Design and Build procurement route

University Degree Architecture, Building and Planning

Student Name: Peter K. Marshall Module Name: Contracts and

Registration No.: 081363528 Procurement

Person No.: 08271423 Module No.: D31PZ

1.0 - PROJECT OVERVIEW

1.1 The location

Donington Park is located in North West Leicestershire, – just of the M1 motorway1. The site lies to the west of the East Midlands airport and south west of Castle Donington – a large village with a population of around seven thousand2.

1.2 The site

The circuit last hosted an F1 Grand Prix in 1993 and since then has been hosting a variety of other motorsport events. The circuit contains approximately two and a half miles of track with existing facilities for spectators1. The surroundings area is largely open field with scattered dwellings and enterprises.

2.0 - BRIEF

The Fédération Internationale de L’Automobile (FIA) has announced that for ten years onwards from the year 2010 that British Formula 1 Grand Prix will be hosted at the Donington Park race circuit in the East Midlands of England 3. To meet Formula 1’s facility and FIA’s requirements – the present facility will be upgraded. The upgrading works to be pursued has been grouped into the following categories:-

• Project 1: Earthworks.

• Project 2: New spectator stands.

• Project 3: New pits and team garages.

• Project 4: Extension and upgrading of the racetrack.

Donington Ventures Leisure Limited has engaged the services of Peter Marshall to advise on the best suited procurement options to pursue for the improvement of their race circuit. This report will provide argument for or against the design – build procurement route and a recommended alternative for the client use. The options listed on Table 13 (See Appendix I) was used as the back drop to assess the parameters associated with each procurement option that was recommended.

The report will also advise Donington Ventures Leisure Limited on ways Value for Money can be attained using a traditional procurement route under Item 4.0 – Asphalt works to Donington Park Race Track.

3.0 PROJECTS AND PROCUREMENT OPTIONS

3.1 - Project 1: Earthworks

Design and Build procurement route

A design and build procurement route isn’t best suited for the earthworks project. Although time is a critical factor in the completion of the earthworks – the focus shall be in the quality during its construction – where succeeding works will be built upon.

The consequences of probable quality failings stay within the context of the earthworks contract and will be unreasonable to extend the warranty to cover the successive works. These quality risks will not be in the best interest of the overall project and should be directly influenced by Donington ventures for assurance of the works done and avoidance of liabilities as the overall circuit development project evolves.

Earthworks designs are often altered as experience develops on site 4. Therefore the pre-construction cost certainty associated with a design and build procurement route is not certain – which will lead to change orders5 – both in time and cost.

Alternative

Two-Stage Tendering procurement route

Quality assurance and effective material management are the complexities associated with the earthwork projects. In acknowledgment of this – a two-stage tendering procurement route is recommended. This route will allow for the design team to select a contractor (see figure 1) at an early stage of the project. This will facilitate their understanding of the project complexities involved as well as have their inputs made before work commences6.

The contractor is selected via “pre-qualification” based on preliminary design information and geotechnical reports followed by their inputs into the design ...

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Alternative

Two-Stage Tendering procurement route

The contractor is selected via “pre-qualification” based on preliminary design information and geotechnical reports followed by their inputs into the design process and ongoing price negotiations as more information becomes obtainable.

Design, construction and monitoring will be linked in earthworks – where the selection and placement of fill onsite can lead to designs being altered4. As this is common in earthworks – the advantage of the two-stage route is that the design can be extended into the construction period6. Also, as far Quality assurance is concern – the monitoring as well as the control of the design and workmanship remain with the clients designers7. The contractor will be involved earlier in the contract negotiations can be shorter resulting in an earlier construction start time.

The early contractor selection will allow for the contractor to provide – material management, technical and practical skill inputs. Most notably – participation in the design and documentation preparation process7 will help in determining the final specification for the earthworks. This will cover the way for fewer disputes because the contractor will be involved in the final design preparation and is more in sync with the projects requirements and risks involved in balancing all sides of the cost – time – quality triangle7 associated with the earthworks project (see Fig. 3).

3.2 - Project 2: New Spectator Stands

Design and Build procurement route

A design and build procurement route isn’t best suited to for the new spectator stands project. There are features of the project that will need to be investigated and researched in order for the requirement is incorporated into the design9 – all resulting in a technically complex project.

A brief that usually conveys the projects general requirements to the contractor in a design and build route8 – will not be sufficient in this case. This all means that the details of the project will need to be fully developed as design excellence will weigh heavily for the new spectator stands in contrary to other standard building types where this route is best suited9.

This route allows for little flexibility for changes to be made8 which affects cost and in particular schedule – the primary reason owners select a design and build procurement route10. The route does not allow for an independent certification role11 – which leads to the project not being understood in-house by Donington Ventures Leisure Limited – and the design intent not being control12.

Alternative

Two-Stage Tendering procurement route

This route will allow for Donington Ventures Leisure Limited’s brief to be fully developed by consultants as well as have the input of the contractor. The design process will remain under Donington Ventures Leisure Limited full control7 which will ensure that the design meets the approval and its intent is fulfilled – as contracts will be held directly with the design consultants.

The advantage of having the contractor on board earlier is to provide technical and managerial inputs into the project. This will allow the contractor to provide practical skill input into the project, avoid construction difficulties on site and ensure the buildability of the design7.

There can be the early procurement of materials as the contractor is on board – particularly those with long delivery times. This will go a long way in minimising delays on the schedule to complete the works as well it could bring about possible cost saving7. Then again; the contractor can bring in sight alternative construction resolutions as well as alternative materials which can also bring about time and cost savings7.

As discussed earlier there is a possibility that contract negotiations can be shorter resulting in an earlier construction start time – together with a overall cost certainty. The route will cover the way for fewer disputes because the contractor will be involved in the final design preparation and will be more in sync with the projects requirements and risks involved in balancing all sides of the cost – time – quality triangle7 associated with the new spectator stands project (see Fig. 3).

3.3 - Project 3: New pits and team garages

Design and Build procurement route

The new pits and team garages can be procured under design and build route because of its repetitive characteristics9. The works involved are not complex and can easily be developed into a comprehensive brief. There-on the contractor can fully understand the intent of the works and the FIA specifications that needs to be fulfilled. The cost and schedule will be known from the onset – as customary with this route.

This route will simplify this phase in the overall project in terms of communication, cost and schedule. An independent consultant representing Donington Ventures Leisure Limited will provide the quality assurances to ensure that the works will adhere to the required specifications as outlined in the brief and the contractor’s proposal.

3.4 - Project 4: Extension and upgrading of the racetrack

Design and Build procurement route

This project can be procured with a design and build route. Most of the works consists of the replacement of the kerbs, track run-off areas, gravel traps, barriers inclusive of the new crowd control – all considered repetitive work – that can be procured under this route9. These works are not complex and can easily be developed into a comprehensive brief with a stringent focus on the FIA specifications.

An appointed independent consultant will prepare the brief for the tracks and drainage and be retained to provide quality certification as the design and construction works progresses. The route also allows for the contractor’s liabilities to be extended covering a fitness for purpose8 – which will serve as a surety that the works will be done to specifications and superb workmanship.

4.0 – ASPHALT WORKS TO DONINGTON PARK RACE TRACK

Under the circumstances described – Value for money success by Donington Ventures Leisure Limited (DVLL) places particular focus on the suppliers of the wearing course material. As all risks lies with the DVLL to ensure that the design is done right. The first step is to ensure that the material supplied for the wearing course material is to the right quality. This is achievable by sourcing competent suppliers to be nominated that are better able to understand and mange these risk13. DVLL consultants will advise on the selection criteria for supplier and the involvement of Terrific Tarmac Limited (TTL) is recommended in this process.

The supplier must demonstrate to DVLL and TTL that they fulfil the requirements and to do so must be able to14:

Provide the Managerial capacity to ensure that they can meet the demands specified by DVLL and co-ordinate with TTL.
Be technically verse on the wearing course material to ensure that it matches FIA specifications..
Provide a methodology that can fulfil all the needs to complete the project successfully – where it must incorporate co-ordination with TTL.
Have all the necessary plant and systems that will ensure that the product can be supplied within the contexts of the specifications and methodology to the project site.
Have worked on similar projects in the past where they can demonstrate they have fulfilled similar requirements.

Sourcing these suppliers will not only increase the pool of suppliers to choose from – it will also increase price competition13 – where a possible cost saving can be shared with DVLL and TTL. It will also aid DVLL in the assessment of the supplier’s strengths and weaknesses as well as possible opportunities that may exist with regards to any innovation that can be applied. The early involvement of the supplier on the project will allow discussions with DVLL and TTL, so that there is a better understanding of the desired out come – facilitate the exchange of ideas – and avoidance of costly mistakes and variations13.

DVLL and TTL will need to establish with the supplier that the product will meet its “fitness for purpose” requirement – all towards value for money attainment14. This can be done by the consultant on board – an independent party that will vet the supplier’s product and the contractor’s (TTL) workmanship. The quality checks will span from the supplier’s materials selection from there suppliers, the manufacture processing at the plant and the delivery – placement in the track. TTL will also be fall under the quality checks to ensure that there plants for paving is inspected for plant conformance – as well as the method employed in which the asphalt is set in place15. All this will add up to ensure the value for money is attained during the construction works.

Contractually – DVLL will need to ensure that the contract for both supplier and contractor (TTL) guarantees the track’s reliability – a feature of value for money attainment14. This will provide some leverage to DVLL if any defects were to manifest after the works have been completed. This will also spill into maintainability14 – another value for money feature that will need to be discussed with both supplier and contractor for future maintenance issues on the track. These are services that can be retained by DVLL to ensure that maintenance support is available beyond the completion of the track.

5.0 – CONCLUSION

This completes the evaluation of the procurement routes available. The table below provides the list of projects and the respective recommended procurement option.

REFERENCES

Wikipedia contributors, "Donington Park," Wikipedia, The Free Encyclopedia, (accessed October 1st, 2008).

Wikipedia contributors, "Castle Donington," Wikipedia, The Free Encyclopedia, (accessed October 1st, 2008).

Adaption from Scottish Executive (2005)., Construction Procurement Manual: Construction Works Procurement Guidance, Edinburgh Scottish Executive.

Trenter N. A., Earthworks: A Guide, Thomas Telford, 2001, Chpt. 8, p.81.

Friedlander M. C., (2003), Schiff Harden LLP., Legal issues Unique to Design – Build, p.3. (accessed September 28th 2008).

School of Built Environment, (2008), D31PZ Contracts and Procurement Module Handbook, Heriot-Watt University, Chpt. 2, p. 2-22 – 2-24.

Bagnall B., Aqua Group, Tenders and Contracts for Building, Blackwell Publishing, 1999, Chpt. 4, p.33 – 44.

School of Built Environment, (2008), D31PZ Contracts and Procurement Module Handbook, Heriot-Watt University, Chpt. 2, p. 2-13 – 2-15.

Bagnall B., Aqua Group, Tenders and Contracts for Building, Blackwell Publishing, 1999, Chpt. 12, p.117 – 127.

Songer A. D., Molenaar K. R., Robinson G. D., (1997), Selection Factors and Success Criteria for Design-Build in the U.S. and U.K., University of Colorado, (accessed September 29th 2008)

Murdoch J., Hughes W., Construction Contracts: Law and Management, 3rd ed., Spon Press, 2005, Chpt. 4, p.43 – 45.

Friedlander M. C., (1997), Schiff Harden LLP., Design - Build – The Single entity option, p.3. (accessed September 28th 2008).

Jensen C.D., Fernando S., (2002), Clients Driving Innovation: Moving Ideas into practice (12-14 March 2006), Cooperative Research Centre (CRC) for Construction Innovation, Value for money in Road Infrastructure Delivery, (accessed October 15th 2008).