I think this gets very close to the answer. It also provides an explanation why in other sectors and contexts there has never been a need to create this new discipline. You can also argue that the idea of commissioning is a helpful concept to explain the context in which procurement sits alongside service planning and service needs assessment in those types of organisation.
I know from my own experience that procurement, as it has traditionally been practiced in Local Authorities is not on its own adequate to describe the whole process that the term commissioning is intended to convey. Happily, this is now breaking down. Commissioning teams now understand that procurement activity and the relevant skill base is fundamental to delivering their plans. I think you more or less have it Peter. The problem originates in the public sector where those who have little or no knowledge of procurement particularly those in Central Government have created a niche profession and where having any commercial skills appears to be an option.
Just take a look at what has been created in your local health centre as a good example. Your email address will not be published. Notify me of new posts by email. This site uses Akismet to reduce spam. Learn how your comment data is processed. Contact Support Ask Spend Matters!
The design group will prepare the design and all the documents required to tender the construction contract. A separate contract will then be awarded to the contractor. Constructability issues can be encountered with this method since the designer is not responsible for building what they design and may not be aware of the issues in the field. Much more of the design is known prior to issuing the construction contract.
DB — Design — Build — For this strategy, the designer is the same group as the constructor. A single contract is awarded to a contractor that also has a design group, and it can generate the design packages per the technical specifications. This makes the contractor accountable for the design as well as the constructability of the design, and integrates the two functions. This requires a comprehensive technical specification prepared in advance of contract award.
A strong working relationship is established between the design group, and the contractor to perform constructability reviews, and prepare for construction. With this, the project risk is transitioned from the owner to the contractor who is participating in the design process and building the design that is developed. P3 or PPP — Public Private Partnership — In this structure, governments and private firms create partnerships to include all aspects of the project in a single contract.
This includes financing of the project as well. The designer, contractor, and financial partners are all part of the same group to build public infrastructure.
The contracting strategy is determined well before the Commissioning Team mobilizes to site. But it is beneficial to have at least a small part of the Commissioning Team engaged with the project during planning of the contract, and procurement strategies in order to start with the end in mind, and plan the project for commissioning success. Lump Sum or Fixed Price — The contractor performs the defined work for a price agreed to before the work starts.
If the level of effort is more or less than originally estimated by the contractor, the contractor is responsible for this risk or reward. Cost Plus — A target price and percentage fee is established before the work starts. Once the work is complete, the contractor submits their actual costs, which they are then entitled to a percentage fee above the actual costs. Time and Material — A target price is agreed to in advance.
Once the contractor completes the work, they submit their actual hours worked and material purchased for reimbursement. This is similar to cost plus. Unit Price — For linear infrastructure, an agreed price is established for each length of work or portion of installation. The contractor invoices periodically once portions of the work are complete. If this upper limit is exceeded, the contractor is responsible to cover the additional cost, therefore limiting the risk to the owner.
The procurement strategy of your project will determine its success. If not set up correctly from the beginning, it will be difficult to deliver the project on-time and on-budget. The errors in the procurement strategy will gradually cause issues during design and construction, but only really become issues when the commissioning team is trying to make the systems work for HTE first time. A procurement strategy that only uses cost as the evaluation criteria is not an appropriate procurement strategy, and it rarely provides best value to the owner.
I have worked with both of these contract formats, and an industry accepted contract template such as these should be used for your projects. Contractors will be familiar with these contract structures, and they can be adapted to include any specific terms and conditions that need to be included.
The evaluation criteria need to be reviewed with the owner. Price will be the biggest evaluation criteria, but it cannot be the only evaluation criteria. The percentage that price makes up the overall evaluation score should be as low as the owner is comfortable with. Other evaluation criteria that should be included in the procurement process are:. By only evaluating price, these other important criteria are not taken into account. Getting a great price will not benefit the owner if the contractor is not actually capable to complete the work on-time and on-budget.
Get Started With the Mini-Course. Articles of Agreement — This is the final signed document by both parties incorporating all parts of the contract and agreeing on the final price structure. General Conditions — These are the general terms and conditions of the contract defining the rights, responsibilities, and relationships of the parties involved in the contract. General and Local Conditions — These are terms and conditions more specific to the project.
They supplement the general conditions to provide specific contract clauses for the project. Technical Requirements — This defines how the new facilities are to function and the technical parameters that must be achieved at the end of the project. In a performance specification, the contractor has more freedom to propose the technology that best achieves the desired technical criteria. The technical specification is important to the commissioning team since it is the criteria that will be used to evaluate performance of the equipment during commissioning.
This is still the case in Scotland, Wales and Northern Ireland. Commissioning at that time involved market management rather than competitive procurement.
And you know what? Interesting to see where this leads. The term procurement is used more consistently, although some definitions are wider than others.
Here are some examples, maybe others can comment on whether or not they really are procurement activities. Direct service decommissioning. Simulating other providers to meet local needs. Which is a circular argument and probably not very helpful! Agreed, there is a lot of make v buy, demand management and needs rather than wants going on there. All areas that Procurement have a role to play in. Your email address will not be published. Notify me of new posts by email. This site uses Akismet to reduce spam.
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Trevor Black: Clare: Alison Smale: Helen Oliver: Dan: Dave Orr: Whatever happened to base-lining the existing service?
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