The most appropriate procurement strategy on any project must evolve from a careful examination and evaluation by the Client and project team of project priorities, and of where the Client wishes to allocate responsibility for cost, quality, programme and project financial risk.
At its most basic, a successful procurement strategy will deliver what the Client wants, manage risk to acceptable levels that offer value for money, and better facilitates that the Trade Contractors achieve a reasonable level of profit to ensure they remain motivated to provide quality work.
The traditional – and complex – contract procedure is to identify three or four Main Contractors to tender against a standard document of spec, drawings and main contract conditions. The lowest priced submissions are then asked to deliver a more detailed breakdown. This is analysed predominantly by the QS and also by the design team. If the breakdown is considered accurate, the lowest priced contractor gets the job. The procedure is in principle no different whether applied to a Traditional contract or Design and Build contract.
This approach is not only time consuming and inefficient for all parties but also contributes to the unnecessarily high costs in the UK construction industry.
Ian Ritchie and his practice believe that obtaining a contractual Guaranteed Maximum Price (GMP) early from the five or six main Trade Contractors directly (not through Main Contractors) is the best way of ensuring early technical collaboration and design input, the motivation of all concerned in the building process, and certainty of cost and time for the Client without offering an overall cost from the outset. This procurement we describe as an early Negotiated Trade Contractor GMP Contract. (NTC GMP C)
It is critical that Trade Contractors believe that a) the project will happen; b) funding is in place with a bona fide Client; and c) that there is an understood time scale. Only then will they commit the proper resources to work with the design team. If the architect/design team can identify competent Trade Contractors with whom they have a good rapport, and who have demonstrated a commitment to maintaining their key personnel, this is a bonus. It also encourages the success of good Trade Contractors.
The position of the QS
With traditional forms of procurement the QS provides a measured and detailed cost estimate (by applying broad rates for types of work) from the architects’ and engineers’ drawings and descriptions. The QS then adds a ‘QS percentage markup’ within the rates (as a security) and a ‘benchmark’ figure for Preliminaries, Overheads, Profit and Risk. The QS then lists the exclusions, including inflation. Because the measurement of drawings is now produced automatically from the architects’ and engineers’ BIM information, this aspect of the QS’s service is becoming redundant. Under the NTC GMP C method, the QS simply prepares the Construction Cost Estimate and initial Trade Contractor package estimates, ideally just before the planning submission. [The role of a Client appointed QS during the procurement and construction phases can be tailored to suit the Client/CM expertise.]
The Position of the Project Manager
If the Client is experienced with realising buildings (e.g. is a commercial developer, University Estates Department or industrialist) it is certain the project management expertise exists within the Client structure.
If not, then the role of any appointed Project Manager in this alternative approach is subject to the management competence within the design team. A well-rounded architectural practice is capable of undertaking the PM role, as they know the project and will know and understand the Client’s ambitions for the project. It would be for the Client to recommend where he wants to place the role of PM.