The Aqua Group Guide to Procurement, Tendering and Contract Administration

by Hackett, Mark; Statham, Gary

• ISBN13: 9781118346549
• ISBN10: 1118346548
• Edition: 2nd
• Format: Paperback
• Copyright: 2016-04-18
• Publisher: Wiley-Blackwell

Summary

This key text for the building team is an authoritative guide and gives a detailed account of the team's roles and responsibilities, with best industry practice required to ensure that building projects meet clients' expectations on time, cost and quality.

The second edition of The Aqua Group Guide to Procurement, Tendering and Contract Administration has been edited, enlarged and updated by a high-profile author team with unparalleled experience of both private and public sectors, as well as of teaching on QS courses.  It covers the entire building process from inception to final account and throughout, the emphasis is on current best practice. This edition has new material on the CDM regulations; JCT contracts; the RIBA Plan of Work; the RICS New Rules of Measurement; BIM; and Sustainability - as well as a general update for industry changes, especially on procurement; internationalisation; and PFI.

With clear and thorough explanations, you are taken through self-contained chapters covering the detail of the briefing stage, procurement methods, tendering procedures, and contract administration.

The period from starting a college course to successful completion of professional examinations represents a long and steep learning curve. The range of skills and the knowledge required to perform work efficiently and effectively might, at first, seem rather daunting. Although designed as an introductory textbook for undergraduates in construction, architecture and quantity surveying, The Aqua Group Guide offers an excellent overview of contract administration and will provide you with sufficient understanding to hold you in good stead for your early years in professional practice.

Author Biography

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

Gary Statham, Partner, Mark Hackett Associates, LLP.

Table of Contents

Part I Briefing The Project Team 1

1 The Project Team 3

Introduction 3

Parties to a building contract and their supporting teams 3

Rights, duties and responsibilities 4

The employer 5

The architect/contract administrator 5

The quantity surveyor 5

The principal designer 5

The clerk of works 6

The status of named consultants 6

Unnamed consultants with delegated powers 7

The project manager 7

The principal contractor 7

Sub-contractors 9

Statutory requirements 9

The CDM regulations 10

Avoiding disputes 12

Communications 12

2 Assessing the Needs 14

The structure 14

The strategic definition 14

Contribution to the initial project brief 16

The initial programme 17

The appointment 17

Appointment documents 19

Collateral warranties 20

3 Buildings as Assets 21

Buildings as assets as well as buildings 21

Single building or programme? 22

Buildings as solutions to business challenges? 23

Everyday solutions-based thinking 24

Summary 25

Part II Available Procurement Methods 27

4 Principles of Procurement 29

Simple theory – complex practice 29

The eternal triangle 29

Other considerations 32

The Construction (Design and Management) Regulations 2015 32

Risk 33

Accountability 33

Entering into the contract 33

Type of contract 34

Selection of the contractor – the tendering procedure 35

Establishing price and time 35

The dynamics of tendering 36

5 Basic Concepts 37

Economic use of resources 38

Labour 38

Materials 39

Plant 39

Capital 39

Contractor’s contribution to design and contract programme 40

Production cost savings 40

Continuity 41

Risk and accountability 41

Accountability 43

Summary 43

6 Accountability 45

Background 45

The modern concept of public accountability 46

Contract documentation 46

Proper price 47

Dispensing with competition 47

Inflation 47

Value for money 48

Summary 49

Contents vii

7 Value and Risk Management 50

Value management 50

Value articulation and project definition 52

Optimisation of benefits and costs 52

Learning lessons and performance optimisation 53

Risk management 54

Risk must be managed 54

Nothing ventured, nothing gained 55

Understanding the project 56

Risk management strategies 57

Allocating management actions 58

Value and risk are complementary 59

Similarities in the processes 63

The integrated process 63

8 Fixed Price and Cost Reimbursement 64

Fixed price 64

Cost reimbursement 65

Application to contract elements 65

Fluctuations 66

Target cost contracts 66

Use 67

The employer’s position 67

The contractor’s position 67

Programme 68

Summary 69

9 Fixed Price Contracts 70

JCT fixed price contracts 70

The standard building contract 71

Design and build contract 71

Major project construction contract 73

Intermediate building contract 74

Minor works building contract 75

Other fixed price contracts available 75

Advantages and disadvantages of fixed price contracts 76

Advantages 76

Disadvantages 76

10 Cost Reimbursement Contracts 77

The fee 77

The prime cost building contract 78

Characteristics of the form 78

Advantages and disadvantages of cost reimbursement contracts 79

Advantages 79

Disadvantages 80

Budget and cost control 80

Administering the contract 80

Procedure for keeping prime costs 81

Contractor’s site staff and direct workforce 81

Materials 82

Plant 82

Credits 82

Sub-letting 83

Defective work 83

Cost control 83

Final account 84

11 Target Cost Contracts 85

Guaranteed maximum price contracts 87

Competition 88

Contract 88

Advantages and disadvantages 89

Use 89

12 Management and Construction Management Contracts 90

Payment and cost control 90

Selection and appointment of the contractor 92

Contract conditions 93

Contract administration 94

Professional advisers 94

Advantages and disadvantages 95

Advantages 95

Disadvantages 95

Construction management 96

Use 97

Programme 97

13 Design and Build Contracts 99

The contract 100

Where to use DB (and when not to do so) 101

Managing the design process 102

Novation 103

Evaluation of submissions 104

Post-contract administration 104

Financial administration 104

Programme 105

Advantages and disadvantages 106

Advantages 106

Disadvantages 106

14 Continuity Contracts 107

Serial contracting 108

Purpose and use 109

Operation 109

Continuation contracts 110

Purpose and use 110

Operation 111

Term contracts 112

Purpose and use 112

JCT Measured Term Contract 113

Operation 113

15 Partnering 115

A definition 115

When to adopt a partnering approach 117

The agreement 117

JCT Partnering Charter 118

JCT Framework Agreement 118

JCT constructing excellence 119

The partnering workshop 119

The benefits 119

The risks 120

Future of partnering 121

16 EU Procurement 122

Introduction 122

The scope of procurement law 123

The general principles 123

Procedures 124

Key principles 124

Evaluating tenderers 124

Evaluating tenders 125

Framework agreements 126

Contract change 127

Cancellation of the process 127

Information obligations debrief and disclosure 127

Commencing proceedings 128

Remedies 128

Complaints to the EU commission and other challenge procedures 129

Tendering contracts 130

Notes 130

Part III Preparing For And Inviting Tenders 131

17 Procedure from Brief to Tender 133

Initial brief 133

Developing the brief 133

Feasibility stage 134

Sketch scheme 134

Costs 135

Procurement 135

Detailed design 136

Programming 137

Design team meetings 138

Drawings 138

Specifications 139

Bills of quantities 140

Specialist sub-contractors and suppliers 140

Quality assurance 140

Obtaining tenders 141

18 Pre-Contract Cost Control 142

Introduction 142

The purpose of pre-contract cost control 142

Framework for pre-contract estimating 143

Order of cost estimate 145

Information used to prepare an order of cost estimate 146

Treatment of on-costs and other costs in order of cost estimates 147

Presenting an order of cost estimate 148

Cost plans 149

Treatment of on-costs and other costs in cost plans 151

Presenting a cost plan 153

Challenges associated with the production of cost plans 155

Cash flow 155

Whole life costs 156

Summary 158

Notes 158

19 Drawings and Schedules 159

The language of drawing 159

The changing role of drawings and documents 159

Quality 162

Standards 162

Quality manuals 162

Quality procedure codes 163

Quality review 164

Types, sizes and layout of drawings 164

Size 165

Layout and revision 165

Scale 166

Nature and sequence of drawing production 167

RIBA Plan of Work 2013 167

Drawings for SBC contracts 167

Drawings for design and build or management contracts 168

Design intent information 169

Computer aided design 170

Drawing file formats and translation 171

Project extranets 171

Contents of drawings 174

Survey plan 174

Site plan, layout and drainage 175

General arrangement 175

Elevations of all parts of the building 177

Descriptive sections 177

Ceiling plans at all floor levels 177

Construction details (scale 1 : 20 and 1 : 10) 177

Large-scale details (scale 1 : 10 and 1 : 15) 178

Schedules 178

Drawings and schedules for records 179

Notes 184

20 Specifications 185

The use of specifications 185

Specifying by prescription 187

Specifying by performance 187

Specifying by description 187

Specification writing 188

Decide on format 188

Collect information 194

Input information 194

Check and test 195

Deliver 195

BIM 196

21 Building Information Modelling 197

The BIM revolution – what is BIM, and who/what is it for? 197

The role of government and its BIM strategy 199

The levels of BIM adoption 202

The BIM journey 203

Plan of work, deliverables and work stages 203

Loading the model: language and libraries 205

Bringing different software programmes together – the search for interoperability 206

Operation and maintenance 207

Terms of appointment and changes to other business practices 208

Level 3 and the future 209

Epilogue 209

Notes 210

22 Bills of Quantities 211

Tender and contract document 211

The wider role 211

Basic information 212

Preliminaries 212

Preambles 213

Measured works 213

Formats 214

23 Sub-contractors 220

Introduction 220

Specialist sub-contractors 221

Design by the sub-contractor 221

The SBC and sub-contract agreements 222

SBC provisions under the main contract 223

24 Obtaining Tenders 224

Introduction 224

Tender list 225

Preliminary enquiry 226

Tender documents and invitation 226

Tender period 227

Tender compliance 227

Late tenders 228

Opening tenders 228

Examination and adjustment of the priced document 228

Negotiated reduction of a tender 229

Notification of results 229

Tender analysis 230

E-Tendering 230

Part IV Contract Administration 231

25 Placing the Contract 233

Preparing and signing the contract documents 233

Sectional completion 234

Contractor’s designed portion 234

Executing the contract 235

Performance bonds and parent company guarantees 236

Collateral warranties 236

Third party rights 240

Issue of documents 241

Insurances 242

26 Meetings 245

Initial meeting 245

Introductions 246

Factors affecting the carrying out of the works 246

Programme 247

Sub-contractors and suppliers 248

Lines of communication 248

Financial matters 248

Procedure to be followed at subsequent meetings 250

Contractor’s meetings 251

Employer’s meetings 251

27 Site Duties 256

The architect on site 256

The architect’s duty of inspection and supervision 258

Supervision and Inspection duties 258

Routine site visits 259

Consultants’ site visits 260

Inspections by statutory officials 260

Records and reports 261

Samples and testing 262

Considerate constructors scheme 263

Site safety 264

Health and Safety Policy 264

Fire precautions on site 267

Regulatory control 268

The Joint Fire Code 268

Means of escape 269

Fire-fighting equipment 270

Emergency plans 270

Providing information 270

28 Instructions 277

Architect/contract administrator’s instructions 277

Clerk of works’ directions 279

Format and distribution of instructions 279

29 Variations and Post-Contract Cost Control 281

Variations 281

Valuing variations 282

Dayworks 286

Cost control 287

30 Interim Payments 290

Introduction 290

Payments of pre-determined amounts at regular intervals 292

Pre-determined payments at pre-determined stages 293

Regular payments by detailed valuation 293

Certificates and payments under the SBC 293

The architect/contract administrator 293

The quantity surveyor 294

The employer 294

The contractor 295

Interim certificates under the SBC 296

Unfixed materials and goods on site 298

Unfixed materials and goods off site 298

Retention under the SBC 299

Payments to sub-contractors under the SBC 299

Value added tax 299

Valuation and certificate forms 300

31 Completion, Defects and the Final Account 304

Practical completion 304

Partial possession 307

Possession of the building 307

Defects and making good 308

Final account 309

Adjustment of the contract sum 309

Practical considerations 311

Final certificate 312

32 Delays and Disputes 316

Introduction 316

Delays caused by the contractor 317

Delays caused by the employer or his representatives 317

Delays caused by events outside the control of either party 318

Force majeure 319

Exceptionally adverse weather conditions 319

SBC procedure in the event of delay 320

Best endeavours 320

Notification of delay 321

New completion dates 321

Final adjustment 322

Duties and decisions 322

Reimbursement of loss and/or expense under the SBC 323

Liquidated damages 324

Disputes and dispute resolution 325

Mediation 326

Adjudication 326

Arbitration 330

Litigation 332

33 An Introduction to Sustainability in Construction 335

Sustainable development 335

Key concepts 335

The importance of the environment and the importance of energy 336

Sustainability in the built environment 336

The regulatory framework for construction 337

European Union developments 337

UK regulatory and policy developments 338

Assessing the sustainability of construction and buildings 340

UK building environmental assessment schemes and standards 341

International building environmental assessment schemes and standards 342

Author’s comment 343

Sustainable procurement 344

Key concepts 344

Guidance and standards 345

Other important issues 346

References 346

34 Future Trends 349

Global -v- local 349

Industry and corporate trends 351

Opportunities and challenges 352

BIM 352

Lean process and procedures 353

Knowledge management 353

Behaviours 354

Index 357