Primary business strategy of the client is hotel business and development
Secondary business stragery is project management
client is experienced at renovation of building
Absence of full time in-house executive for the project incharge
Estimated Budget for the reconstruction is $ 120 million and the cost should not exceed the budget.
First phase target to reconstruct the hotels areas are Roofs, Guest rooms, Restaurant and Swimming pools.
Second phase target to reconstruct the hotels areas are Dance studios, health and fitness centre, conference and meeting rooms. During the phase two reconstruction, there should not be any inconveniences to the hotel customers.
Conference and meeting room required high technology multimedia facilities with air condition.
Lagging of project expertise, so experience executive person to look after the contractual of their project works and therefore to avoid risk/allocation.
Better quality easy maintenance of the building is very important.
Complexity must be considered, when deciding the procurement route.
Preserve the heritage of the building to maintain dignity.
Well organized construction planning, follow safety,environmental and health standards as per the local law requirements.
Selection of material and quality of workmanship should be value for money.
This projectis to be carried out in two phases and the first phase is targeted to complete in 12 months’ time .The project starts on 1st March 2014 and is to be complete by 28th February 2015.Hotel target operational date is 1st April 2015.
There are different methods of procurement routes:
Traditional Procurement Routes
Non-traditional procurement routes areÂ :
Traditional Procurement Routes:
The traditional approach to procuring projects involves discrete design development, tender, contract award and delivery phases. Client appoints a group of consultant to prepare the contract document. In this method the contractor builds to define scope of works for a fixed price lump sum. The retains responsibility for the design and the project team. The contractor will be appointed normally following a tender process or negotiation and will sign up to a contract for the works. There are numbers of standard forms of building contract available for this purpose. The design is completed before the tender process commence and it offered the client a great deal of control over the quality, specification and cost.
Under the procurement arrangement the work is designed, then tendered, then constructed, thus the design team has an established relationship with the clients and dominates the design development phase.
The client has all the responsibility for the design or omission and the contractor has no responsibility. Eventhough some of the risk is shared by the contractor and majority of the risk bare by client.
Risk:Cost risk is low because it is based on lump sumcontract, time risk is medium because contract date is fixed. quality and design risk is low because most the work is insured.
Advantage:Competitive justice, procedures familiar, comparatively low tender preparation cost and satisfactory public accountability.
Disadvantage:Start work on site will be delayed, contractor will not involved in the planning and design, possible for adversarial interaction and design risk bare by client.
This system is that removes the contractor from the design development phase and thus much management and contractibility information is lost.
Reason for Rejection:
This procurement route is not suitable for selection because no time certainty and possibility of design risk.