and requires clear accountability and cost monitoring at all stages. Competitive tenders are possible for all items. The risk is generally fair and balanced between all the parties.
(CLAMP, Hugh, COX, Stanley & LUPTON, Sarah, 2003)
A Design and Build contract benefits in cost and time, but at the expense of quality. It is a relatively fast method. The pre-tender time largely depends on the amount of detail in the client's requirements, but the construction time can be reduced because the design and building phases proceed in parallel. With this procurement route the client has no direct control over the contractor's performance, has little say in the choice of specialist sub-contractors, and has virtually no flexibility once the contract is signed. It has a guaranteed cost and completion date. The risk with this procurement route lies almost entirely with the contractor.
(CLAMP, Hugh, COX, Stanley & LUPTON, Sarah, 2003)
A Management contract benefits in time and quality, but at the expense of cost. An early start on site is possible with this procurement route, long before tenders have been invited for some of the works packages. It involves a complex management operation requiring sophisticated techniques. The managing contractor is responsible for quality of work and materials on site and can easily adjust the programme and costs, meaning the client can also easily modify or develop design requirements during construction. With this procurement route the client is committed to start building on only a cost plan, project drawings and a specification. The risk lies mainly with the client in this method of procurement.
(CLAMP, Hugh, COX, Stanley & LUPTON, Sarah, 2003)
For the purpose of this project we propose to use a Design and Build contract. We have made this decision based on the project requiring cost and time to be prioritized, a guaranteed completion date being essential to minimise down time, and the benefit of having the responsibility of risk being taken away from the client.
Tendering is the name given to the process or procedure that is used to obtain offers leading to a contract between two parties. The two main types of tender process are single stage tendering and two-stage tendering.
Single stage tendering is suitable for small simple projects, where the key issues are speed and cost assurity. It is considered by clients because of a need for greater cost certainty during the design and construction phases, the need for a well documented, fixed-price contract, the benefit from the discipline of completing the design before a contractor appointment takes place, and the use of commercial pressure to secure cost reductions for projects that might otherwise be unviable. A single stage tendering process however offers limited scope for a team to develop a shared objective or for a contractor to contribute to design development, and changes introduced by the design team will undermine the certainty achieved with a lump sum tender.
A two-stage tendering process is particularly suitable for large or complex projects, where a key factor is the close collaboration between the contractor and client, particularly during the design phase, as the contractor will endeavour to find the best solution for the project in terms of cost programme and design. A two-stage tendering process is considered by clients because of its second stage being based on more complete information and therefore the contractor having a better understanding of the scope of works, which in turn should help obtain a final account that is closer to the contract sum, the ability to continue the development of the design during the second stage of the tender in conjunction with the main contractor and specialist sub contractors, and because it helps promote a specific focus on issues of buildability and economic construction during the later stages of design. However the cost of second stage tenders tend to be higher because of negotiation premiums and the inclusion of additional risk transfers, and not exceeding the cost and completion date are not binding prior to the finalisation of the contract.
In two-stage tendering, like single stage tendering, the first stage is a competitive tender and it is usual to base these on the tenderers' track records, preliminaries, overheads, an outline programme and the contractors pricing documents in relation to the preliminary design information. Unlike a single stage tender, the first stage ends not with a contract being awarded but with the selection of a contractor for the second phase, in which the level of pricing provided in the first stage of the tender is used to open negotiations to produce a firmer price based on the drawings, bills of quantities and any other relevant documents that reflect the completed design.
For the purposes of this project we propose to use a single stage tendering process. We have made this decision based on the need for speed and cost assurity on the project, with the two key issues being time and cost.
As early as possible during the design process we will propose a list of suitable contractors obtained from an electronic database containing a list of approved contractors. The main criteria for selecting contractors for the initial tender list will include adequacy of available resources, adequacy of technical and management structure, financial stability and insurance cover, health and safety record, quality of work and adequacy of quality control, and performance record.
We propose to issue preliminary enquiries to each contractor on the initial tender list 4-6 weeks before the tender documents are due to be issued, including a project information schedule and a questionnaire. This will determine whether each contractor is both suited to the project and willing to submit a tender. The contractors will be given 10 days from its original dispatch to return the completed questionnaire.
Once a short list of tenderers has been agreed and the tender documents are ready for release, they will be sent to the tenderers along with a Form of Invitation to Tender and a Form of Tender. The latest time and date for submission of the tender will be included on both the Invitation to Tender and the Form of Tender, and will state that they are to remain open for acceptance for a period of 28 days from the bid submission date.
When the tender return forms are received, the ones which are returned by the closing date will be analysed and a summary report will be written and sent to the client, and those which are returned after the closing date will remain unopened and be sent back to the sender. As project managers we will offer advice upon the choice of appointed contractor, if the client requests so. When we have received confirmation from the client regarding the chosen contractor we will notify them that they have won the work, and notify the unsuccessful tenderers that they have not.
On Site Strategy
Prior to work commencing on-site we propose to call a pre-start meeting, where the programme of works will be discussed and a letter of intent will be issued to the client.
When the contractor begins work on site we propose to take a monitoring roll. On the first day of the work commencing on-site, as contract administrators, we will meet with the contractor and discuss site security, access, welfare facilities, deliveries and storage, and notify them of the time and date that snagging will be carried out.
We propose to commence snagging 6 hours before the end of the construction phase, in order to give the contractor time to rectify any issues raised during the snagging process. The snagging process will assess the quality of the work, the workmanship, and ensure all of the work complies with the client's specification. We propose, as the contract administrators, to write the snagging list in conjunction with the foreman on site due to time constraints, of which a copy will be left with the foreman on site so that they can rectify any snags prior to the completion of the construction works.
We propose to commence de-snagging once the contractor has informed us, as the contract administrators, that the construction work has been completed. At this point, acting as the contract administrators, we will issue a certificate of practical completion and initialize the defects liability period, as determined in the contract.
CLAMP, Hugh, COX, Stanley & LUPTON, Sarah. (2003). Which Contract? Choosing the Appropriate Building Contract. 4th ed., London, RIBA Enterprises Ltd.
CHAPPELL, David. (2006). Construction Contracts, Questions & Answers. Oxford, Taylor & Francis.
CHAPPELL, David. (2006). Contractual Correspondence for Architects & Project Managers. 4th ed., Oxford, Blackwell Publishing Ltd.
LUPTON, Sarah. (ed.) (2001). Architects Handbook & Practice Management. 7th ed., London, R.I.B.A. Publications.
LUPTON, Sarah. (ed.) (2000). Architects Job Book. 7th ed., London, R.I.B.A. Publications.
ROY, Morledge, SMITH, Adrian & KASHIWAGI, Dean T. (2006). Building Procurement. Oxford, Blackwell Publishing Ltd.
MURDOCH, John & HUGHES, Will. (2008). Construction Contracts, Law and Management. 4th ed., Oxon, Taylor & Francis.
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