Case Study On Construction

Any contract for construction, alteration, or repair of public buildings or public works, including painting and decorating;

A basic definition for the procurement is “the way the building is realised” and “involves assembling and organising the skills and services of a team of construction professionals”. (the Construction Round Table, 1995). More precisely, the construction industry describes procurement as “a system that establishes the roles and relationships which make up a project organisation”; hence the overall organisation and communication structure for the management, administration and control of a project is established by the procurement system. (D.C.H Coles, 2010)

A contract is an official agreement between two parties. There are different types of contract, such as sale and purchase of a business agreement, partnership agreements, lease of business premises, lease of plant and equipment and employment agreements. The format can vary too. It can be face to face, written, or distance selling. The specifications of a contract involve offer and acceptance, the intention to create legal relations, lawful considerations, capacity and legal formalities such as terms and conditions.

In this method, the design and the construction roles are combined into a single responsibility and the team is referred to as the Design Build Contractor. The architect is under contract to the contractor and not the owner. The advantages of this method are that the owner is dealing with one contract for the design and construction and does not get involved in the details of the design and construction. The design can be accomplished according to the budget and easily be changed if necessary. Since the maximum price is set in an early stage, this method is faster than the design-bid-build and the construction manager method. However, there are drawbacks to this approach. Since the architect and contractor report to the design/build firm, a conflict is created between the owner and the design/build firm. Also, as the design and construction roles are part of the same team, this can lead to a disadvantage. As the owner is no longer dependent on the architect, the architect’s judgement is no longer provided to the owner and this leads to quality control problems. (what I think if this is the best method or

The workers then have to redo the project. This takes up a lot of time. Now the workers are behind and might not finish in time. New workers also slow down the process. The contractors have to take the time to train the new workers. They also have a tendency to make more mistakes. Since the new workers have little experience, they are slower and usually are the ones to make most of the mistakes. This is why contractors prefer people with experience over new workers. The only problem is that people with experience want to get paid more. Good communication is always important to have for better productivity. It is very important so that the workers know what they are doing and how they are going to do it. Planning everything out before will create fewer problems, and the work will be more productive.

The owner hired some consultants prior to calling for tendering, and the consultant’s estimations for the cost of the project including enough profit was not far from the “mistaken” figure of the complainant.

Over the years the construction industry has developed a reputation for shady deals and untrustworthiness. Contractors specifically are the root cause of the mistrust between the industry and the public. When it comes to the relationships between contractors and subcontractors though there is still a mistrust even though both sides share the same unfavorable reputation. Often times contractors bully subcontractors into signing contracts that put them in very unfavorable positions. And after that subcontractors bully sub-subcontractors into signing equally unfavorable sub-contracts. However, not all contracts are terrible, what makes them so one sided are specific clauses that are inserted in an attempt to transfer responsibilities from the contractor to the sub and sub-subcontractors. Conditional payment and oversight responsibility are a couple of the types of clauses that attempt to do such work. Another clause in construction contracts attempts to protect the contractor and owner from each other with regard to change orders, it is included to force each party to put changes into writing. For the most part, no set of plans is perfect so inevitably changes must be made. So contractors and owners find themselves in yet another situation where both sides have the opportunity to be as unsavory as they can be. As the industry progresses into the future, many additional contract clauses will pop up. They will attempt to shift more responsibility and blame off the

In project management, contract almost related with every level of project, such as material buying, price negotiation, customer service and payments. Supplier is another important role in project management. If contractor could give a appropriate contact to supplier, it will helps on build stable relationship, with supplier, even more, it could bargain with price of materials. However, if contract not finish at each single phases of project, it will increase negotiation time, which means definitely time delay and cost overruns. With decent contract management of project, it will simply to avoid such fundamental problems. Another explanation for contract error is worker. Human resource is also important for basic project proceeding, and it has been included in contract management as well. Similarly, all potential possibilities need considered by manager. “careful consideration need to be finished when forming the initial contract, for about what might occur during its operation, this will guarantee that things are included in the contract documents that enable effective contract management”(OGC 2010)

In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.

First, the ethical dilemma itself will be outlined. In the construction industry, it is often necessary for an owner or a construction company to enlist the help of other smaller or more specialized companies in the completion of a project. This practice is known as contracting. When an owner or company, referred to as the contractor, wants to contract out for a job, they will list the job and interested companies will bid for the contract. When arriving at a bid amount, interested companies will estimate

Client and the contractor have same priorities. Basically, contractor will make the decision in turnkey approach and client will just accept in silent. In this project, the contractor and the client have the same focus and priorities therefore the relationship between the contractor and client is good and there is no overruns or communication problems between both sides.

Muller and Turner (2005) also interprets the agency theory as suggesting the solution to this problem is to realign the two parties’ interest through contracts where the principal yields the highest payoff for the agent. However, they also note that other factors influence contract selection, most notably cost, as contracts are commonly selected to minimise the overall cost for governing projects.

Another ‘fast track’ strategy where work can be carry out before the design is complete. Construction manager is appointed in early state may benefit to the client. For this strategy, client have direct contract with the trade contractor. Same as management contracting, the final cost for the project can not be identified until the final work has been awarded.

Dr Sally Yu is a chartered chemist specialising in construction materials who has been recognized for her innovative approaches to engineering chemistry and combustion science. She instructs as an expert by Bond Legal to prepare a report on behalf of Queensland Best Property Group. This report will be used in Court at the trial/hearing of dispute.

A contract is a formal agreement which can be written or literal between two or more parties.