Procurement of four projects


This study is prepared to advice Donington Ventures Leisure Limited on the procurance of betterments to their race circuit and associated installations. This study comprises of two subdivisions. Section-1 discusses the suitableness of design and physique to the procurance of four undertakings ( Earthworks, New Spectator stands, New cavities and squad garages, Extension and upgrading of the racecourse ) . Section-2 discusses the ways to accommodate the traditional path erectile dysfunction by the client to guarantee value for money.


Undertaking 1: Earthworks

The Earthworks undertaking is to be commenced and completed foremost in the renovation. The expected continuance is excessively short which is four months. Similar to all earthwork undertakings the successful completion depends on the conditions every bit good. Hence to sum up, the Earthworks undertaking has the undermentioned features and restraints:

  • Short Duration

  • Completion critical to get down of other undertakings

  • Works highly reasonable to endure conditions

  • Technically simple

  • Large measure of Earth to be handled

Design and Build procurement path would be suited for this undertaking. One of the grounds is that the short continuance of the undertaking. The design and building can overlap and hence it would cut down the clip. Besides, the majority and technically simple character of the undertaking makes Design & A ; Build suited. In add-on to this the client would be able to cut down the cost since the work can be awarded on a lumpsum footing. One of the set back in this procurement path is that any alteration made by the client during the advancement of work would increase the cost. But this job can be avoided since the client has old experience of put to deathing Design and Build contracts. Hence it is recommended to travel with the Design and Build procurance path for the Undertaking 1: Earthworks.

Undertaking 2: New Spectator stands

This undertaking has the undermentioned features:

  • Complex Structural Design due to windy site

  • Simple method of building

  • Luxury specification

Design and Build procurement path would non be precisely suited for this undertaking due to the demand for careful consideration of the structural design. These witness bases would be constructed over a extremely elevated and exposed location which requires carefully designed constructions. Design & A ; Build procurement path can be rejected for the above undertaking on the undermentioned evidences:

  • Design and Build procurance would be more suited for a undertaking which has simple design and building demands which is non the instance in the above undertaking.

  • The demand for careful design and luxury specifications which has to be clearly defined by the client. A Design and Build contractor would seek to plan a

  • Limited design liability

  • Less clip available with the client for the assignment of contractor.

Although the client is non advised to reassign the full design duty, it can be done up to some extent. Develop and Construct procurance path would be more suited for this undertaking. The client shall name their independent design adviser and fix a elaborate design. In this manner, the client can hold more control over the design. The client can travel for stamp one time the elaborate design is ready.

The successful tenderer would be responsible to develop farther the design and complete the building. Hence the client can command the of import country of design which could non be done efficaciously in a Design and Build Contract. If the client wishes Novation of the Design adviser to the contractor is besides possible which could safeguard the design involvements of the client even after presenting the contract.

Further the develop and concept procurement path makes the analysis of stamps easier since the commands are based on similar unlike the commands received for a Design and Build contract [ xx ] .

Undertaking 3: New cavities and squad garages

This undertaking involves the building of 20 indistinguishable garages to FIA specifications. The undertaking is of simple design and building. As discussed earlier, Design and Build procurement path is best suited for simple and insistent building. There are assorted advantages in taking the Design and Build procurance path for this undertaking. The client can interact with a individual point of contact and duty. Further due to the simple and insistent building, the Design and Build contractor would be able to salvage clip in building. There is besides a low cost hazard since the design and physique contract would be on a ball sum footing.

However the client shall non lose to include the status that the plants shall follow to FIA specifications since there is a high hazard of design quality. The contractor ‘s attack would be ever towards constructability. Hence it is of import to put down the usher lines to safeguard the quality and expected criterions. The other known advantages of a Design and Build contract are:

  • They are suited for short continuance undertakings

  • Third party Architect is avoided thereby making direct relationship with the client and the contractor

  • The are more suited for undertakings which involves simple constructions like these squad garages

  • Specific guidelines can be included in the Design and Build contract like the rigorous attachment to FIA guidelines

Undertaking 4: Extension and upgrading of the racecourse

This undertaking involves the extension of the bing path and up step of all go outing path, safety characteristics and other ancillaries. Design and Build procurement path would non work out for this undertaking for the undermentioned grounds:

  • The specification is to purely follow with the FIA criterions which can non be done efficaciously with a Design and Build Contract

  • Assorted types of plants are involved which may necessitate several trade sub-contractors. The trade sub-contractors are to be closely coordinated and communicated.

  • Less Design flexibleness.

  • Full conformity with the FIA demands and safety criterions required.

  • Changes can be expected and alterations at ulterior phases of Design and Build contract can be more expensive.

Hence for the above grounds, Design and Build Procurement path can non be followed for this Extension and upgrading of race path undertaking.

Alternatively it is recommended to hold Construction Management path for this undertaking. This undertaking includes assorted types of plants like new path subdivision, ascent of bing path, replacing of all path curb, replacing and extension of all track run-off countries, new drainage, replacing of bing safety barriers, new crowd control and safety barriers and so on. Appointing an independent building director to coordinate with the client, design squad and the trade contractors would let this undertaking to accomplish its marks without much hurdle.

Since all the activities are closely coordinated and managed, the overall clip salvaging chance is high in building direction. Construction direction besides breaks the traditional adversarial barriers and there is a clear lines of duties and functions which finally help for the success of the undertaking.

The Client can come in in to direct contracts with the Trade contractors which avoids unneeded holds in their payment processes. A competitory pricing can besides be expected from the trade contractors.

The important factor in building direction is the choice of the building director. So many standard like the building director ‘s ability, past experience and other accomplishments are to be considered during the choice procedure since the success of a building direction undertakings depends a batch on the 1 who manages it. And besides the quality of the squad is a important factor as good. Unless the squad has the ability and the right attitude, the undertaking would be in problem irrespective of the procurance scheme chosen.


The concluding renovation undertaking is the laying of top asphalt surface to the race path. Rigorous attachment to the FIA demands is a must. Hence, there is no design flexibleness in this undertaking. Since the client must be to the full accountable for the design, traditional path is the lone option available for procurance. There is merely one specializer contractor available to put to death the work. Normally in traditional procurance path, competitory tendering is used to choose the contractor which is non possible in this undertaking. Hence in order to guarantee value for money for the client, a well analysed determination has to be taken sing the payment footings.

Sing the features of the client and the undertaking demands, upon extended dialogue with the contractor, it is advised to for the GMP ( Guaranteed Maximum Price ) method for Payment method. The other options available are Lump-sum, Activity based payments, Remeasurement and Target costing.

If we go for Lump-sum method it is really hard to measure the contractor ‘s stamp sum since there is no competition. Although this method gives a kind of cost certainty to the client, still it does non give a full confidence of value for money.

Activity based payments is a reasonable option. Still this method can non be implemented for the same ground for which we rejected the Lump-sum method. There is no agencies available for the client to look into the contractor ‘s offer. Further this method can turn out to be more successful for undertakings where the range includes building of big figure similar units.

Remeasurement method is once more can non be successful since the agenda of rates provided by the tenderer can non be reviewed. Further any alteration in the measure would increase the cost of the undertaking or if an point of work or activity is non predicted during the pre-tender phase.

Target costing is a considerable option where the client and the contractor work towards a mark cost and any fluctuation ( loss or addition ) is shared by both the parties. The advantage with this method is the attitude and attack of the client and the contractor towards the undertaking would more or less be the same. However the client gain the existent result merely towards the terminal of the undertaking. Therefore we can non pretermit this method when compared to the other methods mentioned.

Although Target costing is a favorable option, there is a much better option in the client ‘s point of position which is the Guaranteed Maximum Price ( GMP ) method. The GMP method is more or less similar to the Target costing method. But there is a little difference. In this method the cost hazard is transferred to the contractor unlike the other method where the cost hazard shared between the client and the contractor.

Guaranteed Maximal Price ( GMP ) Method

The GMP method provides the client with a nice feeling of security. It gives the confidence to the client that no affair what happens the concluding cost of the undertaking would non be above the maximal sum fixed and there is a considerable opportunity of it could be lower.

Since the client would be using a Design adviser to finish all the design work prior to the tendering procedure, it is advisable that the client approaches a Quantity Surveyor to make an estimation based on the design Bill of Quantities. The measure surveyor shall make a complete market research every bit extensively as possible in order to come to a realistic figure.

Once the estimation is prepared, now the client has at least one time beginning to depend while analyzing the stamp amount submitted by the lone contractor. Depending on the difference between the estimation and contractor ‘s stamp amount, the client can negociate so that they can come to an acceptable GMP for both the sides.

The client needs to guarantee that the design is done exhaustively and shall take every necessary measure to understate the station stamp alterations. Hence it is required to make complete preliminary surveies without leting for any pending issues and let the design to germinate in a sap cogent evidence manner. Because after the award of the contract, if there are any alterations to be made from the client side or due to plan mistake, it would turn out detrimental to the aims of the undertaking. GMP method is unafraid merely when the client initiated alterations are kept to bare lower limit.

This undertaking involves a specialized work to be executed purely following the specification. The FIA demands are to be purely followed and no via media can be done with the quality since an international athleticss event is planned in the locale. Time is the most of import restraint for the client since this undertaking is critical to the timely start of the Formula One event. Hence the contractor would seek to utilize every chance to travel for claims for extension of clip every bit good as extra cost.

If the client sticks to the programs and does non do any alterations to the intended work, so the contractor would hold less range to claim anything excess. The client can besides reassign the hazard of cogency of the information provided in the stamp paperss to the contractor if needed. The other countries of concern are there is no readily available contract signifier for GMP method nevertheless FIDIC Silver Book can be used with some amendments to the conditions.

If the contractor comes up with a ready made bespoke contract, so it is of import to read and reexamine the paperss with undue attention since the contractor would seek to utilize every opportunity to claim for extra sum above the in agreement GMP.

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