6 Type of Procurement Latest

Type of Procurement 8/3/2021
Type of Procurement
M S MOHAMED MUNAS
B.Sc Hons in QS, MRICS, MCIOB, MCABE, MCInstCES, FCMI, MQSI
Chartered Quantity Surveyor

Chartered Construction Manager
Chartered Manager
Chartered Building Engineer
Member of Chartered Institute of Civil Engineering Surveyor
Authorised Quantity Surveying Lecturer
RICS APC Assessor/ RICS APC Counsellor /APC Coaching
Contact: munasqs@yahoo.com
Learning Outcomes
Contract Award
Pre Contract Management Post Contract Management

Feasibility studies
Taking-off and BOQ Preparation Payments
Cost Management – Cost (analysis/ advice/ plans • Interim Payment
/Control)
• Statement at Completion
Advice on Type of Contract
Advice on Form of Contract • Final Account
Advice on Procurement Route and Tendering Method Variations
Preparing Tender documents
Tender Floating
Claims
Decision to Tender Sub-contract Management
Subcontractor’s and Supplier’s enquiries Cost Reports
Selection of Suppliers and Subcontractors
Prepare Subcontract documents
Contracts Management
Tender Adjudication & Tender Submission Commercial Management
Tender Receipt and Tender Evaluation
Tender Negotiation Based on FIDIC 99 Red Book
Prepare Contract Documents and Award of the Contract
Type of Procurement
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Type of Procurement - Learning Outcome
Procurement Strategies
Criteria for consideration to choose suitable procurement route
Type of Procurement Route
Type of Procurement
PROCUREMENT STRATEGIES
 Procurement can be defined as the process required acquiring goods and
services from outside the performing organization.
 Procurement system sets up the roles and relationships of the parties.
 It is sets up the overall management structure and systems and helps shape
the overall values and style of the project.
 The selection of a procurement system depends on the client’s objectives and
end product.
 Different methodologies are available as procurement strategies.
 A procurement strategy selected for a particular project will depend on a
number of criteria: the client body, the project type and size, the time
available, the cost certainty required and the responsibility for design.
 These criteria will often conflict with one another, and the most suitable
procurement strategy will therefore represent a balance between them.
 A good procurement methodology improves overall performance of project
delivery.
Type of Procurement
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Criteria for consideration to choose the suitable procurement route

1. Time - The time available to procure, design and construct a project.
2. Cost certainty – client has fixed budget or not. the most important criteria
may be absolute cost certainty before the project commence.
3. Quality – Client Quality expectations.
4. Type of client – Public or private sector client. An end-user client may be more
concerned with building functionality and costs in use, whereas a developer
client may be more influenced by market conditions and by being able to get a
sellable product to the market as quickly as possible. Potentially, therefore, an
end-user may have quality as his or her prime concern, while for a developer
the prime concern may be time. These priorities change from client to client
and project to project.
5. Risk - Risk in construction, be it time, cost or quality, is best allocated to the
party best able to manage, control or insure that risk. The management of risk
can be dealt with in a number of ways:
 Transfer of risk: from one party to other party.
 Acceptance of risk: Risk remains with the employer; and
 Avoidance of risk: define the risk beforehand and take mitigating measures,
or insure against the risk. Type of Procurement
Criteria for consideration to choose the suitable procurement route?

6. Design responsibility
 Who does the design and who is best to do that design in terms of their
ability, experience and price. This can be an engineer or architect and
they may work for the employer as consultants or for the contractor.
 Who is responsible for the design - Apportionment of design
responsibility between the designer and the contractor and sub-
contractors should be considered.
7. Design development
 It takes time, skill and money to develop the design of a project.
 There are several measures for considering the completion of the design
(RIBA stages).
 As the design develops, degree of certainty about the project increases in
terms of time and cost.
 The extent to which design has been developed before the construction
work begins should be considered in advance, to set out procurement
strategy.
 The general rule is that more design work has been carried out before the
project is tendered, the greater degree of certainty of the tender price.
Type of Procurement
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8. Specialist input
 The design may require input from specialists at an early stage. .
 Specialists may include project planners, façade engineers, piling
contractors and geotechnical specialists.
 Advice from the contractor on buildability may be required, or enabling
works may be needed.
 Each of these will affect the choice of procurement.
9. BIM
 With the current UK Government focus on Building Information Modelling
(BIM) and its stated requirement to have BIM ‘level 2’ in place by 2016 and
the acknowledged implications of this, including the front loading of
resource requirements, BIM is another consideration in the analysis and
selection of a procurement strategy.
Type of Procurement

10. Project complexity
 A very complex project will be likely to require design and construction
input from a number of specialists.
 It may also require specialist equipment, which may be costly or of limited
availability. (A tunnelling project, for example, needs to take into account in
its procurement strategy that the tunnel boring machines will probably
need to be ordered at least 1 – 2 years in advance.).
11. Ability to change scope of works
 The client may need to change the scope of work, due to a change in
market conditions or business requirements.
 External factors such as site conditions may also necessitate a design
change.
 If such changes are likely, the correct structure needs to be in place to allow
this to happen.
12. Contract administration
 The responsibility for contract administration will be consequential on the
procurement strategy selected, and may fall upon the design team, the
project manager, a contract administrator
Type of Procurement or the client.
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Q1) What are the selection Criteria for consideration to choose the suitable
procurement route?
1. Time.
2. Cost certainty - the stage at which cost certainty is achieved.
3. Quality.
4. Type of client - (Experience/ input required by the client) .
5. Risk allocation.
6. Design responsibility.
7. Design development- the stage at which design certainty is assured.
8. Specialist input.
9. BIM. (UK only)
10. Level of Variation.
11. Project complexity.
12. Ability to change scope of works.
13. Contract administration.
14. Point of financial commitment by the client.
15. Over lapping of the stages, e.g. design and construction.
It is the balance between these aspects that will determine the most
appropriate method of procurement.
Type of Procurement
Type of Procurement Route
Traditional Management
Design & build Other
method Oriented
Management PPP
Sequential Develop & Construct Contracting
Accelerated Package deal PFI
Construction
Management
Turnkey Term Contract
Design and
Manage Framework agreements
Serial Contracting
Continuation Contracts
Alliancing
JV
Partnering Approach
Type of Procurement
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TRADITIONAL METHOD
Employer
Engineer Contractor
Suppliers Sub-contractor
Indicates Contractual Relationship between parties
Indicates lines of communication
 Design Bid  Build concept.

 The main feature of this approach is that the design process is kept separate
from the construction process.
 Design needs to be in place before the contractor can be invited to tender.
Type of Procurement
TRADITIONAL METHOD - Advantages

 Competitive fairness - all tenders are based on exactly the same information.
 Clear commitment.
 Programme certainty - Time frame is established at the outset of the
contract.
 Cost certainty - the total cost is largely known at the outset of the contract.
 The form is capable of conversion to a guaranteed maximum price (GMP).
 Priced BoQ provide a basis for variations to be priced at tendered rates.
 There is no need for a contractor to build in a risk premium.
 It is easier to analyse the prices.
 The lowest price is usually the best value for money.
 Where elements of the building are not fully designed, provisional sums may
be used to allow for the later design of those elements.
 Familiarity among contractors and consultants - the roles and responsibilities
are well understood.
 Minor changes and adaptations for a specific project are easy to implement,
with an established method of valuation.
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TRADITIONAL METHOD - Advantages

 The client retains responsibility for and control of design team.
 There is direct reporting by design team to client to ensure that quality
control is maintained.
 The client has an independent professional in the role of contract
administrator monitoring the project.
Type of Procurement
TRADITIONAL METHOD – Disadvantages

 The method relies on full design information prior to the tender, which
requires time to prepare. this often results in an extended pre-tender period.
 Full design may not be achievable, and this can lead to some contractor
design portion supplements (CDPS) or provisional sums: all of which
compromise the certainty of output.
 The client will be in a weak position if major changes are introduced during
the contract.
 The split design and construction process and responsibility can lead to
disputes, for example in respect of whether construction defects are really
design defects or whether they are construction defects.
 There is the potential for over-design and/or over-engineering.
 The contractor is not involved in the design process caused to build-ability
issues.
 The client retains responsibility for the design and design team performance.
 A fixed lump sum price is rarely actually achievable.
 The use of provisional sums and power of the Architect or Engineer to issue
instructions for additional or varied works can lead to price escalation.
Type of Procurement
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TRADITIONAL METHOD - Further Information

 Some theory says…
 Traditional Method- Design  Bid  Build is using competitive tendering
method. But variant to this method
 Sequential Method – using single stage tendering based on drawings and
specification.
 Accelerated Method - using two stage tendering or negotiated tendering,
based on Lump sum contract/ Measurement contract /Cost Reimbursement
contract. By this variant, design and construction can run in parallel to a limited
extent.
Q1 When design is completed prior to tender, Can we use measure and value
Contract instead of lump sum contract? ( Answer Yes/ No)
Q2 In above circumstance, how you would called that procurement method?
Q3 as per Q1, if you use single stage tendering to select a contractor, how you
would called that procurement method?
Q4 as per Q1, if you use two stage tendering OR negotiated tendering, to select a
contractor, how you would called that procurement method?
Type of Procurement
TRADITIONAL METHOD - Suitability

The Traditional Method is suitable for the following:
 Cost certainty required.
 Complex projects and projects where functionality is prime objective.
 If there will be minimal changes during construction.
 Certainty of completion date required (Time predictability).
 If the fast start on site is not required.
Type of Procurement
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Homework
1. What is Assignment?
2. What is the major difference between
Assignment and Novation?
Type of Procurement
Design & Build Procurement

Will be Continue…
Thank you
By M.S.M.Munas,
Type of Procurement
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DESIGN AND BUILD
Employer
Employer’s advisors Possible Novation D&B

(design/cost/management) Contractor
Structural M&E Sub-

Architect QS
Engineer Engineer contractor

Indicates lines of communication
Novation is a process in which the contractual rights and obligations are transferred to
a third party. Or
replacing party to an agreement with new party or replacing old agreement with new.
Type of Procurement
DESIGN AND BUILD

 Contractor is responsible for design and construction.
 Therefore, is Single Point Responsibility placed on the contractor to deliver to
time, cost and stated quality.
 Generally satisfying the Employer’s requirement and offer his service for an
inclusive sum.
 The procedure is initiated by the client or an architect on his behalf Preparing
his requirements.
 Then these are sent to a selection of suitable contractors, each of whom
prepares his proposals on design time and cost.
 Then the client accept the proposals he is satisfied best meet his requirement
and enter into a contract with the successful tender.
 Then contractor proceeds to develop his design proposals and to carry out
and complete the works.
 The client may use the services of and independent architecture and QS to
advise him on the contractor’s proposals as to design and construction
methods and as to the financial aspects respectively.
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DESIGN AND BUILD
 The client may also appoint an agent to supervise the works and generally to
act on his behalf to ensure that the contractor’s proposals are complied with.
 It is also common for the original consultants to be employed by the
contractor to complete the design. This is achieved through a Novation
agreement. Alternatively, the contractor can employ his own team to
complete the design, with the client's team retained to verify that the design
and construction is proceeding satisfactorily.
Type of Procurement
DESIGN AND BUILD- Advantages

 Single point responsibility is provided - Contractor is solely responsible for
failure in the design and or the construction.
 The client has only one person to deal with namely the contractor whose
design team includes architects, QS, structural Eng. etc
 Cost certainty - client is aware of his total financial commitment from the out
set.
 Programme certainty - the time-frame is established at the outset of the
contract.
 Close intercommunication between the contractor’s design and construction
teams promotes co-operation in achieving smoother running of the contract
and prompt resolution of site problems.
 Speed of delivery than for traditional procurement. In its simplest form, design
and build allows work on site to begin earlier (that is before the design is fully
complete) than under traditional forms of contract, because of the level of
design control given to the contractor. Normally, the design and build
procurement approach allows programmes and budgets to be more easily met
and the speed of construction is also often quicker.
Type of Procurement
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DESIGN AND BUILD- Advantages

 Contractor is responsible for the design and the construction, it allows that the
design is more likely to be 'buildable' than may be the case under other
procurement methods.
 Novation of design. There is normally the facility for the client's own designers to
be novated to the contractor. This approach has several perceived benefits,
including;
i. Client may have used those designers many times previously and will be
happy with the quality of their work;
ii. Design team is likely to be more familiar to the client's requirements.
iii. Design team can continue with Contractor where they left off with client.
iv. Some clients believe that through the novation of their own designers, they
(in effect) have an independent voice in respect of the contractor's
subsequent design intentions.
 There is less client management/consultant involvement required during the post
contract. Therefore, its results in lower management costs and lower consultants'
fees.
 Shorter tender documentation period compared Traditional Procurement Method.
 Capable of conversion to a guaranteed maximum price (GMP).
Type of Procurement
DESIGN AND BUILD- Disadvantages

 Variations from the original design are discouraged by the contractor and if it
is allowed, very expensive and have programme implications.
 Inflexibility. There is only limited scope for the client to make changes to his
requirements once the client's requirements and contractor's proposals have
been agreed. If the client does not have a firm and robust set of client's
requirements he may be given a design that he did not want, or may be
required to pay considerably more to obtain the design that he did require.
 If the contractor’s organization is relatively small, he is unlikely to be as
expert on design as he is on construction and the resulting building may be
aesthetically less acceptable.
 The initial price may be higher as the contractor may build into his price a
'risk premium'.
 A longer tender evaluation period is required, to ensure that the
contractor's proposals meets the employer's requirements.
 There are higher tendering costs for contractors.
Type of Procurement
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 The employer's requirements must be clear and unambiguous, so that cost
and programme certainty can be obtained from the tenders. There may be a
conflict between the client's requirements and the contractor's proposals
unless both documents are carefully checked. This conflict can be obviated
by making it clear in the contract which document takes precedence.
 Quality needs to be carefully defined and supervised. Lack of control that
the client has over the architect. The architect acts for the contractor not for
the client.
 The client has no means of knowing whether he getting value for money
unless he employs his own independent advisors, which adds to his cost.
 There is a loss of client control over design and construction activities.
 Design quality. Because it is often apparent that the contractor is driven by
price rather than by design standards, it is often considered that the design
and build procurement route is not the appropriate route to use where a
high quality design is required, unless a robust specification is included
within the client's requirements.
Type of Procurement

 There is the potential of dual loyalties of a novated architect. Also there
could be complex legal issues in relation to the novation process. Following
the decision in Blyth & Blyth v Carillion - [2001] CILL 1789; a Scottish case
with influential authority in England and Wales where the court ruled that
the novation in that case did not entitle the contractor to recover loss for a
failure by the employer's engineer to perform its services with reasonable
skill and care prior to the novation - contractors need to ensure that they are
able to pursue claims against the novated consultants for any pre-novation
losses they may suffer as a consequence of breaches of duty by the
consultants pre-novation.
Type of Procurement
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DESIGN AND BUILD - Suitability

The design and build approach is suitable for the following:
 clients, including inexperienced ones and those who do not want
close involvement;
 those desiring cost certainty;
 fast track projects;
 simple buildings; and
 projects where aesthetic appearance is not a priority.
Q) While design is carrying out by D&B Contractor, Design

consultant identified & informed that D&B contractor not
perform well. What are the precautions can be taken?
Design consultant can be novated to develop the design. Then
Design consultant will be part of the design team
Type of Procurement
DEVELOP AND CONSTRUCT

 Employer appointed design team develop concept design/ ER to a more
detailed design, to allow for more client control and influence on the end-
product. In this way, the client's expectations regarding the level of detail and
the product are managed.
 Contractor submit his proposal based on developed design.
 Design team transferred to Contractor by Novation or alternatively Contractor
could employ his own design team while employer design team retained to
verify design process.
Q) Who will have the design liability in Develop & Construct method?
D&B Contractor has the Design Liability
Q) Is there a way to increase the quality in Design & Build method?

Use Develop & Construct method. The design will be developed in to a certain
extend and D&B Contractor will be assigned to develop the design &
Construction of the project.
Type of Procurement
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TURNKEY
 A turnkey procurement is an arrangement whereby a project is delivered in a
completed state.
 Therefore, rather than contracting with various parties to develop a project in
stages, an client enters into a contract with one party (normally a developer or
a contractor) to finish the entire project without any further input from the
client.
 The developer or contractor is separate from the client, and the project is
handed over only once it is fully operational. In effect, the developer or
contractor is finishing the project and 'turning the key' over to the client.
 This type of arrangement can be used for construction projects ranging from
single buildings to large-scale developments.
 Client is generally left out of the building process entirely as the developer or
contractor handles all decisions and problems related to construction.
Type of Procurement
TURNKEY - Advantages
 Flexibility - design can extend into the construction period. The developer or
contractor normally owns the project until it is complete, and therefore it has
the financial motivation to complete the job as quickly and efficiently as
possible.
 A turnkey contract provides more time for a client to seek financing and
investors before he/she is required to pay for a completed project.
 An inexperienced client does not need to make difficult construction decisions,
as those decisions are left entirely in the hands of the developer or contractor.
Type of Procurement
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TURNKEY - Disadvantages
 With regard to Quality, the client normally has a lack of control over design
decisions, and this may mean that the project is not perfectly suited to his/her
needs when completed.
Type of Procurement
TURNKEY - Suitability
Contractor being responsible for design as well as construction;
therefore it can be suitable for the projects;
 where the cost certainty is highly considered.
where the fast track construction requires.
 However it is not suitable for the project with uncertain or

developing client brief and not ideal for complex buildings.
Type of Procurement
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Package Deal
 Package deal and turnkey are both expressions used to describe traditional
design build, but with the absolute minimum of client involvement in the
design development or the building operations.
 Typical examples are farm, factory, warehouses and straightforward office
buildings.
 A turnkey contract additionally requires that building is fully fitted out to
enable immediate operation by end user.
Type of Procurement
Management Oriented Procurement

Will be Continue…
Thank you
By M.S.M.Munas,
Type of Procurement
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MANAGEMENT CONTRACTING Employer
Structural M&E Management

Architect QS
Engineer Engineer Contractor

WC Works Contractors WC1 WC2 WC3 WC…
Management contracting characteristics that,

Initially, client appoint consultants to prepare project drawings and
specification.
Then client appoint a Management Contractor (MC) by a process of tender and
interviews.
MC also may select by selective or competitive basis based upon;
previous experience
The management fees
Price for additional services
Type of Procurement
MANAGEMENT CONTRACTING
MC does not do any construction work himself.
MC’s role therefore is providing a cost management service on a fee basis as
part of the client’s management team.
A MC is generally appointed on the basis of a fixed management fee (usually a
percentage based on the prime cost of the project) which is paid on top of the
construction costs incurred by the management contractor.
The MC advise on the design programming and provide Buildability advice at
an early stage to the design team.
MC divide construction work into several packages.
The management contractor then employs and pays works contractors to
carry out the actual construction works.
Management Contracting consists of 100% sub-contracting. Every item of the
construction works is sub-contracted to the works contractors.
Works Contractors may be select by competitive base or selective base.
Works contractors tend to be procured as and when they are required.
The prime cost of all the works contractors is monitored against the estimated
prime cost, and the client therefore retains the cost risk on the project, unless
there is a default by the management contractor.
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MANAGEMENT CONTRACTING
Management Contractor is usually only responsible to the employer for:
1. Management Contractor’s own negligence or breach of the management
contract; and
2. Breaches of the Works Contracts, but only to the extent that the
management contractor recovers damages from the works contractors.
In addition, even though the management contractor appoints the works
contractors, the employer usually also enters into a separate direct agreement with
each Works Contractor. Under these agreements, the works contractors warrant to
the employer that they will carry out their works properly.
In some respects, these agreements are similar to collateral warranties.
Unlike traditional or D&B contracting, a Management Contract is not a fixed price
lump-sum contract.
The amount to be paid to the Management Contractor is the prime cost of all work
done under the management contract, plus the Management Contractor’s fee.
Therefore, while Management Contractor is under an obligation to control costs,
employer has to pay whatever management contractor spends, plus an amount for
management fee (which may either be a lump sum or percentage of prime cost).
Because of these arrangements, the contract between the employer and the
Management Contractor can be considered a ‘cost reimbursement’ or ‘prime cost’
contract.
Type of Procurement
MANAGEMENT CONTRACTING - Advantages

 Work can be begin when 1 or 2 works packages have been designed.
 It is particularly beneficial for fast-track complex projects where minimal design
information is available at the start of the project.
 Over lapping of design & construction reduce the time & resulting earlier
return for client investment.
 Can predict great designed by contractor’s practical knowledge and
management expertise.
 It allows for early 'buildability' and programming input from the management
contractor acting as a consultant.
 The contractor being part of the client team, is able to identify with the client’s
needs and interests.
 Without extending the construction period can design of later work packages.
 Because works contracts are entered into close to the time of their
commencement on site, they can be based on firm price tenders.
 This is a quick method of procuring a competitively tendered main contractor; it
can also enable a quick start on site.
 There is a reduced potential for claims. There is great scope for client changes.
Type of Procurement
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MANAGEMENT CONTRACTING - Advantages

 Flexibility - design can extend into the construction period. The process is very
flexible, and therefore changes to suit the client's requirements are relatively
easy to accommodate.
 Flexibility - the later procurement of finishes to suit the tenant is possible.
 The construction manager acts on behalf of client where as a traditional
contractor primarily acts in its own interests.
 There is a single point contractual and payment arrangement for the client
with the management contractor (rather than to all of the individual works
contractors).
 The preliminaries and management fee can be fixed, therefore allowing for a
degree of certainty on price.
 The quality can be controlled by the design team.
 Programme and cost plan is agreed with the design team, including information
release dates, before the work starts.
 An advantage over construction management for some clients is that payments
to the supply chain are made by the contractor, so the client avoids the
administration inherent in making such payments.
Type of Procurement
MANAGEMENT CONTRACTING - Disadvantages

 Uncertainty as to the final cost of the project until the last works contract has
been signed.
 The number of variations and the amount of re-measurement required may be
greater than on traditional contracts because of the greater opportunity to
make changes in design during the construction period, because of problems
connected with the interface between packages.
 Delayed procurement exposes the employer to the risk of market inflation.
 There is a limited amount of cost fixed at the time the employer enters into the
contract.
 Very close cost control is required, with detailed reporting.
 A larger degree of reliance is placed on the contractor.
 Very close control of procurement and construction programmes is required by
the contractor, to ensure that the programme is achieved without the need for
accelerated working or extended working hours, which would add to the prime
cost.
Type of Procurement
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MANAGEMENT CONTRACTING - Disadvantages

 The package content needs to be precisely detailed by the contractor prior to
commencement, in order to minimise works that fall between packages.
 There is a programme risk, as the scope of work develops well into the
construction phase and the final scope is not known until close to completion.
 This method requires a higher level of client involvement in rolling decision-
making throughout the construction period.
 The method is incapable of conversion to a guaranteed maximum price (GMP).
 This procurement approach is a low risk strategy for the management
contractor as he/she has little responsibility for package contractor defaults,
bankruptcy, etc.
Type of Procurement
MANAGEMENT CONTRACTING - Suitability

 This is suitable for fast track nature project
 For clients who have limited resources to administer Contracts;
 For complex projects which require many specialized works;
 For projects where complete design is not complete; and
 Early contractor involvement.
 However, it is less suitable for inexperience clients, project with cost

certainty before staring the construction and for clients waiting to pass risk to
the contractor.
Type of Procurement
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CONSTRUCTION MANAGEMENT
Employer
Structural M&E Construction Trade

Architect QS Management Contractors
Engineer Engineer
Indicates Contractual Relationship between parties TC1 TC2 TC3 TC..

TC Trade Contractors
 The processes for Construction Management are largely similar to those for
Management Contracting, with the exception that client enters into separate
contracts with each Trade contractor.
 Appointment of a management team and Construction Manager (CM) on a fee
basis, which could be obtained in competition.
 lead designer responsible for overall design, a CM responsible for the
management and coordination of work, the client responsible for directing the
project and entering into all trades contracts. As all trades contractors are
directly and contractually responsible to the client, CM is in some ways less
accountable for time and costs, whilst the client takes on the greater risk.
Type of Procurement
CONSTRUCTION MANAGEMENT - Advantages

 This method can allow for a quick start on site.
 Flexibility - design can extend into the construction period.
 Flexibility - the later procurement of finishes to suit the tenant is possible.
 Easier incorporation of occupier's fit-out into contract, if required.
 Early construction manager input on programme, buildability and the content
of works contract packages.
 The programme and cost plan is agreed with the design team, including
information release dates before the work starts.
 The employer has the opportunity to stop the work before proceeding to
construction, for a set fee to the construction manager.
 There is a direct client relationship with the Trade contractors. This is attractive
to trade contractors, and can lead to improved performance.
Type of Procurement
22
CONSTRUCTION MANAGEMENT - Disadvantages

 Delayed procurement exposes the employer to the risk of market inflation.
 The final cost is not known until the contract is complete.
 There is a limited amount of cost fixed at the time the employer enters into the
contract.
 Very close cost control is required, with detailed reporting.
 Very close control of the procurement and construction programmes is needed by
the client and construction manager to ensure that the programme is achieved
without the need for accelerated working or extended working hours, which would
add to the prime cost.
 Programme certainty will not be achieved until all works contracts are agreed.
 The package content needs to be precisely detailed prior to commencement, to
minimise works that fall between packages.
 The method requires a higher level of client involvement in rolling decision-making
throughout the construction period.
 The method is incapable of conversion to a guaranteed maximum price (GMP).
 There is reduced single-point responsibility.
 There is a higher level of client administration, and consequent cost, throughout the
contract period.
Type of Procurement
CONSTRUCTION MANAGEMENT - Suitability

 Experienced clients;
 Where cost certainty is not a priority;
 Fast track projects;
 Complex buildings;
 A developing brief; and
 Where buildability advice is required.
Type of Procurement
23
DESIGN AND MANAGE Client
Scope Design & Management

Designer Contractor
Indicates Contractual Relationship between parties Work

Indicates lines of communication Contractors
 Not to be confused with Design & Build, as it is sometimes presented. What is

actually on offer is Design & Project Management For a fee, the ‘Design &
Manage’ contractor will undertake the Design & Project Management of the
Scheme. The Construction work is bought in separately by tendering or
negotiation.
 Suitable for specialised project (i.e. oil & gas project).
 Less time and more quality.
 No cost certainty.
 No Time certainty.
Type of Procurement
Will be Continue…
Thank you
By M.S.M.Munas,
Type of Procurement
24
PUBLIC PRIVATE PARTNERSHIP – (PPP)

 Public Private Partnerships or P3 can be the long-awaited solution for the
construction industry, developing new strategic alliances, improving public
services and reducing government costs.
 The term Public Private Partnership (or PPP) is an umbrella term that covers a
diverse range of business structures and partnerships involving the public and
private sectors.
 Typically, private sector companies will enter into some kind of partnership with
the public sector for supporting or providing a public service.
 Public private partnerships can be negotiated using different contracting methods
producing the projected results allowing a faster benefit to all citizens.
 Depending on the job being executed Public Private Partnerships will results in
greater benefits and will allow the business to develop into an exciting emerging
market.
Type of Procurement
PUBLIC PRIVATE PARTNERSHIP – (PPP)

 PFI involves an infrastructure project (e.g. a hospital, health centre, school,
leisure centre, social housing, street lighting, road or prison) being funded by
private sector and then being paid for by the public sector 'customer' through
monthly payments over the life of the project. A PPP project would not
necessarily require or have such private sector funding.
 A good example of a PPP would be public and private sector parties setting up a
joint venture company for a regeneration project, with the parties each
contributing one or more of land interests, expertise/people.
Type of Procurement
25
PPP - Advantages
 PPP could increase and provide greater infrastructure solutions.
 It will offer faster project completion and reduced delays on infrastructure
projects.
 The PPP return of investment (ROI) is greater when compare to traditional
methods, due to innovative design and financing approaches.
 PPP identify the expected life-cycle cost analysis and schedules operation and
maintenance component of project, programming their cost and expected
depreciation.
 Risks are weighted from initial conceptual stages to determine the feasibility of a
certain project.
 The operational and project execution risk is transferred totally to the private
sector, leaving the public component on a win-win situation.
 PPP is a concept where early completion is expected under expected budget,
reducing the claims and change order process.
 P3 allows government funds to be re-directed to other important socio-economic
areas.
 Reduces government budget and budget shortfall.
Type of Procurement
PPP - Advantages
 High quality standards should be obtained and maintain through expected life-
cycle of the project.
 Public Private partnership allows a reduce tax payment from users.
 Allows the government to direct the expected function of the project in
accordance to their own interests.
Type of Procurement
26
PPP - Disadvantages
 Every Public private partnership has risks involved, and the government will
the pay the price to transfer those risks to the private sector.
 Certain situations can affect the purity of the process due to specialized
areas being improved, reducing the number of contractors available to
perform the requested projects.
 Profits of the projects can vary depending on the assumed risk, competitive
level, complexity and volume of the project being performed.
 There is a slight risk that the proposed contracting alternative being offered
is not the best suited option.
 Government representative must be highly specialized personnel and
contracting experts.
 PPC 2000 is used for making agreement. it was launched by Sir, John Egan in
September 2000. It integrates the entire project team under single multy
party contract. in addition PPC 2000 has been accepted by PII insurers as
well.
Type of Procurement
PRIVATE FINANCE INITIATIVE (PFI)

 Private Finance Initiative (PFI) is a form of public / private partnership (PPP)
where the private sector works with the public sector to deliver public services.
 The best known of the PPP arrangements is the Private Finance Initiative (PFI),
which has now been revamped for England and Wales and is known as Private
Finance 2 (or PF2).
 PFI was set following the development of new forms of procurement such as
outsourcing, privatization and build–operate–transfer, were developed.
 This modern form of procurement encourages private investment in public
sector projects.
 PFI suppliers are typically contracted not only to construct a facility but also to
manage and maintain the infrastructure and provide support services for a
period of several years following the construction.
 A project procured under PFI is based on a new kind of relationship between a
public sector client and a private sector contractor.
 General procedure is that contractors usually operating in a consortium agree
to design, build and finance and manage a facility provided by public sector.
Type of Procurement
27

 In return the public sector client agrees to pay annual charges during the life of
the contract and allows the contractor to obtain any profit that can be made
over the stipulated time.
 PFI model has been used also for developing social infrastructure such as school
and hospital buildings which do not generate direct revenue.
 PFI project involves a long term contractual arrangement (often 25–30 years)
between the public and private sector.
 There are number of different methods have been used by the public sector to
build facilities with private sector. Those are described under following
headings.
1. BOOT (Build, Own, Operate and Transfer)
2. BOO (Build, Own, Operate)
3. BOT (Build, Operate, Transfer)
4. DBFO (Design, Build, Finance, Operate)
5. BLT (Build–Lease–Transfer)
Type of Procurement
From Black Book
Type of Procurement
28

 As can be seen from the diagram, a PF2 scheme involves a complex web of
contractual relationships.
 A PF2 project is typically delivered through the creation by the private sector
of a consortium (known as a Special Purpose Vehicle or SPV).
 The SPV will be financed by its parent companies and also by loans from
banks.
 The SPV will enter into the concession agreement with the public sector and
will also enter into agreements with those contractors who will be carrying out
the actual construction and maintenance services.
 Only once the asset is constructed will the public sector start paying the
service charge to the SPV, although the construction contractor is paid for his
works by the SPV throughout the construction period.
Type of Procurement
BOOT (Build, Own, Operate and Transfer)

 BOOT (Build, Own, Operate, Transfer) is a public-private partnership (PPP)
project model in which a private organization conducts a large development
project under contract to a public-sector partner, such as a government agency.
 A BOOT project is often seen as a way to develop a large public infrastructure
project with private funding.
 For an instance, a large corporation or consortium of businesses with specific
expertise wants to design and implement a large project.
 The public-sector partner may provide limited funding or some other benefit
(such as tax exempt status) but the private-sector partner assumes the risks
associated with planning, constructing, operating and maintaining the project
for a specified time period.
 During that time, the developer charges customers who use the infrastructure
that's been built to realize a profit.
 At the end of the specified period, the private-sector partner transfers
ownership to the funding organization, either freely or for an amount stipulated
in the original contract. Such contracts are typically long-term, approximately
25 years and may extend to 40 or more years.
Type of Procurement
29
BOOT (Build, Own, Operate and Transfer)

 Variants on the BOOT model include BOO (build, own, operate), BLT (build,
lease, transfer) and BLOT (build, lease, operate, transfer).
 Simply, a BOOT funding model involves a single organization or consortium
(BOOT provider) designing, building, funding, owning and operating the scheme
for a defined period and then transferring the ownership across to agreed
party.
 Customers enter into long term supply contract with BOOT operator and are
charged accordingly for the service delivered.
 The service charge includes capital and operating cost recovery and project
profit.
 Boot scheme are becoming an increasingly popular means of financing large
scale infrastructure development such as roads, bridges and hydro dams in
developing countries.
Type of Procurement
BOOT (Build, Own, Operate and Transfer) - Advantages

 The majority of construction and long term operating risk can be transferred
onto BOOT Provider.
 Project development will be quickly implemented.
 The project is not constrained through a lack of funding, a lack of expertise or
project management capability. Also, there are strong financial incentives for
the BOOT operator to complete the construction and get the project
operational as soon as possible.
 BOOT operator gives the project certainty and makes it more believable for
users. This in turn encourages interest in the project from an early stage.
 No upfront cost for end users.
 The tender process will encourage maximum innovation allowing the most
efficient design to be explored for the project.
 BOOT operators are experienced with management and operation of
infrastructure assets and bring these skills to the project.
 Corporate structuring issues and costs are minimal within a BOOT model, as
project funding, ownership and operation are the responsibility of the BOOT
operator. These costs will however be built in to the BOOT project pricing.
Type of Procurement
30
BOOT (Build, Own, Operate and Transfer) - Disadvantages

 BOOT is likely to result in higher cost for end users. This is a result of the
BOOT provider incurring the risks associated with 100 percent financing of
the project and the acceptance of the ongoing maintenance liabilities.
Further, cost for their know-how will be additional cost to the project.
 BOOT has no real track records available and is still a relatively new concept
internationally.
 A careful selection process is required when selecting a BOOT partner. It
should be confirmed that the BOOT provider is financially stable and secure
for undertaking the project as such prior to considering their bid.
Type of Procurement
BOO (Build, Own, Operate)

 BOO (Build, Own, Operate) is a public-private partnership (PPP) project model
in which a private organization builds, owns and operates some facility or
structure with some degree of encouragement from the government.
 Although the government doesn't provide direct funding in this model, it may
offer other financial incentives such as tax-exempt status. The developer owns
and operates the facility independently.
Type of Procurement
31
BOT (Build, Operate, Transfer)

 Build-own-operate-transfer (BOOT) or build-operate-transfer (BOT) is a form of
project financing, wherein a private entity receives a concession from the
private or public sector to finance, design, construct, and operate a facility
stated in the concession contract. This enables the project proponent to
recover its investment, operating and maintenance expenses in the project.
 Due to the long-term nature of the arrangement, the fees are usually raised
during the concession period. The rate of increase is often tied to a
combination of internal and external variables, allowing the proponent to reach
a satisfactory internal rate of return for its investment.
 Examples of countries using BOT are Thailand, Turkey, Taiwan, Israel, India, Iran,
Croatia, Japan, China, Vietnam, Malaysia, Philippines, Egypt, and a few U.S.
states (California, Florida, Indiana, Texas, and Virginia). However, in some
countries, such as Canada, Australia and New Zealand, the term used is build-
own-operate-transfer (BOOT).
 Traditionally, such projects provide for the infrastructure to be transferred to
the government at the end of the concession period.
Type of Procurement
DBFO (Design, Build, Finance, Operate)

 Build-own-operate-transfer (BOOT) or build-operate-transfer (BOT) is a form of
project financing, wherein a private entity receives a concession from the private
or public sector to finance, design, construct, and operate a facility stated in the
concession contract. This enables the project proponent to recover its
investment, operating and maintenance expenses in the project.
 Design–build–finance–operate is a project delivery method very similar to BOOT
except that there is no actual ownership transfer.
 Moreover, the contractor assumes the risk of financing till the end of the contract
period.
 The owner then assumes the responsibility for maintenance and operation.
 This model is extensively used in specific infrastructure projects such as toll
roads.
 The construction company builds a private entity which is in charge to design and
construct an infrastructure for the government which is the true owner.
 Moreover the private entity has the responsibility to raise finance during the
construction and the development period.
Type of Procurement
32
DBFO (Design, Build, Finance, Operate)

 The cash flows serve to repay the investment and reward its shareholders.
 They end up in form of periodical payment to the government for the use of the
infrastructure.
 The government has advantage that it remains the owner of the facility and at
the same time, avoids direct payment from the users.
 Additionally, government succeeds to avoid getting into debt and to spread out
the cost for the road over the years of utilization.
Type of Procurement
BLT (Build, Lease, Transfer)

 Under BLT a private entity builds a complete project and leases it to the
government.
 On this way the control over the project is transferred from the project owner to
a lessee.
 In other words the ownership remains by the shareholders but operation
purposes are leased.
 After the expiry of the leasing the ownership of the asset and the operational
responsibility are transferred to the government at a previously agreed price.
 For foreign investors taking into account the country risk BLT provides good
conditions because the project company maintains the property rights while
avoiding operational risk.
Type of Procurement
33
TERM CONTRACTS
 Term contracts enable employers and contractors to enter into long term
arrangements where there is likely to be a regular flow of work for the
contractor.
 Term contracts are normally used where regular maintenance and repair work
or some other kind of minor improvement works to an existing asset for a
specific period.
 Rather than enter into separate contracts for every piece of work, it is often
better to appoint one contractor to carry out all the works during a specified
period.
 In order to obtain competitive rates, tenderers need to be informed of type of
work involved, place of work and duration of contract.
 The term contract differs from lump sum contracts in that it is not possible to
define the extent of the work or establish a contract sum at the tender stage.
 The term contract will contain a mechanism that enables the employer to
issue instructions (often known as ‘call-off orders’) to the contractor which
will detail the exact nature of the works required.
 Term contracts are a form of measurement contract, so the contractor’s work
is measured and valued after completion on the basis of an agreed schedule of
rates.
Type of Procurement
TERM CONTRACTS
The term contract can includes the followings

 Measured - the work is measured after completion and the contractor paid in
accordance with the schedule of rates. The schedule is often pre-priced, with
the contractor tendering a percentage mark-up or mark-down.
 Day work – the contractor is paid the cost of labour and materials for the job
plus a tendered percentage to cover overheads, profit etc., or contractor may
be required to tender “all in” hourly labour rates.
 Service (specialist)- the contractor is paid a tendered price per visit or per
operation, or even for a predetermined service for whole term.
Type of Procurement
34
TERM CONTRACTS
Advantages of term contract
 Lower prices quoted by contractors in view of continuity of work.
 Saving in time and overheads compared with a series of single job contracts.
 A long term relationship resulting from contractor becoming familiar with
client’s requirements and needs.
 The contractor can establish an efficient rapid response team.
Disadvantages of term contract

 Dependence on single contractor.
 A minimum workload may need to be established.
 The client can place over confidence on the easiness of the system, resulting
inadequate pre planning and excessive costs.
In long term contract there will be a clause allowing either party to terminate the
contract on giving written notice. Type of Procurement
Framework Agreements
 As with term contracts, framework agreements enable employers and contractors
to enter into long term arrangements where there is likely to be a regular flow of
work for the contractor.
 However, in contrast to term contracts, framework agreements are often used to
procure the construction of a new asset, as opposed to term contracts which
generally cover the maintenance of an existing asset.
 Instructions to carry out works are also issued by way of a call-off order to the
contractor but, depending on how the framework agreement is drafted the call-
off order may itself constitute a separate contract that is distinct from the
overarching framework agreement.
Type of Procurement
35
SERIAL CONTRACTING
 this type of contract should be similar.
 In this method a number of projects often referred to as “programme” with
similar characteristics, particularly in case of design development are awarded
to a single contractor following the receipt of competitive tender based upon
a master set of documents.
 Although, this forming parts of the same programme, each project is
administrated by means of separate contract.
 Serial contract can consist of number of projects. Other way, a contractor
under takes and enters into a series of contract (lump sum) with the terms and
conditions set out in the initial offer.
 In many programme of building work, such as providing several supermarkets
for the supermarket chain or refurbishing a high street shopping chain for
retailer, there is an element of continuity.
Type of Procurement
SERIAL CONTRACTING
 The standing offer is usually taken up in a letter of intent, which should make
clear that the number of contracts let within the frame work of the offer will
depend upon satisfactory performance by the contractor, and that the
individual offers must be acceptable to the client irrespective of quantity,
quality, cost and completion on time.
 The system offers an incentive to firms to maintain a high standard of
workmanship and cooperation. It produces time saving by eliminating lengthy
pre contract procedures for each project in a programme. It also enables
skilled production gangs to be kept together, which aids productivity.
Type of Procurement
36
SERIAL CONTRACTING - Advantages
 They offer advantage in providing continued work over long period.

 Possible with a number of individual contracts and there for cheaper
price.
 The tenders have to invite only one time.
Type of Procurement
SERIAL CONTRACTING - Disadvantages
 The type of contract should be similar to use this type of

contract.
 No guarantee to achieve the satisfaction of both parties.
 The scope of the construction limited.
Type of Procurement
37
CONTINUATION CONTRACTS
Q) Can you Explain the different between serial contracts & Continuation
Contracts?
Serial Contracts (Enter in to a contract of series of projects Ex. Series of school.)
 Contracts awarded to same contractor in series
 No competitive prices
 Mechanism to reduce prices
 Selected from a pre-qualified list
 Contractor enters in to series of contracts with same rates / prices
Continuation contracts
 Set an initial offer
 for the next project employer will use the same contractor.
Type of Procurement
ALLIANCING
 Some clients able to offer a series of major long term construction opportunities, for
example the petrochemical industry, have begun to extend partnering to embrace
Alliancing.
 Here, successful partners, both design collaborators, having demonstrated full
commitment in terms of previous behavioral attitudes, are invited to co-operate in
developing new schemes before even sanction for final approval by the client’s main
board of directors may have been achieved for the scheme to go ahead.
 The client’s project team, designers and contractors jointly prepare target cost coupled
to a risk / award structure based on the final outcome, the implication being that future
opportunities will only be forthcoming if the final product meets the client’s satisfaction.
 The management structure requires an executive team with a directorate representative
from each alliance member responsible to the client’s board for administrating the
alliance agreement.
 The project itself is led by the client’s project manager heading a team comprising
managers from each of the principal parties responsible for implementation of the
project, management and administration of the works contracts.
 Forms of agreement with the principal parties are still evolving either incorporated
within the individual contracts for the provision of services or quite separately in an
alliance agreement with each.
Type of Procurement
38
Joint Venture
 The unusual step beyond partnering is the joint venture contract between a
major client and providers of the facility, perhaps where co-operation is vital,
for example dealing Joint ventures are a common feature in international
construction projects in Asia.
 There are different reasons to form joint ventures. Joint ventures can take
different forms.
 The primary feature that distinguishes a joint venture from a partnership is that
the joint venture usually is formed to undertake a single project whereas a
partnership creates an ongoing business.
 Proper management of joint ventures, using an appropriate joint venture
agreement, is critical in managing the risks inherent in joint ventures.
Type of Procurement
Joint Venture
Reasons to Form Joint Ventures
 Taking on a project that is larger than the contractor normally would undertake,
with a view toward spreading the risk. Combining two contractors to generate
bonding capacity that each contractor would not have individually.
 Teaming up two contractors with special expertise (a civil and mechanical
contractor teaming up to construct a power plant).
 Teaming up a contractor that has an established organization in a country with
a contractor with little or no experience in the country but with specialized
engineering knowledge or skill.
 Teaming up a foreign contractor with a local contractor that may have political
or other valuable relationships in the country where the project is.
Type of Procurement
39
Joint Venture
Venture Agreements
 The joint venture agreement on a sophisticated international construction
project is a complex document that usually is the product of extensive
negotiations between the parties. A typical joint venture agreement will include
more than 30 numbered paragraphs and many sub-paragraphs.
Management of Joint Ventures
1. A unique feature of the joint venture is that it needs to be managed with due
attention to the sometimes differing interests of the members.
2. While joint venture is not a partnership (usually the JV agreement will
expressly stipulate that it is not), its structure and form closely similar to a
partnership.
3. Frequently the joint venture will, like many partnerships, generally include
only two members.
4. There must be a manager of the joint venture, and the joint venture must have
a decision-making structure.
Type of Procurement
Joint Venture
Management Board
 In order to avoid one party dominating the joint venture, it is a good practice to
establish an appropriate system of management.
 Management normally will be in two tiers: project-level and "board" level.
 The top layer is often referred to as the Management Board. - Its members
usually include senior management personnel from the head offices of the
respective members and not project staff. The Management Board usually is
empowered to take such actions as appointing the project manager and taking
action on any matters that cannot be resolved at or delegated to the project
level.
 There are several different ways to manage the decision-making process at the
Management Board level. Require agreed consent on any vote, with the matter
being submitted to a dispute process in the event that agreement cannot be
reached.
 This is not a particularly good approach, as there may be critical matters on
which decisions need to be made and for which delays can prove to be
damaging.
Type of Procurement
40
Joint Venture
Management Board
 Require common consent, but in the event common consent cannot be
reached, include a tie-breaking mechanism (end of relationship or JV).
 The JV agreement should provide that the person who is to make the final
decision shall act in a way that benefits the interests of the joint venture as a
whole as opposed to any one of its individual members.
Type of Procurement
Joint Venture -
Project Level Management
 The project-level management often is left to a project manager, with or
without the support of a project board.
 Any project board usually will include key project personnel.
 The chairman of the board usually is the project manager.
 The project manager usually is selected by the management board, but
frequently the terms of the JV agreement will prescribe who may be nominated
as the "leader" of the JV and as such may be empowered to select the project
manager and/or his deputy.
 The project manager and project board essentially will conduct the day-to-day
business of the JV.
 Open and manage the bank account.
 Submit the monthly payment applications and interact with the engineer and
the employer.
 Submit and negotiate change orders.
 Approve and manage subcontracts and purchase orders.
 Manage work progress.
Type of Procurement
41
Joint Venture -
Project Leader
 The concept of the "leader" takes into account the fact that one of the joint
venture parties will have to be in a position of negotiating with the employer
and/or other third parties.
 This will be the case even when there is an non-integrated joint venture in
which each party is undertaking its own separate scope of work. Therefore, it is
critical that all joint venture agreements contain provisions that either: Specify
the party that is the "leader" of the JV; or Identify who is the project manager
or provide a mechanism to appoint the project manager. In any event, the role
and powers (authority) of the "leader" or the "project manager" need to be
defined.
Type of Procurement
Joint Venture -
Successful Joint Ventures
1. Use long-term partners, with the resulting familiarity and awareness of
cultural/business issues.
2. Perform due diligence to ensure that joint venture members are solid on both
technical and business grounds.
3. Try a small project to start.
4. Use a comprehensive joint venture agreement.
5. Recognize management control issues - in effect recognizing the need to
release control but on appropriate terms.
6. Insist on transparency in provisions dealing with project leadership and
delegation of duties to project manager
Type of Procurement
42
'PARTNERING' APPROACH
 Partnering is not a procurement route.
 Partnering is a concept that can be applied to many other procurement routes.
 Partnering is a co-operative relationship between business partners formed in
order to improve performance in the delivery of projects.
 Provides a framework for trust and the mutual desire of the parties to achieve a
common goal - a project that is low cost, high-quality and completed in a timely
manner.
 Partnering is best considered as a set of collaborative processes.
 Partnering is applied either in project situation known as project partnering or in
a long-term relationship known as strategic partnering.
 In partnering approach, negotiation rather than competitive tendering is the key.
 The risks that both parties face as a result of the project in question are made
transparent at commencement of the project, and partners to partnering
approach share those risks on the basis of which party can best bear those risks
and/or insure against those risks.
 The essence of any partnering agreement now involves a duty of good faith,
mutual co-operation and trust between all parties involved in construction
process. Type of Procurement
'PARTNERING' APPROACH
Keys for Successful Partnering
Co-operation & Teamwork
Openness & Honesty
Trust & Honesty
Equity & Equality
Reason for failure of Partnering

Selection of wrong Partner
Mismatch of organizational structure & culture
Lack of Trust & Commitment
Type of Procurement
43
'PARTNERING' APPROACH - Advantages
 A reduction in number of disputes.

 The benefit of early supply chain involvement.
 There is integration of the design process with construction process.
 The main benefits are generated from strategic partnering (multiple
projects) rather than a single project.
Type of Procurement
'PARTNERING' APPROACH - Disadvantages

 Poor communication in sharing information.
 The partnering process can be abused by one of the parties.
 Partnering process requires more client resource to compensate for the less
competitive environment, and the process can collapse when one party
becomes disadvantaged.
 To be most effective, partnering needs to be practised and learnt over a series
of projects and typically requires an early commitment in terms of
management resources and direct costs.
 There are direct costs of workshops, of training staff and of more intensive
early involvement of management in establishing partnering approach.
Type of Procurement
44
Type of Procurement Route
Traditional Management
Design & build Other
method Oriented
Management PPP
Sequential Develop & Construct Contracting
Accelerated Package deal PFI
Construction
Management
Turnkey Term Contract
Design and
Manage Framework agreements
Serial Contracting
Continuation Contracts
Alliancing
JV
Partnering Approach
Type of Procurement
Thank You!!!
Any Question ?
Type of Procurement
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6 Type of Procurement Latest

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Type of Procurement 8/3/2021

Chartered Quantity Surveyor

Pre Contract Management Post Contract Management

Type of Procurement - Learning Outcome

Criteria for consideration to choose suitable procurement route

Type of Procurement Route

Criteria for consideration to choose the suitable procurement route

Criteria for consideration to choose the suitable procurement route?

Criteria for consideration to choose the suitable procurement route?

Criteria for consideration to choose the suitable procurement route?

Type of Procurement Route

 Design Bid  Build concept.

TRADITIONAL METHOD - Advantages

TRADITIONAL METHOD - Advantages

TRADITIONAL METHOD – Disadvantages

TRADITIONAL METHOD - Further Information

TRADITIONAL METHOD - Suitability

Design & Build Procurement

DESIGN AND BUILD

Employer’s advisors Possible Novation D&B

Structural M&E Sub-

Indicates Contractual Relationship between parties

DESIGN AND BUILD

DESIGN AND BUILD

DESIGN AND BUILD- Advantages

DESIGN AND BUILD- Advantages

DESIGN AND BUILD- Disadvantages

DESIGN AND BUILD- Disadvantages

DESIGN AND BUILD- Disadvantages

DESIGN AND BUILD - Suitability

Q) While design is carrying out by D&B Contractor, Design

DEVELOP AND CONSTRUCT

Q) Is there a way to increase the quality in Design & Build method?

 However it is not suitable for the project with uncertain or

Management Oriented Procurement

MANAGEMENT CONTRACTING Employer

Structural M&E Management

Indicates Contractual Relationship between parties

Management contracting characteristics that,

MANAGEMENT CONTRACTING - Advantages

MANAGEMENT CONTRACTING - Advantages

MANAGEMENT CONTRACTING - Disadvantages

MANAGEMENT CONTRACTING - Disadvantages

MANAGEMENT CONTRACTING - Suitability

 However, it is less suitable for inexperience clients, project with cost

Structural M&E Construction Trade

Indicates Contractual Relationship between parties TC1 TC2 TC3 TC..

CONSTRUCTION MANAGEMENT - Advantages

CONSTRUCTION MANAGEMENT - Disadvantages

CONSTRUCTION MANAGEMENT - Suitability

DESIGN AND MANAGE Client

Scope Design & Management

Indicates Contractual Relationship between parties Work

 Not to be confused with Design & Build, as it is sometimes presented. What is

PUBLIC PRIVATE PARTNERSHIP – (PPP)

PUBLIC PRIVATE PARTNERSHIP – (PPP)

PRIVATE FINANCE INITIATIVE (PFI)

PRIVATE FINANCE INITIATIVE (PFI)

PRIVATE FINANCE INITIATIVE (PFI)

From Black Book

PRIVATE FINANCE INITIATIVE (PFI)

BOOT (Build, Own, Operate and Transfer)

BOOT (Build, Own, Operate and Transfer)