ABEE3002 Procurement Lecture 4 PDF

ABEE3002 Graeme Barker  Practice and Management Lecture 4 Procurement – buying a building  Week 4 Procurement – How to Buy a Building 4.1 - introduction ABEE3002 - Week 4 - Procurement Overview of Week 4 content Pre-session 4.1 – Introduc...

ABEE3002 Graeme Barker  Practice and Management Lecture 4 Procurement – buying a building  Week 4 Procurement – How to Buy a Building 4.1 - introduction ABEE3002 - Week 4 - Procurement Overview of Week 4 content Pre-session 4.1 – Introduction to procurement and contracts 4.2 – Outline of Main Contract choices Workshop 4.3 – Exploration of Main Contract Choices 4.4 - Decision Making – justifying procurement choice 4.4 - Exploring what impact procurement has on design ABEE3002 - Week 4 - Procurement Week 4 – procurement Aims and Learning Outcomes GC10.1 - knowledge and an understanding of the component costs of different building costs, constructional systems, and specification choices, and the impact of these on architectural design GC11.2 - knowledge of the different roles of clients, consultants and contractors under different building procurement methods ABEE3002 - Week 4 - Procurement Learning Objectives To learn the key procurement methods To understand the decision making process used when deciding on an appropriate contract To gain knowledge of some of the key terms in contracts and the implications for their use on management of the design process [email protected] ABEE3002 - Week 4 - Procurement CW1 - Fee Proposal Advise your client on whether they should pursue a design and build or traditional contract for their project, giving the three most important reasons for this choice [email protected]  Week 4 4.1 – An Introduction to Procurement  ABEE3002 - Week 4 - Procurement What is procurement? The term ‘procurement method’ is used to describe the often complex network of relationships which are formed between clients, consultants and construction companies to enable a building project to be realised - RIBA ‘Procurement’ is the overall act of obtaining goods and services from external sources…and includes deciding the strategy on how those goods are to be acquired by reviewing the client’s requirements and their attitudes to risk - RICS ABEE3002 - Week 4 - Procurement Why have a Contract? “The difficulty about gentlemen’s agreement is that it depends on the continued existence of the gentlemen” Ronald Green – The Architects Guide to Running a Practice The 2011 Construction Act now covers verbal agreements, but it is important to have a written contract in place as soon as possible [email protected] ABEE3002 - Week 4 - Procurement Contracts Why have a contract? Contract Variations Slow construction Provision of information Poor specification [email protected] ABEE3002 - Week 4 - Procurement Contract Selection Cost ABEE3002 - Week 4 - Procurement Contract Selection Time ABEE3002 - Week 4 - Procurement Contract Selection Contracts give a clear legal structure to what is expected of clients, architects and contractors Time: they confirm fixed completion dates and what happens when Cost: They confirm how changes to the contract are costed and instructed Quality: They set quality standards and control retention of monies when works are not up to standard Termination: What happens when a contractor goes bust, or a client runs out of money Insurance: Who insures the building site during the works? Payments: Determine how is the contractor paid and how often  Week 4 4.2 – Outline of Contract Choices ABEE3002 - Week 4 - Procurement Time Cost Quality The Options [email protected] ABEE3002 - Week 4 - Procurement Contract choice affects when you invite contractors to tender ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract Assumed that the WHOLE design will be produced by the CLIENTS design team As the client appoints all consultants they retain control over all matters of cost, design and quality The Architect is typically retained to work for the client DURING construction to inspect the works and administer the contract for the client. [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality Key Aspects of a Traditional Lump Sum Contract Requires time for production of a full set of documents before tender There is cost certainty as a lump sum is known before contract – as long as there are no changes during construction. Takes the most TIME to prepare for the design team – all details must be in place for tender [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality Lump Sum Contracts ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract As the Architect you will typically choose exactly what window you want in order to meet the required performance. Materials, Finishes, Thermal Performance, Acoustic Performance, Glass type, frame arrangement and type etc. [email protected] ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract BUT BEWARE The contractor cannot choose a more cost effective alternative. There may be a long lead in for the exact window you want If it fails and the guarantees are inadequate the client will come to you to ask why. [email protected] ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract Takes the most time Gives the client the most control over quality of the work Can be relatively costly Less likely to be used on large scale projects unless it is of wider client / public interest to achieve high quality Most readily used on owner occupier projects such as housing. [email protected] ABEE3002 - Week 4 - Procurement Design and Build Contract The architect does not develop the whole design in isolation but allows the contractor to propose design or product solutions that might be more cost effective or have a shorter lead in time. As the ‘lead designer’ the main contractor offers a single point of design responsibility for delivery of the project. The client lacks control over detailed aspects of the design. [email protected] ABEE3002 - Week 4 - Procurement Design and Build Contract Construction work can be started early as contracts are agreed before much detailed design work is in place. There is great certainty on cost as many D&B contracts seek to assign all risk to the contractor under a GMP. [email protected] ABEE3002 - Week 4 - Procurement Design and Build You typically specify how the window will PERFORM Materials – what does it need to be made from? Finishes – what colour and type of finish – how long should it last? Thermal Performance Acoustic Performance Glass - How much heat and light will it let in – what colour will the glass be? Window profiles – how thick can the transoms be? You guide the contractor on how the window will need to perform – not what to buy [email protected] ABEE3002 - Week 4 - Procurement Key features of Design and Build Contract The client typically requires the contractor to appoint the design team. If transferring this is done under a novation agreement passing liability for ALL design, including that carried out before contract, to the main contractor. There is heavy reliance in the Employers Requirements on performance criteria to ensure that there are clear parameters for the contractor to meet. [email protected] ABEE3002 - Week 4 - Procurement Drawings for Traditional Contract [email protected] ABEE3002 - Week 4 - Procurement Drawings for Design and Build [email protected] ABEE3002 - Week 4 - Procurement Early Contractor Engagement Offsite Manufacture ABEE3002 - Week 4 - Procurement Early Contractor Engagement Offsite Manufacture ABEE3002 - Week 4 - Procurement Design for Manufacture Increased Offsite Manufacture ABEE3002 - Week 4 - Procurement Assembling a Project Team Increased Offsite Manufacture ABEE3002 - Week 4 - Procurement Assembling a Project Team Increased Offsite Manufacture ABEE3002 - Week 4 - Procurement Time Cost Quality Why use a Management or Partnering Contract Detailed design can proceed in parallel with site operations but take care – if packages are procured and then co-ordination is required with other later works, changes and delays can easily occur. Long Lead in specialist design sub-contractors can be appointed early without complexities of traditional contracts [email protected]  ABEE3002 - Week 4 - Procurement Procurement Selection and Choice Early Contractor Engagement? PROS CONS Supply chain can be accessed early Client loses access to design team and Logistics, construction and health and safety design quality early can be considered early with construction Larger overall team from early in process is team harder to manage Contractor can take control of project risks Design innovation reduced as risk averse and overall cost contractors under programme / cost Offers security of cost and programme to obligations are controlling the process client ABEE3002 - Week 4 - Procurement Time Cost Quality Key Aspects of a Management Contract Detailed design can proceed in parallel with site operations but take care – if packages are procured and then co-ordination is required with other later works, changes and delays can easily occur. Long Lead in specialist design sub-contractors can be appointed early without complexities of traditional contracts [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality the traditional methodology [email protected] ABEE3002 - Week 4 - Procurement Assembling a Project Team Changing world of Contracts ABEE3002 - Week 4 - Procurement ABEE3002 - Week 4 - Procurement A changing contractual world ABEE3002 - Week 4 - Procurement A changing contractual world ABEE3002 - Week 4 - Procurement Changes in Procurement Strategy Changes in Procurement Increasing need to use Specialists in design process due to complexity of ‘component’ design Demand to engage with contractor led designers early in the process Lack of site staff coming into the industry Growth in D&B and management contracts But what is right for your project? ABEE3002 - Week 4 - Procurement Deciding on your Procurement Strategy Who is involved – what are the main drivers for the scheme? What are the clients requirement on Time:Cost Quality? Allocation of risk – who owns the risk The timing of contractor appointment – control over quality and brief Level and importance of sub—contractor design portions Level of off site construction and BIM to be employed Cultural challenges – are the client, contractor and design team familiar with the contract structure and ethos of working?  Week 4 - Workshop 4.3 – Exploration of Main Contract Choices ABEE3002 - Week 4 - Procurement Overview of Week 4 content Pre-session 4.1 – Introduction to procurement and contracts 4.2 – Outline of Main Contract choices Workshop 4.3 – Exploration of Main Contract Choices 4.4 - Decision Making – justifying procurement choice 4.5 - Exploring what impact procurement has on design ABEE3002 - Week 4 - Procurement Week 4 – procurement Aims and Learning Outcomes GC10.1 - knowledge and an understanding of the component costs of different building costs, constructional systems, and specification choices, and the impact of these on architectural design GC11.2 - knowledge of the different roles of clients, consultants and contractors under different building procurement methods ABEE3002 - Week 4 - Procurement Learning Objectives To learn the key procurement methods To understand the decision making process used when deciding on an appropriate contract To gain knowledge of some of the key terms in contracts and the implications for their use on management of the design process [email protected] ABEE3002 - Week 4 - Procurement CW1 - Fee Proposal Advise your client on whether they should pursue a design and build or traditional contract for their project, giving the three most important reasons for this choice [email protected] ABEE3002 - Week 4 - Procurement Contract Selection Contracts give a clear legal structure to what is expected of clients, architects and contractors Time: they confirm fixed completion dates and what happens when Cost: They confirm how changes to the contract are costed and instructed Quality: They set quality standards and control retention of monies when works are not up to standard Termination: What happens when a contractor goes bust, or a client runs out of money Insurance: Who insures the building site during the works? Payments: Determine how is the contractor paid and how often ABEE3002 - Week 4 - Procurement Time Cost Quality The Options TIME : COST : QUALITY So what do you know? [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality The Options [email protected] ABEE3002 - Week 4 - Procurement Contract choice affects when you invite contractors to tender ABEE3002 - Week 4 - Procurement Time Cost Quality Lump Sum Contracts ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract Assumed that the WHOLE design will be produced by the CLIENTS design team As the client appoints all consultants they retain control over all matters of cost, design and quality The Architect is typically retained to work for the client DURING construction to inspect the works and administer the contract for the client. [email protected] ABEE3002 - Week 4 - Procurement Traditional Lump Sum Contract Takes the most time Gives the client the most control over quality of the work Can be relatively costly Less likely to be used on large scale projects unless it is of wider client / public interest to achieve high quality Most readily used on owner occupier projects such as housing. [email protected] ABEE3002 - Week 4 - Procurement Design and Build Contract The architect does not develop the whole design in isolation but allows the contractor to propose design or product solutions that might be more cost effective or have a shorter lead in time. As the ‘lead designer’ the main contractor offers a single point of design responsibility for delivery of the project. The client lacks control over detailed aspects of the design. [email protected] ABEE3002 - Week 4 - Procurement Design and Build Contract Construction work can be started early as contracts are agreed before much detailed design work is in place. There is great certainty on cost as many D&B contracts seek to assign all risk to the contractor under a GMP. [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Costs – Questions to ask: Is there a cost limit that must not, under any circumstance be exceeded? How much risk can a client accept? Is it essential to know the total cost of the work before the project starts on site? Is it important to obtain the absolute lowest cost regardless of other considerations? [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Costs – Questions to ask: Lowest possible expenditure? Certainty over price once contracts are signed Best value for money NOTE DOWN YOUR CLIENT OBJECTIVES RATE EACH OUT OF 5 FOR IMPORTANCE [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Quality – Questions to ask: Are the considerations of commercial prestige and public image important? Are high quality materials important to the project? Is it essential that all matters of design and specification are firmly under the control of the design team? Is it a project where high standards of finishes are expected? [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Quality – Questions to ask: A top quality building is most important The employer needs control of the details of the design A sensitive personal response. Detailed resign is really critical – cannot be left to the contractor NOTE DOWN YOUR CLIENT OBJECTIVES RATE EACH OUT OF 5 FOR IMPORTANCE [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Time – Questions to ask: Early Start: is there time for a full brief and detailed required to be developed? Certainty: are there over-riding rental or other financial commitments that mean the earliest completion date is an over-riding objective? Are there any other commercial or other external pressures that make completion imperative? [email protected] ABEE3002 - Week 4 - Procurement Time Cost Quality How is it assessed? Time – Questions to ask: Need to start on site as soon as possible We need certainty over the contract period We need the building urgently – the shortest possible contract! NOTE DOWN YOUR CLIENT OBJECTIVES RATE EACH OUT OF 5 FOR IMPORTANCE [email protected] ABEE4041 - Professional Studies - Lecture 9 - Procurement Time Cost Quality Contract Profiling Set out your contract profile using the feedback from your three questions Evaluate where the balance lies between the three criteria What are the two most important criteria? Use Time: Cost: Quality to decide on an initial proposal [email protected] ABEE4041 - Professional Studies - Lecture 9 - Procurement Time Cost Quality Contract Choice - Risk Profiling Choice of contract has BIG influence over the level of risk your client is exposed to These can be adapted through bespoke contract terms, target pricing, GMP etc but the basic principles still hold [email protected] ABEE4041 - Professional Studies - Lecture 9 - Procurement Time Cost Quality Contract Choice - Risk Profiling What is your clients attitude to RISK? Can they afford cost or programme over-runs? Check your identified contract preference against the risk to the client. What is your outcome now – how would you explain it to your client? [email protected] ABEE4041 - Professional Studies - Lecture 9 - Procurement Time Cost Quality Contract Profiling Note down your contract choice Think about the three key reasons for your client for your choice Think about how you would present them to your client to justify your selection [email protected]  Week 4 - Workshop 4.5 – the impact of procurement on design ABEE3002 - Week 3 - Fees and Team Impact of Procurement on design Changes the point of contract Affects the level of information available Changes who makes decisions in later stages of design process And who is responsible….. ABEE3002 - Week 3 - Fees and Team Stage 2 Concept Design ABEE3002 - Week 3 - Fees and Team Stage 2 Concept Design ABEE3002 - Week 3 - Fees and Team Stage 3 Developed Design Completion of this stage typically aligns with the submission of your project for Planning. For design and build projects you may tender your scheme at his stage, but for small traditional projects your design work will continue. ABEE3002 - Week 3 - Fees and Team Stage 4 Technical Design ABEE3002 - Week 3 - Fees and Team ABEE3002 - Week 3 - Fees and Team Stage 2 Concept Design ABEE3002 - Week 3 - Fees and Team Stage 3 Developed Design ABEE3002 - Week 3 - Fees and Team Stage 3 Developed Design ABEE3002 - Week 3 - Fees and Team Design and Build Tender Stage ABEE3002 - Week 3 - Fees and Team Design and Build Tender Stage ABEE3002 - Week 3 - Fees and Team Design and Build Tender Stage ABEE3002 - Week 3 - Fees and Team Manufacture and Construction ABEE3002 - Week 3 - Fees and Team Manufacture and Construction ABEE3002 - Week 3 - Fees and Team Manufacture and Construction  ABEE3002 - Week 4 - Procurement Procurement Options – The Shed for an Architect 1. Traditional Lump Sum Contract 2. Design and Build 3. Management Contract [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Traditional Lump Sum Contract What would you need to know? What notes would you need to put on this drawing? [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Under a traditional Lump Sum Contract Spatial qualities (height, length etc.) Door (size, hinges, lock, handle): Envelope Design (materials, thicknesses) Foundations (materials, depth): Roof (material, overhang, gutters) Windows (size, glass, frame): Services (Sockets, lighting, alarm): Floor (material, thickness, fixing): Finishes (material, guarantee): [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Traditional Lump Sum Contract Windows What criteria do you need? How would you describe them? [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Traditional Lump Sum Contract Windows (size, glass, frame) Glass thickness? Thermal performance? Fire performance? Acoustic performance? Frame size? Material? Safety requirements? Wind / water tightness? [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Traditional Lump Sum Contract Roof What criteria do you need? How would you describe them? [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Under a traditional Lump Sum Contract Spatial qualities (height, length etc.) Door (size, hinges, lock, handle): Envelope Design (materials, thicknesses) Foundations (materials, depth): Roof (material, overhang, gutters) Windows (size, glass, frame): Services (Sockets, lighting, alarm): Floor (material, thickness, fixing): Finishes (material, guarantee): Architects and Engineers Drawings [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Under a traditional Lump Sum Contract Spatial qualities (height, length etc.) Door (size, hinges, lock, handle): Envelope Design (materials, thicknesses) Foundations (materials, depth): Roof (material, overhang, gutters) Windows (size, glass, frame): Services (Sockets, lighting, alarm): Floor (material, thickness, fixing): Finishes (material, guarantee): Architects and Engineers Specification [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Under a traditional Lump Sum Contract What needs to be defined? Materials, performative qualities? On a traditional contract, as an architect you would CONSIDER all of these requirements and working with a team of experts DESIGN all aspects of the building. How does a shed stand up? You would need an engineer. Working with standard timber sizes an engineer you would advise on the maximum sizes of trusses and beams, and what material you wanted to use for aesthetics, and then co-ordinate all of this. [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Under a traditional Lump Sum Contract How long would you want your shed to last? You may speak to a SPECIALIST SUPPLIER to obtain guidance on what treatments to use to ensure the external timber lasts for a period of time stipulated by the client. You need to consider how the boards are laid out to allow water to be discharged. As an architect you will use your experience and technical guidance to confirm how THICK your weathering boards are for the given spans. [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Single Stage Design and Build You define the PERFORMATIVE QUALITIES of the shed and let the Builder source the materials and design it. The CONTRACTOR leads the design – the architect defines qualities the client wants. [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Design and Build Contract Walls: What criteria do you need? How would you describe them? [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options The Shed for an Architect Design and Build Contract Walls? What performance criteria? Longevity Thermal performance Robustness (impact / security) Waterproofing Air tightness [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Single Stage Design and Build Spatial qualities (height, length etc.) Door: material finish – long does it last? Thermal performance? Robustness? Envelope Design (materials, robustness, thermal, acoustic, fire, air tightness performance) Foundations: Loading, dead and live Roof: Lifetime guarantee, material, finish, thermal performance. Windows: Minimum daylighting, acoustic, security, safety, thermal performance, frame material [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Management Contract The client wants the quality of a traditionally defined product but doesn’t want to wait for all the details to be ready. PACKAGE 1 – An engineer designs the foundations PACKAGE 2 – An offsite Specialist designs the shed PACKAGE 3 - Package Sub-Contractors are brought in to design and install the windows For each package a client employs a contracts manager procures a specialist to do the work. [email protected]  ABEE3002 - Week 4 - Procurement The Shed for an Architect Management Contract Detailed design can proceed in parallel with site operations Long Lead in specialist design sub- contractors can be appointed early without complexities of traditional contracts  ABEE3002 - Week 4 - Procurement The Shed for an Architect Design and Build v Traditional Contract Can you write a specification for a shed? What are the differences in approach and written descriptions? Design and Build architect - You should ONLY use performative descriptions, not absolute products or definitions. Your contractor should have the ability to choose specific products and develop your design. Traditional Contract - You are working direct for your client and have absolute control of the specification and design. How would you describe your design to a contractor to ensure you get what you ask for?  ABEE3002 - Week 4 - Procurement Procurement Options Choosing the right option: RISK [email protected]  ABEE3002 - Week 4 - Procurement Procurement Options Choosing the right option: RISK [email protected]  ABEE3002 - Week 4 - Procurement Q10? Your client wants to start early on a small extension but keep control over quality – Which Contract? 1. Traditional Lump Sum Contract 2. Traditional Remeasurement Contract 3. Design and Build [email protected]  ANY QUESTIONS? for details contact [email protected]