Village Hall Procurement Approaches - Assignment Example

THE VILLAGE HALL PROCUREMENT APPROACHES Course Professor University City The Date Task 1-Procurement Approaches The choice of procurement method and selection of contract is a critical determinant factor affecting the success of the refurbishment of the village hall. The selection of the procurement approach determines the nature of the relationship which exists between the clients and construction companies enabling completion of the intended project within the required time and within the budgeted cost. Procurement approach depends on nature and scope of the proposed refurbishment, risks apportioned, where to place design responsibilities, work coordination, and the pricing of the contract. The procurement method and the contract type determines and precedes the choice of the form of contract (Loosemore, 2016, p.136). Bury Port Community should adopt traditional procurement approach in carrying out refurbishment work on the Village Hall. In the case of a traditional approach, the client appoints a consultant to design the construction work in details and prepare the tender documents. These documents are; the drawings of the project, bill of quantities, and the work schedules. After documentation, the client invites contractors to submit their tenders for the intended project on a competitive basis after which the selected contractor commences the project. The contractor can either be appointed competitively or through negotiation. The client is responsible for the project design as the case of the Village Hall whereby the design was prepared earlier in 2010 by a local architect before obtaining funding of the project. The contractor is not responsible for the project design. However, he or she can design specific part of the work. The contractor responsibility extends to subcontractors and suppliers (Ren-Jye, Ken-Yu & Pei-Ru, 2014, p.1125). Being a community project funded by donors, the traditional approach gives an advantage to the community to supervise and understand the progress of the project during refurbishment phase. The traditional approach requires the client to retain the design consultants and prepare an additional design that the contractor requires during the construction phase. Additionally, the client should review new designs prepared by the contractor and inspect the work. The routine inspection cuts down the construction cost which would have paid to consultants outside the project. However, the client has an option of appointing a consultant whose primary responsibility is to administer the progress of the project (Loosemore, 2016, p.139). The traditional approach is suitable for an inexperienced client like the Bury Port Community Council. The presence of the project design before the funding and tendering process give the Community certainty about the design cost and quality of the refurbished work. It has three forms of contracts i.e. lump sum, measurement, and cost reimbursement contracts. Since the Bury Port Community is jointly funded by public fund, Heritage Lottery grant, and the Carmarthenshire County Council, it should enter a lump sum contract with the contractor to carry out the refurbishment work because of its limited funding. Bury Port is not a commercial entity and relies wholly on grants to implement major contracts (Regan, Love & Smith, 2015, p.430). A lump sum contract assumes that the client has a fixed amount of financial resources. It is a risk aversion approach by the client to minimize cost which may arise because of structural adjustment of the initial design. Additionally, there is a limited time to carry out the refurbishment work because the Community project the work to be complete by October 2016 to coincide with the fiftieth anniversary of the hall's opening. Lastly, it assumes that using different consultant improves the quality of the work (Ren-Jye, Ken-Yu & Pei-Ru, 2014, p.1129). In a lump sum contract, the contractor agrees with the client the contract amount before commencing on any work and the parties enter into a formal agreement. The contractor agrees to undertake the refurbishment work in return for an agreed contract amount. The price is arrived at after the contractor reviews the project design given by the client. The contractor will use the design to determine materials and labor cost necessary to carry out the work. The agreed amount is subject to minimal fluctuations which are not foreseeable at the time the parties enter into an agreement. The contract gives the contractor authority to make fluctuation provision to the client regarding such changes affecting the total cost of the contract (Loosemore, 2016, p.144). Additionally, the drawings and the bill of quantities determine the price of lump sum contract. However, it is not possible to accurately quantify every material used in the contract. The contractor recovers the cost of such materials but making a provisional sum of an approximate quantity which the contractor should keep at a minimum level. The drawing design helps to determine the pricing of contracts without the bill of quantities. For such cases, the lump sum is not itemized and detailed to the extent that the agreed price is the total of the items which are easily priced. The itemized lump sum break down is used in valuing additional work which the contractor carries out of the original client design. In cases, the contractor provides the client with the schedule of rates of the contract sum analysis schedule which replaces notional quantities with the firm quantities on the Community side (Regan, Love & Smith, 2015, p.435). The traditional approach is suitable for the case of Bury Port community. However, the community has to consider some factors before using the approach. First, the client should produce a complete set of documents before inviting tenders for lump sum contracts. Secondly, the consultant should appoint the design which the contractor will follow. Therefore, the client should include express terms in the contract. Additionally, the contractor should retain the control over the design of the work and quality requirement because he appoints a consultant to advise on such matters. Furthermore, the contractor work depends upon the instruction given by the client design consultant from time to time which is likely to cause risk in cases of claim delay. Besides, the employer has the autonomy of deciding which specialist firm to use which employs safeguard in the contractor performance. Lastly, it the responsibility of the client design consultant to carry out the valuation matters of the contract work (Ren-Jye, Ken-Yu & Pei-Ru, 2014, p.1132). The use of traditional procurement approach is advantageous to the Bury Port community. First of all, it enhances accountability because of its highly competitive contractor selection method. Secondly, the availability of the project design gives the contractors opportunity to bid on the same basis. Furthermore, the project design gives the client a direct authority to influence the functionality of the contract work and improve the overall design when the need arises. Besides, the approach provides the price certainty when awarding the contract. Also, the approach eases the client work in managing the contract work. Furthermore, it is a low risk contracting approach because the client only takes the financial risk of the project. Lastly, it is a good method which is familiar in the market (Suprapto, Bakker, Mooi & Hertogh, 2015, p.57). However, the use of traditional method has some disadvantages. First of all, the process of producing full contract documentation is lengthy. Therefore, it has time uncertainty and cost which may lead to disputes because of numerous disagreement with the project team. Moreover, a conflict can arise once the project is complete about whether the defect emanates from poor design or poor workmanship by the contractor. Secondly, the approach is slow than the other procurement approaches because the project cannot commence before the completion of the project design. Lastly, the approach denies the contractor power to give his input on the project design which ultimately affects the quality of the contract work because the contractor cannot add his innovative power to the project (Suprapto, Bakker, Mooi & Hertogh, 2015, p.60). Task 2-Resolving defect issues and Alternative solutions Bury Port Community should carry out structural changes in the Village Hall so as to reduce noise pollution. Either poor workmanship or poor project design causes noise pollution in the Hall. Before incurring an additional cost of the new contract which is meant to reduce noise pollution, Bury Port Community should critically investigate whether the defect emanated from the project design or the contractors negligence (Suprapto, Bakker, Mooi & Hertogh, 2015, p.45). In the traditional approach, the client is the project manager to the architect responsible for developing the project design. The architect adheres to the client demands about the preference of the structural design. The client must thoroughly scrutinize the project design before approving and paying the architect. Therefore, the architect suffers no blame when such defects occur. The work of the architect ends when he delivers the project design to the client. If the architect design included the sound transmission structures and the client alters it, the architect will not be held responsible. When the architect fails to include sound transmission in the design at the client request, the architect is responsible for the loss emanating from additional restructuring. The client can expressly enter into an agreement with the contractor to avoid sound transmission structures because of the cost issues. In such a case, the client is solely responsible for catering the extra cost of restructuring (Suprapto, Bakker, Mooi & Hertogh, 2015, p.54). The contractual agreement should be the basis for resolving such disputes. The contractor should adhere to the project design and advice the client in cases where the contract design is not fit enough to accomplish all the project work. The standard design restricts the contractor duty during the project phase to one of reasonable care and duty. The contractor and the client agree in writing on any additional duties which may arise outside the original project design. The presence of defect requires the contractor to prove beyond reasonable doubt that they used reasonable care and skills during the project phase (Loosemore, 2016, p.142). Bury Port Community require additional funding to cater for the structural adjustment necessary to reduce noise pollution. In Task 1, the funding was not enough to cater for stage lighting which is a risky financial situation for the community. The community should seek additional funding more than £40,000 from Carmarthenshire County Council, Heritage Lottery grant, and through public fundraising. After raising funds, the Bury Port community should engage the contractor who carried out the initial refurbishment work in a measurement contract to carry out the structural adjustments. The move is a cost-cutting measure because it eliminates the tendering process costs (Regan, Love & Smith, 2015, p.427). Measurement contract works well in this case because the client well knows the cost of adjustment. It works well because of the presence of complete bill of quantities and project design. The measurement contract helps to avoid the scenarios of incomplete projects due to lack of funding. The community should instruct the contractor to commence the work immediately because the project cost is calculated after completing the project. The contract gives the contractor authority to commence the work before the design is complete which saves the project time and allows for the project adjustment to reflect upcoming issues in the project. The client must be ready for the project cost uncertainty because some issues can arise during the implementation phase (Ren-Jye, Ken-Yu & Pei-Ru, 2014, p.1128). Once the contractor finishes installing the sound absorbers, the Bury Port should measure the quantities of work to determine the total cost of the work. After which, the contractor agrees on the pricing with the community on a reasonable grounds. The contractor should thoroughly scrutinize all the costs and record them accurately because they form the basis of valuing the work done. The valuation uses a standard bill of rates while factoring inflation and applicable taxes (Suprapto, Bakker, Mooi & Hertogh, 2015, p.61). Adopting the measurement contract has many advantages. It saves the project time because the work commences immediately after entering into an agreement which is flexible to allow remodeling of the project design. Moreover, it allows parallel working system whereby the contractor starts to work before completing the project design. Furthermore, it gives the client authority to value the work done based on standard approximate quantities. Additionally, there is public accountability of limited resources which works well for the Bury Port community. However, the measurement contract has two disadvantages. First, the accuracy of the value of the materials depends on the sufficiency of the schedule of rates. Secondly, an adversarial relationship is likely to develop during the planning stages of the contract which negatively affects the success of the project (Regan, Love & Smith, 2015, p.437). In conclusion, the Bury Port Community should use traditional procurement approach and enter into a lump sum contract with the contractor for the refurbishment of the Village Hall. Any dispute arising from structural defect should be resolved by first of all determining the source of negligence and then carrying out the necessary structural adjustments to amend the defect on the Village Hall. References Loosemore, M 2016, 'Social procurement in UK construction projects', International Journal of Project Management, 34, pp. 133-144. Regan, M, Love, P, & Smith, J 2015, 'Public Infrastructure Procurement: A Review of Adversarial and Non-Adversarial Contracting Methods', Journal of Public Procurement, 15, 4, pp. 405-438. Ren-Jye, D, Ken-Yu, L, & Pei-Ru, W 2014, 'Building a construction procurement negotiation training game model: Learning experiences and outcomes', British Journal of Educational Technology, 45, 6, pp. 1115-1135. Suprapto, M, Bakker, H, Mooi, H, & Hertogh, M 2015, 'How Do Contract Types And Incentives Matter To Project Performance?’ International Journal of Project Management, 35, pp.14-64. Read More