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The Client is the most important factor that determines the choice of procurement system.


Procurement is a formal process by which to obtain or to create a product upon the client’s need for a new facility through two main steps. Firstly, the logical starting point would be the client’s approval, which is based on the feasibility study to determine whether to proceed or not. Furthermore, the client’s decision will determine whether to procure, how to procure, what to procure and when to procure. Thus, all construction projects must begin by identifying the client’s needs and constraints. For example, public organisations might be required by law to follow certain procurement practices and make bidding selection from the prospective sellers in a certain way, on the other hand, private companies do not need to comply with competitive bidding because it is not required by law. Secondly, procurement routes should be established by identifying the project’s needs. This includes marketplace conditions, local standards and determining the overall complexity of the project and the level of risk is critical to selecting the best procurement approach

Evidently, the client’s prime role as a project creator is to define the project objectives and to establish a structure for the management of the project, as well as selecting the most appropriate method of procurement, which requires the client’s understanding of basic principles of risk management. A survey from the Chartered Institute of Building (CIOB) into procurement in the construction industry indicates over 77% of respondents have serious doubts whether construction clients are educated enough about the importance of selecting the right procurement route. Among possible problems that may be encountered at later stages of a project, poor standards, projects becoming over-budgeted or unable to be finished within the estimated timeframe were mentioned. Thus when construction clients think that procuring construction is “the same as buying grocery” and do not understand the damage they cause to their own projects when they accept suicide bids (CIOB, 2010). A good example to illustrate this can be found in the case of Wembley stadium, when the client action and consideration were based on price alone and very low cost. Having awarded the project to an Australian contractor, who has no sufficient Knowledge of UK construction supply chain, Design and Build contract was rush assembled by the client without fully establishing its requirement (NAO, 2003). It is clear from the above that complete project information, client’s awareness and positive involvement will lead to more accurate selection of the procurement system and if the client selects an inappropriate procurement, method this may lead to undesirable project outcomes.

Bearing in mind the client’s significant impact on choosing of the procurement system, there are other factors that will also influence procurement choice, which are project-nature related, such as the complexity of the project, size, innovative design, innovative materials and local condition. This has been seen in the case of Portcullis House. The start of construction was delayed by almost a year because of certain problems London Underground met, while building the new Underground railway station, which lies beneath Portcullis House, and involved a complex structural engineering solution. Moreover, the roof and external walls, cost a total of £29 million more than forecasted, because of the innovative nature of the design. Therefore, project complexity definitely should have led to changes in the approach towards selecting the appropriate procurement route. Designs and technology change rapidly, and so do innovations, which tend to lead to changes in materials (NAO N. A., 2002). Those projects involving minimal risks will call for simple, straightforward plans. Large projects, or those involving significant risks, will need further detail and more sophisticated procurement route.

Regardless of project type or whether the project is notifiable or not, the client should always ensure they have access to competent procurement advice. The construction client’s attitude towards contractor selection and contractor’s freedom of presenting what is good practice are paramount. The evidence above suggests that success in construction projects is driven by the knowledge and skills of the client. Because even if the contractor or the client’s adviser introduce the top quality procurement route, client can simply ignore it, as nobody can force the client to do anything. This is certainly true in the case of The New Scottish Parliament Building. The reports by the Auditor General of Scotland provided sound project management advice but the project team did not act upon them, nor did they deal with the identified shortcomings. A lack of a proper analysis and selection of the procurement system was a fundamental cause of the problems with the project (Isobel White, 2005). Consequently, it can be concluded that the success of a selecting the right procurement system lies largely in the hands of the construction clients. Therefore, the client has more impact factor that determines the choice of procurement system than the project nature.

References

CIOB, 2010. A report exploring procurement in the construction industry. [Online] [pdf]
Available at: http://www.ciob.org/sites/default/files/CIOB%20research%20-%20Procurement%20in%20the%20Construction%20Industry%202010_1.pdf
[Accessed 09 March 2015].

Isobel White, I. S., 2005. Building the Scottish Parliament, The Holyrood Project. [Online] [pdf]
Available at: http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.parliament.uk%2Fbriefing-papers%2Fsn03357.pdf&ei=68H9VMSRH9Tvao6vgbAB&usg=AFQjCNGU8B4CwsBT6R-48K3N0LMtXgH-_g
[Accessed 4 march 2015].

Masterman, J. W. E., 2002. The project-implementation process. 2ND ed. london: London : Spon.

NAO, 2003. The English national stadium project at Wembley. [Online] [pdf]
Available at: http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved=0CCgQFjAB&url=http%3A%2F%2Fwww.nao.org.uk%2Fwp-content%2Fuploads%2F2003%2F06%2F0203699.pdf&ei=EsT9VJHnDYneaujvgbgP&usg=AFQjCNGUtXxMCfvHkkFBzzceTos_mZSiHg&bvm=bv.87611401,d.ZWU
[Accessed 6 march 2015].

NAO, N. A. O., 2002. Construction of Portcullis House, the new Parliamentary building. [[pdf]]
Available at: http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved=0CCcQFjAB&url=http%3A%2F%2Fwww.nao.org.uk%2Fwp-content%2Fuploads%2F2002%2F04%2F0102750es.pdf&ei=Gcb9VI6-CIPiavbTgIgF&usg=AFQjCNFDCc2fRvhO353gbw9ahCtavwxQhQ
[Accessed 3 march 2015].

PMI, 2008. a guide to the project management body of knowledge. 4th ed. Pennsylvania: Project Management institute.

Quick guide to Planning and Building requirements

Building work needs to comply with the relevant rules and regulations. All these lie within the remit of the planning department of your local authority. If in doubt, you can make an initial verbal or written enquiry to the planning department,  to find out whether the work you plan to do needs to comply with any regulations and, if so, which ones. 
Even if you don’t need planning permission, you will still need to comply with any  relevant building regulations. Exceptional cases might involve listed buildings, work in conservation areas, or change of use (from barn to house, for example).

Planning permission

Deals with the way a building looks and its effect on the local environment. You can apply for planning permission in two stages – outline and then detailed – but you will need detailed drawings to accompany the application, so unless you are very experienced it is best to get an expert to submit an application for you. Submit an application in good time- it may take a while to be approved.

Building regulations

Deal with the safety, structure and function of a building and with its environmental impact (insulation etc). You can either submit a building notice, if you are doing minor works, or submit a full planned application for more major works. It is best to ask  TATE to be advice you for any compliance with building regulations. 
Some properties are listed buildings or in a conservation area and you will need special permission to do work. Both these will fall under the remit of the conservation department in your local planning office. 

Important note. It is considered a criminal offence when carrying out works without the relevant conditions or the work does not comply with an ongoing requirement set by a planning condition. Read more

What type of contractor is right for you?

A BUILDER

‘Builder’ is a convenient catch-all term that covers everything from a main contractor at one end of the scale, to an odd job man right at the other. 

MAIN CONTRACTOR

Hiring a big main contractor to carry out all the work on your property has the advantage of providing an in-built project manager. He will take the responsibility for everything to do with the job, however big or small. They will organise materials, the sub-contractors, building inspectors’ visits, and liaise with your architect, if you employ one. Generally, main contractor has more than one job on the go at a time so, it is a demanding and juggling job to make sure men employed are constantly used and sites run smoothly. The company is responsible for the quality of the work of its sub-contractors, so if anything goes wrong – they should deal with it. 

To cover overheads, it is likely to put a mark-up of at least 15% on the cost of the work. 

SUB-CONTRACTOR

If you are determined to shoulder the project management yourself, a potentially time-consuming and hair-tearing-out job – especially if you are inexperienced – you will be using specialist subcontractors or individual tradesmen. 

Specialist companies cover a specific trade and employ several people skilled in this trade. Again they will put a mark-up of at least 15% on the basic price of the work. Bear in mind that even if the sub-contractors have associations with regulatory bodies, such as CORGI (Confederation for the Registration of Gas Installers), NICEIC (National Inspection Council for Electrical Installation Contracting) or related trade associations, this does not necessarily guarantee recommendation or to follow up references given by previous clients. 

SMALL CONTRACTORS

There are also smaller contractors who will be able to supply different tradesmen but will not take on the full responsibility of a main contractor. They may well leave dealing with building regulations, the architect’s drawings, ordering materials and suchlike to you. Very often builders like this will have  a specialist trade of their own, such as plumbing or electrical work, but they will bring in other tradesmen as required.