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Contents Page
I. Introduction
i. Location 3 ii. Specifications 4
II. The developer
i. Heron International 6 ii. Planning Problems 6
III. Sources of Funding and Risks
i. Internal 7 ii. External 8
IV. Stakeholders 10
V. Procurement Routes and Associated Risks
i. Management Contracting vs Construction Management 12
VI. Legal System and Dispute Resolution 16
VII. Conclusion 18
VIII. References 20
I. Introduction
Procurement, by definition, is a collaboration of merging activities which ultimately lead to something or a service being acquired. (City of London, What is Procurement [online], available from
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The majority of the tower is allocated primarily for office space, totalling in 442,928 Sq Ft. The Offices are principally divided into groups of three floors to form relatively small office villages of approximately 35,000 Sq Ft each. It is expected that in total the offices will house 20-25 tenants who will use the premises as their major representative offices for the UK. The renting of the offices has a certain degree of flexibility, designed to be let floor by floor, as well as village by village. Levels 38-40 contain a luxurious sky bar and restaurant overlooking the city rooftops. This has huge appeal and is a spectacular and exclusive option for the wealthy, high flying businessmen who enjoy splashing a bit of cash. At the base of the tower there are three basement levels for retail, parking, storage and management services. The site is in an inner city area, free space is sparse and commercial business competitive. (The Heron Tower, 2010, [online] available at http://www.herontower.com/the_building/ [Accessed 24/4/10]). The construction of this superb building started in September 2007 and is set to be completed in the first quarter of 2011 at a construction cost of approximately £185 million, with rental office space estimated at £75/SqFt
II. The Developer i. Heron International
The developers, Heron International are one of Europe’s leading property investment and
First, the top solution is not to enter into a single source procurement situation in the first place. It is very important for the public procurement there is no charge of corruption can be levied at either party, government or organization should rigorously review their purchasing strategies to ensure that this does not happen.
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)
© Crown copyright 1994 Applications for reproduction should be made to HMSO First published 1994
Over the past few years, the construction industry has been changing dramatically. One of the most important stages in the construction management and business management is the planning phase. They share similar two main levels of planning which are the strategic and operational planning. However, business management planning to decide in advance what should be done, and how to do it, when you do and you are done. On the other hand, Construction management strategic planning is to deal with selection on a high level of overall objective of the project, including the scope, procurement methods, schedules and financing options but the planning of operations, including the
In this assignment I will be writing a formal report that will explain a typical procurement process, I will outline a variety of methods of supplier reimbursement and contract relationships; I will also outline the pros and cons of each contract type. As well as this, I will explain a typical supplier selection process through the use of Carters 10 C’s and a typical selection process model.
Once I have a clear Statement of work and the previous vendors are interested in bidding; I will compete this procurement to the best practices of government procurement are achieves.
This paper includes a description of the procurement planning process. The most valuable output of the plan procurement process will be identified. Furthermore, the various contract types will be explained. A source criterion that would be applicable to any project will be described and three criteria that would apply to most projects will be identified. An analysis of the ethical
Procurement management is the processes to purchase or acquire the products, services or results needed from outside the project team to perform the work. Project Procurement Management involves not just purchasing products, services or results, but also ensuring that those that are purchased are right for the project, meets standards and is based on project requirements. This life cycle includes tracking from order through deployment and completing with invoice reconciliation.
It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in
Arup is a professional service firm specialising in engineering, design, planning, and project management and consulting services for the built environment. Arup is a global firm, present in Africa, North and South America, Australasia, Europe, Asia and the Middle East. It has nearly 10,000 staff based in 92 offices spread over 35 countries with its headquarters situated in London, UK.
Procurement intends to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organization, its stakeholders and clients (Kidd, 2005). Therefore, construction procurement exists to purchase a construction project as requirement of firms or organizational entities to achieve its goals. However, the choice to use external resources is the part of firms’ decision-making
terms of time can be managed in this scenario, as there is no specific delivery
This type of procurement strategy is a ‘fast track’ strategy. Client pays a sum of money to hire a management contractor to manage the whole construction project. Therefore, some early work can be carried out before the design is complete. The contract for the construction projects are between the management contractor and sub contractor. The final cost for the project can not be identified until the final work has been awarded.
The construction industry much like other industries is dependant with the distribution of “scarce resources” (Drake,1994). Many of its resources known as the factors or production i.e. labour, capital, land etc. are limited (Gregory-Mankiw, 2008), however, wants and desires within the industry are infinite (Myers, 2013). Kishtainy notes that this creates two problems; at any given time, there will be a fixed number of resource, against numerous wants. Sloman 2003 adds that in an effort to rectify this, he argues that we must make choices, in terms of choices within the construction industry Myers suggested that firms need to considered their investments made, how they construct and for whom they construct for.