Water Services National Training Group
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Water Services National Training Group 12th Annual Conference 11 th September, 2008
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Water Services National Training Group. 12th Annual Conference 11 th September, 2008. Water Services National Training Group. Delivery. New Conditions of Engagement and Forms of Contract from a Consultant's Perspective. Michael Hand Managing Director WYG Engineering Ireland Ltd. - PowerPoint PPT Presentation
Transcript of Water Services National Training Group
Water Services National Training Group
12th Annual Conference
11th September, 2008
Water Services National Training Group
Delivery
Michael Hand
Managing Director
WYG Engineering Ireland Ltd
New Conditions of Engagement and Forms of Contract
from a Consultant's Perspective
Content
Introduction
New Conditions of Engagement
New Conditions of Contract
Conclusions
Introduction
Project Execution - Aims
Time Cost
Performance
Project
Time
Cost
Quality/Performance
Strategic Choices
ManagementAll-in
Conventional
CompetitiveTwo – StageNegotiatedContinuity
Lump SumAdmeasurement
Cost Reimbursable Target
Organisational Method
Tender ProcedureType of Contract
Historical Development of New Conditions
2004/05 Development of New Conditions of Contract & Conditions of Engagement
2005/06 Consultation with the Industry
2007 Public & Private Sector Training
2008 Effective Launch of New Conditions
2010 Review and Modifications ?
Change Process Model
New Conditions of Engagement
Consultancy in ContextTypically 7-10 year project relationship
Design critical to project cost efficiency
Consultants’ fees represent 4-6% of Project Capital Cost
Consultants’ fees represent 1-2% of Project Whole Life Costs
Service or Commodity ?
Guide Quality/Price Ratios
Feasibility Report and Investigations
Innovative and Imaginative Design ProjectsMajor Conservation & Restoration Projects
Most Construction Projects
Repeat & Straightforward Projects
Straightforward Repairs & Maintenance
RatioQuality/Price
80%
80%
70%
40%
20%
20%
20%
30%
60%
80%
Risks of Price-Biased Selection
THE COMMON LAW OF BUSINESS PROHIBITS PAYING A LITTLE AND GETTING A LOT – John Ruskin (1860)
Drop in Quality of Service
Less Time for Innovation
Less Time for Value Engineering
More Errors and Consequential Costs
More Claims for Extras and Disputes
Conflict/Adversarial Relationships
Loss of Quality Personnel from the Industry
Value EngineeringProject 1 – RC Basement
Initial Design 130t Rebar
Revised Design 80t Rebar
Works Cost Saving €60k
Audit Fee €5k
Project 2 – 3 storey RC Building
Initial Design 150t Rebar
Revised Design 110t Rebar
Works Cost Saving €150k
Job Fee €250k
Fee CorrectionWhere approved construction contract tender price >10% higher or lower than pre-tender estimate
Design Stage Fee reduced by % variation in excess of + 10%
Sliding Scale 10% for projects up to €50m 1% for projects above €600m
Applies only to Consultant at fault
Client discretion to waive fee correction
Procurement - Lianakis
Prequalification – Qualitative Selection Criteria
Tender – Award Criteria
Can Assess Quality of Team Once Only
Award Sub-criteria to be Brought to Tenderers’ Attention
Transparency and Equal Treatment
Some Suggestions on ConsultantsBrief at EOI Stage
“Eurovision” Scoring on Quality
Reality Check on Prices and Eliminate Outliers
Health & Safety is a Key Ingredient
Select on Value for Money – Not Price
Timely Appointments and Approvals
New Conditions of Contract
Historical Contracts – Employer Issues
Overspends & VFM
Health & Safety
Public Relations
Services Disruption
Landowner Issues
Prompt Reinstatement
Historical Contracts - Contractual Claims
Unforeseeable Conditions
Legislative Enactments
Delay & Disruption
Method of Measurement
Method Statement
Extensions of Time
DoF Public Works Contract Objectives
Short listing of tenderers
Tender price = Final cost
Transparent risk allocation
Non adversarial / partnering
Value engineering incentivised
Speedy appointments
New Inflation Index
New Conditions of Contract Experience
Early Days
Launch Coincided with Market Decline
Burden of Notices
Value Engineering
Partnering
SI Inadequacies / Errors
Award Delays
Ground Condition RisksAll Risk may be transferred to Contractor
Comprehensive Site Investigation
Factual Report Only
Tender Period SI Facilitated
Archaeology Fully Investigated
Utility Services Identified
Measurements IssuesBOQ Accuracy – Contractors Risk
Compensation Events
Delay Events
Claims - Notice within 20 days- Valuation within 20 additional days- Monthly updates for continuing effect
Delay costs - Cost per day Quote
Provisional Sums Out
Prime Cost Sums Out
Price Variation (New Index) after 36Mts
Conclusions
Conclusions
Engineers Adaptable & Flexible
Industry Cooperation Essential for Efficiency
Vital to Attract and Retain the Best
Competition on Price Wrong for Design – Not VFM
Still Time to Stave off Lawyer-ridden Industry
Enlightened Review Essential
Water Services National Training Group
12th Annual Conference
11th September, 2008
