Image: Athanasius on flickr. Some rights reserved. Unit 1: Construction Project Participants D39PZ: Procurement and Contracts 1
Construction project parties • Construction projects are complex collaborations of many specialised organisations: Some provide advice Others do the physical work • Procurement is concerned with structuring the relationships of these collaborating organisations • The role and responsibilities of each must be understood D39PZ: Procurement and Contracts 2
Construction project “stakeholders” Who is a stakeholder? (Discuss with the colleague next to you within a minute) …………………………………………………………………… ………………………………………………………………… Who are the stakeholders of a construction project? (Discuss with the colleague next to you within 2 minutes) ………………… ………………… ………………… D39PZ: Procurement and Contracts 3
Construction project “stakeholders” Employer/Client Physical Provide advice construction Contract Contractor Sub-contractor Architect administrator Project Engineer Manager Project Engineer QS BS Manager Building Quantity Surveyors Surveyor Clerk of Work D39PZ: Procurement and Contracts 4
Construction project “stakeholders” Identify 2-3 responsibilities of each project stakeholder listed below: 1. Employer (All) 2. Contractor (All) 3. Subcontractor (All) 4. Contract Administrator (All) 5. Clerk of work (All) 6. Architect (AE students only) 7. Project Manager (CPM students only) 8. Building Surveyor (BS students only) 9. Quantity Surveyor (QS students only) Work in groups of three in each. 15 minutes D39PZ: Procurement and Contracts 5
The Employer • The legal entity that employs the Contractor to complete the Works • May be an individual, firm, company, plc. • Basic responsibilities: To define what must be done To appoint the Contractor To make decisions and provide information when required To pay the Contractor • May be quite distinct from the individual or group of people acting as the “client.” D39PZ: Procurement and Contracts 6
The Architect • Employed by the employer to provide overall project guidance, design expertise and to (usually) administer the contract • Brief responsibilities: extracting and understanding the client’s requirements developing a design response ensuring the design is constructed (contract administration – administering the Contract between Employer and Contractor) D39PZ: Procurement and Contracts 7
The Contract Administrator • Traditionally, this role is performed by the Architect but any suitably competent organisation can do it • Ensures the overall project process is legally appropriate • Ensures the contract is applied (i.e. “administered”) to the project correctly • Acts as the Employer’s agent makes decisions on their behalf “certifies” key events in the project, usually to resulting in a payment from the Employer to the Contractor can vary the contract by issuing instructions D39PZ: Procurement and Contracts 8
The Project Manager If appointed by the Employer, the project manager may: Co-ordinate the general flow of the project Ensure programmes are realistic Facilitate the flow of information between organisations Co-ordinate site activities Ensure the quality of workmanship and materials Ensure good health and safety practice D39PZ: Procurement and Contracts 9
The Building Surveyor (the client’s BS) • Provide solutions to building failures • Preparing condition surveys of existing buildings • Preparing conceptual and technical design proposals • Managing the design and delivery of construction projects • Preparing management plans for real estate assets • Running construction contracts D39PZ: Procurement and Contracts 10
The Quantity Surveyor (the client’s QS) • Advises the Employer on procurement route and selection of contract • Provides budgeting advice • Prepares bills of quantities and compiles the tender documentation • Co-ordinates the tendering process and reports on tenders • Ascertains the value of the Works during their construction • Ascertains the value of any claims from the Contractor • Agrees the Final Account with the Contractor D39PZ: Procurement and Contracts 11
The Clerk of Works • Appointed by the Employer as an experienced set of “eyes and ears” on site • Responsible for monitoring workmanship to ensure compliance with the preambles and general good practice • Can reject work if not of sufficient standard • Signs the Contractor's Daywork sheets, if produced. D39PZ: Procurement and Contracts 12
The Contractor • Appointed by the Employer to construct the Works in accordance with the Contract Documents The Contract Documents contain: the Architect’s design and specification (including the preambles); the bills of quantities priced by the Contractor the contract itself • The Contractor usually appoints a series of subcontractors to complete the Works on its behalf. Subcontractors (usually) have no link to the Employer D39PZ: Procurement and Contracts 13
Subcontractors • In practice, the subcontractors do the majority of the work. • The contractor is vicariously liable for all subcontractors’ performance • Subcontractors are typically specialised (although there are also labour-only subcontractors) Specialised by trade Specialised by technical expertise • Usually entirely of the contractor’s choosing “Nominated” subcontractors no longer exist . D39PZ: Procurement and Contracts 14
The contracted parties • We will focus on the main contract between Employer and Contractor Only the Employer and the Contractor are parties to this Contract • Other contracts also exist: Fee-based consultancy contracts between the client and: its Agent (the Architect / Contract Administrator) its other consultants (e.g. Quantity Surveyor) Lump sum contracts between the Contractor and its subcontractors D39PZ: Procurement and Contracts 15
The devil’s in the details Pay attention to the precise words used Employer is not the same as client D39PZ: Procurement and Contracts 16
What does it mean to procure? D39PZ: Procurement and Contracts 17
Image: Toby Maloy on flickr. Some rights reserved. What does it mean to procure? Procurement is the management of process complexity Image: www.curtiswoodarchitects.com on flickr. Some rights reserved. D39PZ: Procurement and Contracts 18
Procurement issues To procure a building it is necessary to: • understand what the client wants • organise the relationships of many specialised organisations • allocate each risk to the organisation best placed to handle it • agree and document the responsibilities of the collaborating organisations • agree how problems will be solved • organise the exchange of information and money D39PZ: Procurement and Contracts 19
Construction and the client’s business • Commercial clients construct buildings or facilities to develop their business • The relationship between the construction project and the client’s business need must be understood • It is critical that the construction project is aligned with the client’s business • Many clients don’t want to build They do so because there is no alternative D39PZ: Procurement and Contracts 20
Construction and the client’s business • The client’s primary strategy directs its business Long term goals focus on organisational development and commercial competitiveness • The client’s secondary strategies direct its projects Short term goals focus on meeting immediate business needs Secondary strategies that involve construction projects are implemented with the assistance of construction industry professionals D39PZ: Procurement and Contracts 21
Construction and the client’s business D39PZ: Procurement and Contracts 22
Can you briefly define ‘Procurement’? 4 minutes…..discuss with the colleague next to you • Procurement is not briefing • Procurement is: “the framework through which construction is brought about, acquired or obtained” or “t he strategy to satisfy the client’s development and/or operational needs with respect to the provision of constructed facilities for a discrete life cycle ” D39PZ: Procurement and Contracts 23
Clients and industry change • Clients have stimulated change in the principles of the construction industry due to historically poor performance • A series of industry initiatives have directed change D39PZ: Procurement and Contracts 24
Clients and industry change • 1994: The Latham Report (“Constructing the Team”) Advocated more collaboration and less adversarial working • 1998: The Egan Report (“Rethinking Construction”) Advocated partnering and other forms of collaboration Started a series of “demonstration projects” • 2002: “Accelerating Change” Recommended practices and procedures Led to “Achieving Excellence in Construction” Adopted by the Office of Government Commerce D39PZ: Procurement and Contracts 25
Understanding clients D39PZ: Procurement and Contracts 26
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