Early Contractor Procurement Essays

This method offers good flexibility to the client throughout the project. He can make changes and look for feasibility to make the changes with the Construction manager added in the team.

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.

The first stage allows the contractor to start the work followed by the second stage whereby a fixed price is negotiated for the contract. It can be used to appoint a main contractor early or as a means of appointing a specialist contractor early. It can also be used on a design and build project whereby an employer’s requirements are not expanded on enough for a contractor to come up with a realistic price. The first stage can be a ‘custom made’ agreement, a consultancy agreement or a pre-construction services agreement (PCSA). The early involvement of a contractor improves the construction and cost certainty of the project and for a more integrated project team, thus reducing likelihood of disputes. The second stage is a mathematical exercise. In two stage tendering, design risk is transferred to the contractor but the client can lose hold, as competition becomes less of a

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.

These goals may vary, but are usually associated with cost, schedule and quality metrics commonly used to measure project success. Over time, businesses are adopting the integrated project delivery and project partnering in place of traditional delivery methods. IPD works in a way such so that team members integrate with each other. IPD is an effective tool because it involves all team members who work collaboratively to ensure the success of the project. For this project delivery organization to succeed, members of the team must commit to a true partnership. IPD demands a higher level of trust and engagement of not only the conception and construction team members, but also from the client, owner, and end users. IPD also fosters collaboration such that schedules are not only planned, but also developed by all the members involved as well.

The anticipated consulting services provided by a selected consultant will include mechanical, electrical, and plumbing engineering design services. In addition to MEP practice teams, the ability to provide design services for fire suppression systems, fire alarms, energy conservation and LEED standards is greatly preferred.

HOW TO BUILD A SMARTER PROCUREMENT IN THE CONSTRUCTION INDUSTRY CONTENTS 1 Introduction5 1.1 Meaning of Procurement 5 1.2 Procurement Supply Chain management 6 1.3 Procurement supply chain in construction industry 6 2 How is procurement important in the construction industry?........................................... 7 2.1 Size of industry 7 2.2 nature of construction industry 8 2.3 Importance of procurement systems 8 2.3.1 Converges cost reduction towards site activities 9 2.3.2 Share the risk throughout the supply chain 10 2.3.3 Information dissemination 11 2.3.4 Supplier relationship management 12 2.3.5 Product Diversification 13 3 What are the factors affecting the process of procurement?..............................................14 3.1 meaning of procurement process 14 3.2 Construction Procurement Process Framework 15 3.3 Factors that impact the procurement process 16 3.3.1 Time 17 3.3.1.(1)

The report will begin by critically evaluating the different types of procurement method and routes available to the client, examining the key terms of contracts and concluding with the with the best option for the client going forward. The first section of the report will identify and explain the complexities of construction contacts, procurement routes and negotiation; and will show that by understanding why problems emerge they may be prevented and resolved.

A project should be done as a whole package, not only focusing on the construction phase, which most likely become the spotlight of the project, as people commonly seen, but also should be considered from the planning process to maintenance phase.

Traditional contracts struggle to deliver these requirements especially for complex and high risk projects. Consequently, the allocation of risk can be complicated and costly if its not assigned correctly. A shared risk mechanism might be more appropriate in this case. However this can only work when all the parties are aware of the implications involved. This is precisely why the traditional construction only or D&C contracts don’t work for these projects, because they exclude the main contractor’s influences from the early design and project planning stage. The builder is not introduced until after the design is finalised and tenders are being sought (Mosey, 2009). The contractor’s attempts to assess the risk involved and prices accordingly are inhibited. Insufficient time or information usually results in additional cost to cover potential risk.

This form of procurement is fast establishing itself as one of the most popular methods used in the modern day construction industry. Design and Build procurement “can be employed on sophisticated buildings, but tends to be associated with Projects where the employer is more concerned with the functional aspects of the building rather than its aesthetic qualities” (Cunningham, Tony, 2013, p5) such as repetitive housing, office buildings or warehouses.

When engaging in a construction contract, time is of the essence and running over time projections can cause literally millions of dollars in additional non-contract costs. Therefore, construction contracts that can provide incentives to complete the project on time or early are beneficial because they effectively penalized contractors who fail to deliver on-time performance. With a CPIF contract, the

Here, the design and engineering firms are contracted separately. After the designs and specifications are completed, bid solicitation for construction follows. As with detailed designs available, firm costs can usually be established. Payment for construction is also done item wise as generally, unit price for each item is established.

LB traditionally provides several benefits to the owners. Regarding the monetary viewpoint, for example, the owner can save a considerable amount of money for the project budget if utilizing LB (Shrestha 2014). In addition, it is also simple to use because it focuses on the most crucial evaluation criterion, the bidding cost (Yu and Wang 2012). In the construction industry, especially in highway projects, LB is supported by the legislation for the transparency in the bidding process (Tran et al. 2016). Even though LB has aided, typically, the public owners for decades, it consists of various drawbacks (Ahmed et al. 2012, Tran et al. 2016).

When it is time to do some form of construction it is not an easy process. Many people want to do construction on various parts of their homes. Sometimes a family has decided it is time to remodel their kitchen and sometimes people figure out that their bathroom is way too small and it is time for it to be updated. Unfortunately a few people try to do the updates themselves and somewhere along doing the project they realize that maybe they should have contacted some construction companies a long time ago. If someone wants for the update to their home then it is best that they contact some professional construction companies to do the work. This way they can completely forget about the project and it will take a great deal of stress off