BSC (Hons) Quantity Surveying - Development Economic Project.
SCHOOL OF ENGINEERING
AND
BUILT ENVIRONMENT
BSC (HONS) QUANTITY SURVEYING
MODULE: DEVELOPMENT ECONOMIC PROJECT
MODULE No.: CN3338
MODULE LEADER: ARMIT SAGOO
ASSIGNMENT 3 - FINAL SUBMISSION
HAND-IN DATE: 8TH JUNE, 2001
PREPARED BY: CHIN SWEE, NGO (0071309)
.0 INTRODUCTION 1
.1 GENERAL INTRODUCTION 1
.2 OBJECTIVE OF THIS REPORT 1
2.0 SELECTION & MEASUREMENT OF THE SITE 2
2.1 GENERAL MEASUREMENT 2
2.2 PRESENT & PREVIOUS USE 3
2.3 SITE MEASUREMENT & CONDITIONS 3
2.4 DEVELOPMENT OPPORTUNITIES 4
2.5 DESIGN CONSTRAINTS 4
3.0 INITIAL APPRAISAL AND REVIEW OF ALTERNATIVES 5
3.1 SCHEME 1: PROPOSED DOUBLE STOREY BUNGALOW DWELLING UNITS 5
3.2 SCHEME 2: POPOSED DOUBLE STOREY SEMI DETACHED DWELLING UNITS 6
3.3 SCHEME 3: PROPOSED DOUBLE STOREY TERRACE DWELLING UNITS 6
3.4 DEVELOPMENT OPPORTUNITIES FOR HOUSING SCHEME 6
3.1.1 Location Factor 6
3.1.2 Market Demand 7
3.1.3 Comply with Development Policies 7
4.0 ECONOMIC ANALYSIS 9
4.1 FEASIBILITY ANALYSIS FOR SCHEME 1,2 & 3 9
4.2 SENSITIVITY ANALYSIS - RISK ASSESSMENT 9
4.3 SELECTED HOUSING SCHEME 9
4.4 FUNDING 11
4.3.1 Developer Own Capital 11
4.3.2 Loan from Bank 11
5.0 PLANNING ACCEPTABILITY 12
5.1 STRUCTURE PLAN 12
5.2 PROJECTION OF POPULATION IN WOLVERHAMPTON 12
5.3 HOUSEHOLD TRENDS 13
6.0 PROPOSALS FOR DESIGN AND CONSTRUCTION 14
6.1 CONTRACTUAL ARRANGEMENTS 14
6.1.1 D&B Procurement System 15
6.1.2 Reasons For Choosing Design-Build Procurement System 16
6.2 FORMS OF CONTRACT 17
6.3 TENDERING PROCEDURES 17
7.0 BRIEFING OF DESIGN TEAM 19
7.1 ROLES & RESPONSIBILITIES OF CLIENT AND CONTRACTOR UNDER WCD 98 19
7.2 CDM REGULATIONS 19
7.2.1 Definition of CDM Regulations 19
7.2.2 Roles & Responsibilities of Parties Involved in CDM Regulations 20
7.3 OUTLINE HEALTH & SAFETY PLAN 21
8.0 OVERALL PROJECT PLANNING AND CONTROL 23
8.1 METHODS STATEMENT 23
8.2 PROGRAMMING FOR CONSTRUCTION PROCESS 25
8.3 PREPARATORY WORKS 25
8.4 SUB-STRUCTURE WORKS 25
8.5 SUPER-STRUCTURE WORKS 26
8.6 FINANCIAL PLANNING & COST CHECKING 26
8.7 SITE LAYOUT 27
9.0 PROPOSALS FOR DISPOSAL AND HANDOVER / USE 27
9.1 SALES & PROMOTION 27
9.1.1 Managing the Promotion and Sales 28
9.1.2 Media for Promotion 28
0.0 MANAGEMENT OF THE COMPLETED DEVELOPMENT 31
0.1 MANAGEMENT MAINTENANCE 31
0.1.1 Building Fabric & Services Maintenance 31
Building Fabric 31
Building Services 32
0.1.2 External Works Maintenance 32
0.2 EVALUATE FEEDBACK 32
1.0 CONCLUSION 33
2.0 LEARNING OUTCOME 34
REFERENCES 35
BIBLIOGRAPHY 35
.0
.0 INTRODUCTION
.1 General Introduction
This report will comprised of two sections, the first will be the "Proposal" that prepared in report format, and the second section will be the appendices that containing all the back-up, research, minutes of meetings, letters etc. which were used in preparing the proposal.
This report will detail analyse and discussed the nine assessment areas in the "Proposal", start from:
(i) Selection & Measurement of Site;
(ii) Initial Appraisal & Review of Alternatives;
(iii) Economic Analysis;
(iv) Planning Acceptability;
(v) Proposals for Design & Construction;
(vi) Briefing of Design Team;
(vii) Overall Project Planning & Control;
(viii) Proposals for Disposal & Handover;
(ix) Management of the Completed Development.
The impacts, difficulties, and benefits as well the problems will be encountered when implementing the proposal will be forecasted by carry out practical (interviews, site visits, investigations etc.) and theory methods (literature reviews). All areas will be evaluated and analysis thoroughly in order to ensure the later stage can be carried out smoothly and in its place.
.2 Objective of this Report
The main objective of this report is to let the student posses a basic knowledge and understanding on the various steps that will be required when implement a developing project. Besides, by producing this report, the student will be able to evaluate and analysis the main factors that influence the nature of the project; for e.g. micro and macroeconomics, marketing, demand, surrounding environment etc.
Therefore, through this report, the student will learnt the correct and accurate methodology to collect the data, analysis it and producing as useful information in the project. It is very helpful for the student to suit themselves into the construction sector, since it can be treated as practical project.
2.0 SELECTION & MEASUREMENT OF THE SITE
2.1 General Measurement
> Location
The proposed site; Rydal Green Estate is located at the South-East of the Wolverhampton City. It is off the Willenhall Road; i.e. 3 km away from Wolverhampton City Centre; which connects the city centre to the Walsall. This road is one of the main access road to the Wolverhampton City Centre. Besides, it is just 3 minutes distance from Walsall town centre by transportation. Some major road around this proposed site will include Wolverhampton Road, Stow Heath Lane, Bilston Road, East Park Way, Tyburn Road and Essington Way.
(Please refer Appendix 1 & 2))
> Location Factor
Surrounding Environment
Rydal Green is surrounded by residential buildings; which normally will be low cost housing. Opposite of it, there is a derelict housing estate known as Mayfield; which ready for demolish and reconstruct as Hospital in the future. Beside the site, there is a petrol station, a church and few shops.
At the southern, there is a recreation park name as East Park and a stadium called Monmore Green; which is only 10-15 minutes walking distance from the site. Besides, there is also a wholesale market at this area. At the eastern, there is a high school nearby.
Access to Rydal Green
There are several roads can access into the Rydal Green Estate. However, there are two main accessing points. The first is from the South East; i.e. from the Ring Road of Wolverhampton City Centre; which passing through the Horseley Fields Road and go into Willenhall Road; Rydal Green is just besides this road. The second accessing point will from the North-West, i.e. from the M6 Motorway, then passing through Walsall Road, Wasall Street and lastly meet the Willenhall Road.
Basically, the access to Rydal Green is simple and straightforward; the public will found easy to reach here. For public transportation, e.g. buses and taxis, these services are sufficient provided in this area. The residents will found no difficulties to take this service. As a conclusion, this proposed site is well-located and can be defined as a convenience location.
> Availability of Site
This site is under the possession of Wolverhampton Council, all the tenants are moved out and now it is ready for developed by the potential and interested developers. Developer is found no potential constraint on the purchase and possession of the site. The current land value for Rydal Green Estate will be three hundred and thirty thousand pound per acres.
2.2 Present & Previous Use
At previous, the proposed site was accompanied with 152 units residential building; i.e. flats, however due to improper maintenance and lack of services, the buildings were deteriorated and the residents were all moved out. Now, the existing building had been demolished and cleared by the Wolverhampton Council and ready for developed.
2.3 Site Measurement & Conditions
The proposed site is in rectangular shape, the dimension is 270m x 67.5m, and encompasses an area of approximate 17550m2 or 4.34 acres. Although the demolished building structure was removed and the site was cleared, however, there are still some existing trees in the site. So, the contractor should take into account these obstructions during the construction stage.
The following information regarding the site is obtained from the Planning Department, Wolverhampton Council:
> The proposed site is not a contaminated site or mining area in the past.
> The ground investigation carried before showed that, the ground condition is stable and consists of firm soil, there is no underground cavities in Rydal Green.
> The water table is low around that area.
> The existing underground services and cables were removed.
> No overhead electricity and telephone cables.
Therefore, since the investigation showed that the subsoil is consist of firm soil, so the ground support up to 1.5m can be eliminated and the foundation difficulties in this case will be eliminated.
All of the above-mentioned factors showed that, the proposed site; Rydal Green has a Great potential in developing purposes.
As according to Planning Policy H13 - Improvement of the Housing Stock (Wolverhampton Council, 1999), the Wolverhamton Council will continue this programme The Council is actively acquiring land in this area for redevelopment. Besides, the Wolverhampton Council's Housing Investment Programme also identifies area improvements as the main basis of the Council's policy in improving older and unsatisfactory housing. Since the proposed site is subject to this problem, therefore it is appropriate to implement this policy.
2.4 Development Opportunities
Rydal Green is one of the sites under the Unitary Development Planning Policies H13 - Improvement of Housing Stock (Wolverhampton Council, 1999). This recommended policy tend to improve local housing stock and encourage the improvement of other privately owned dwellings through renewal area initiatives and the renovation grant system.
Besides, under the Wolverhampton Council MBC - 'Three Years Housing Strategy', private sector is invited to invest or develop for the scheme in mixing tenure housing as to meet the requirements of the local residents. So, Rydal Green; a well-located area in Wolverhampton is encourage by the local council to improve of its residential housing stock to meet the existing market demand.
As a conclusion, the development opportunities of the Rydal Green Estate can be defined as high since it is encouraged by the local authority and invited by the public sector.
2.5 Design Constraints
After carry out investigation and confirmation to Wolverhampton Council, I discover that the proposed site; Rydal Green are not categorized under the following areas:-
* Green Belts, i.e. green field sites,
* Conservation Areas; i.e. site of special interests,
* Floor Land; i.e. river,
* Safe Guarding Zones; adjacent to airports,
* Car Park - car parking purpose.
The local council officer notice that, all the proposed carried out schemes on this site must comply with Environmental Standard, i.e. not seriously impacts on local areas.
Since as above-mentioned, this site is under Unitary Development Planning Policies H13 - Improvement of Housing Stock. Therefore, it is encourage by the Wolverhampton Council to develop this site as residential housing area. So the proposed schemes stated in chapter 2 will be the residential purposed.
3.0 INITIAL APPRAISAL AND REVIEW OF ALTERNATIVES
Since the proposed site; Rydal Green is the ideal site for residential purpose, therefore, the proposed scheme will be the housing project.
Review of proposed site: Rydal Green
Location:
Southeast of Wolverhampton City Centre
Site dimension:
270m x 65m = 17550m2
Shape:
Rectangular
Availability to purchase:
Yes, under Wolverhampton Council
Subsoil:
Firm soil, good condition
Contaminated:
No
Underground services:
No
Design constraint:
Residential dwelling
Existing Services:
Provided
Availability to commencing:
Yes, site is cleared
Development opportunities:
High
3.1 Scheme 1: Proposed Double Storey Bungalow Dwelling Units
Scheme 1
Description
Standard:
Higher cost
Quantities:
40 units
Dimension:
7.5m x 13m
Floor area/unit
2 x (7.5m x 13m) = 195m2
Layout:
living room, 1 kitchen, 1 dining room,
4bedrooms and 2 toilets
Ground area/unit:
3.5m x 21m = 283.5m2
Construction period:
8 months
Playground: 810m2
Services (road, drainage, etc) = 6000m2
3.2 Scheme 2: Poposed Double Storey Semi Detached Dwelling Units
Scheme 2
Description
Standard:
Medium cost
Quantities:
60 units
Dimension:
7m x 12m
Floor area/unit
2 x (7m x 12m) = 168m2
Layout:
living room, 1 ...
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2 x (7.5m x 13m) = 195m2
Layout:
living room, 1 kitchen, 1 dining room,
4bedrooms and 2 toilets
Ground area/unit:
3.5m x 21m = 283.5m2
Construction period:
8 months
Playground: 810m2
Services (road, drainage, etc) = 6000m2
3.2 Scheme 2: Poposed Double Storey Semi Detached Dwelling Units
Scheme 2
Description
Standard:
Medium cost
Quantities:
60 units
Dimension:
7m x 12m
Floor area/unit
2 x (7m x 12m) = 168m2
Layout:
living room, 1 kitchen, 1 dining room,
4bedrooms and 2 toilets
Boundary per unit:
9m x 20m = 180m2
Construction period:
8 months
Playground: 1350m2
Services (road, drainage, etc) = 6750m2
3.3 Scheme 3: Proposed Double Storey Terrace Dwelling Units
Scheme 3
Description
Standard:
Lower cost
Quantities:
26 units
Dimension:
6m x 9m
Floor area/unit
2 x (6m x 9m) = 108m2
Layout:
living room, 1 kitchen, 1 dining room,
4bedrooms and 1 toilet
Ground area/unit:
6m x 12m = 72m2
Construction period:
24 months
Playground: 1350m2
Services (road, drainage, etc) = 6750m2
3.4 Development Opportunities For Housing Scheme
3.1.1 Location Factor
As we know, Wolverhampton can be defined as a well-connected city, because it is being strategically placed at the heart of the nation; and being place at the centre of the city centre and Walsall Town Centre. This city provides a wonderful location for access to all parts of the country by way of excellent motorway links, rail services and conveniently placed air transport. Besides, a light rapid transport system has providing a quick and easy travel between Wolverhampton and Birmingham; the second largest city in UK. So all of these provided facilities will bring the development opportunities for the proposed project.
That is a great potential for developing residential dwelling in the proposed site; Rydal Green; since it is located just a few minutes distance for the Wolverhampton city centre. This wonderful location will brings to more market demands. As conclusion, all of these stated factors will be the confident for the developer to carry out the investment on these housing schemes.
3.1.2 Market Demand
Recent year, due to the growth population, many residents have moved out from the city and searching for more reasonable cost housing. Therefore, a great deal of residential development has implemented in Wolverhampton. This trend has been accentuated by infrastructure improvements such as the building of a new by-pass to north of city and a better railway service.
The market research and investigation carried out showed that, the surrounding residential at the Willenhall Road are not satisfied with the current low cost accommodation due to the reason of too small and congested. Therefore by referring to this point, the proposed Rydal Green: New Housing Scheme will fulfil the resident's necessity requirements and solve the facing problem by providing sufficient and big enough dwelling units.
The research found that currently there has 361 properties in Mayfield Estate (just opposite Rydal Green Estate) and most of the flat houses became vacate. This is due to dissatisfy and complaints for too small of the existing flats. The desire for a new accommodation has arisen among the tenants. The local authority proof that, proof to the tenants that, they will receive considerable support both before and following their move to better accommodation.
As a conclusion the market demand for new residential dwelling has greatly increased, so by implement the proposed housing scheme; it will make a direct contribution to satisfy the demand arise from the residents.
3.1.3 Comply with Development Policies
The Wolverhampton Council is looking for the development in the countryside in order to implement the well-balance development strategy. So this Rydal Green development proposal which located at the down part of the city and aim to provide sufficient new housing of an appropriate standard within the price range of local people will be encouraged and easier approved by the Council.
Besides, as above-mentioned in Section 1, under the development policies - Unitary Development Plan H13 and Three Years Housing Strategy, this scheme will meet the policies set by the local council, so the developer need not worry about the crashing to the stated planning policies of this proposed scheme. Moreover, it will also comply the policies for complementary environmental improvements in residential areas as recommended by Wolverhampton Council.
As conclusion, the proposed schemes will comply with the stated planning policies.
4.0 ECONOMIC ANALYSIS
4.1 Feasibility Analysis for Scheme 1,2 & 3
The feasibility study for the these 3 schemes will be produced base on residual and comparable method.
(Please referred to Appendices)
4.2 Sensitivity Analysis - Risk Assessment
(Please refer to Appendices)
4.3 Selected Housing Scheme
After evaluate the market demand in the proposed site area and carried out economic analysis for the 3 proposed schemes, the Scheme 2 - Proposed Double storey Semi Detached Dwelling Units is selected as the most potential scheme.
The economic analysis carried out in Chapter 3 can be summarised as below;
Scheme
GDV
Developer Profit
Feasibility Net Balance (based on Year 3)
£ 8,066,885.42
£ 597,547.07
£ 455,389.24
2
£ 7,847,051.29
£ 581,263.06
£ 663,824.37
3
£ 7,478,307.17
£ 553,948.68
£ 657,276.55
From the above chart it is obvious to see that, the Scheme 1 will gain the highest developer profit, however, the feasibility net balance; which based on year 3 also indicated that, it will be the lowest among these schemes.
Scheme 2 and 3 is not much differ in feasibility net balance, the Scheme 2 will be slightly higher 5 or 6 thousand pound than Scheme 3.
An evaluation to the possible inflation (up to 7%) on both construction cost and land cost for the schemes are carried out in the Risk Analysis and the result shown are shown as below.
Construction Cost Variable
Rate of Return (%)
(Land Cost Constant)
Scheme 1
Scheme 2
Scheme 3
Forecast
2.46
3.42
3.54
+7%
-0.48
.4
.55
-7%
3.15
5.04
5.13
+3%
0.51
2.39
2.52
-3%
2.06
3.94
4.05
Land Cost Variable
Rate of Return (%)
(Construction Cost Constant)
Scheme 1
Scheme 2
Scheme 3
Forecast
2.46
3.42
3.54
+7%
0.73
2.57
2.66
-7%
.83
3.75
3.91
+3%
.04
2.90
3.01
-3%
.51
3.41
3.54
The result indicated that, when an inflation; 7% arise to the construction cost (land constant) for Scheme 1, a negative figure; -0.48% is obtained; this shown that the developer will liable and incur lost when implement this scheme1 once inflation of 7% achieved. Whereas when the land cost is inflate for 7%; a positive figure; o.73% is obtained. In this case, the developer will not suffer for lost, but the profit earned will be extremely low.
On the other hand, the rate return for Scheme 2 and 3 is quite similar. Both will achieve a figure; 1.45 and 1.55 once inflation for 7% of construction cost occurred. Whereas, for inflation of 7% in land cost, a rate return of 2.57% and 2.66% will obtain.
Therefore, the Scheme 2 and 3 will be the potential development projects for the developer.
However, the market research carried out in the previous stage (by interview and questionnaire the local residents and literature review the local demand needs) shown that, the medium cost housing will be more interested and preferable in this area. The higher cost bungalow and lower cost link house is not so interested by the local residents.
So by implement the Scheme 2, it will meet the local market demand need, and therefore will secure the developer from the selling risk.
4.4 Funding
4.3.1 Developer Own Capital
If possible, the developer can invest his own capital into the selected project - Scheme 2. By using own money, the developer won't be effect by the high loan interest charge from bank or other financial institute. It will secure the developer from the investment risk (high interest) and any other burden imposed on it, therefore will benefit the developer.
4.3.2 Loan from Bank
As above-mentioned, the loan from bank will increase the investment risk and burden of the developer. Therefore, it will be the developer's responsibility to pay the charges interest on the loan for a certain defined period once this option is chosen. However, this fund will be easier obtained, the developer just need to mortgage his fixed charges assets, then the loan will be obtainable.
The economic analysis carried out for the Scheme 1,2 and 3 will be based on this loan, the interest charges 8% per year is allowed for every Scheme. Since the duration of the construction period until the disposal (selling) of the dwellings for Scheme 2 will last for 3 years, so it will be treated as short-term finance.
5.0 PLANNING ACCEPTABILITY
5.1 Structure Plan
The structure plan is essential for the selected scheme, since it is a written account of the Country Planning Authority's policies for the whole of the Rydal Green Estate. This plan is implement after:
a) Survey physical and economic characteristics, population, communication and transport, plus other relevant matters,
b) Formulation of strategies and alternatives
c) Publication of the survey and public participation,
d) Draft plan,
e) Public inquiry to consider objections,
f) Publication of the Secretary of State's modifications, and consideration of objections,
g) Approval or rejection by the Secretary of State,
The structure plan is solely concerned with physical planning, i.e. the location and the appearance of buildings; while the structure plan is primarily concerned with land usage.
The draft plan and layout plan is for the selected scheme will indicated in the Appendices.
5.2 Projection of Population in Wolverhampton
Age Range
991
996
2001
2006
2011
0 - 14
49,700
51,200
52,100
50,800
47,400
5 - 19
7,200
5,100
5,400
6,500
7,100
20 - 29
42,200
36,300
29,400
28,800
29,800
30 - 39
32,000
35,800
38,900
34,400
27,700
40 - 49
28,900
29,200
29,900
34,100
32,200
50 - 59
26,000
25,100
26,200
26,300
27,300
60 -69
26,400
23,900
22,000
21,700
22,800
70 - 79
7,900
8,800
8,900
7,700
6,800
80 +
8,200
9,100
0,200
1,400
2,200
Total
248,500
244,500
243,100
241,900
238,300
Table 1 : Projection of Population in Wolverhamton Council
Table 1, obtain from the Wolverhampton Council indicated that, the population in Wolverhamtpon will be decreasing along the years, i.e. from 1991 to 2011. It brings a negative significant for all the development projects proposed in this Borough. However the market research carried out in previous stage, proof that, the market demand for the medium cost semi-D dwelling is still very encouraging and interested by the residents if compare to other dwellings.
5.3 Household trends
Tenure
Wolverhampton
England & Wales
Total
%
%
Owner occupied
54,171
57.7
67.8
Rented - Local Authority
31,636
33.7
9.8
Rented - Housing Association
2,583
2.8
3.1
Rented - Private Landlord
4,330
4.6
7.4
Rented - With Job/Business
,121
.2
.9
Table 2: Types of tenures for Accommodation in Wolverhampton; 1991.
By referring to the Census in Wolverhampton City Council1991, the total amount of households in Wolverhampton is 93,841. Table 2 above show the breakdown number of tenure of households in Wolverhampton, it indicates the basis on which the tenures occupy their accommodation. Percentages for England and Wales are also given for comparison.
From the table above, the owner occupied is the highest among the rest. So, the reason can be defined, as the people are more preferring their own home. It is also an economical way for implementing long term saving. Renting accommodation from local authority is also preferable by the tenures, since the rental will be more lower if compare to other landlords.
So, this table will proof that, the dwelling scheme is very potential in the Wolverhampton.
6.0 PROPOSALS FOR DESIGN AND CONSTRUCTION
6.1 Contractual Arrangements
After evaluate and take into account the characteristics of the Rydal Green - Development Scheme; the contractual system used to operate the whole activities for this project will be the Design & Build (D&B) procurement system. The term of contract that will be adopted in conjunction with this system will be JCT Standard Form of Building Contract With Contractor Design 98.
Since the proposed project can be defined as simple and non-complicated work, therefore, by using this system, the developer will eliminating the management burden over the project, i.e. let the contractor to handle and manage for both design and construct responsibility. The main contractor for this scheme will be appointed through Selective Tendering.
Legend
Relationship of Various Parties in D&B System
Above flow chart indicate the style of communication of various parties involved in the B&D procurement system.
6.1.1 D&B Procurement System
Design & BuildOperation
i) The proposed project will be introduced by the developer to the selected qualified contractors. All his requirement will be brief to the contractors to let them have a better understanding on the project.
ii) It is advice to the developer that, an independent advisor, whether quantity surveyor or Architect should be employed by him as to provide advice in setting up his requirements with the lowest budget and to supervise the works during construction (Christopher J. Willis & Ashworth, 1992).
iii) The information of requirements is then send to the contractor. This contractor for the project will be appointed by competitive variants; i.e. selective tendering.
iv) Since, applying the competitive variant, so the tender documents will prepared by construction consultants to enable several contractors to offer designs and prices proposal in competition, on the basis of pre-prepared documents. (Corbett, 2000).
v) Then, the developer and his agents should evaluate and exam the most suitable and satisfied proposal with the design, time and cost implications. The independent advisors will advise the developer on the contractor's proposals as to design and construction methods as well as the financial aspects respectively (Ramus, 1989).
vi) After found every thing is satisfaction, the developer can then enter into the contract (i.e. Standard Form of Building Contract With Contractor's Design 1998) with the awarded or appointed contractor.
vii) Later, as the project proceed, the developer should appoint an agent (Clerk of Work) to supervise the work done and generally to act on his behalf to ensure that the contractor comply with his proposal.
viii) The contractor's quantity surveyor will prepare the interim payments when work is proceeding and final account when the project completed. Client should honour the payments but provided the workdone it is comply with the Employer's Requirement.
6.1.2 Reasons For Choosing Design-Build Procurement System
> Fast and Guaranteed Completion Date
The contractor will ensure and responsible the whole construction project complete before or on the specific date stated in the proposal. Besides, due to the design is evolved by the contractor, it is easier to suite to his own organization and will resulting in faster construction and more buildable (Murdoch 1993). In the case of direct appointment of single contractor, the design and construction can be overlapped, furthermore the bidding time are eliminated, thus the design and construction period will be far more shorter.
> Lower Project Cost
This can be obtained because of more buildable or efficient constructability construction design is achieved. Moreover, the absence of separate design team eliminates the bulk cost for consultant fee (Douglas J. Ferry, 1996). Besides, due to shorter construction period will reduce the developer's financing charges, inflation has less effect and the building is operational sooner which, in a commercial context, produces an earlier return on the capital invested.
> Early Cost Guarantees
By using this system, the developer will obtain a satisfied guaranteed cost which offer by the contractor stated in his proposal. So, the developer need not to worry about his budget will be exceed. This guarantee will eliminate the potential for the developer to extend funds for completed plans only to the cost of the project as designed is prohibitive. (Pankow, 2000)
> Single Source Responsibility
With both design and construction in the hands of one contractor, this single point of responsibility avoids controversy due to non-performance and adversarial profit. Furthermore, it eliminates complex relationship between client and contractor as in the case of traditional procurement system (Colinseel, 1984).
> No Change Orders for Design Related Deficiencies
Once project scope and price are defined and accepted, change orders due to lack specification completeness, constructability and coordination are eliminated. Such issues is the responsibility of the contractor, not the developer (Pankow, 2000)
A major disadvantage, is the variations from the original design are discouraged by the contractor and, if allowed, are expensive (Ramus, 1990). Besides, quality of work may be low, due to the contractor may not intend to maintain high workmanship in order to sustain or even decrease the ordinary budget. (COBRA, 1998). Lastly, if the contractor's organization is relatively small, he is unlikely to be as expert on design as he is on construction, so the resulting building may be aesthetically less acceptable.
6.2 Forms of Contract
The most suitable term of contract used in the D&B procurement system will be the JCT Standard Form of Contract With Contractor Design 98. However it is advice that, the developer's professional advisors should have enough power to monitor the work and to ensure performance of the contract.
Once the developer decide enters into the contract with the contractor, then both of them should sign this recommended form of contract; which normally known as Article of Agreement. Under this agreement, all the conditions, recital and clauses of the scheme should be stated down.
It is emphasis that, the contracts for this Rydal Green - New Housing Scheme is required subject to the provisions of Housing Grants, Construction and Regeneration Act 1996.
6.3 Tendering Procedures
In order to get the best value for the money invested, the contractor for the proposed project will be appointed through Selective Tendering. So, the developer will responsible to invite the interested and potential contractors for this project. This recommended tendering process will be more time and cost saving.
The open competition, with no limit on the number of contractors invited; in this case will not be adopted, since it is expensive and time consuming to exam all the tenders.
By taken this step, most qualified contractors can be invited for the tender, and subsequently the possible lowest or desired tender sum will be obtained. It is most benefit to the developer to adopt this type of tendering.
However, when implementing this tendering, 4 weeks period is recommended for the contractors to prepare their proposal (tender).
The Contractor Selection Process
After tender submission stage, the developer's representatives or agents will responsible to evaluate the submitted tenders. When assessing, the quality and price will be the main criteria to exam the best value for money. So, the developer should take into account the selected contractors performance or quality of the previous projects; the capacity to offer design, overall competence; health and safety record; financial stability; size and resources; technical and organizational stability and appropriate insurance cover.
After, select the appropriate competitive for this project (normally up to maximum 3 tenderers), an interview should be arranged. Then, in this interview, the developer can test these contractors by asking the question like their experiences, skills, capacity of company, manpower, as well as grasp and enthusiasm.
After this step, the appropriate contractor will be identified by the developer and his agents. Then, a negotiation to the basis of the contract can be take place by both parties. So, this successful contractor should be formally notified, once the post- tender procedures have been completed and the developer has decided to place the contract.
As soon as a tender been accepted by the developer, then it will also be the responsibility of the client to sent a list of compliant tender prices and tenderers to all tenderers within a reasonable period of time. It is advice that, the names of the tenderers should not be matched to the prices.
As a conclusion, the selection of the appropriate contractor for the proposed project is paramount important, since in the later stage of the project, it will solely rely on the chosen contractor. So, the developer and his agents should ensure this tendering process will be carried out in a fair and smooth method.
7.0 BRIEFING OF DESIGN TEAM
It is important for the developer to brief or inform the contractor of his/her needs, aspirations and desires. Since, the adopted procurement is Design & Build system, therefore, the standard outcome of the project will relies on the quality of the briefing provided. Besides, the recommended form of contract will be the JCT Standard Form of Building Contract, so the roles and responsibilities of the developer and Contractor will refer to this contract.
7.1 Roles & Responsibilities of Client and Contractor under WCD 98
Since, WCD 98 is adopted in this proposed project, so the major players will only refer to the developer and the contractor. Normally, the obligation stated for both parties in WCD98 will be very similar with JCT 98, so the duty and general role for both parties will be briefly explained as following.
Developer
By adopting the WCD98, the developer who will also act as the Employer in the proposed project is required to brief to the D&B Contractor about the overall requirement. Besides, the developer need also to prepare a document known as Employer's Requirement, which stated down all his requirements for the project to the contractor.
In this contract, the developer is no right to design the building. He is only entitle to give his requirements or ideals to the contractor when during briefing.
Contractor
Under the proposed scheme the successful and appointed contractor will be the D&B Contractor. So, it is his responsibility and obligation to produce the design for the scheme as refer to the developer's requirement. Normally, the design is to be produced by his in-house designers. When submitting the proposal (design, cost etc) to the developer, he need to prepare a document known as Contract Sum Analysis which analyse the overall contract sum where his generated.
7.2 CDM Regulations
7.2.1 Definition of CDM Regulations
The Construction (Design and Management) Regulations as requirement for this development project will be stated and included in this proposal. By complying this Regulation, statutory duties will be imposed on developer, designer and contractor; so these parties need to rethink their approach to health and safety matters throughout all stages in this new housing project. Besides, the roles of planning supervisor and principle contractor will also be introduced under this Regulation.
It is important to let the developer, his agents and designers have a knowledge and better understanding on this CDM Regulations, so the principle objectives of the Regulations will be listed down as below:
> To promote proper consideration and the better management and co-ordination of health and safety issues throughout every phase of construction, including concept, outline and detailed design, maintenance, repair, cleaning and demolition.
> To require designers to include adequate regard to the health and safety of persons at work carrying out "construction work or cleaning" (as defined by the Regulations) or of any other person who might be affected by the work among other design considerations.
> To create two documents: the first is the health and safety plan whish is prepared in two stages, (prior to and following the appointment of a contractor), and is used to convey health and safety information to the contractor during the tender and construction phases of the project; the second is the health and safety file - this holds information about health and safety matters which will assist those carrying out construction, maintenance, repair or demolition work on a structure at any time after the completion of the project.
7.2.2 Roles & Responsibilities of Parties Involved in CDM Regulations
Developer (including his agents and developers)
In this project, the developer must ensure that he only use competent people as planning supervisor, designers and principal contractor and also provide that sufficient resources, including time will be given to enable this Rydal Green - Housing Scheme to be carried out in compliance with health and safety law.
Planning Supervisor
Under CDM Regulations, developer should appoint a planning supervisor who possess overall responsibility for co-ordinating the health and safety aspects in the design and planning stage. This planning supervisor is responsible to prepare the safety plan and monitor the health and safety aspects in the design. He wills advice the developer on satisfactory allocation of resources for health and safety in this project and prepare a health and safety file for it.
Designer
Designers will responsible to design the proposed project in a reasonable way; which avoids, reduces, or control risks to health and safety so that the project can be constructed and maintained safely. If there is any risk remain, this supervisor need to stated in the safety file to enable reliable performance by a competent contractor.
Principle Contractor
This principle contractor will take account the specific requirement for this housing project when preparing and presenting tenders. He will take over and develop the health and safety plan from the planning supervisor, co-ordinate the activities of sub-contractors to ensure they comply with relevant health and safety legislation with the developed health and safety plan. This contractor also has duties in relation to provide information, training and consultation with employees including self-employed.
7.3 Outline Health & Safety Plan
Stage 1: Preparation of the Health & Safety Plan
Reg. 13(2) Reg. 11
Stage 2: Development of the Health & Safety Plan Reg. 10
Reg. 19(1)
Contributors to the Health & Safety Plan
- dashed line indicates referral back to the client before the start of construction phase
Stage 1: Preparation of the Health & Safety Plan
(i) The developer provides H&S information (risk assessment) to the planning supervisor, by virtue of Reg. 11, under CDM Reg.
(ii) Designers to ensure their designs are complied with Reg.13(2).
(iii) The planning supervisor on behalf of the developer prepared the H&S Plan at pre-tender stage.
Stage 2: Development of the Health & Safety Plan
(i) After appointing the principal contractor, it will be his responsibilities to develop and implement the H&S Plan.
8.0 OVERALL PROJECT PLANNING AND CONTROL
8.1 Methods Statement
8.2 Programming for Construction Process
The outline master programme; which stated above is used to monitor the construction work carried out by the contractor. Its aim is ensure the contractor to carry out the work in accordance with his prepared programming.
This master programme is intended to give an roughly idea for the developer how the developer will perform his duty once commencing the project.
Since, at this phase, a lot steps to carry out the whole construction activities are still uncertainty, so the prepared master programme will contains lots assumptions and allowance, therefore this programme is inaccuracy once compare to the contractor actual programme.
8.3 Preparatory Works
The D&B contractor will carry out the preparatory work on the Rydal Green in order to get a start on the construction works. This preparatory work will consists of preparation of plans for the estate and the type of building designs where detailed planning and Building Regulation approval will be needed before a working start can be made. On the other hand, the developer's solicitor can start preparing the documents that will be required for future sales of the dwellings to be developed, i.e. sales contracts, draft conveyances or transfers (Davidson and Leonard, 1976).
Then, the contractor will arrange with the statutory authorities for the provision of electricity, gas and water services into the site. It is also the contractor's responsibility to negotiate with the highway authority for provision the required bond in respect of new street/road to be constructed to the local authority (Ibid). Lastly, the types and various insurances, i.e. public liability, fire etc. will be considered by the contractor and priced into the Contract Bills.
8.4 Sub-structure Works
Sub structure construction for the Rydal Green Semi-D Double Storey Housing Scheme is commenced with the excavation and foundation operation. The foundation used for this project will be reinforced strip foundation and the concrete used will be ready mixed concrete. The foundation works will commence from the West elevation and progress to the East elevation. This sequence will dictate the progression of subsequent works to the superstructure.
As soon as the strip foundation works complete, the remaining sub-structure works will commence in the following sequence:
(i) Establish underground drainage;
(ii) Make up formation levels;
(iii) Form concrete oversite slab (blinding, reinforcement and concrete).
Mobile concrete pumps will be used for strip foundations and slab pours. Dewatering will used, if ground water is found.
8.5 Super-structure Works
The super-structure work can be briefly break down into the following elements:
* PartyWall, in between of Semi-D dwellings to distinguish the boundary and act as compartmental and load bearing structure. Rest on Strip foundation.
* Cavity wall, also act as load bearing wall and transmit the load through trip foundation.
* Partition walls, within the dwellings.
* First floor slab, cast in-situ reinforcement slab
* Suspended ceiling
* Domestic pitch roof, covered with concrete roof tiles and matching with rainwater gutters.
Distribution of concrete, reinforcement and formwork for the frame will be carried out by using mobile crane on the first floor. However, to maintain rapid construction of the frame, I proposed to use the mobile concrete pumps for concreting the suspended concrete slabs.
8.6 Financial Planning & Cost Checking
In this field, all the construction cost required for the selected scheme will be analyzed in detailed. The contingencies, fluctuations and prime cost items and provisional sums will be taken into account. Then, linking the physical progress with financial progress will be prepared and evaluated. This can be done through a simple method of plotting the estimated financial progress against the rate of expenditure; which is necessary to complete the contract on time. So, it is vital important to monitor and check the cash flow once the construction project is commenced.
This financial planning and control can be considerable assisted by preparing and frequently up-dating a comprehensive cash flow programme. The objective of financial planning is to enable the cost affect of any major change to be seen in the context of the project as a whole in the construction stage (Potts, 1995). This cost information can let the developer has a better understanding on the selected scheme.
8.7 Site Layout
Site Access
The site access shown in the layout drawing indicated
(i) The main access point into the site from Willenhall Road.
(ii) The access (temporary way) within the site
(Please refer the attached Site Layout Plan)
To ensure a safe means of entering and leaving, the contractor will ensure to obtain approval from the police and Local Authority. During the construction period all the access to be ensure by the contractor clear from any obstruction and have good visibility. The access is allowed for largest size vehicle. The direction signs and warning signs to be placed within these accesses
.
The temporary way shown in the drawing will the permanent access and road in the later stage.
Site Accommodation
The layout also indicates the possible sitting of site accommodation. All the accommodation such as site office, sub-contractor's offices etc. are shown in the drawing.
Welfare facilities like canteen, drying room, toilets and first aid are take into account and clearly indicated.
A electrical sub-station will be provided to supply all the power for the accommodations and running the site
Temporary Site Hoardings
During the construction period, the temporary site hoarding is to be erected by the contractor along the site boundary. (Shown in Layout Plan) These hoarding will be maintain by the contractor until completion of the contract.
Others
Location for top soil spoil heap, cement silo, batching mixer, aggregate storage, locked stores open compound, car park are all shown in the layout.
9.0 PROPOSALS FOR DISPOSAL AND HANDOVER / USE
9.1 Sales & Promotion
This step is paramount important in the whole development project, since it will increase customer awareness of this Rydal Green - Housing Scheme and will subsequently make an advantageous contract easier to achieve. The cost of disposal; in this case, will lie into in two areas: making the potential clients aware of the project and persuading them to purchase at the most advantageous price.
9.1.1 Managing the Promotion and Sales
It is recommended that, the developer should employ a reputable estate agent specialist in housing property to handle the promotion and sale for this Rydal Green - Housing Scheme.
Specialised Expert Knowledge
This agent will specialist in housing property, so he/she will be able to offer an expert view of the current market. Furthermore, the local agents will possess a detailed knowledge of the market and its peculiarities in their particular locality. So, the agent can recommend the best and effective methods for advertising and promote the housing accommodations.
Selling Ability
The agent will have the ability for persuasion the customers to buy the products at the most advantageous price. So, the developer should entering a contract with this agents stated that the level of commission. The 'no-sale-no-fee' deal is encouraging in this case. Therefore, the developer can rely upon this agent's negotiation and bargaining ability, since his/her income and viability will depends on this ability; if there is no sale, the agents does not obtain a fee.
The solicitor used by the developer should be asked to keep in touch with this agents employed and informally 'vet' any promotional literature prepared by the agent prior to circulation.
9.1.2 Media for Promotion
After interview the local estate agency and carry out investigation on the advertising methods in Wolverhampton. The recommended media of promotion from the agency for this proposed project will divided into three types, first is newspapers and magazines and second is posters or billboard; both are advertising methods and lastly is direct mail method.
Newspapers and Magazines
After analysis, this proposed project can be advertised through the popular local newspapers, free local and regional papers and magazines. The advertising managers for all of these can explain for the choice of their publication as the best promotional medium; therefore, the client and his agents should analysis before makes any decision.
In general, it is advice to the developer that, the better daily newspapers, with audited circulation figures and a verified breakdown of reader types, should be selected, since it will form the best 'core' for the promotion of the development project (Rougvie, 1987).
It is also proposed that, the timing for advertising and location within the paper should be selected. Because, at particular time, the paper will has regular property page or series of features on property matters section, therefore, it will be the best opportunity for advertising in this section, as many people in the property business will purchase only them, for this specialised matters. The other recommended prime positions for advertising purpose in a paper will be the front or back pages, in particular the top corners or alternatively advertised the advertisement near some interesting editorial material.
Posters
Posters or bill types of advertising is more economic promotion media if compare to newspapers and magazines advertising method. It can be act as an effective advertising method for this project ensure that the design of the material and its location are placed in ideally.
So, the posters should be placed at the most obvious locations, i.e. near the site or building it self, or in other prominent locations such as shopping centre, railway station etc in Wolverhampton city centre or others town centre, where these posters can be seen by large number of people. Locations such as prominent hoardings at major road junctions, on buses or Underground is also suitable.
The important criteria for this poster advertising method is that, it should be readable quickly. So the design or display for the poster must not be cluttered that the essential details are lost. So, a brief and direct poster should be introduced for this project.
Direct Mail
This promotion method is popular in nowadays market. A large number of organisations; which specialise in supplying lists of individuals and organisations within defined categories of size, location, type of business etc. can be easily found. So, the potential clients who interested in the project for disposal can be found on these lists, and then direct mail will be shots to these people to notify them on the project particular. However, it is advice that, evaluation and analysis should be carried out to the lists, so that the most accurate list will only be used, otherwise a large number of mail shots will be waste.
Since today, there are huge amount of direct advertising, so the message should be expressed in as simple and direct as possible. Short, concise messages should be introduced, this will help the massage to be absorbed before the recipients has an opportunity to throe it into the waste paper bin.
0.0 MANAGEMENT OF THE COMPLETED DEVELOPMENT
0.1 Management Maintenance
Maintenance is essential for ensuring the useful and economic life of all buildings. All buildings start to deteriorate from the moment they are completed and from that time begin to need maintenance in order to keep them in good condition (Dichiara & Rowe, 2000)
Therefore, for the proposed Semi-D double storey dwellings scheme, the maintenance can be classified into two fields; Building Fabric & Services Maintenance and External Works Maintenance.
Since the dwellings is proposed to sold out, so the building fabric and services maintenance will responsible by the buyers/users and the external works will be maintained by the developer.
0.1.1 Building Fabric & Services Maintenance
Following is the description of the items that will be most commonly requiring attention in the management of building fabric and services maintenance;
Building Fabric
* Roofs
The roof for the Semi- D dwelling will be sloped roof, in normal practice, it will subject to ice dams and resulting in improper gutter and poor flashing. Thus, the flushing at roof transitions is often required and this will be the signal to examine the roof for its overall condition and for possible replacement. However, it is recommended to the users that, the examination should be carried out once a year.
* Masonry
Masonry will requires little annual maintenance until the mortar needs repointing. If masonry crack is found, then should be repaired to avoid accelerated damage, particular when freeze-thaw cycles are common. It is suggested to carry out exterior painting 3 years a time.
* Windows
Windows are recommended to repaint three years a time by the users in conjunction with exterior painting. When repainting, the replacement of following miscellaneous should be done;
* Deteriorated caulking and putty work
* Sash cords and hardware
* Deteriorated wood trim
* Cracked glass
Window replacement not to be done because its expensive, unless it's extremely discomfort from leakage and severe rot.
* Doors
Hardwood for doors will often required rekeying.
Building Services
* Water, Gas, Heating & Electricity System
Inspection should be carried out for these services once a year. The pipes and cables should be checked thoroughly to ensure the safety of the users. And this is recommended to be done by these services suppliers.
0.1.2 External Works Maintenance
* Landscaping
Annual maintenance is recommended for maintenance of roads, cleanout of site manholes, maintenance of mowing and planting areas and snow removal.
* Paths & Signage
Annual review and patching is recommended for wear and tear, frost heaves, salt damage and weathering.
0.2 Evaluate Feedback
Once the dwellings is sold out and in used, the developer and his agents should evaluate the feedback from the users.
So the developer's agent will responsible to carry out the following:
* Put feedback mechanisms in place
* Appraise the results feed back
This feedback evaluation aim to improve the outcome of future projects that the developer may undertake. Therefore, the developer should not ignore this step.
1.0 CONCLUSION
The selected scheme for the development in Rydal Green Estate will be the 60 units Medium Cost Double Storey Semi-Detached Dwelling. According to the economic analysis carried out, this scheme will be the most stable and profitable project among the 3 recommended schemes.
The proposed procurement system used in this scheme will be Design and Build system, whereas the term of contract will be the WCD 98. This scheme is recommended based on the characteristic stated.
However, the developer is still be encouraged to monitor the effectiveness of procedures and review the performance of the parties involved. This will give a clear ideal of improvement for the developer in the future development projects.
It is advice to the developer that, the feedback evaluation should be carried out for the project both during its development and when the completed facilities is in used; i.e. from the initial stage until the final stage.
2.0 LEARNING OUTCOME
By producing this report, I have learn and get a knowledge on the actual development process of carrying out works involving a change in the physical use or in the intensity of an existing use of land. By carried out this project, I notice that development is a lengthy process that required lots people to put in their effort on various stages; in survey, design, estimate, discussion with various authorities like planning, highway etc on various requirement of a project.
Then, time is taken to apply and wait for the formal application for planning consent. During the construction stage, it is needed to carry out constant appraisal for the cost implications of the scheme and financial arrangement until the successful completion of the whole scheme. All of these stage are time and cost consuming, it increase the complexity and burden on the developer financial management.
Through this project, I have a better understanding on the market demand in the Wolverhampton and I know that the office space is over flood in this area. Besides, by researching, I also found that the most potential development opportunity's option in my selected site. Hence, it will assures that my proposed scheme is viable and profitable.
I am now more familiar with the various valuation method used to implement the feasibility analysis. I am also known the various application steps and sequences on the planning procedures for a development when applying for the permission. Lastly, the places for easier getting and collecting information are also in my mind, it is helpful for me especially in my future.
The problems facing and the solutions taken for remedy have also benefit me. The various remedy solutions are come from analysis and evaluation of the problems encounter. Therefore, I learnt from the mistake that I made.
REFERENCES
* Rougvie, A. (1995) Project Evaluation and Development, B.T. Batsford Ltd., London, ISBN: 0 7134 5075 4.
* Davison, A.W. and Leonard, J.E. (1976) The Property Development Process, College of Estate Management, Reading, ISBN : 090213228 8.
* Dichiara & Rowe (2000) Cost Planning & Estimating for Facilities Maintenance, RS Means, Kingston, ISBN: 0 87629 419 0.
* Willis, J. C. & Ashworth, A. (1992) Practice and Procedure for the Quantity Surveyor, 9th Edition, British Library, Great Britain, ISBN 0 632 02932 3.
* DETR (1998) Planning Permission - A Guide for Business, Department of the Environment, Transport and the Regions, West Yorkshire.
BIBLIOGRAPHY
* CIRIA (1995) CDM Regulations - case study guidance for designers : An interim report, CIRIA, London, ISBN: 0 86017 421 2
* Ferry, D. J. (1996) Cost Planning and Building, 6th Edition, British Library Cataloguing in Publication Data, London, ISBN 0 632 02367 8.
* Colinseel (1984) Contractual Procedures For Building Students, Cassel Publishers Limited Artillery house, London, ISBN 030431565 6.
* Murdoch, J. (1993) Construction Contracts Law and Management, E& FN SPON, An Imprint of Chapman & Hall, London.
* Isaac, D. (1996) Property Development Appraisal and Finance, Macmillan Press Ltd., London, ISBN : 0 333 64690 8.
* Balchin, P., Gregory, B. and Kieve, J. (995) Urban Land Economics and Public Policy, 5th Ed., Macmillan Press Ltd., Hanpshire, ISBN: 0 333 62903 5.
* Potts, K. (1995) Major Construction Works Contractual & Financial Management, Longman Group Ltd., London, ISBN: 0 582 10298 7.
D.E.P : CN 3338 BSc (Hons) Quantity Surveying
Assignment 3 : Final Submisssion _______________________________________________________
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