PF4102 Notes PDF

Abbreviations AIs Architect’s Instructions BQ Bills of Quantities CRS Contractors Registration System EOI Expression of Interest EOT Extension of Time EPV Estimated Procurement Value FOT Form of Tender GPE...

Abbreviations AIs Architect’s Instructions BQ Bills of Quantities CRS Contractors Registration System EOI Expression of Interest EOT Extension of Time EPV Estimated Procurement Value FOT Form of Tender GPE Government Procuring Entity ITT Instruction To Tender MC Main Contractor PC Prime Cost PQM Price Quality Method PSPC Public Sector Panel of Consultants PSSCOC Public Sector Stand Conditions of Contract RFP Request for Proposal RVO Request for Variation Order SIA Singapore Institute of Architects SO Superintending Officer Types of Certificates 1) Payment certificate a) Issued by Architect for all the works done to allow MC to receive payment from owner 2) Certificate of Revised Date of Commencement a) Issued by Architect for SIA projects, for change of time of commencement b) To be issued during construction phase for the change of date (Lect 4 slide 9) 3) Certificate of Substantial Completion a) Is for PSSCOC projects b) Issued by SO upon project completion 4) Completion Certificate a) For SIA projects b) Issued by Architect upon project completion 5) Delay Certificate a) ONLY FOR SIA projects b) Issued by the Architect to Contractor when Contractor is in Delay c) Without this cert, cant claim LD Formulas QFM QFM score = quality + fee CPAS score (for public project only) 1st 10 2nd 7 3rd 5 4th 3 5th 1 Quality score = (tenderer’s raw quality points / highest raw quality points among all tenderers) x quality weightage Anti Fee Diving Mechanism Fee Score Computation - Where lowest fee quoted >= 0.8Faverage, [NO low Outliers] Fee score = (lowest proposed fees among tenderers / tenderers’ proposed fees) x fee weightage - Where lowest fee quoted this has no anti fee diving mechanism Quality Attributes CS Index or Productivity Score = (Tenderer’s CS index/Highest Tenderer’s CS Index) x weightage TA (C) index Score = (Tenderer’s TA score/Highest Tenderer’s TA score) x weightage Tenderer with the highest TA score will be awarded the maximum points Tenderers with no TA score will be scored 0 points WD (C) Index Score = (Tenderer’s WD score/Highest Tenderer’s WD score) x weightage (1%) Tenderer with the highest WD score will be awarded the maximum points Tenderers with no WD score will be scored 0 points Total quality points = past performance + safety performance + CS index or productivity attributes + GPE’s own quality attribute Quality score (Q-Score) = (Tenderers’ Total Quality Points / Highest Total Quality Points) x Quality Weightage Valuing Variations (Lect 6 p1) Valuation of Variation = Qty x relevant rates (slide 7) Eg: Contract Rates - Change the painting finish in all toilet walls to ceramic wall tiles in accordance with the drawings attached - Schedule of Rate for painting = $12/m2 Step 1: Omit painting Quantity = measure the area of the toilet wall from the Contract Drawing (say 200m2) Omission amount = 200m2 x $12/m2 = $2,400.00 Step 2: Add ceramic tiles Quantity = Assume same area = say 200m2 Rate = If there are similar rate in the Contract Document, use same rate (say $80/m2) Addition amount = 200m2 x $80/m2 = $16,000.00 Step 3: Variation amount = +$16,000.00 minus $2,400.00 = +$13,600.00 Lecture 1 Parties in a Construction Project Roles and Responsibilities 1) Owner/Client/Employer a) Public owner - government agency b) Private - an individual house owner (who have interest to develop a project, whether it is A&A or a new built project) or entity eg CDL, far east that holds the legal rights to a property, asset or business like a Developer c) Invested capital and/or other resources to finance the construction project d) Appoint QPs - Architect/Structural Engineer - Expert in relevant field, the client will give them a brief and the architect will have to start with the project by having some design e) Appoint Licensed Land Surveyor – site boundary to ensure no trespassing of land f) Do feasibility study on the potential of the project g) Appoint QS – advise Budget. Usually based on S$/sf, because the design is still evolving h) Decision to proceed with project – design and timelines etc.  i) Give the green light to award the project after getting recommendation from the Architect on the tender returns j) Paymaster k) Decide on the changes to the project (variations) during post contract 2) Architect a) A professional who designs and plans buildings, structures, and spaces -> he knows what needs to be design and what needs to comply with the authorities. He determines that the design is in compliance and make sure that it can be submit in good time. b) Qualified Persons - as they are registered with the Board of Architects c) Consults Frontline Technical Departments on Employer’s Brief (URA (eg. Carpark requirement)/BCA (building regulations) /LTA/SCDF/NParks, etc.) d) Usually the DRAFTMEN are the only who are very familiar with the authorities requirement and the Architect will endorse on the drawings. e) Architect don’t usually get down to do the drawings themselves, they do the concept design and some sketching. The draftmen will develop the actual drawing. f) Architects are involved in all stages of the design and construction process and from the inception, tender process, award, construction, defects rectification till maintenance. the architect is involved, based on the brief, they ensure the design is properly crafted out. Once the design gets to a certain stage, they will develop into the tender drawings for QS to do the tender documents and then we will call out for tender and then we will award, and of course construction takes place. g) Responsible to get all Authority approval on building plans and various government department h) designing building layouts and floor plans, determining structural requirements, and creating detailed construction plans and specifications. i) Work closely with clients, engineers, contractors, and other professionals to ensure that the project meets the needs of the client while also adhering to building codes, zoning laws, and other regulations 3) Project Manager - Can be architect, can be a project manager, can be an employer who go their in house PM. For eg: far east or cdl they will have their in house PM. Or they can engage a company to outsource the PM. a) Must have strong leadership and communication skills to lead the project team to achieve specific timeframe and budget. They got to communicate to the client  and the consultants while ensuring that the contractor construct the project accordingly b) Plan the overall timeline to make sure that the respective consultants are on board so that whether the QS will be on board first or the M&E needs to be on board so that the whole project is organized, and tenders can go out and oversee all aspects of a project from initiation to completion. c) Reporting to Client d) Constant updating of financial position e) Responsible for managing the consultants, the project risks and issues f) Work well under pressure and adapt to changing circumstances g) Communicate and manage all the stakeholders especially in a large project, h) Resolve conflicts that may arise during the project 4) Structural Engineer a) Qualified Persons - Registered with the PE Board b) Responsible to apply to BCA to submit all the structural drawings to get the approval on his structural drawings from piling, framing, the design of the load etc c) Upon completion of the structural works, he also submit to BCA to inform them that the building designed and supervised by him has been completed according to what has been approved by the authority in the original submission d) Specializes in the design and analysis of structures, such as buildings, bridges, tunnels, and other infrastructure. e) Duty is to ensure structures are safe, stable, and capable of withstanding the forces and loads they are designed to bear. f) Responsible to get Authority approval on the permit to commence works. It is a submission to the authorities. Without the permit, the work cannot start at all g) Create structural designs and specifications, performing calculations and simulations, preparing construction drawings and plans, and conducting site inspections to ensure that the construction process is proceeding according to plan. 5) Mechanical & Electrical Engineer - In SG, the M&E engineer will have to be responsible for both the design and contract. - Lot of times the client would want the M&E work to be under design and built by the contractor. Sometimes they feel that the M&E engineers they probably have over specs, they will then bring the cost up. So sometimes you put as a  design and built by the contractor, it will be so called much more cost effective, because each of the m&e, they will have their own people to design something that is sufficient. But of course, there must be a design brief that is given by the M&E engineer. So it can be both. a) Design i) Two separate professions but they are interrelated ii) Responsible for designing and developing a wide range of mechanical systems and electrical system and including plumbing and gas. iii) Mechanical system comprises Sanitary, Gas and Plumbing and Air conditioning and mechanical ventilation (ACMV), Lift and Escalator Installation iv) Electrical system comprises, Electrical Installation, Lighting Systems, Fire Alarm Systems, Security Systems, Communication Systems like PA system, telephone systems, internet connectivity, and audio/visual systems v) Responsible for dealing with SP Power and NEA to obtain approval vi) Either designed by M&E Engineer and build by Contractor’s domestic M&E Contractor or can be Nominated Sub Contractor or can be design and build by Contractor (M&E Engineer engaged by Contractor) b) Contract i) Besides being responsible for design and preparing Tender Drawing that meets all the Authorities’ regulations and compliance, M&E Engr also responsible ii) For:- iii) Prepare M&E Budget iv) Prepare M&E portion of the Tender Documents v) Evaluate tender returns and prepare tender report vi) Do payment Recommendation vii) Assess M&E variations viii) Prepare M&E final account statement ix) Monitor Contractor’s maintenance of equipment during maintenance period 6) Quantity Surveyor a) Developer QS, Consultant QS, Main Contractor QS, ID QS, Specialist Contractor QS, Government Agencies QS.  b) Manage costs and finances of construction projects with inputs from the M&E Engineers and other specialist consultants c) Prepare cash flow projection. Usually in a S curve. d) Responsible to prepare tender document with inputs from the M&E Engineers and other specialist consultants e) Ensure project completed within its budget, provide financial advice to clients and stakeholders. f) Cost planning and management: Quantity surveyors prepare and manage cost estimates for construction projects. This includes estimating the costs of labour, materials, equipment, and other expenses. g) Other Scope of Service includes:- h) Procurement – Prepare Tender Document for the calling of the tender, prepare tender report upon tender returns, conduct tender interview, ensure all contractual matters are clarified with all tenderers, recommend for award based on tender prices of all compliance tenderers, draft Letter of Acceptance to be issued by Owner or Contract Administrator. i) Contract administration (Usually assist Contract Administrator) – payment recommendations, assess variations (changes due to client requirements and improvements from drawing), handles contractual matters, settle final account with Contractors j) Monitor all warranties are submitted k) Value engineering l) Dispute resolution 7) Other Specialist Consultants eg: landscape architect, facade consultants, lift consultans, audio visual consultants, lighting consults, acoustic consultants a) Landscape Architect designs and plans outdoor spaces such as parks, gardens, and other public areas. b) Façade Consultants: specialize in the design and engineering of building facades. c) Lift Consultants: experts in the design and installation of elevators and other vertical transportation systems. Usually the lift tender vv troublesome a lot of exclusion clauses and requirements. so the m&e consultants would usually call for tender in the early stages of the project d) Audio Visual Consultants: specialize in the design and installation of audio and video systems for buildings, such as conference rooms, theaters, and public spaces.  e) Lighting Consultants: Lighting consultants specialize in the design and installation of lighting systems for buildings and outdoor spaces. f) Acoustic Consultants: specialize in the design and implementation of sound systems and acoustic treatments for buildings g) Engage by Employer or part of a Multi Disciplinary Team (MDT) usually mention in the Request for Proposal (RFP). mulit disciplinary team (MDT) usually is for the gov projects then will have 8) Main contractor, Nominated Sub Contractor/Suppliers, Designated Sub Contractors/Suppliers, domestic sub contractors a) Main Contractor to carry out and complete the project at the agreed awarded sum (unless there are changes to the contract) within the stipulated contract period or alternative contract period (unless there are extension of time granted by the Employer) b) If the project too specialised, the client will decide to call a separate tender. When call a separate tender, normally in the tender, time when u prepare the tender document, u put in a Prime Cost (PC) sum. For example the lift is gg to be called separately larter on, so u put a sum inside, $1 mil, which is the PC sum of $1mil. Then subsequently when u call a tender, maybe finally when u award, it is only $900k, then u do the adjustments accordingly c) In reality – additional cost and time d) Main Contractor usually cannot carry out all the works himself and hence engages his domestic sub contractors e) Nominated Sub Contractor – Specialist Sub Contractors appointed by Employer and nominated to Main Contractor. Privy of Sub Contract is between Main Contractor and Nominated Sub Contractors f) Designated Sub Contractors – Pre selected by Employer prior to calling Main Tender and the name of the preselected sub contractor is included and make known to the Tenderers during tender Period 9) Direct contractors a) Directly engaged by Employer and privy of contract remains between the Employer b) Usually if the scope does not have any interfacing with the Main Contract Works Contract Administrator - Can be anybody. It is called the contract administrator cause it is the one who administers the contract under the condition of the contract. He is the one who is going to issue the instructions, payment certificate, completion certificate, maintenance certificate so he got to administer the entire project.  - In the private sector, normally Singapore Institure of Architects (SIA) conditions of contracts. The architect is called the contract administrator. In the documentations, usually u have a lot of reference to architects. - But in public project, because the Public Sector Conditions of Contract (PSSCOC), under the government agency, is prepared for the purpose of public projects. But instead of calling them as architect, it is called Superintending Officer (SO). He can be the architect or any other person. Roles of Contract Administrator 1) Client’s agent, manage contracts between two or more parties. For eg. the employer and main contractor and various sub contractors as well as consultants. Key role during tender period to shortlist and award the successful tenderer. For Public Project, adopt the Price Quality Method (PQM) 2) Ensure all contract parties fulfil their obligations as per the contract 3) In charge of site staffs like Resident Engineers (RE)/ Resident Technical Officer (RTO). In complex project, can have 3 RTO - Archi RTO, Structural RTO, M&E RTO 4) Chair meetings usually weekly and prepare minutes of meeting. During the meetings, changes to the awarded scope of works happens, EG: Owner requires changes/post award Authority changes 5) Administer variations to the contract and issue Architect Instruction 6) Review Master Programme vs site progress. They will see whether any delay, is there a need for them to prepare a catchup program. a) What is happening, is it because of the material? (they did not place the order early) And then now that it is an issue with the lead time, it is going to affect the overall programme. Just like now i have one project, the contractor said that he has placed order upon when the conservation consultant confirmed, then he said that just the plaster itself is going to take 4 months, because the consultant want this particular brand. So, the contractor tried to talk to the clients’ consultant to use another brand, so that he will not suffer all these delays. And when he thought that the material now has a lead time, he is going to ask for EOT. So think about it, why should the client bear the EOT when it is due to yourself, whether not ordering, because during the tender, you committed that there is no lead time. These are not to be considered. So this type of real life situation, it can turn into a question to you guys for the exam. She can generate into a question into the exam. She want us to think, is it a bill? is it not a bill? is it an EOT or not? things like that. 7) Responsible for issuing certificates - payment, completion, final, maintenance 8) Access delay, EOT and LD a) Assess contractor’s notice of extension of time claim and award accordingly and will advice the LD to the owner if there are delay caused by the contractor. LD is at the sole discretion of the private owner. For public owner, must impose if advise by SO for accountability issue b) Usually these are not to be done by QS, as QS, when they approach us for assessment of EOT, anything to do with contract related things, or usually we will help them to assess whether there is inclement weather. Inclement weather means that, say for example, Singapore rains a lot, then the contract will put up, “oh this month rain 6 days, so i am going to put 6 days of EOT claim,  because I cannot do my work outside.” But in the contract, when we prepare prelim, we will take a 10 years kind of series. In the month of jan, feb etc, there will be a number of days. So meaning that, every contractor when you tender, you must take it into consideration. Because it means that if you are in the market, you knows that Singapore rains, you know that there are rain, so you will have to cater. Say in the contract there are 5 days, but after you calculate the wet days, wet days mean anything, when they do the measurements, it exceeds 10.16mm, you consider the one day as wet day. So if there are 6 days, meaning 6 - 5 = 1 day EOT. It is not 6 days EOT, because in the contract it is already 5 days. So now they show you, for this month, there is a total of 6 wet days. You got to take the difference and only give them one day EOT. You do not go and recommend 6 days of EOT. 9) Do site inspection and prepare Schedule of Defects a) Defects, anything not in accordance to materials specifications and construction drawings – Common Defects – leaking/spalling concrete/wrong thickness of material etc. 10) Resolve site and contract disputes that may arise Architect (1) Besides designing and supervising the Works, another role is Contract Administrator (2) When a project does not have an Architect, other lead Consultants will be the Contract Administrator (3) Usually not the QS as the QS is not the one who are involved in designing the project or specifying the materials Roles of Resident Engineer (RE), Resident Architect (RA) – complex and mega project, Resident Technical Officer (RTO) 1) Act as Consultants’ “eyes” on site 2) Check quality of materials being delivered against the specifications in the Contract Documents on behalf of Consultants and report to them on any abnormalities 3) Also check quality of work being constructed and installed against the latest construction drawings 4) No authority to instruct the Contractor a) They do not have the rights to go around and tell “oh, i want you to do this, i want you to do that” they do not have the power. But, when it comes to safety, they can stop them from doing and have to report it back to the consultant. 5) Usually issue site memos to Contractor for actions. If Contractor deem the site memo constitute VO to the contract, he must raise a Request for Variation Orders otherwise not payable. Timeline in a construction project 1) Pre Contract Administration a) Design development period  Employer has a proposed development Employer appoints Consultant team Employer appoints Architect and QS to do feasibility study including preliminary budget b) Tender period Employer gives green light on architect’s design to call tender QS prepare tender document Prequalification and shortlisting of tenderers for public project Tender close, tender interview, prepare tender questionnaires. Evaluate and prepare tender report Public project – PQM for evaluation recommend for award Issue LOA to successful tenderer and their acceptance 2) Post Contract Administration a) Mobilisation period (usually 7 - 14 days) Insurance for the Works and Performance Bond (a guarantee given by the Bank or Insurance Company for a sum equivalent to 5 or 10% of the Contract Sum) – assurance for Owner in the event the Contractor fails to carry out the work properly Hoard up the Site unless done by Owner earlier/Gates/Site Entrances/Washing Bay Arrange for Sub Cons Master Programme Apply for Permit to commence works Get his land surveyor to mark out the site boundary Commencement of Works b) Construction period = Contract period Contract document (usually takes more than 3 months. Can even takes a year) Progress Claims Payment response and Certificates ○ State reasons for difference. ○ Architect Certificate deemed as Payment Response) Instructions & Variations ○ SIA – Instruction and Directions ○ PSSCOC – Instruction only Time Management- Architect chair meeting.Approve Master Prog for tracking and basis of determination of EOT later. Chase Contractor to obtain their temporary power and water for the Works in order not to cause unnecessary delays. Management of quality of work with the Site Staff and benchmark against the specifications. Check D.O. Lab Test of material – concrete/rebar/steel c) Maintenance period (usually 12 mths, can be 18/24 mths) EOT/delay Completion of Works Expiry of maintenance ○ Signify that (1) all defects have been rectified; (2) Release of balance 2.5% retention monies  Settlement of final account [Add/Omit due to change order, adjustment due to defects not remedied or unacceptable, LD Issue Final Certificate Lecture 2 2.1 Meaning of Procurement Procurement refers to the process of obtaining goods, services, or works from external sources. For Construction project, the most common method to purchase construction service for Consultants or Contractor is by calling TENDERS Aim: 1) best possible price – not necessarily the lowest will be awarded. Highest PQM 2) best quality, 3) timely delivery, 4) full compliance with relevant regulations and ethical standards 2.2 Key Concepts of Good Procurement 1) Transparency ○ This involves ensuring that the procurement process is open, fair, and transparent, with clear guidelines and criteria for evaluating bids or proposals. All tenderers should have the same information to submit competitive tenders. Example – queries raised by individual tenderer are compiled and issued to all. 2) Open and Fair Competition ○ Open Tender – Any contractor eligible can tender. ○ Fair Tender – All tenderers tender on same terms ○ public sector is open tender, the financial grade would be stated to allow the contractors to have a basic understanding of the cost of the project 3) Value for Money ○ Need not be awarded to the lowest tenderer. ○ Award must be based on stringent evaluation (ensure that they meet all the requirements) and the tenderer who was both evaluated of good quality rating andreasonable tender sum – highest PQM score should be awarded the Contract 2.3 Methods to Ensure Key Concepts of Good Procurement 1) Effective planning ○ Identify the procurement requirements, determine the appropriate procurement method, and establish a timeline for the procurement process. (To ensure that the QS hv enough time and time is not being eaten up by the other consultants who are drawing etc) 2) Supplier selection ○ This involves selecting the right supplier or vendor based on criteria such as price, quality, delivery time, and compliance with ethical and regulatory standards. 3) Contract management  ○ This involves establishing and managing contracts with suppliers, including monitoring supplier performance, enforcing contract terms, and resolving disputes. Conclusion: Overall, good procurement involves a systematic and strategic approach (so when during audit, there is no penalty orbe flagged out) to obtaining goods, services, or works that meets organizational requirements, while also ensuring transparency, fairness, and compliance with relevant regulations and ethical standards. Singapore Compliance with the Government Procurement Act GeBIZ is the Singapore Government's one-stop e-procurement portal where suppliers can conduct e-commerce with the Singapore Government. An electronic web portal Participating countries’ suppliers may register with GeBIZ. Other semi government portal – SESAMI, TENDER BOARD. Consultants can still call up contractors to ask them to participate in the project. It is not wrong to call cause it is a project (public sector proj) for all to participate. Methods of Procuring a Consultant 1) Traditional Method ○ Normally adapted by the Private Sector ○ Informal ○ Employer seeking fees proposal from few firms through contacts /recommendations for each discipline, some negotiations and awarding to each firm individual. ○ Not necessary the lowest bid wins. ○ Sometimes it depends on who the Employer prefers. ○ The higher bidder may be asked by the Employer to match the lowest tender bid to win or Consultants may be asked to give their best quote during interview and the lowest bidder may not be the original lowest bidder. ○ (call a few quotes, during interview ask for best price, get contractors to submit their best price) 2) Quality Fee Method ○ Normally adapted by the Public Sector for accountability purpose ○ The QFM is a structured framework for the selection of the most suitable bid proposal that provides the best value for the tender. It is a competitive selection method that considers both Fee and Quality proposals submitted by firms.” ○ other then price, other information would be requested to be submitted with regards to their performance (non-fees attribute -> eg: their past works, how they deal with challenges etc), the scoring system for both the fees and non- fees will be taken into account. ○ What is The Quality Fee Method (QFM)? for Evaluating Consultants’ Bids ○ A structured tender evaluation framework based on both fees and non-fees attributes to evaluate construction-related consultancy tenders. ○ Adopts a range of weightages for evaluation of attributes and formalizes the assessment of non-fees attributes into quantitative scores.  ○ The framework optimizes value by enabling the tenderer with the highest combined QFM score (i.e. best offer) to be selected for award. ○ Why use Quality Fee Method (QFM)? ○ Projects getting bigger and more complexity and more complicated ○ Experienced Consultants needed ○ How is the Quality Fee Method (QFM) being adopted? ○ Assessing candidates through point-scoring over the criteria as follows: ○ (a) Quality ○ (b) Fee ○ Points or scores will be assigned to each candidate depending on the erformance of that candidate for each criterion. ○ The best performing candidate is the one who has obtained the highest total score. ○ For which categories of Consultants? ○ Firms registered under the Public Sector Panels of Consultants (PSPC) by BCA (based on various requirements such as company size etc) are eligible to participate in public sector construction tenders with project values corresponding to the tendering limit based on the panel they are listed on. ○ The Public Sector Panels of Consultants (PSPC) firms comprise five major disciplines with four panels within each discipline. ○ To be able to be tender for public tender, Consultants must be registered under the PSPC – Public Sector Panels of Consultants and they are classified into different disciplines: ○ Architect ○ (usually other disciplines are parked under the Architect e.g. Landscape Architect, Lighting Consultants, Acoustic Consultant, Lighting Consultants, Façade Consultants, Security Consultants, etc.) - the other consultants will be parked under the architect to allow for lesser management by the public agency. The consultants would also have to have the PSPC depending on the different category to be eligible for the project. ○ Civil and Structural Engineer ○ Mechanical and Electrical Engineer ○ Quantity Surveyor ○ Project Manager ○ Alternatively, Public Agency can call for a MDT – Multi Disciplinary Team All disciplines under the Architect Accredited Checker (AC) for Public Sectors - All structural drawings must go through an AC checker - QFM method also applies to AC Key principles and Features of QFM Framework 1) Quality Focused  a) Emphasis on firms’ capacity and capability to undertake the project and quality of service; discourage fee-diving behaviour in tenderers (some contractors will include the LD into their contracted sum as they already know that they wont be able to complete the project in time, some will cut corners by not inputting senior staffs or not attending meetings.) b) Features: i) Higher weightage for quality component (1) Quality 70-90% (2) Fee 30-10% ii) Mechanism to reduce fee-diving (1) Fee score for low outlier bid is capped; outlier bids are excluded from the computation of the average fees to prevent skewing of the average. (PM may be asked to evaluate and assess the consultants fees) 2) Open and transparent a) Ensure all tenderers’ proposal are evaluated objectively and not affected by the fees proposed b) Features: i) Two-envelope system (1) Quality proposals are first opened and evaluated before fee proposals (for bigger and more sensitive projects usually would adopt this system to allow the client to evaluate the consultants based of the performance first then evaluate the price.) 3) Resource efficient a) Reduce tendering efforts b) Features: i) Public Sector Panels of Consultants (PSPC) (1) Tenders are only opened to tenderers from specific PSPC panels, which provides the first sleeve to ensure firms’ capacity and capability. ii) Expression of Interest (EOI) Stage (1) 5 tenderers are selected for tender stage through the EOI shortlisting process. (consultants can express their interest first then u submit your tender. aft that the submit the fees. then go through the QFM process) Four main stages in the QFM Process: Stage 1 - Expression of Interest Stage 1) Call for EOI (at least 14 days in between call and closing) 2) Closing of EOI 3) EOI Evaluation 4) Shortlist firms or teams for tender (by merits or balloting) a) Tenderers shall be shortlisted for tender stage through i) Balloting (1-stage QFM), or ii) Selection b) by merits (2-stage QFM) depending on the Estimated Construction Cost of Project as below.  - 1 stage QFM: Involves balloting of 5 eligible firms (whom have submitted the ROI and fulfilled critical criteria eg: correct PSPC panel. - 2 stage QFM: Involves selection of eligible firms based on stipulated quality criteria. Quality proposal can be requested and evaluated at EOI stage. But fees and concept design proposal (if need) only at tender stage. Scoring criteria stated clearly on the EOI document Stage 2 - Tender Stage 1) Invitation to tender 2) Closing of tender 3) Tender evaluation - Open quality proposal and finalise Q score for all complying submission and open Fee proposal and compute Fee score, Highest QFM Stage 3 - Tender Award Stage 1) Award to successful tenderer - Firm or MDT with highest QFM awarded the project - Agencies reserve the right not to award to highest QFM scorer if it is a low outlier bid - Unsuccessful tenderer can write to agencies to find out their individual tender performance Stage 4 - Post-Tender Award Stage 1) Consultants performance - Consultants performance under Consultanants Performance Appraisal System (CPAS) are assessed by agencies on a six monthly basis QFM Scoring Methodology QFM score = Quality score (Q-Score) + Fee Score (F-Score) Quality score Quality score = Consultants’ Performance score (CP-Score) + Other Quality Score (Q Sub- Score) CP-Score - Based on the overall consultants’ performances scores derived from CPAS - Minimum weightage of 10% of the total QFM weightage - Tenderers shall be awarded raw scores based on the rankings of the tenderers past performance scores CPAS score 1st 10 2nd 7  3rd 5 4th 3 5th 1 In cases where less than two (only one or none) of the tenderers has consultant’s performance score (becos the tenderer has not completed any public sector projects before), all tenderers (including the tenderer that has consultant’s past performance score) will have 0 point for the CP-Score. Other quality score (Q Sub-score), derived from the assessment of other quality attributes which can include: 1) Written proposal a) It is a written outline of the firm’s approach and understanding of agencies’ project requirements and constraints, but does not include any form of drawings or presentation (limited to 2 A4 sheets to minimise wastage of tendering efforts and resources by firms) 2) Concept Design Proposal (for 2 stage QFM tenders only) a) Within the Quality component, the evaluation criterion on Concept Design Proposal is usually given significant Quality points. Written proposal and Concept Design Proposal could include evaluation of innovative proposals in the relevant key transformantaion areas under the Built Environment Trnformation Map: 1) Advanced Manufacturing and Assembly (AMA) / Construction Productivtiy a) Eg: for adoption of Prefabricated Prefinished Volumetric Construction, Mass Engineered Timber, Structural Steel, Mechanical & Electrical (M&E) buildable design features, standardisation and any other proposed innovations to improve construction productivity. 2) Integrated Planning and Design (IPD) a) Eg: proposed BIM team and its BIM capabilities and experience both at organisation and personnel level, pre-contract BIM Executive Plan (eg a write up on how the consultants, together with the BIM team, intends to adopt BIM from the commencement of preliminary design through project completion) 3) Environmental Sustainability a) Eg: considerations of passive design strategies 4) Design for Maintainability (DfM) a) Eg: improves building performance for long-term benefits Other quality attributes include: a) Firm’s track records b) Relevant expertise, accreditation and experience of the proposed project team c) Awards attained by firm The tenderer with the highest toral raw points shall be given maximum Quality sub-score. The Quality sub-score for the other tenderers shall be calculated proportionally to the highest total Quality points Other Quality score = (tenderer’s raw quality points / highest raw quality points among all tenderers) x quality weightage Fee Score - Tenderers shall quote for Fee proposals as specified in the tender documents: - By Percentage of the final construction cost - By Lump Sum ($) - Measures to reduce fee diving. To discourage firms from quoting excessively low fees, the fee score formula shall be employed for the calculation of fee score where there are fees which are more than 20% below of the average quoted (“perceived fee- diving”). Tenderers with fees which are more than 20% below the average shall be awarded no further advantage than the score awarded to the fee at 20% below the average (Faverage). - Anti fee diving mechanism: - Weightage = 30 - 10% correspondingly - Fee quoted usually based on tender requirements either as % of total construction cost or fixed lump sum - Measures to reduce ‘fee diving’ - Tenderers (‘outliers’) with fees>20% below average not awarded further advantage than to fee at 20% below average - Fee score computation - Calculation of average Fee (Faverage). To prevent skewing of the average fee, outlier bids shall be excluded from the calculation of the average fee. Outlier bids are defined as bids that are more than 20% below (low outlier) or 50% above (high outlier) the average fee of all conforming bids. The steps to discard outlier bids in the calculation of Faverage are as below: - Exclude the outlier bid sequentially by first excluding any high outlier and computing the new average. After which, based on the new average, exclude any low outlier and compute the Faverage. - Check that the number of outlier bids is less than half of the qualified bids. Otherwise, the above para shall be disregarded and consider all qualified bids in the calculation of Faverage. - Apply Fee-score formula - Scenario A -> Where the lowest fee quoted is higher than or equal to 0.8Faverage Fee Score = (lowest proposed fee/ tenderer’s proposed fee) x weightage - Scenario B -> Where there is perceived fee-diving i.e. the lowest fee quoted is lower than 0.8Faverage Fee score = (0.8Faverage / Tenderer’s proposed fee) x weightage Where Faverage = sum of proposed fees of all conforming bids/no. Of conforming bids - Any fee quoted lower than 0.8Faverage will get the maximum F-score Evaluating Collaborative bidding The table below indicates the evaluation methodology for the various attributes when evaluating collaborative bids by firms ie a consortium of two or more PSPC firms of the same discipline which wish to tender for higher value projects under Collaborative Bidding. (this approach shall be applicable to other Joint Ventures arrangement between firms of the same discipline)  QFM Components QFM Attributes Evaluation Methodology Quality (Q) Past performance ie CPAS Take highest score amongst Score the firms within the consortium Firm’s Track Records Awards/Certificates Expertise and experience of Assessed as one consortium personnel Design Proposal/Approach Fee (F) Fee Proposal Methods of Procuring a Consultant - Public sectors Stage 1 Publish Expression of Govt publish EOI through Interest (EOI) Gebiz and state the categories of PSPC. Only those who are eligible can submit Close of EOI Interested members must respond to the Gebiz before closing of EOI Shortlist PSPC members Those who responded may who responded be shortlisted by the Govt Stage 2 Invitation to tender for Those shortlisted PSPC shortlisted PSPC members members would be invited to tender Preparation and submission Tender submission include of Tender (a) Quality Proposal including Design Proposal (b) Fee Proposal (can be one stage or 2 stage) Close of Tender Shortlisted members must submit before closing of tender Evaluation of Tender Govt Agency will compute scores for each tenderer (a) Scores for Quality (b) Scores for Productivity (c) Scores for Fee Stage 3 Award of successful tenderer Tenderer with highest score under the QFM process awarded the Consultancy Service Lecture 3 Methods of Procuring a Contractor 1. Usually by calling tenders 2. Tenders can be called by way of a. Open tender - open to any contractor who meets the requirements b. Selective tender i. Request for Proposal -> When owner wants tender to input design in their proposal ii. 2 Envelope System -> When owner wants tender to input design in their proposal iii. Quotation c. Limited Tender -> Special & unique project d. Joint Venture with Developer Process of Procuring a Contractor 1. Client/Consultants prepare Tender Documents 2. Tenderers submit tender 3. Evaluation 4. Award to successful tenderer 5. Construction & Completion 6. Maintenance Period -> Typically in actual Private Practice 1) lowest tenderer win 2) Other preferred tenderer asked to match lowest 3) New tenderer parachute in after tender closed and they went on to win CRS Firms registered under the Contractors Registration System (CRS) are eligible to participate in public sector construction tenders with project values corresponding to the tendering limit based on their grade. Example: - estimated construction cost of a public project -> $50m - Invite general building contractor CW01 workhead registered at A1, A2, B1 Flow Chart for Private Sector Tender Process 1) Needs 2) Employer procure Consultants 3) Tender Preparation a) Concept design and preliminary estimate b) Owner’s approval of concept design and preliminary estimate c) Preparation of tender drawings, specifications, tender document by consultants d) Prequalification of tenders e) Calling of tenders 4) Calling of Tenders a) Site showround unless it is a new built b) Pay tender deposit c) Collect tender document d) Raise tender queries if any e) Prepare tender sums f) Submit at specific venue before tender closing date and time 5) Tender Close a) Tender opening by owner and consultants for transparency b) Evaluation by consultants c) Conduct tender interviews with shortlisted tenderers d) Consultants prepare tender report and make recommendation e) Owner negotiate with potential tenderers (for private tender) f) Employer give approval g) Consultant prepare Letter of Acceptance 6) Commencement of Works a) Site possession (7 to 14 days)  7) Construction and Completion a) Complete by completion date b) Delay, Liquidated Damages c) Rectify defects d) Handing over to owner 8) Expiry of Maintenance Period Flow Chart for Public Sector Tender Process 1) Needs 2) Employer procure Consultants a) QFM 3) Tender Preparation (tender document will be checked by Gov Agency & approval must be obtained before uploading tender in Gebiz) a) Concept design and preliminary estimate b) Owner’s approval of concept design and preliminary estimate c) Preparation of tender drawings, specifications, tender document by consultants d) Prequalification of tenders and shortlisting based on BCA’s Workhead and Tender Limit e) Calling of tenders 4) Calling of Tenders a) Site showround unless it is a new built b) Pay tender deposit c) Collect tender document d) Raise tender queries if any e) Contractor prepare tender sums f) Submit through Gebiz before Tender closing date and time 5) Tender Close a) Tender opening by owner and consultants for transparency b) Evaluation by consultants c) Conduct tender interviews with shortlisted tenderers d) Consultants evaluate tender based on PQM and compute scores for each tenderer and recommend tenderer with highest PQM in the Tender Report and make recommendation e) Employer give approval f) Consultant prepare Letter of Acceptance 6) Commencement of Works a) Site possession (7 to 14 days) 7) Construction and Completion a) Complete by completion date b) Delay, Liquidated Damages c) Rectify defects i) Strict Request for Variation Order (RVO), the agency will tell u to make sure the RVO is approved, AI is issued, then u instruct the contractor d) Handing over to owner 8) Expiry of Maintenance Period Evaluation of Contractors’s bid using Price Quality Method PQM - For evaluating Contractors’ bids submitted at the tender closing - Similar to QFM -> a structured tender evaluation framework bassed on both price and non-price attributes to evaluate Contractors’ bids - Adopts a range of weightages for evaluation of attributes and formalises the assessment of non-price attributes into quantitative scores - The framework optimises value by enabling the tenderer with the highest combined PQM score (i.e. best offer from Contractor) to be selected for award Advantages of PQM process 1. Allows other factors to be considered other than the tender sum (taking quality related ones and transfer them into score) 2. Especially taking contractor’s past performance and past experience which might affect the proposed project 3. Objective assessment PQM Weightages - Price and Quality combine, highest PQM scorer - Building itself, the weightage for price and quality depends how u put the %, as long as the agency agrees - For civil engine, a bit different, depends on what the agency wants Tender Submission - Contractors have to ensure that they follow the tender submission instructions whether is 1/2 envelope system as stated in the Instructions To Tender (ITT), if submitted wrongly the contractors would be disqualified - Have to ensure that the contractors passes the first criteria first before assessing their individual quality and price 1. One envelope - Adopted for projects whereby scoring of specified quality attributes is based on quantified templates with on subjective judgement - Projects that are relatively standardise such as schools can just use one envelope a. Tenders submit Price and Quality tgt in 1 envelope  b. Price, quality and combined score computed at the same time c. Tenderer with the best combined score awarded the contract 2. Two Envelope - Adopted for more complicated and higher value projects - Ensures that quality score in not influenced by Price a. Tenderers submit Quality envelope separately from Price envelope b. Client first opens Quality envelope and computes Quality score before shortlisting no. of tenderers c. Client then opens Price envelope and computes Price score and combined scores d. Tenderer with best combined score awarded the contract Price Score P-score = (Lowest tender Price / tenderer’s price) x Price weightage -> this has no anti fee diving mechanism Application of PQM 1) Public Sector construction tenders 2) BCA Construction Workheads (CW01 & CW02) 3) Estimated procurement value (EPV) >= $3mil Key Principles of PQM 1) Impartial 2) Open & transparent a) The PQM procedures will be open and transparent. The weightages among PRice and Quality components, the Quality attributes, the number of points assigned to each attribute and the method of scoring will be made known upfront in the tender b) All tenderers can request in writing for their individual tender performance after the tender award 3) Value for Money a) Both price and quality attributes will be given weightages and scored based on the guideline provided. The bid with the highest combined Price-Quality score will be awarded the project - To prevent any situation such as seen to favour any particular contractor & complaints. All items should be documented, prevent unfavourable situations to arise during auditing Quality Score 1) Past performance a) Based on C41 reports &/or GPE’s in-house performance assessment system 2) Safety performance a) Based on MOM Demerit Point System &/or GPE’s in-house safety performance score or records 3) Constructability Score (CS) Index/Productivity Attributes a) Tenderer with highest CS index will obtain full points  b) Tenderers with no CS index will be given the average points across all conforming tenderers c) For cases < 2 (ie 1 or 0) tenderers, all tenderers given 0 points for CS index attribute d) Where minimum Constructability Score is applicable, up to 4$ could be assigned to project-specific productivity attributes. Total of CS index and other productivity attributes specs byu GPEs = 8% e) If minimum Constructability Score not applicable, CS Index attributes not applicable. GPEs can then have flexibility to assign the 8% to other quality attributes to make total Price Quality weightage = 100% f) CS Index Score = (Tenderer’s CS index/Highest Tenderer’s CS Index) x weightage 4) Government Procuring Entity (GPE) own quality attributes a) Relevant track records or specific competencies b) Project specific proposals including work methods and resources assigned to project c) Awards or other attributes if any Total quality points = past performance + safety performance + CS index or productivity attributes + GPE’s own quality attribute Quality score (Q-Score) = (Tenderers’ Total Quality Points / Highest Total Quality Points) x Quality Weightage PQM Scoring Method 1) Benchmark Performance Method a) A benchmark performance level may be determined for a particular attribute. The benchmark performance level for this attribute can be set at 50 to 100% of the Quality points depending on how the agency wishes to treat tenderers that do better or worse than the benchmark level 2) Ranking Method a) For some attributes such as the project specific proposal, it may be difficult to set a benchmark performance level. For such attributes, GPEs can rank the tenderers according to the relative merits of their proposals and allocate Quality points based on the rankings 3) Banding Method a) Is similar to benchmark performance method but the scoring is based on bands rather than with reference to a fixed benchmark. When using this method, GPEs will have to decide the range and allocated score for each band depending on how the agency wishes to treat tenderers that fall into each band. 4) Raw Score Method a) For quality attributes such as the project specific proposal in which there will be subjective assessment involved and the scoring is based on a list of sub- attributes which describes how points will be assigned to each area of the proposal, GPEs could give any score from 0 to the maximum score assigned for the sub-attribute to the tenderer based on the extent to which the tenderer has met the specific evaluation criterion. If any specific evaluation criterion  involves subjective assessment, eg. project specific proposals, a two-envelope system will be adopted. Conditions of Tendering (slides 35) - The eligibility of tender states the specific requirements of tenderers which includes the CPS level and financial grade - For tenderers who are unable to pass this requirements they will be disqualified immediately from the project. Contractors should not submit their tender if they dont meet the criterias stated here. Tender Evaluation Method -> Hong Kong Housing Authority’s Three-Envelope System - Aims to encourage innovations for green design and construction - System launched in 2009 to procure an integrated design and building contract on a 5.7 hectare site with existing piles at Kai Tak Site 1B for 8000 flats with a greening ratio exceeding 30%, based on price, quality and innovation - The additional envelope requires tenderers to propose any specific innovations + corresponding price adjustments - Applicable to infrastructure kind of project to include innovation Strengths and Weakness of Tender Methods SN Factors Open Selective Limited Remarks 1 Highly Yes Yes No Where many tenderers are tendering in competitive the open & selective tender, the tender in price price is expected to be high competitive and vise versa 2 Fairness to Yes No No Where the Owner or Consultants select all potential names of tenderers to tender, those not tenderers selected will criticise the process as unfair to them. In open tendering, all eligible tenderers may tender 3 High Yes No No Once there is human intervention in integrity in Selective or Limited tendering, the the system integrity of the system of appointing a of successful tenderer is in question. In appointing a Open Tendering, apart from setting the successful basic criteria, there is no human tenderer intervention in the selection and invitation of tenderers. And success of a tenderer depends on merit 4 All No Yes Yes In Open tendering, many tenderers may tenderers’ satisfy the basic criteria but may still be tendering unsuitable. In selective and limited are suitable tender, the tenderers are more suitable for the as consultants shortlisted tenderers  project who have good past performance records for the specific type of work required to undertake the project 5 Allegations No Yes Yes Naturally, in Selective & Limited of biasness Tender, tenderers are so called ‘hand- & picked’ & therefore are open to favouritism allegations of biasness & favouritism 6 Tenderers No Yes Yes If tenderers are encouraged to are required participate in the design process prior to to tendering, it would not be practical to participate adopt the Open tender method as there in the may be too many tenderers in design consequence. In contrast, it may be process more practical to choose either the prior to Selective or Limited tendering methods tendering due to the smaller number of tenderers expected 7 Longer time No No Yes In Open & Selective Tenders, it is for common to give a deadline for the tendering submission of tender. Hence, by consultants decide on the length of time tenderer(s) to be given to the tenderers to tender. In a limited tender, where there is usually only one tenderer, parties negotiate on the price, terms and conditions. This invariably leads to a longer time before a deal is agreed to. Lecture 4 Project Delivery Methods Project delivery method for construction works refers to the process and approach comprising for example: plan, finance, design, construct operate, maintenance Different Types of Project Delivery Methods Design Bid Build (DBB) (slide 8) Most common & straightforward approach Involves 3 distinct phases: design, bidding & construction. The owner hires Consultants to design the project and after the design and the tender document complete, it is put out to bid. Contractors then submit their bids, and the owner selects the winning bidder to construct the project In this method, the contractor has no part in the design of the building. Contractor carriers out construction in accordance with design and specifications - Features of DBB - Engages Contractors & Consultants separately - Consultants; role - design, manage & supervise the construction works - Owner maintain direct control over Consultants - design and management of construction work - Why DBB - Employer prefer professional and experienced people to design & manage the project vs Contractor’s design - Suitable for almost any types of projects - Payment model - Lump Sum Contract (most common - contractors provides own quantities) - Bills of Quantities Contract - Firm BQ: quantities are firm, not be subjected to re measurement - Approximate BQ: drawings are not done & tender are called, quantities are approximate so it is subjected to re measurement - Procuring Contractor - Open or Selective Tender - Relationships - Owner will get the consultant to design, engage the contractor and they will have sub contractors - The consultants will have to supervise the main contractor, so the consultants are fully involved because they are the owner’s agent - Risk Associated with DBB SN Types of Risk Risks Risks faced Remarks faced by by Owner Contractors 1 Payment to the Yes No Owner obligated to pay Contractor Contractor 2 Defective Design No No Consultants liable to Owner for  defect design 3 Construction & No Yes Contractor responsible for completion construction & completion of the project 4 Increase in material No Yes Borne by Contractor unless there is a price fluctuation clause 5 Increase in labour No Yes Increase in labour price. Borne by price contractor 6 Delay by workmen No Yes Contractor liable to Owner for LD due and sub contractors to the delay 7 Any work which the No Yes In Lump Sum contract, risk of error in Contractors fail to measurement. measure and price in (if they fail to measure correctly, it is the contract also the contractor’s responsibility) Early Contractor Involvement (ECI) Features: (slide 17) - Objective: to solicit feedback from the tenderers during the Design Stage/Tender stage in order to improve the Design & Tender Documents in the interest of the Project & possibly other terms and conditions arising from such feedback. (get feedback from contractors for the consultants to improve the design to make the project more constructable - Allow tenderers’ early involvement and feedback prior to calling of tender or during tender stage - Similar to DBB expect Contractor's early involvement - Consultants to decide whether or not to incorporate Contractors’ feedback into the design and tender documents - Employer will have to bear the risk if they decided to include Contractor’s feedback against Consultants’ advice Purpose: - Enhance buildability design - Time schedule and construction sequence - Value engineering - Value management - Save time, cost and resources in construction due to application of ECI Why ECI: - Tap on Contractor’s experience and constructive feedback on (1) its buildability, (2) to implement changes if design is complicate/difficult to build (3) project schedule (4) etc. Payment model: - Lump Sum Contract - BQ Projects: - Suitable for projects that are more special or technical. The consultants would require the technical knowledge and experience of the contractors to assist them Procuring Contractor:  - Selective tender SN Types of Risk Risks Risks faced Remarks faced by by Owner Contractors 1 Payment to the Yes No Owner obligated to pay Contractor Contractor 2 Defective Design No No Consultants liable to Owner for defect design 3 Construction & No Yes Contractor responsible for completion construction & completion of the project 4 Increase in material No Yes Borne by Contractor unless there is a price fluctuation clause 5 Increase in labour No Yes Increase in labour price. Borne by price contractor 6 Delay by workmen No Yes Contractor liable to Owner for LD due and sub contractors to the delay (inclusive resources/materials) 7 Any work which the No Yes In Lump Sum contract, risk of error in Contractors fail to measurement. measure and price in the contract 8 Prolonging of pre Yes No Client & Consultants are to cater this contract period (1 to 3 in the overall schedule for the project months) 9 Higher Cost Yes No Project time lengthen due to more consultative activities 10 Incorporating one No Yes Different contractors have their own tenderer feedback skills sets, but at the end of the day may not be the one awarded may not have the advantages to other skill tenderer Design & build (D&B) - Most consultants are always trying to adopt this as consultants do not need to come out with a lot of details the things will be pushed to the contractor - There can be hybrid design and build, where only QS is with the client and the rest (archi, structural & M&E) is fully Design and build Features: - Owner provides design brief and engage a Main contractor to design and build the project. Main contractor engages External Architects/ID, QS , Engineer to provide  design and contract management services. Contractor’s design responsibility includes fit for purpose. Design brief must be very clear and concise as this is the only document to fall back on in the event of dispute. Why D&B? - One stop shop - More practical and buildable -> Main contractor can incorporate experience into design - Speed/shorter project timeline Payment method: - Lump sum Contract or cost plus contract (paid for cost of design, material and installation plus profit) - Cannot be BQ because the design comes from the contractor, the contractor is responsible for the quantities Procuring Contractor: - Selective tender usually two envelope tender esp for public tender. Cos even for private, they want to see the design first without the price factor influencing the decision. Examples of D&B Projects: 1) Suitable a) Standard building types esp for industry and warehousing use. Early return on capital investment preferred over excellent design, Buildings, products and services using proprietary systems eg: repetitive housing, PPVC etc b) Building types in which some contractors have become specialists: eg complex healthcare/lab buildings using pre-fabrication 2) Not suitable a) Quality of design is important b) Building/product design tailored to client’s special requirements c) Complex refurbishment work (eg: historical buildings) needing frequent or unexpected variations d) Where brief cannot be defined or complex building function requiring long time for R&D from outset SN Types of Risk Risks Risks faced Remarks faced by by Owner Contractors 1 Payment to the Yes No Owner obligated to pay Contractor Contractor 2 Defective Design No No Consultants liable to Owner for defect design 3 Construction & No Yes Contractor responsible for construction & completion completion of the project 4 Increase in material No Yes Borne by Contractor unless there is a price fluctuation clause 5 Increase in labour No Yes Increase in labour price. Borne by price contractor 6 Delay by workmen No Yes Contractor liable to Owner for LD due to  and sub contractors the delay 7 Any work which the No Yes In Lump Sum contract, risk of error in Contractors fail to measurement. measure and price in the contract Construction Management Features: (CM calls for tender or contractors, PM doesnt) - Owner engages a construction manager who is responsible for the overall planning, coordination and control of the project from beginning to completion - CM engage Consultants separately - CM enter into direct contract with each Trade Contractor and manages programme & performance of the specialist subcontractors, financially & operationally & advises Owner to make informed decisions. - Employer can use in-house construction team to serve as Construction Manager to optimise programme & sales objectives. Why CM? - Adopted for large specialised project. - But…. Uncommon - Main Contractor plans, coordinate and control sub con and till completion and handover to Owner Payment Model - Fixed fees to CM Examples of CM projects - MBS Sourcing of CM - Like sourcing for Architect or other Consultants – usually selective tender - Evaluation base on their track record, scope of services, fees quoted Critical success factors in CM - Early start to project - Value for money - Focus on time & cost (the individual trades contractors are called in directly eg: rebar) - Developer’s experience SN Types of Risk Risks Risks faced Remarks faced by by Owner Contractors 1 Payment to the Yes No Owner obligated to pay Contractor Contractor 2 Defective Design No No Consultants liable to Owner for defect design 3 Construction & No Yes Contractor responsible for construction & completion completion of the project 4 Increase in material No Yes Borne by Contractor unless there is a  price fluctuation clause 5 Increase in labour No Yes Increase in labour price. Borne by price contractor 6 Delay by workmen No Yes Contractor liable to Owner for LD due to and sub contractors the delay 7 Any work which the No Yes In Lump Sum contract, risk of error in Contractors fail to measurement. measure and price in the contract 8 Control Yes No Lesser control of the consultants in the design of the project. Hence lesser accountability of consultants to architect and consultants. Architect and Consultants act for Consultants’ interest and lesser for Owner’s interest. Since Contractor is resp for design, strict compliance with design is difficult as Architect and Consultants act in Contractor’s interest. Public Private Partnership - PPP service provider provides design, build, operate and manage the facility - Since there is no change in parties, some reduction in cost, time and resources Flow chart of PPP contract (Slide 47) 1) A Public Sector Authority acquires land for PPP facility. 2) Public Sector Authority prepares PPP agreement 3) Public Sector Authority invites Prequalification (PQ) of tenderers from worldwide to submit the PQ details 4) After shortlisting, selected tenderers are required to submit mock up model of proposed facility, financial payment for the land, payment for operating the facility etc. 5) Tenderer submit, evaluated and successful proposal accepted and appointed as PPP Service provider 6) PP service provider form the SPV – a company established to provide the PPP Service and the shareholders of SPV are usually the Contractor/facility manager & other investors 7) Purpose of SPV a) Pay land price b) Process financing c) Appoint design Consultants d) Develop and complete design e) Procure Contractor and complete construction. f) Engage facility manager Why PPP?  - Public sector lacks the knowledge know how whilst private sector has the specialised knowledge and experiences - Risk transferred to Private sector - Pte Sector is motivated to maximise profit from the success of the project - Possibility of getting competitive and best design proposals - Public Sector capital expenditure is minimal Payment to PPP service Provider Model - Public Sector Authority gives annual payment to the PPP service provider - PPP Service provider also generates income through various streams such as events and F&B tenants etc Examples of PPP projects - Singapore Sports Hub/ITE College/Tuas Desalination plant Procuring Contractor - Usually selective tendering (2 envelopes tendering) SN Types of Risk Risks faced by Risks faced by Remarks Public Sector PPP Service Agency Provider 1 Payment to the No Yes Payment to the contractors as SPV Contractor is financing the project 2 Defective Design No No Although indicated as No RISK to SPV but if there are defective design, SPV will take action against their design consultants 3 Construction & No No Although indicated as No RISK to completion SPV but construction & completion by the Contractor appointed by the SPV, SPV will still suffer if there is a delay in completion 4 Increase in material No No Borne by Contractor unless there is price a fluctuation clause 5 Increase in labour No No Increase in labour price. Borne by price contractor 6 Delay by workmen No No Contractor will be liable to pay LD and sub contractors to SPV for the delay 7 Any work which the No No Lump Sum contract, Contractors Contractors fail to bears such risk measure and price in the contract 8 Loss of possession Yes No Where the land is leased to PPP and control over the Service Provider. The Govt face land and facility loss of possession and control of the land 9 Loss of control and Yes No  the management and operation of the facility PPP procurement process (slide 52) 1) Invitation for EOI 2) Prequalification of Bidders 3) Request for Proposals from selected bidders (Invitation to Tender) 4) Market feedback period 5) Issue of final tender 6) Closing of tender 7) Contract award/ financial close Turnkey - Owner say what they want then the contractor just give the key for handover Features: - Owner engages Contractor to design, build and handover the project to the Owner with no supervision from Owner - When completed, Contractor pass key to Owner to “turn the key” to open the facility - Owner no control over the turnkey contractor in the design, use of material and construction. - Owner provides some brief to Turnkey Contractor - This type is NOT COMMON in Singapore Why turnkey?: - Very specialised project Payment model - Lump Sum contract or cost plus contract Examples of turnkey projects: - Rides in amusement parks Procuring turnkey contractor - Limited/negotiated tender SN Types of Risk Risks faced by Risks faced by Remarks Public Sector PPP Service Agency Provider 1 Payment to the Yes No Contractor 2 Defective Design No Yes As design and construction are not supervised/checked by third parties, there is a risk of defective design or construction 3 Construction & No Yes completion 4 Increase in material No Yes Borne by Contractor unless there is price a fluctuation clause  5 Increase in labour No Yes Increase in labour price. Borne by price contractor 6 Delay by workmen No Yes Contractors will be liable to pay LD and sub contractors to owner for the delay 7 Any work which the No Yes Lump Sum contract, turnkey Contractors fail to contractor assume full risk measure and price in the contract Sub Contract - Whichever project delivery method, contractor usually have to engage sub contractors to construct and complete the whole building/project - Sub contracting is a common project delivery method - Types of sub contract - Domestic sub contractors - Nominated sub contractors - Designated sub contractors - Reasons for sub contracting - Specilisation - Main contractor may not have the experience and expertise - Sub con able to do the works better and cheaper and better quality - Main con remains responsible to employer even if they sub contract out Features: - Sub contracting is a common part of the project delivery regardless whether DBB, D&B or other project delivery - No one main con can complete a project without subcontracting some works to sub con especially M&E works, facade works etc Why sub contract? - Main Con dont have the experience and expertise - Sub con can carry out certain works faster and cheaper as compared to Main con - Hence better quality works - Sub con = outsourcing risk + LD sub con if they delay - Size and value of the main con work are beyond main con capability - Specialisation in work promotes higher efficiency and reduces wastage in the work Payment model: - Lump Sum Contract - BQ Contract Sourcing Sub Con - Open, selective or limited tender - Sourcing of Domestic SC - by Main Con - Sourcing of Nominated SC - by owner - Scouring of Designated SC - by owner - Usually is for Lifts How does the sub contractors get paid? (slide 32) 1) Domestic sub con a) Owner will pay the MC  b) MC pay DSC i) Owner and consultants not involved with how much MC pays SC ii) MC submits payment claim (inclusive of all his domestic SC payment claim) iii) Consultants makes recommendation on main con payment for all works done iv) Architect issues payment certificates v) Owner pays MC vi) Main Con make payment to Domestic SC. Owner/Consultants are not involved in the payment settlement between MC and Domestic SC 2) Nominated SC a) Owner pay MC (including payment for NSC recommended by Consultants) b) Main con pays NSC payment recommended by consultants i) MC submits payment claim (inclusive of NSC payment claim) ii) Consultants makes recommendation on MC payment and nsc payment iii) Architect issues payment certificates iv) Owner pays MC v) MC is obligated to pay NSC accordance to the amount recommended by Consultants 3) Designated SC a) Owner pay MC (including payment for De SC recommended by the Consultants) b) Main Con pay De SC based on the payment recommendation by Consultants i) Main Contractor submits payment claim (inclusive of Designated SC payment claim) ii) Consultants makes recommendation on main con payment and DeSC payment iii) Architect issues payment certificates iv) Owner pays Main Con v) Main Con is obligated to pay Designated SC accordance to the amount recommended by Consultants SN Types of Risk Risks Risks faced Remarks faced by by Owner Contractors 1 Payment to the NA Yes Not being paid by MC event though MC Contractor may be paid by Owner 2 Defective Design in No Yes If the design obligation is under the Sub sub contract contract works 3 Construction & No Yes completion 4 Increase in material No Yes Borne by Sub Contractor unless there is price a fluctuation clause 5 Increase in labour No Yes Increase in labour price. Borne by Sub price contractor  6 Delay by workmen No Yes SC liable to pay LD to MC if SC causes and sub contractors delay to the Main Contract period. Very often, MC will apportion the LD to various SC causing the delay unless the SC is the only one causing the delay and the said SC has to bear full LD imposed by the owner 7 Any work which the No Yes Lump Sum - SC assume the risk Contractors fail to measure and price in the contract Difference in Designated vs Nominated SC Designated SC Nominate SC Tender Stage Identity known Identity not known Award of Sub Con Before the award of MC After the award of MC Contractual Relationship DSC first entered into a NSC enter into sub con contract with Employer. After agreement with MC directly MC is awarded, the contract between E & DSC will novate to the MC Objection by MC Not entitled to object Can object according to the Conditions of Contract Risk Assessment for Different Payment Models Low Owner & High Mid Risk for both Owner and High risk for owner and low Contractor Risk Contractor risk for contract Lump Sum Contract BQ Contract Cost Plus Lowest risk to owner Used to be the Highest risk to Owner as the contractor is tendering norm but as owner has to pay responsible to no longer preferred contractor based on measure the by Owner. amount incurred with quantities from the Risk of under an agreed profit. tender drawings to measurement by QS Least preferred by prepare his tender bid during BQ owner and hence bear the preparation 0 risk for contractor. risk of any errors in Tenderers prefer to Most favoured by measurement. tender based on BQ Contractor as they Least preferred by Contract are assured of all tenderers Risk of under costs being Most popular tending provisions of design reimbursed by Owner method -> public & especially rebar with a profit private design in tender drawings and subsequent increases during construction stage Hence the risk of increase in quantities based on as built drawings & Contractor will ask for remeasurement Lecture 5 Possession of Site and Commencement of Works - SIA Site possession a) The contractor shall be entitled on the Date of Commencement, stated in the Appendix, to free and uninterrupted possession of the whole Site unless expressly agreed otherwise. The Site shall be as defined in the Appendix whether by reference to the Contract Specifications, Contract Drawings or in other Contract Documents b) The Contractor may be also entitled to such Special Access to the Site as stated in the Appendix to which the Employer shall be responsible to provide c) Any other access to the Site shall be the responsibility of the Contractor d) Any arrangements for possession to be given by stages or any other restrictions upon possession of the whole Site shall be stated in the Appendix or in the Contract Specifications, Contract Drawings or in other Contract Documents * - SIA is commonly used for private sector building projects in Singapore, particularly those where architectural design and construction are managed separately (Design-Bid-Build). The SIA form is suitable for both large and small construction projects. - It sets out the contractual obligations of the parties (client, contractor, and architect) and covers areas such as payment terms, variations, extensions of time, defects liability, and dispute resolution.* Time of Commencement a) The Contractor shall commerce work on the Date of Commencement stated in the Appendix subject to the provision of clauses 4,5,8 and 10. b) The Construction Period and Date of Completion as stated in the Appendix shall respectively commence upon and be calculated from the date subject to extension of time properly due under the terms of the Contract. c) Alternatively, the Contractor shall commence work on the deemed Date of Commencement which shall be the date as may be expressly or implicitly agreed by the parties or on a reasonable date for the commencement of the work when: i) No Date of Commencement shall have been stated in the Appendix; or ii) The date in the Appendix shall be invalidated for any reason for which the contractor shall not be responsible. Accordingly the Date of Completion shall be appropriately modified or re-calculated. d) In such event the Architect may, and shall, if required by the Contractor, issue a certificate stating the revised Date of Commencement and revised Date of Completion. Such certificate shall be referred to in this Contract as a “Certificate of Revised Date of Commencement” * If for whatever reason the employer cannot give the site to the successful contractor on a particular date that was agreed, either he can still commence on the same but eventually they got to give extension of time, which sometimes some tenderers will ask for additional prelim or additional cost. - But what if you decided to change the commencement date? That means if you give them later, you shift the whole programme such that if the contract period is 12 months, it still remains as 12 months, except that the commencement date change. - So for the SIA, you need to issue a “Certificate of Revised Date of Commencement” * Possession of Site and Commencement of Works - PSSCOC Commencement of Works The Contractor shall commence the Works: (a) on the date specified in the Letter of Acceptance; or (b) if no date is specified in the Letter of Acceptance, on the date specified in an instruction in writing to that effect from the Superintending Officer. Thereafter the Contractor shall proceed with due diligence and expedition and without delay in accordance with the Contract and in accordance with the programme or any revised or modified programme accepted by the Superintending Officer pursuant to Clause 9. The Time for Completion shall run from the date on which the Contractor is to commence the Works under this Clause. * The PSSCOC outlines the conditions under which construction work is to be performed for public sector clients, such as government agencies. It focuses on ensuring that public projects are completed on time, within budget, and to the required standard, while providing mechanisms for managing changes, delays, and disputes.* Site Possession Save insofar as the Contract may expressly provide, the Employer shall, on or before the date when the Contractor is to commence the Works pursuant to Clause 12.1, give to the Contractor possession of so much of the Site as may be required to enable the Contractor to commence the construction of the Works and will from time to time as the Works proceed give to the Contractor possession of such further portions of the Site as may be required to enable the Contractor to proceed with the construction of the Works in accordance with the Contract. The Contractor's licence to occupy and use the Site for the purposes of carrying out the Works shall not be exclusive and shall be subject to the Employer's rights under Clause 12.5 and as otherwise provided in the Contract to enter so much of the Site as may not be required by the Contrac