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Summary Advanced Real Estate WS6- Procurement of the construction and design team £4.99
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Summary Advanced Real Estate WS6- Procurement of the construction and design team
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These notes include everything covered in workshop 6 of the Advanced Real estate course. Examples of particular projects using certain procurement methods are also included! The notes are ready to be printed and used in the exam. I used these notes and achieved a high distinction in the LPC

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  • September 1, 2021
  • 9
  • 2021/2022
  • Summary

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Procurement of the construction and design team

Outcomes:
1. Explore the different options for procuring the design, construction and management of a
development project.
2. Explain the structure, purpose and content of an Architect’s deed of appointment.
3. Advise on whether certain third parties can claim in relation to possible defects in the design
and/or the construction of a building.


Different forms of procurement
Traditional procurement • Design element and the construction are separate.
• Building contractor is engaged to construct the project pursuant to
the building contract.
• Professional consultants are contracted separately in a different
contract to design the project under the terms of their professional
appointments.

Contractor= their own contract and may also bring in sub-contractors

Professional design team= their own contract which includes the
architect, engineers, project manager and CDM coordinator where
appropriate.
Advantages of the traditional contract • TIME- more certain construction period as the design has already
been completed and the contractor will be able to build in
accordance with the plans.
• MONEY- more certainty in the fixed lump-sum that is in the
contract as the design has already been fully developed prior to
construction, there will be less unforeseen variables that may
affect the price.
• QUALITY- the individual contracts are detailed documents and
can specify the employer’s exact requirements. This should lead
to better quality as the design team would have already been in
and the construction can start in accordance with the plans.
• Widely known and understood method
Disadvantages of the traditional approach • TIME- longer overall period as the employer needs to complete
the design before the construction phase commences, so whilst
construction may be quicker, the design team needs to be fully
aligned and complete before construction can commence.
Employer-driven alterations to the design of the project may also
delay matters.
• MONEY- additional design fees are paid to the design teams and
professional consultants which can be costly. If the employer
makes any changes, this can increase costs.
• QUALITY- the building contract is responsible for the works, but
not for the design. Therefore, the employer retains both the
design risk and the interface risk with construction. They cannot
influence whether the design is realistic and feasible from a
building point of view to align with the budget.
• There is room for dispute between design or construction
and thus may not know initially who is liable
• The technical documents, forming part of the building
contract, need to set out precisely the requirements of the
employer, which places an additional burden on the employer

, (Phoenix developments).thus, helps if the developer is
experienced.
Wembley Stadium • Initial budget was 326.5 million but came in at 729 million
• The initial subcontractors underestimated the scope of the project
and later pulled out
• another sub-contractor violated health and safety laws
• Multiplex was the company in charge of construction- they were
feeling the pressures the complete, they avoided paying sub-
contractors and as a result, the sub-contractors filled in the
sewage pipes with concrete- causing further delay and caused
increasing costs
• There was also a death in relation to poor health and safety
measures of the construction team
Design and build contract- most popular Most popular form of building contract and used for simple and
major projects
• Building contractor is responsible for both the construction and the
design of the project. He may appoint his own design team or
employ sub-contractors.
• The building contractor is liable to the employer for the design as
well as construction of the project.
• Usually no architect appointed- all done by the construction
• Lump sum price to take responsibility of all aspects of the project
(package deal contracts)

Common structure:
1. Where there is a major construction and the employer seeks an
effective and complete risk transfer, the employer will first instruct
their own professional consultants to develop the initial design.
Once the designs have been developed, the employer, principal
members of the design team and the building contractor will enter
into a novation agreement- transferring rights and responsibilities
from the employer to the building contractor.
2. The building contractor will then instruct the consultant previously
engaged, to complete the detailed design and has direct rights
against the consultant in the event that such designs developed
under the appointment are deficient.
3. Transfers responsibility and rights from the employer to the
contractor once initial designs have been developed.

Advantages of design and build contract • TIME- may be quicker in terms of design for the employer as they
only need to develop the outline designs, therefore when they
enter into a novation agreement, the contractor that resumes
responsibility may be overall quicker in instructing a design team
to continue with the design as the initial stage has already been
done.
• MONEY- offers certainty as there is a fixed-lump sum in the
contract price. Therefore, the employer can be more certain in
their budgeting for development (although the price will be
negotiated but it means they can factor in the most that can be
negotiated).
• QUALITY- the building contractor assumes a single point of
responsibility towards the employer rather than responsibility
being spread between the building contractor and design team –
this will mean there is likely to be more aligned and uniform
standards of quality as the contractor carried the sole
responsibility and the employer will receive the same standard of
quality in both the design and construction.
Disadvantages of the design and build contract • TIME- once you factor in the novation agreement and establishing
new responsibility, this may be no quicker than the traditional

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