1- An advice on the appropriate delivery model
Facts to be considered
1- BWC is fully aware of the scope of works to a high degree of certainty. This fact leads to the assumption that the client has a clear set of ideas of his needs and requirements. Aspects pertaining to the functionality and use of the proposed building may well be covered within a detailed Scope and Statement of the works required, which, BWC, should be in a position to do, given their full scope awareness and their previous expertise with similar building premises.
2- Cost Certainty is a major criterion on which BWC will evaluate the choice of delivery model. High levels of cost certainty are required.
3- BWC has a ...view middle of the document...
Since the suggested DB module may restrict BWC from being highly involved with the process, it will also be suggested that BWC spend a considerable amount of time and effort in order to prepare a full and comprehensive Scope of works statement for the project and adequately define the project. Reference and documentation of the tender which took place a couple of years ago in Christchurch may be a very useful tool in defining the project, requirements and expected outcomes. Although Mr. William and Charles have reported that they are confident about their requirements, it is still advised that BWC employ the services of specialized consultancies in order to ensure full and proper project definition and requirements uncovering in an attempt to document them in the most appropriate technical manner. Furthermore, scope and works verification clauses can be added to ensure that BWC is continuously involved.
4- It is clear that BWC emphasizes the cost factor and requires a high degrees of cost certainty as well as price. DB modules can be beneficial in this case and can reduce the costs by substantial amounts, up to 10%, (Build LLC, 2010). However, to increase the cost certainty, it is advised that BWC engages in a DB module on a Lump Sum or GMP contract basis. The fact that previous designs may be utilized to some degree would reduce the need for whole complete design sets, thus the need to hire designers solely for the purpose of design may work out as the more expensive option when compared to only design review and modifications to suit the new project.
5- Further issues about constructability and buildabilty can be catered for by the proper evolution of the scope of works as well as the involvement of BWC, who are quite experienced in the field.
It is therefore appropriate to advice BWC to proceed ahead with a DB delivery module.
2- Risks associated with Cover Note A
The main characteristic of Cover Note A is that it may be interpreted as the offer itself and not as an “Invitation to Treat”. Cover Note A sets out the offer in terms of price, time and nonnegotiable conditions. The form of contract is also attached and ready for signature. It clearly shows the “Intention” to be contractually bound. It is now left to the prospective bidders to accept or reject the offer made by BWC. Such a document makes the whole exercise close to a Direct Order Contract, where the client has one shortlisted contractor, rather than a competitive bidding exercise. The risks associated with cover note A:
1- Loss of opportunity for competitive bidding.
2- Loss of opportunity to gain lower prices, contractors will agree to the nominated price even if their costs were substantially lower.
3- If two or more contractors respond with their agreement to the offer extended by BWC, then, there was an offer and acceptance. BWC is contractually bound towards them all and claims may arise from unsuccessful bidders.
3- When to use cover note A