The Aqua Group Guide to Procurement, Tendering and Contract Administration

Mark Hackett, Senior Partner, Mark Hackett Associates, LLP. Gary Statham, Partner, Mark Hackett Associates, LLP.

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 Contents vii 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