PROCUREMENT

ROUTES
I
NCOLLABORATI
ONWI
TH
 TheSi
tuat
ion:
es
ementRout

I
'm aDev el
operwit
hasecur
edsi
tei
nSout
hWestL
[Link]
sanew-bui
ldr
esi
dent
ial
devel
opmentformedof2
5apart
mentsv
ary
ingi
nsi
zefr
om 1,2and3bedroomswi
thamid-l
evel
speci
ficat
i
on.

Wehav
ej us
tsec
uredplanni
ngandourf
ocusi
stonowmoves
wift
l
yfr
om theAr
chi
tec
tur
aldes
igntot
he
ur

s
it
eworkswit
har eal
focusondel
i
ver
ingt
hesi
tewitht
hes
hor
tes
tposs
ibl
eprogr
ammeof works.
oc
Pr

I
haven't
yetdec
idedt
hefinalPr
ocur
ementRoute/St
rat
egyf
ort
hepr
oject
andwantedsomeadvic
ein
r
egardstowhatt
heProsandConswer
einter
msoftowhom wegi
vetheDes
ignRespons
ibi
l
it
y.

TheQues
ti
ons
:
. Gi
1 venourfocusisondeli
ver
ingtheprojectqui
ckl
y,whati
sthebes
tpr oc
urementrout
eto
chooseandwhy ?Woul
ditbebett
erforustoadopttheTr
adi
ti
onal
ApproachorisDes
ignand
Buil
dabetterwayfor
wardonapr oj
ectofthi
snatur
e?

2. I
naddi
ti
ontotheabove,istheJ
CTsuit
eofc
ont
rac
tsbet
tert
ochoos
easas
tandar
dfor
m of
c
ont
rac
tingonthi
spr
ojectthanNEC?

3. Ouri
ntenti
oni
stoeit
heremployaMai nContract
ordi
rect
lyorins
teadt
oSubc ont
rac
t t
heworks
outt
o3or4maj orsubcont
ractor
sdirect
ly(i
.
[Link],Fr
ame,Env
elopeandFi tOut
).I
f
wedec i
detoactasaMai nCont r
actoroursel
vesandempl oythe3or4k eysubcontr
act
ors
di
rect
,whatar
et hemainconsi
derati
onsforuscont
ract
uall
y?

4. I
fwedecidetoactasMai
nCont
rac
tordoweneedt
ocons
ideras
pec
ificc
ont
rac
tualr
out
e/
s
tandar
dt empl
ate?

J
asonwr
it
es:

Howrefr
eshingtobethi
nkingabouthowtoget somethingri
ghtratherthanthemoreusualsi
tuati
onof
howtoputsomethi
ngr i
ghtorst
opitget
ti
ngwor se!Thi
sisexact
l
yt hepointinaproj
ect
toinves
t t
heti
me
t
omak egooddec i
si
onsfortheri
ghtreasonsrathert
hanr us
hingi nt
oi l
l
-consi
der
eddel i
ver
ymodel s
andhavi
ngt oli
vewit
hthec ons
equences,dur
ingc ons
truct
i
onandi nt
ooper at
i
on.

Thi
sisagoods iz
edschemetoo, wit
hal i
kel
ybuil
dc os
tof
sever
almi l
li
onsofpoundsand bei ng ofa s c
aleand
complexit
yt hatwil
lmean t hati twillrequir
et he
engagementofc ompetentprofessi
onal
s,whateverthe
adopted procur
ementr out
e mi ghtbe,i fiti
st o be
del
iveredeffecti
vel
yandeffic i
ent l
y.

2
 es
ementRout

1
.G i
venourf
whati
st
oc
usi
hebes
sondel
tpr
ocur
iv
eri
ngt
ementr
hepr
out
et
oj
oc
ectqui
hoos
ckl
y
eand
,

why? Woulditbe betterforus to adoptt

he
Tr
adi
tional
Approac
horisDesignandBui
ldabet
ter
wayforwardonaproj
ectoft
hisnatur
e?
oc
Pr ur

Iam pres
umingthattheobject
iveistoac hi
evethes hort
estpos s
ibledurationfr
om whenplanningis
grant
edupunti
lwhent heunit
swill
beav ail
ableforoccupanc y
.Wi thoutknowingtheconfigur
ationof
t
hebuildi
nganearlyac t
i
onwoul dbet oinvestsomet i
meandper hapsev enengageac ontr
actoror
proj
ectmanagertoassis
twithapre- constr
ucti
onlogist
[Link] swouldenabletheDeveloperto
devel
opas t
rat
egyfortheeffic i
entconstr
uc t
ionoftheprojectandal sofori
tscomplet
ion.

F
orex
ampl
e:

How manyentr
ancesarethere?How manyfloor s?Isitpossi
bletoachievephasedcompl et
ionand
occupancyand pr
ogress
ivel
yc ol
lectsalesorr ent
alr evenues? The preparati
on ofa pr operl
y
consi
deredl
ogi
call
yli
nkedmas terprogrammef ort
hedev el
opmentt hatcanbeus edf ordecis
ion
mak i
ngandmanagement oft
hes chemeat t
hisearl
ystagewi l
lpaydi
videndsthr
oughouttheli
feofthe
proj
ect.

I
npract
ic
e,t
hedurati
onfort
heac t
ualconst
ruct
i
onwor ksshouldbethes amei r
respect
i
veofthe
pr
ocur
ementr
outeast
heworksc
opeandqualit
ystandar
dsshouldbecompar abl
e–anyt i
mesav
ings
woul
dbeachi
evedbyhav
ingacti
vi
ti
esc
arri
edoutinparal
lel
rathert
hansequenti
all
y.

Ther
eareperhapsfourmai
npr
ocur
ements
tyl
est
hatc
oul
dbec
ons
ider
ed,butpr
obabl
ynumer
ous
hybr
idappr
oaches:

T
radi
ti
onal
–thec
li
ent
hasaf
ull
des
ignc
arr
iedout
andpr
ici
ngdoc
ument
spr
epar
edf
ort
ender
.
Thedes i
gnc hoicesandr isk
sofanyer rorsint hem ar er etainedbyt heCl i
entwhowi l
lhav e
engagedades ignteam to‘ f
ull
y’detailthes [Link] chitect wi
ll f
ulfilt
hedes igns ubmi t
ted
forpl anning,inc onjuncti
onwi thotherdes igners(Struct
ural;MEP;et c)andwi l
lber et
ainedt o
super visethec onstr
uc ti
[Link] ender sr eturnedwi llbeonal umps um bas isands ubjectto
ensur i
ng t hatt hey ar ef ull
yc ompl iantwi llbe t he bas is oft he Cont r
ac tSum. Any
variations/changespos tcont
ractwillbeatt hecos tandpr ogr ammer iskoftheCl i
[Link] ewil
l
beal ongerper iodr equi
redf orprepar ationoft hedes ignandpr i
c i
ngdoc ument sthanot her
proc urementr outes,butt he tenderper iod s hould be s horters incet he tender erswi l
lbe
respondi ngt oadefineddes i
gn, s
copeandqual it
[Link] ti
cei tisal ongt i
mes inceI haves een
afullydes igneds chemewhi chdidnoti nv olves omeel ement sofs pec i
alis
tdesignsbyt heMai n
Cont ractor,ori
nr eali
tythedes i
gnings ub- contractors.

Des
ignandBui
l
d–i
nst
andar
dfor
mcont
rac
tst
heCont
rac
tori
sappoi
ntedt
o‘c
ompl
ete
’the
desi
gn prepar
ed on behalfoft he Cl
ient,responding t
ot he Employ
er’
sRequirementswit
h
Contr
actor’
sProposal
swhichs houldc ompl ementeac hot hertocompris
ethewhol eofthe
desi
gnfortheWor k
[Link]
scommonpr acti
cef orCl
ientst
os eektocomprehens
ivel
ytrans
fert
he
res
ponsi
bili
t
yforthewhol eoft hedes i
gnt ot heCont r
actor,alt
houghthedes i
gnand buil
d
cont
ract
ingmar k
etisbec
omi ngresi
stanttothis.

3
 es
Dependi nguponthequal i
t
yofthec ontr
actdocumentati
ontheCli
entshoul
dbeabl etodefine
ementRout

t
hes tandardsandqualit
yrequi
redalthoughthemor echoi
cesar
eretai
nedbytheClientt
heless
responsi
bil
it
yfordesignispassedt otheCont r
actor
.Intermsofti
met hereisprobablyli
tt
l
e
differencebetweenthisandthetradit
ionalapproachsi
ncethet
endererswil
lrequi
relongert
o
prepareapr oper
lyconsi
dereddesign&bui l
dtender.

T
wo-
stage–undert
ur

hispr
ocur
ements
tyl
etheCont
rac
tori
stender
ingonl
yal
i
mit
ednumberof
compet i
ti
veelement s–us uallymar gin,preli
minar i
es/common- userfac i
l
it
iesandpr ogramme.
oc

TheCont r
actorist henon- boar daspar toft heClient’
st eam towor kwi t
ht heArchitect/design
Pr

team onsub- contract

ors electi
onandpr oc ur
ement t
owor kupthepr i
cet oar ri
veatal umps um
fort
heCont r
ac [Link] ractoristhenalsoenabl edt oinputonpr ogrammi ngandl ogisti
csfor
theeffic i
entdeliveryofthes [Link] sty
peofpr ocurement lendsit
selftoeitheratraditi
onal or
desi
gnandbui ldappr oac hf orc arr
yingoutt hedes i
gn,s ot
hatthes ki
llsofs peci
ali
stdes igning
sub-contr
actorsc anbehar ness [Link] t
haneffic ientprogr ammeof designingandpr oc urement
theprojectcouldbepr ogr essingwhi ls
tsubs equenttradesar ebeingdes i
gnedt ender edand
[Link] dpr obabl ybet hebes topti
ont osec uretheshortestpos s
iblet
imes cale.

Cons
truc
tionManagement–s
imi
l
ari
nes
senc
etot
het
wo-
stageappr
oac
hint
ermsof
having a shor t
ergestati
on peri
od f orengagementoft he Cons t
ruct
i
on Managerwi t
ht he
advant agesofearlyengagementf orlogi
st
ics,pr
ojectpl
anningandpr [Link] i
mar y
differenc ei
st hattheCons tr
ucti
onManageri seffec t
iv
elyac onsult
antwi t
hr esponsibil
i
tyfor
deli
ver i
ngadefineds copeofs er
[Link] r
adepac kagec ont
ract
orscontractdir
ec t
l
ywi ththe
Cli
entwhohast hefullri
skofpr i
c ees cal
ati
onandpr ogrammedel ays. Undert hi
sf orm of
procur ementthedesi
gnc anbepr ocuredthroughades ignteam orasac ombi nati
onbet ween
thedes i
gnteam andt het r
adepac kagec ontr
actor
[Link] nduet otheshortges t
ationt othe
appoi ntmentoftheConstruct
ionManageras hort
eroveral
ldurati
onfortheprojecti
sac hievabl
e.

I
rrespecti
v eoft
hepr ocurement rout
ethatistobeadoptedoneas pectthat s
houldnotbeoverl
ookedis
t
hes el
ecti
onoft hec ompani eswhowi l
ldeli
vert
hepr oj
ec t
;thi
smeanst hedes i
gner
saswel lasthe
Contractorand s ub-contract
ors. Thes elect
ed c
ompani ess hould beex peri
enced i
nthet y
peof
construc
tion,t
hec ontract
ingris
kal l
ocati
onandhav ethec apac i
t
ytodot hej [Link]
youtint
ervi
ews;
vi
sitprevi
ousprojects;tak
er ef
erences;askdifficul
tquesti
ons.

4
 es
ementRout

2. I
naddi
bet
t
t
i
ert
ont
oc
otheabov
hoos
e,
easast
i
stheJ
andar
CTs
dfor
ui
teofc
m ofc
ont
ontr
r
ac
ac
ti
t
s
ng
ont
hispr
ojec
tthanNEC?
ocur

Thi
sisareal‘
Mar
mit
e’ques
ti
[Link]
htheJ
CTandt
heNECs
uit
eofc
ont
rac
tshav
ethei
radmi
rer
sand
Pr

det
ract
ors.

I
nmyv iew,J
CTi sst
il
lt
hemor efamil
i
arcontr
acti
nbuildi
ngprojec
ts,part
ic
ular
lyofthi
sscal
eandthe
behavi
oursrequir
ed to admi
ni
steritar
e more deeplyengrai
ned inthe i
ndust
ry. User
stend t
o
under
-est
imatetheresourc
esr
equir
edtoproper
lyadminis
tert
heNECc ontr
actmechanis
mswhichcan
l
eadtodifficult
ies.

Onbal
anc
e,f
orapr
ojec
toft
hiss
cal
eandt
ypeI
woul
dleant
owar
dst
heJ
CTs
uit
es.

[Link]
di
r
nt
ec
tl
enti
oni
yori
ns
st
t
oei
eadt
t
herempl
oSubcont
r
oyaMai
actt
nCont
hework
rac
t
soutt
or
o3
or 4 maj or s ubcontr
ac t
ors di rect
ly (i.
e.
Groundworks,Frame,EnvelopeandFi tOut).I
fwe
deci
detoac tasaMai nCont r
actoroursel
vesand
employthe3or4k eys ubcontr
actor
sdi r
ect,what
arethemainc onsi
derat
ionsforuscontr
ac t
uall
y?

Theappr oachthati
sbeingdescri
bediseffec t
i
v el
yConstr
uct
ionManagementasmyex ampleabove.
Mainc onsi
derati
ons:pr
ogr ammec ompat i
bil
i
ty;designco-
ordinati
on;managementofi nf
ormati
on
flow;pr ogrammemanagement ;admini
strat
ionoft hevari
ousc ontr
act
sincludi
ng paymentsand
not
ic
es;impac t
softhev ar
ioussubcont
ractwor ksuponeachother;budgetcontr
ol;t
herei
snos i
ngl
e
poi
ntresponsi
bili
t
yfordeli
very
.

Thi
swoul
dneeddedi
cat
edr
esour
cesof
var
yingdi
sci
pli
nes
.

ProvidedthattheCl i
entisc onfidentt hatithast heinfrastruct
uretopr operlymanaget hi
scontract
arrangementanddel iv
erthepr oj
ectitwoul dmeant hatitwi l
lret
ainalldes ignchoi
cestoits
elfand
shouldbeabl et odeli
verthepr oj
ectatthebes tac hi
ev ablenettpri
mec [Link] i
skor
conti
ngencyallowanc esthatitisunawar eofthatmi ghtbei ncurr
edasapr emi um i
nothercont
racti
ng
model sandofc our
setherewi llbenoMai nCont ractormar ginorCons t
ructionManagerf eetopay .
J
ustawor dofc auti
onwher et hereisamar ginthereisalsor i
skandt heClientwoulddowel ltothink
about whatisbeing‘giv
enup’ aswellas‘whati sbeinggai ned’.

5
 es
ementRout

4.I
fwedec
t
ocons
i
i
detoac
deras
tasMai
peci
ficc
nCont
ont
rac
t
r
ac
ualr
t
ordoweneed
oute/s
tandar
d
t
empl
ate?
oc
Pr ur

Mostsub-c
ontr
actf
ormsenvi
saget
hatt
herewillbeaMai nContr
actbet
weentheEmpl
oyerandthe
Cont
ract
orandthel
anguageandst
ruct
urereflectt
his
;thesub-
contr
actwor
ksbei
nganint
egral
part
oft
hewhole.

TheJ
CTt
radepackagec
ont
rac
tmaybeappr
opr
iat
ewher
etheCl
i
enti
sint
endi
ngt
obet
heEmpl
oyer
andt
heCons
truc
ti
onManager
.

Bef
oremaki
nganybes
pokeamendmentsort
ryi
ngtoadapt
cont
ractst
os ui
tcontr
act
i
ngar
rangement
s
f
orwhic
htheywer
enotint
endedi
twoul
dbepr udent
tot
akeappropri
ateadv i
ce.

I
tisnotuncommonf oraSpecial PurposeV ehic
le’
s(SPV)
tobes etupbyadev el
operasthecontracti
ng
enti
tythatwi l
ldel
i
v era gi
venpr oject,whic hisseparat
ef r
om t hedev el
oper’
st r
ading c
ompany .
Compani esthatar
egoi ngt
oc ontractwit
hanSPV , whi
chisessent
ial
lyas hel
l,
mayr equir
epar ti
cul
ar
securi
t
yar r
angement s(
e.g.
pr ojectbankac count
s;bankguarantees;ESCROW ac count
s;etc
)thatwill
needtobeputi nplacepre-contrac tt
oav oiddelaysinsec
uri
ngc ontract
orperfor
manc e.

Looki
ngatt hebr iefthatwass et,i
ntheClient
’sposit
onIwouldber et
aini
ngtheAr chi
tectandot her
desi
gnerswhopr epar edthedesignforpl
anningt odevel
opthedesignupunt i
lthepointwhereI was
sat
is
fiedt hatalldes i
gnc hoi
cesthatwerec ri
t
icaltomehadbeenmade,f orthedes i
gnt othenbe
completed bys pec i
alis
tdes i
gning s
ub-contract
ors;sec
uri
ng a Mai n Contr
actoron a two- s
tage
arr
angementt owor kwi t
hmeandt heteam todev el
opouttheschemeont hesharpestprogr
amme
possi
ble,procur
ingt hes pecial
is
tdesigni
ngs ub-contr
act
orsunderaJ CTCont ractwit
hCont ract
or ’
s
Desi
gnPor t
ions,foral umps um pri
ce.