Management Contracting Tranditional Contract

Management Construction

Time

Cost

Quality

Flexibility
Risk

OPEN TENDERING SELECTIVE TENDERING

Quality of work

Ultimate cost
Fairness of contractor
reputation
CONSTRUCTION Management Management Contracting

- it is possible to saving time

by overlap design and
construction progress
- procurement route is ideal
where work need to be started
before the design
- Appropriate for large scale
project requiring an early start
on site

- Prime cost basis per

package
- Potential cost saving
(competitive tender)
- not suited for fixed cost,
because prime cost basis per
package
- in times of unpredictable
high inflation, the final cost
paid by the employer often
exceeds the cost plan
- Management contractor
responsible for achieving
quality

- each package subcontracted

to specialist
- good for
COMPLEX/SPECIALIST
PROJECT individually
appointed packages to best
suited - sub-contractor
(quality control)
- not suited for lack of
available specialists, it would
leave gaps in work to be
undertaken which will affect
efficiency and time, cost,
quality

- DESIGN FLEX. changes can

be made throughout
construction, but potential
cost may needed
 inexperienced clients -> risk
high
satisfactory completion
depends on management
contractor ‘s skill
Management
contractor’s point of view
would be low financial risk.
A separate contractual
responsibility for the design
and management of the
project.

RING OPEN TENDERING

- HIGH RISK TO THE CLIENT

- REDUCES THE USE OF

COVER PRICE BY
CONTRACTORS
- DEVELOP CONSTRACTOR
REPUTATION
Tranditional Contract
Management Construction
- consume time, require full
detailed pack pre tender
Solution: less information
means a quicker
commencement but less
control over cost.
- there may be lump sum
cost benefits unless are
multiple change made
- not a benefit if many
change made
- incomplete drawings may
lead to delay, costs and
claims of negligence
- Contractor responsible for
achieving quality
- Full design pre tender
- specialist subcontractor
- desigh control through the
architect / contract
administrator
- design work will separate
from construction. Upon the
completion of the design,
client will appoint a main
contractor to carry out the
works through bidding
- design flexibility, variations - DESIGN FLEX. changes can be Flexibility
and instructions can be
controlled by employer
CONSTRUCTION Management
- it is possible to overlap design Time
and construction
- Potential cost saving Cost
(competitive tender)
- EFFICIENCY Early appointment
of the construction manager ti
aid programme
- not suited for fixed cost,
because prime cost basis per
package
- in times of unpredictable high
inflation, the final cost paid by
the employer often exceeds the
cost plan
- GOOD FOR COMPLEX / Quality
SPECIALIST PROJECT
individually appointed packages
to best suited - sub-contractor
(quality control)
- each package subcontracted to
specialist All building types
- it bad if lack of available
specialists
made throughout construction,
but potential cost may needed
low risk to inexperienced inexperienced clients -> risk Risk
clients. high

Design and construction

responsibilities are split.

SELECTIVE TENDERING
- LESS RISK TO THE CLIENT Quality of
- tend to be faster than open tendering (no pre-qualification work
process)
- only suppliers that are now to be appropriate for the propose
contact are invited to prepare tender, it can also give clients greater
confidence that their requirements will be satisfied
- it may particularly a appropriate tendering method for specialist or
complex contracts, or contracts where there are only few suitable
firms

- ENCOURAGE THE USE OF COVER PRICED BIDS Ultimate cost

- there is no pre-qualification process as part of the tender
procedure which can save the time and cost during first stage
- LESS CHANCE OF IMPROVING CONTRACTOR REPUTAION Fairness of
it can be seen to introduce bias into tendering as firms may be contractor
excluded from approved lists for unknown reasons, because of a reputation
lack of awareness , because of personal preferences. it can also
result in prospective suppliers continually contacting clients and
consultants to check that they are on the. appropriate list
- Reduce the potential for innovation, because it can exclude
smaller suppliers or those trying to establish themselves in a new
market.