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
• 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
• Easy to arrange changes in the design
• 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