The Aqua Group Guide to Procurement, Tendering and Contract Administration

PART I BRIEFING THE PROJECT TEAM 1 1 The Project Team 3 Introduction 3 Parties to a building contract and their supporting teams 3 Rights, duties and responsibilities 4 The employer 5 The architect/contract administrator 5 The quantity surveyor 5 The principal designer 5 The clerk of works 6 The status of named consultants 6 Unnamed consultants with delegated powers 7 The project manager 7 The principal contractor 7 Sub-contractors 9 Statutory requirements 9 The CDM regulations 10 Avoiding disputes 12 Communications 12 2 Assessing the Needs 14 The structure 14 The strategic definition 14 Contribution to the initial project brief 16 The initial programme 17 The appointment 17 Appointment documents 19 Collateral warranties 20 3 Buildings as Assets 21 Buildings as assets as well as buildings 21 Single building or programme? 22 Buildings as solutions to business challenges? 23 Everyday solutions-based thinking 24 Summary 25 PART II AVAILABLE PROCUREMENT METHODS 27 4 Principles of Procurement 29 Simple theory - complex practice 29 The eternal triangle 29 Other considerations 32 The Construction (Design and Management) Regulations 2015 32 Risk 33 Accountability 33 Entering into the contract 33 Type of contract 34 Selection of the contractor - the tendering procedure 35 Establishing price and time 35 The dynamics of tendering 36 5 Basic Concepts 37 Economic use of resources 38 Labour 38 Materials 39 Plant 39 Capital 39 Contractor's contribution to design and contract programme 40 Production cost savings 40 Continuity 41 Risk and accountability 41 Accountability 43 Summary 43 6 Accountability 45 Background 45 The modern concept of public accountability 46 Contract documentation 46 Proper price 47 Dispensing with competition 47 Inflation 47 Value for money 48 Summary 49 7 Value and Risk Management 50 Value management 50 Value articulation and project definition 52 Optimisation of benefits and costs 52 Learning lessons and performance optimisation 53 Risk management 54 Risk must be managed 54 Nothing ventured, nothing gained 55 Understanding the project 56 Risk management strategies 57 Allocating management actions 58 Value and risk are complementary 59 Similarities in the processes 63 The integrated process 63 8 Fixed Price and Cost Reimbursement 64 Fixed price 64 Cost reimbursement 65 Application to contract elements 65 Fluctuations 66 Target cost contracts 66 Use 67 The employer's position 67 The contractor's position 67 Programme 68 Summary 69 9 Fixed Price Contracts 70 JCT fixed price contracts 70 The standard building contract 71 Design and build contract 71 Major project construction contract 73 Intermediate building contract 74 Minor works building contract 75 Other fixed price contracts available 75 Advantages and disadvantages of fixed price contracts 76 Advantages 76 Disadvantages 76 10 Cost Reimbursement Contracts 77 The fee 77 The prime cost building contract 78 Characteristics of the form 78 Advantages and disadvantages of cost reimbursement contracts 79 Advantages 79 Disadvantages 80 Budget and cost control 80 Administering the contract 80 Procedure for keeping prime costs 81 Contractor's site staff and direct workforce 81 Materials 82 Plant 82 Credits 82 Sub-letting 83 Defective work 83 Cost control 83 Final account 84 11 Target Cost Contracts 85 Guaranteed maximum price contracts 87 Competition 88 Contract 88 Advantages and disadvantages 89 Use 89 12 Management and Construction Management Contracts 90 Payment and cost control 90 Selection and appointment of the contractor 92 Contract conditions 93 Contract administration 94 Professional advisers 94 Advantages and disadvantages 95 Advantages 95 Disadvantages 95 Construction management 96 Use 97 Programme 97 13 Design and Build Contracts 99 The contract 100 Where to use DB (and when not to do so) 101 Managing the design process 102 Novation 103 Evaluation of submissions 104 Post-contract administration 104 Financial administration 104 Programme 105 Advantages and disadvantages 106 Advantages 106 Disadvantages 106 14 Continuity Contracts 107 Serial contracting 108 Purpose and use 109 Operation 109 Continuation contracts 110 Purpose and use 110 Operation 111 Term contracts 112 Purpose and use 112 JCT Measured Term Contract 113 Operation 113 15 Partnering 115 A definition 115 When to adopt a partnering approach 117 The agreement 117 JCT Partnering Charter 118 JCT Framework Agreement 118 JCT constructing excellence 119 The partnering workshop 119 The benefits 119 The risks 120 Future of partnering 121 16 EU Procurement 122 Introduction 122 The scope of procurement law 123 The general principles 123 Procedures 124 Key principles 124 Evaluating tenderers 124 Evaluating tenders 125 Framework agreements 126 Contract change 127 Cancellation of the process 127 Information obligations debrief and disclosure 127 Commencing proceedings 128 Remedies 128 Complaints to the EU commission and other challenge procedures 129 Tendering contracts 130 Notes 130 PART III PREPARING FOR AND INVITING TENDERS 131 17 Procedure from Brief to Tender 133 Initial brief 133 Developing the brief 133 Feasibility stage 134 Sketch scheme 134 Costs 135 Procurement 135 Detailed design 136 Programming 137 Design team meetings 138 Drawings 138 Specifications 139 Bills of quantities 140 Specialist sub-contractors and suppliers 140 Quality assurance 140 Obtaining tenders 141 18 Pre-Contract Cost Control 142 Introduction 142 The purpose of pre-contract cost control 142 Framework for pre-contract estimating 143 Order of cost estimate 145 Information used to prepare an order of cost estimate 146 Treatment of on-costs and other costs in order of cost estimates 147 Presenting an order of cost estimate 148 Cost plans 149 Treatment of on-costs and other costs in cost plans 151 Presenting a cost plan 153 Challenges associated with the production of cost plans 155 Cash flow 155 Whole life costs 156 Summary 158 Notes 158 19 Drawings and Schedules 159 The language of drawing 159 The changing role of drawings and documents 159 Quality 162 Standards 162 Quality manuals 162 Quality procedure codes 163 Quality review 164 Types, sizes and layout of drawings 164 Size 165 Layout and revision 165 Scale 166 Nature and sequence of drawing production 167 RIBA Plan of Work 2013 167 Drawings for SBC contracts 167 Drawings for design and build or management contracts 168 Design intent information 169 Computer aided design 170 Drawing file formats and translation 171 Project extranets 171 Contents of drawings 174 Survey plan 174 Site plan, layout and drainage 175 General arrangement 175 Elevations of all parts of the building 177 Descriptive sections 177 Ceiling plans at all floor levels 177 Construction details (scale 1 : 20 and 1 : 10) 177 Large-scale details (scale 1 : 10 and 1 : 15) 178 Schedules 178 Drawings and schedules for records 179 Notes 184 20 Specifications 185 The use of specifications 185 Specifying by prescription 187 Specifying by performance 187 Specifying by description 187 Specification writing 188 Decide on format 188 Collect information 194 Input information 194 Check and test 195 Deliver 195 BIM 196 21 Building Information Modelling 197 The BIM revolution - what is BIM, and who/what is it for? 197 The role of government and its BIM strategy 199 The levels of BIM adoption 202 The BIM journey 203 Plan of work, deliverables and work stages 203 Loading the model: language and libraries 205 Bringing different software programmes together - the search for interoperability 206 Operation and maintenance 207 Terms of appointment and changes to other business practices 208 Level 3 and the future 209 Epilogue 209 Notes 210 22 Bills of Quantities 211 Tender and contract document 211 The wider role 211 Basic information 212 Preliminaries 212 Preambles 213 Measured works 213 Formats 214 23 Sub-contractors 220 Introduction 220 Specialist sub-contractors 221 Design by the sub-contractor 221 The SBC and sub-contract agreements 222 SBC provisions under the main contract 223 24 Obtaining Tenders 224 Introduction 224 Tender list 225 Preliminary enquiry 226 Tender documents and invitation 226 Tender period 227 Tender compliance 227 Late tenders 228 Opening tenders 228 Examination and adjustment of the priced document 228 Negotiated reduction of a tender 229 Notification of results 229 Tender analysis 230 E-Tendering 230 PART IV CONTRACT ADMINISTRATION 231 25 Placing the Contract 233 Preparing and signing the contract documents 233 Sectional completion 234 Contractor's designed portion 234 Executing the contract 235 Performance bonds and parent company guarantees 236 Collateral warranties 236 Third party rights 240 Issue of documents 241 Insurances 242 26 Meetings 245 Initial meeting 245 Introductions 246 Factors affecting the carrying out of the works 246 Programme 247 Sub-contractors and suppliers 248 Lines of communication 248 Financial matters 248 Procedure to be followed at subsequent meetings 250 Contractor's meetings 251 Employer's meetings 251 27 Site Duties 256 The architect on site 256 The architect's duty of inspection and supervision 258 Supervision and Inspection duties 258 Routine site visits 259 Consultants' site visits 260 Inspections by statutory officials 260 Records and reports 261 Samples and testing 262 Considerate constructors scheme 263 Site safety 264 Health and Safety Policy 264 Fire precautions on site 267 Regulatory control 268 The Joint Fire Code 268 Means of escape 269 Fire-fighting equipment 270 Emergency plans 270 Providing information 270 28 Instructions 277 Architect/contract administrator's instructions 277 Clerk of works' directions 279 Format and distribution of instructions 279 29 Variations and Post-Contract Cost Control 281 Variations 281 Valuing variations 282 Dayworks 286 Cost control 287 30 Interim Payments 290 Introduction 290 Payments of pre-determined amounts at regular intervals 292 Pre-determined payments at pre-determined stages 293 Regular payments by detailed valuation 293 Certificates and payments under the SBC 293 The architect/contract administrator 293 The quantity surveyor 294 The employer 294 The contractor 295 Interim certificates under the SBC 296 Unfixed materials and goods on site 298 Unfixed materials and goods off site 298 Retention under the SBC 299 Payments to sub-contractors under the SBC 299 Value added tax 299 Valuation and certificate forms 300 31 Completion, Defects and the Final Account 304 Practical completion 304 Partial possession 307 Possession of the building 307 Defects and making good 308 Final account 309 Adjustment of the contract sum 309 Practical considerations 311 Final certificate 312 32 Delays and Disputes 316 Introduction 316 Delays caused by the contractor 317 Delays caused by the employer or his representatives 317 Delays caused by events outside the control of either party 318 Force majeure 319 Exceptionally adverse weather conditions 319 SBC procedure in the event of delay 320 Best endeavours 320 Notification of delay 321 New completion dates 321 Final adjustment 322 Duties and decisions 322 Reimbursement of loss and/or expense under the SBC 323 Liquidated damages 324 Disputes and dispute resolution 325 Mediation 326 Adjudication 326 Arbitration 330 Litigation 332 33 An Introduction to Sustainability in Construction 335 Sustainable development 335 Key concepts 335 The importance of the environment and the importance of energy 336 Sustainability in the built environment 336 The regulatory framework for construction 337 European Union developments 337 UK regulatory and policy developments 338 Assessing the sustainability of construction and buildings 340 UK building environmental assessment schemes and standards 341 International building environmental assessment schemes and standards 342 Author's comment 343 Sustainable procurement 344 Key concepts 344 Guidance and standards 345 Other important issues 346 References 346 34 Future Trends 349 Global -v- local 349 Industry and corporate trends 351 Opportunities and challenges 352 BIM 352 Lean process and procedures 353 Knowledge management 353 Behaviours 354 Index 357