Procurement route options pros and cons

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See also: procurement route.

Contents 1 Traditional contract 2 Design and build 3 Management contracting 4 Construction management

[edit] Traditional contract

Good for:

• Quality – full design pre tender
• Design flexibility – variations & instructions
• Specialist subcontractors – Named specialist update to standard building contract sbc11
• Design control – through the architect / contract administrator
• Contractor's Designed Portion – such as mechanical and electrical engineering
• Cost – there may be lump sum cost benefits unless are multiple changes made

Not suited for:

• Time – require full detailed pack pre tender
• Cost – not a benefit if many changes made post tender
• Incomplete drawings – lead to delay, costs and claims of negligence

Contracts: JCT Standard Building Contract 2016, JCT Intermediate Building Contract 2016, JCT Minor Works Building Contract 2016, NEC3 ECC Option A

JCT Standard Building Contract 2016:

• Lump sum payment
• CDM
• Contractor's Designed Portion
• Named subcontractors
• Variations / instructions
• Retention
• Collateral warranties
• Termination provisions
• Pre-agreed alternative dispute resolution procedures.

[edit] Design and build

Good for:

• Time – Fast track, overlap of design and construction
• Cost – lump sum / Guaranteed maximum price
• Single point of responsibility – Contractor design and build responsibility
• Has good price certainty
• Novation – can benefit quality.
• Low risk for the client
• Variations can be accurately valued

Not suited for:

• Quality – cheapest route to meet contract specification can lead to low quality products/ build quality.
• Design flexibility – request for changes will have cost/time implications
• Contractor carries risk for construction
• Client exposed to claims for buildability
• Design could affect the buildability of the project

Contract: JCT Design and Build 2016, JCT Major Project Construction Contract 2016, NEC ECC Options A-E

JCT Design and Build 2016:

• Contractor to complete design and carry out the works.
• Lump sum / Guaranteed maximum price
• CDM
• Collateral warranties
• Termination provisions
• Retention
• Pre-agreed dispute resolution procedures

[edit] Management contracting

Good for:

• Complex / specialist projects – individually appointed packages to best suited sub-contractor
• Potential cost saving – competitive tender
• Time - it is possible to overlap design and construction
• Quality – each package subcontracted to specialist
• Design flexibility – changes can be made throughout construction, although there are potential cost implications.

Not suited for:

• Inexperienced clients – risk high
• Fixed cost - Prime cost basis per package.
• Lack of available specialists – would leave gaps in work to be undertaken.

Contract: JCT Management Building Contract 2016

• Prime cost contract
• Collateral warranties
• Sustainability
• Collaborative working
• Third party rights – such as the funder / contractor

[edit] Construction management

Good for:

• Complex / specialist projects – individually appointed packages to best suited sub-contractor
• Time - It is possible to overlap design and construction

• Design flexibility – changes can be made throughout construction, although there are potential cost implications.

• Potential cost saving – competitive tender
• Quality – each package subcontracted to specialist
• All building types
• Efficiency – Early appointment of the construction manager to aid programme

• Inexperienced client – risk high as appointing trade contractors
• Fixed cost - Prime cost basis per package.
• Lack of available specialists

Contracts:

JCT Construction Management Appointment 2016, NEC ECC Option F, Construction Management Trade Contract 1999

JCT Construction Management Appointment 2016:

• Employer - trade contractor
• Lump sum
• Collateral warranties and third party rights
• Retention

CM/A

• Employer - construction manager
• Collateral warranties
• Sustainability

Comments

This article seems to need some revision: The Management Contracting and Construction Management procurement methods appear to be the wrong way round.

Construction Management is far higher risk than Management Contracting for the client.

The end of the article also doesn't seem to be consistent with the 'suitable for' and 'not suitable for'.

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So change it - its a wiki site.