Procurement, Tendering and Contract Procedures

Whilst our primary concern during this vital period of a project is to maintain cost certainty, every aspect is considered when suggesting an appropriate procurement route or contract arrangement to be implemented. Considerations like time; cost certainty; buildable quality; specialist input; operational requirements; and financing are just some areas that influence any decision in this process.

Regardless of the procurement route chosen, cost control is maintained throughout the course of the project, giving our Client the flexibility to choose a method most suited to his or her requirements. Methods include the traditional method of tendering; two-stage tendering; negotiated contract; management contracts; design and build contracts; cost reimbursement contracts etc.

We provide crucial advice during the tender process to ensure that a well reasoned and comprehensive set of tender documents is in place to enable a project make a smooth transition from drawings to reality.

Under current public sector procurement, GCCC forms of contract are more onerous than previous forms of contract in terms of the completeness of tender documents. Austin Reddy & Company has developed extensive experience in compiling tender documents to comply with the requirements for this form of contract. In many regards this has been an extension of our well established and thorough approach to tender documents on all projects.

Initial Cost Advice & Feasibility Studies
From the outset of every project, our primary concern is that the Client achieves value of money. In order to do this, and ensure that the project is viable, we review and give guidance on outline costs against time, quality and aesthetics. This is done in close liaison with the design team members and client, in order to maximise the potential of any project.

Budget Estimating & Cost Planning
Our particular approach of providing detailed cost estimates at an early stage allows us to establish overall anticipated costs but also enables us to identify where specific costs arise. A detailed cost estimate provides a cost model framework and informs our Client and the design team which elements of the project are more or less economical. This attention to the detail of the project ensures that we can provide the best possible service to our Client from the outset.

Once an initial overall budget is prepared and agreed, we undertake to continuously review and control the budget as the design progresses. Cost control procedures have been established which are firm enough to be effective and flexible enough to adapt to the particular requirements of site, programme and contract arrangements.

Life Cycle Costing & Value Engineering

Life cycle costing as a process is an integral part of our cost advice particularly at the early stage of each project. Standard limitations of initial capital expenditure, subsequent operating costs and replacement or renewal at intermediate stages of the life cycle are considered but also issues such as material sourcing; manufacturing; construction; occupancy/core business; demolition; disposal etc are also considered.

Although the process can be difficult due to the use of projected future costs, our experience and years of operation is vital in this regard. We believe, as do many of our clients and design colleagues that these procedures must be completed in order to produce efficient and sustainable buildings, all the while ensuring cost efficiency.

Risk Assessment

At all stages of the project we review the relevant risks pertaining to that stage of the project. Risks may include construction cost overruns, programme risks, changes in legislation or the risk of costs exceeding value. The results of our assessment will be presented in a simplistic format to ensure that options can be reviewed by those not familiar with construction terminology. We will present a combination of possible scenarios where any overlap may occur.

For government project; the GCCC ensures that most risk items remain closed for the design team at tender stage and now lie with the contractor. Notwithstanding this there still remains many areas where judgements about risk and uncertainty are required to be assessed and priced by the contractor at tender stage. Most of these judgements will have been made when preparing the tender but the extent to which the risks and uncertainties have been correctly assessed will have a huge impact on the success of the project during the construction stage.
We feel that is it of upmost importance that each surveyor understands the risks to Contractors in order to anticipate any problems that may arise on any project as risk needs to be accounted for, and ultimately paid for.

Post Contract Administration

We ensure that the rigorous cost control measures established during the pre contract phase are replicated and applied as part of our post contract duties. Continuity in terms of project surveyors including company directors’ hands-on involvement from project inception to project completion is essential in this process.

Central to ensuring that the project is completed on budget is the control of variations. Where variations do occur, we strive to implement a two phase strategy, namely:
the agreement of variations as soon as practicable with the main contractor to give both parties cost certainty and;
the proposal of alternative designs or specifications in order to offset the additional costs.

We ensure that quality of design and product specification is not forsaken when reducing costs. Interim payment recommendations; monthly cost reports; cash flow projections; and preparation and agreement of final accounts are all post contract duties in which we are proficient. Each area is of equal importance to ensure the ultimate aim of cost control and cost certainty. This gives our Client a commercial advantage which is necessary in any competitive environment.