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SEWERAGE INFRASTRUCTUREP ROCUREMENT M ETHODS
C ONVENTIONAL VS DESIGN & BUILD
1st MALAYSIA NATIONAL SEWERAGE CONFERENCE 2013
JAB. PERKHIDMATAN PEMBENTUNGAN & MyWA
Presented by:Sr Nik Zainal Alam Hasan
Jabatan Kerja Raya
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1. G OVERNMENT P POCUREMENT P PRINCIPLE
PUBLIC ACCOUNUTABILITY
TRANSPARENT
BEST VALUE FOR MONEY
OPEN FAIR COMPETITION
FAIR DEALING
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2. P POCUREMENT STRATEGY
BESTOPTION
ConventionalApproach
Design & BuildApproach
D e p e n
d s
O n
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3a. C ONCEPT C ONVENTIONAL
4
Procurement
Conventional
Design & Build
1. Planning
2. Design3. Supervision
Construction,Completion,
Testing &CommissioningContractor
Appointment(SPP 2/2011)
Designer(In-house)
Responsibility
COC JKR 203/203A
Consultant
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3b. C ONCEPT DESIGN & BUILD
Procurement
Conventional
Design & Build
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1. Planning2. Controlling3. Auditing
Design ;Construction;Supervision ;
Fittings;
Completion;Testing &
Commissioning; &Maintaining
Contractor
HOPT/HODT
COC PWD DB
Consultant
Responsibility
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Form theProject Team
ProjectBrief
Appointed byHead of Dept.
PrepareTender Document
COCDrawings
OpenTender
SelectiveTender
SiteBriefing(If any)
Pricing/Estimate
Closing &Evaluation
Financial
TenderClarification
(if any)
> 21 da
ys Validity = 90 days
LOA
1
2
3 4 5 6 7 8 TenderBoard/Nego
9
6
4a. P ROCESS - C ONVENTIONAL
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Form theProject Team
ProjectBrief
Appointed byHead of Dept.
PreparePre-bid Document
COCGovernmentRequirement
OpenTender
SelectiveTender
Pre-bidBriefing
Pricing/Estimate
Closing &Evaluation
TechnicalFinancial
TenderClarification
> 60 da ys Validity = 120 days
LOI
Pre-Q
Contractors Proposal
1
2
3 4 5 6 7 8 TenderBoard/Nego
LOA
9
Pre-awardClarification
Meeting
1011
7
4b. P ROCESS - DESIGN & BUILD
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PlanningD.O. Approval
Design ProcurementMaterial/
Labour
Construction Testing &Commissioning
Defects
CPC
Conventional
Maintenance
Design &Build
Equipment &furniture
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4c. P ROCESS - C ONTRAST
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4. C HARACTERISTIC DESIGN & BUILD
i. Contractors Liability & Obligation
PLANNING
1 2
DESIGN CONSTRUCTION TESTING &COMMISSION
DEFECTS &MAINTENANCE
MATERIAL WORKMANSHIP
WARRANTY
2 YEARS
APPROVEDBANK
DESIGN WARRANTY = 5 YERAS
3 45
6
CPC
COMPLETION &Fit For its Purpose
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Kes Graevtes & Co. Contractors vs. ByanhamMeikle & Partners
The Engineer appointed by the Contractor todesign suspended floor sab under design &build contract.
However, a failure to the slab theContractor & Engineer gave reason that allattention & diligently care especially on design& construction to complete the works.
Court decided that: The Law does not usually imply a warranty that
he will achieved a desired result but only a termthat he will use reasonable skill & care. Thesurgeon does not warrant that he will cure thepatient nor does the solicitor warrant that hewill win the case but when a dentist agrees tomake a set of false teeth for a patient, there isan implied warranty that they will fit his guns
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Meaning of:Completion
Fit For its Purpose
Responsibility of theContractor:
1. To use his highestskill and knowledge
to fully comply toall requirementsand the obligationsas stipulated underthe Contract.
2. To carry out thework with due care,diligently andworkmanlikemanner
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Meaning of:Completion
Fit For its Purpose
Responsibility of theContractor:
1. To use his highestskill and knowledge
to fully comply toall requirementsand the obligationsas stipulated underthe Contract.
2. To carry out thework with due care,diligently andworkmanlikemanner
Kes Graevtes & Co. Contractors vs.Byanham Meikle & Partners (cont...)
Judgment by the Court that theContractor & Engineer are :
1. liable in their design through impliedwarranty; and
2. Completion of the construction worksmust be FITNESS FOR PURPOSE .
Therefore the Contractor is liable andmust comply as per the clientrequirement.
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Contractors Duty & Responsibility
Before Award
Appoint ConsultantsDesignSubmit the Proposal as per
pre-bid document/ needstatement
After AwardRevise DesignsDevelop details designs asapproval from P.D.Seeks Local Authority approvalManaging the Sub-Contractorsand/or SuppliesConstruct & CompleteSupervision & QualityAssuranceProgress Claim, VO s, EOTHanding Over, Cert. of FitnessDesign GuaranteeMaintenanceAs-built & manual
Attend to Defects 12
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4. C HARACTERISTIC DESIGN & BUILD
ii. Contractors Consultants
Contractors responsible
1
Consultants
2
PlanningStage
Supervision &Completion
No replacementw ithout PDs Approval
Government
3Direct paymentthrough D.O.A
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4. C HARACTERISTIC DESIGN & BUILD
iii. Project Director (P.D.)
Known as ProjectDirector (P.D.);Conventional = S.O.
As agent to theGovernment
Responsible theGovernments interestespecially Best value
for money
Manage & Administer the Contract:
Contractor comply with procedure &Contract obligation SCOPE, TIME & COST
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Before Award
Form the Project TeamPrepare the estimateIssuance of LOI (nego)Preparation of Conceptdesign & need statementPrepare Pre-bid documentTender ExerciseTender Evaluation &Clarification before Award
Issuance of LOACoordination with Employer
After AwardApproved ContractDocument & SigningProject MonitoringValuation & Payment
Managing the ChangesManaging the VO, EOT &ClaimsIssuances of CPC/CNCAccepts Handing Over
Verify & Approved the FinalAccountContract Closing
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P.D.s Duty & Responsibility
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4. C HARACTERISTIC DESIGN & BUILDContractors Duty & Responsibility
iv. Discrepancies
GovernmentRequirement (GR)
Contractors Proposal (CP)
1Discrepancyi
GR prevail
Technical & Quality >GR
ii
CP prevail without extra cost2
GR discrepancies
P.D.s decision & issueinstructions
3
CP discrepancies
InformP.D.
P.D. decide &Contractor to comply
without extra cost
Issue:Contractor not
inform & amend &
construct!!!
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5.
Advantage -Design &
Build
SinglePoint
Responsibility
SimplifiedContractual
Arrangement
Speed ofProcurement
Permits PriceCertainty
Products FitFor Purpose
Design Benefits
BetterBuildability/Constructability
ImprovedWorking
Relationship
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5. Advantage- Design& Build
Only Contractor is responsible for alltasks from planning to completion
Risk is transferred from theGovernment to the Contractor
Major management responsibilities aretransferred to the Contractor including
managing activities and ensuringbudgeting, scheduling and meetingsystem performance specifications
1. Single PointResponsibility
Only one party involve
Should problems arise, Government willonly recognise a single party i.e. theD&B Contractor
2. SimplifiedContractual
Arrangement
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Reduce total project time from planningto ultimate completion due tooverlapping design and constructionactivities
3. Speed ofProcurement
Lump sum price for all worksContractor shoulders the risk of hisestimate of the actual scope of workand the price quoted
4. Permits PriceCertainty
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5. Advantage- Design& Build
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Employer is guaranteed of the qualityand standards required of the finishedproducts
5. Products Fit ForPurpose
Reaping the full benefits of Contractorsinnovative and economically optimaldesign expertise
employer has a choice of options indesign
6. Design Benefits
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5. Advantage- Design& Build
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Since Contractor plays a majorrole in the design stage, hisexperience in buildability is put touse in realizing products that boastof innovation, efficiency inproduction and cost effectiveness
increased creativity in areas ofdesign, methods and materials
7. BetterBuildability /Constructability
Simple line of communication with theContractor, i.e. confined officially to thePD / PD Rep. and the Contractor
8. ImprovedWorkingRelationship
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5. Advantage- Design& Build
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6. Disadvantage-Design & Build
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X especially during post contract stage
X any changes made by govt. shall be at
cost and time premium
X cost of making changes is relativelyhigh
X no direct access to designers to issuechanges, all with Contractors consent
1. Little flexibilityto change
especially at tender stage
difficult to evaluate the relative merits ofcompetitive bids
may prolong tender evaluation
2. Difficulty inEvaluation
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6. Disadvantage-Design & Build
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o Contractors proposal requires:
preparation of design,specification &
financing proposals.
o To achieve this end, the Contractorneeds to engage designers, advisors,specialists etc. in order to submit acompetitive bid.
o These leads to high cost. It will be awaste if he is unsuccessful
3. Uneconomic Useof Resources
Some non-technical employer mayhave to appoint another set ofconsultants to take care of theirinterest, leading to pay anotherprofessional advisors
4. HigherProfessionalOutlay
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6. Disadvantage-Design & Build
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Some non-technical employer mayhave to appoint another set ofconsultants to take care of theirinterest, leading to pay anotherprofessional advisors
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Not a technicaldepartment
Conceptual DesignConsultant (e.g.
Architect; Engineer(C&S; M&E), QS; etc.
Govt.s Representative
Design & BuiltContractor
Sub-Contractor &Supplier
Design Consultant(e.g. Architect;Engineer (C&S;M&E), QS; etc
Legend:
Day-to-day InterfaceContractual Relationship
1
2
6. Disadvantage-Design & Build
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Precise & concise requirements willlead to a complete and effectiveproposal from Contractor
may take longer time to prepare
sketchy requirements may lead tolonger clarification time before award
management responsibilities andOwners/Employers expectation mustbe explicitly outlined
unclear / vague requirements maycause ambiguities which leads todisputes and claims especially afteraward
5. EmployersRequirementsmust bepreparedcarefully
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6. Disadvantage-Design & Build
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o Minimum control over how the works
are done as works are concurrentlyongoing simultaneously with thedesign, more often than not Contractortend to practice `build first & designlater
6. MinimumEmployersinvolvement
Tendency of Contractor to ` design downto a cost or to do value engineeringwhich leads to changes with theintention to make as much profit as theycan, especially after award
7. Changes withthe intention
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6. Disadvantage-Design & Build
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Contractor has to face theconsequences if designers breach thedesign liability
professional indemnity insurance doesnot cover for `fit for purpose, soContractor is deemed to compensatethe Govt.
Employer will face more problems ifContractor ceased to exist
8. Problems withDesign Liability
leads to many misunderstanding andconfusion during implementation9. UnfamiliarisationTo Practitioners
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6. Disadvantage-Design & Build
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7. Option - C ONVENTIONAL OR DB?
Treasurys Circular Conventional
tender
Design & Buildtender
SPP5/2012
Meet Criteria?
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No. Description Answer Approach
1. Time for procurement &construction required shortertime period
Design &Build
2. Try to involve in during thedesign stage i.e. before the
selection of the Contractor
Conventional
3. Involve specialist as theNominated Subcontractor Conventional
4. Employer prefer to change theproject brief during designand/or construction stages
Conventional
5. Client & consultant able tosupervise project directly Conventional
7. Option - C ONVENTIONAL OR DB?
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No. Description Answer Approach
6. The scope of work too complexand specialised expertise that isnot in the Department
Design &Build
7. Design of building / structure isdetermined by the equipmentsystem
Design &Build
8. Special projects to be completedin a short time due to the nationalinterest
Design &Build
9. Standard plan/design Conventional
7. Option - C ONVENTIONAL OR DB?
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