SEWERAGE INFRASTRUCTURE

PROCUREMENT METHODS
CONVENTIONAL VS DESIGN & BUILD
1
st
MALAYSIA NATIONAL SEWERAGE CONFERENCE 2013
JAB. PERKHIDMATAN PEMBENTUNGAN & MyWA
Presented by:
Sr Nik Zainal Alam Hasan
Jabatan Kerja Raya
1. GOVERNMENT PPOCUREMENT PPRINCIPLE
PUBLIC ACCOUNUTABILITY
TRANSPARENT
BEST VALUE FOR MONEY
OPEN FAIR COMPETITION
FAIR DEALING
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2. PPOCUREMENT STRATEGY
BEST
OPTION
Conventional
Approach
Design & Build
Approach
D
e
p
e
n
d
s

O
n

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3a. CONCEPT CONVENTIONAL
4
Procurement
Conventional
Design & Build
1. Planning
2. Design
3. Supervision
Construction,
Completion,
Testing &
Commissioning
Contractor
Appointment
(SPP 2/2011)
Designer
(In-house)
Responsibility
COC JKR 203/203A
Consultant
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3b. CONCEPT DESIGN & BUILD
Procurement
Conventional
Design & Build
5
1. Planning
2. Controlling
3. Auditing
Design;
Construction;
Supervision;
Fittings;
Completion;
Testing &
Commissioning; &
Maintaining
Contractor
HOPT/
HODT
COC PWD DB
Consultant
Responsibility
Form the
Project Team
Project
Brief
Appointed by
Head of Dept.
Prepare
Tender Document
COC Drawings
Open
Tender
Selective
Tender
Site
Briefing
(If any)
Pricing/
Estimate
Closing &
Evaluation
Financial
Tender
Clarification
(if any)
> 21 days
Validity = 90 days
LOA
1
2
3 4 5 6
7 8
Tender
Board/
Nego
9
6
4a. PROCESS - CONVENTIONAL
Form the
Project Team
Project
Brief
Appointed by
Head of Dept.
Prepare
Pre-bid Document
COC Government
Requirement
Open
Tender
Selective
Tender
Pre-bid
Briefing
Pricing/
Estimate
Closing &
Evaluation
Technical
Financial
Tender
Clarification
> 60 days
Validity = 120 days
LOI
Pre-Q
Contractors
Proposal
1
2
3 4 5 6
7 8
Tender
Board/
Nego
LOA
9
Pre-award
Clarification
Meeting
10
11
7
4b. PROCESS - DESIGN & BUILD
Planning
D.O. Approval
Design Procurement
Material/
Labour
Construction Testing &
Commissioning
Defects
CPC
Conventional
Maintenance
Design &
Build
Equipment &
furniture
8
4c. PROCESS - CONTRAST
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4. CHARACTERISTIC DESIGN & BUILD
i. Contractors Liability & Obligation

PLANNING
1 2
DESIGN CONSTRUCTION TESTING &
COMMISSION
DEFECTS &
MAINTENANCE
MATERIAL WORKMANSHIP
WARRANTY
2 YEARS
APPROVED
BANK
DESIGN WARRANTY = 5 YERAS
3
4
5
6
CPC
COMPLETION &
Fit For its Purpose
Kes Graevtes & Co. Contractors vs. Byanham
Meikle & Partners
The Engineer appointed by the Contractor to
design suspended floor sab under design &
build contract.
However, a failure to the slab the
Contractor & Engineer gave reason that all
attention & diligently care especially on design
& construction to complete the works.

Court decided that:
The Law does not usually imply a warranty that
he will achieved a desired result but only a term
that he will use reasonable skill & care. The
surgeon does not warrant that he will cure the
patient nor does the solicitor warrant that he
will win the case but when a dentist agrees to
make a set of false teeth for a patient, there is
an implied warranty that they will fit his guns

10

Meaning of:
Completion
Fit For its Purpose
Responsibility of the
Contractor:

1. To use his highest
skill and knowledge
to fully comply to
all requirements
and the obligations
as stipulated under
the Contract.

2. To carry out the
work with due care,
diligently and
workmanlike
manner
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Meaning of:
Completion
Fit For its Purpose
Responsibility of the
Contractor:

1. To use his highest
skill and knowledge
to fully comply to
all requirements
and the obligations
as stipulated under
the Contract.

2. To carry out the
work with due care,
diligently and
workmanlike
manner
Kes Graevtes & Co. Contractors vs.
Byanham Meikle & Partners (cont...)

Judgment by the Court that the
Contractor & Engineer are :

1. liable in their design through implied
warranty; and
2. Completion of the construction works
must be FITNESS FOR PURPOSE.

Therefore the Contractor is liable and
must comply as per the client
requirement.
Contractors Duty & Responsibility
Before Award

Appoint Consultants
Design
Submit the Proposal as per
pre-bid document/ need
statement
After Award
Revise Designs
Develop details designs as
approval from P.D.
Seeks Local Authority approval
Managing the Sub-Contractors
and/or Supplies
Construct & Complete
Supervision & Quality
Assurance
Progress Claim, VOs, EOT
Handing Over, Cert. of Fitness
Design Guarantee
Maintenance
As-built & manual
Attend to Defects
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4. CHARACTERISTIC DESIGN & BUILD
ii. Contractors Consultants

Contractors responsible
1
Consultants
2
Planning
Stage
Supervision &
Completion
No replacement
without PDs Approval
Government
3
Direct payment
through D.O.A
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4. CHARACTERISTIC DESIGN & BUILD
iii. Project Director (P.D.)

Known as Project
Director (P.D.);
Conventional = S.O.

As agent to the
Government

Responsible the
Governments interest
especially Best value
for money
Manage & Administer the Contract:
Contractor comply with procedure &
Contract obligation SCOPE, TIME & COST
Before Award

Form the Project Team
Prepare the estimate
Issuance of LOI (nego)
Preparation of Concept
design & need statement
Prepare Pre-bid document
Tender Exercise
Tender Evaluation &
Clarification before Award
Issuance of LOA
Coordination with Employer
After Award
Approved Contract
Document & Signing
Project Monitoring
Valuation & Payment
Managing the Changes
Managing the VO, EOT &
Claims
Issuances of CPC/CNC
Accepts Handing Over
Verify & Approved the Final
Account
Contract Closing
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P.D.s Duty & Responsibility
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4. CHARACTERISTIC DESIGN & BUILD
Contractors Duty & Responsibility
iv. Discrepancies
Government
Requirement (GR)
Contractors
Proposal (CP)
1
Discrepancy
i
GR prevail
Technical & Quality >
GR
ii
CP prevail without extra cost
2
GR discrepancies
P.D.s decision & issue
instructions
3
CP discrepancies
Inform
P.D.
P.D. decide &
Contractor to comply
without extra cost
Issue:
Contractor not
inform & amend &
construct!!!
5.
Advantage -
Design &
Build
Single
Point
Responsib
ility
Simplified
Contractual
Arrangement
Speed of
Procurement
Permits Price
Certainty
Products Fit
For Purpose
Design Benefits
Better
Buildability/
Constructability
Improved
Working
Relationship
17
5. Advantage- Design
& Build
Only Contractor is responsible for all
tasks from planning to completion

Risk is transferred from the
Government to the Contractor

Major management responsibilities are
transferred to the Contractor including
managing activities and ensuring
budgeting, scheduling and meeting
system performance specifications
1. Single Point
Responsibility

Only one party involve

Should problems arise, Government will
only recognise a single party i.e. the
D&B Contractor
2. Simplified
Contractual
Arrangement

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Reduce total project time from planning
to ultimate completion due to
overlapping design and construction
activities
3. Speed of
Procurement

Lump sum price for all works

Contractor shoulders the risk of his
estimate of the actual scope of work
and the price quoted
4. Permits Price
Certainty
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5. Advantage- Design
& Build

Employer is guaranteed of the quality
and standards required of the finished
products
5. Products Fit For
Purpose

Reaping the full benefits of Contractors
innovative and economically optimal
design expertise

employer has a choice of options in
design

6. Design Benefits
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5. Advantage- Design
& Build

Since Contractor plays a major
role in the design stage, his
experience in buildability is put to
use in realizing products that boast
of innovation, efficiency in
production and cost effectiveness

increased creativity in areas of
design, methods and materials
7. Better
Buildability /
Constructability

Simple line of communication with the
Contractor, i.e. confined officially to the
PD / PD Rep. and the Contractor

8. Improved
Working
Relationship
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5. Advantage- Design
& Build
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6. Disadvantage-
Design & Build

X especially during post contract stage

X any changes made by govt. shall be at
cost and time premium

X cost of making changes is relatively
high

X no direct access to designers to issue
changes, all with Contractors consent
1. Little flexibility
to change
especially at tender stage

difficult to evaluate the relative merits of
competitive bids

may prolong tender evaluation
2. Difficulty in
Evaluation
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6. Disadvantage-
Design & Build

o Contractors proposal requires:
preparation of design,
specification &
financing proposals.

o To achieve this end, the Contractor
needs to engage designers, advisors,
specialists etc. in order to submit a
competitive bid.

o These leads to high cost. It will be a
waste if he is unsuccessful
3. Uneconomic Use
of Resources

Some non-technical employer may
have to appoint another set of
consultants to take care of their
interest, leading to pay another
professional advisors
4. Higher
Professional
Outlay
24
6. Disadvantage-
Design & Build

Some non-technical employer may
have to appoint another set of
consultants to take care of their
interest, leading to pay another
professional advisors
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Not a technical
department
Conceptual Design
Consultant (e.g.
Architect; Engineer
(C&S; M&E), QS; etc.
Govt.s
Representative
Design & Built
Contractor
Sub-Contractor &
Supplier
Design Consultant
(e.g. Architect;
Engineer (C&S;
M&E), QS; etc
Legend:
Day-to-day Interface
Contractual Relationship
1
2
6. Disadvantage-
Design & Build

Precise & concise requirements will
lead to a complete and effective
proposal from Contractor

may take longer time to prepare

sketchy requirements may lead to
longer clarification time before award

management responsibilities and
Owners/Employers expectation must
be explicitly outlined

unclear / vague requirements may
cause ambiguities which leads to
disputes and claims especially after
award
5. Employers
Requirements
must be
prepared
carefully
26
6. Disadvantage-
Design & Build

o Minimum control over how the works
are done as works are concurrently
ongoing simultaneously with the
design, more often than not Contractor
tend to practice `build first & design
later
6. Minimum
Employers
involvement

Tendency of Contractor to `design down
to a cost or to do value engineering
which leads to changes with the
intention to make as much profit as they
can, especially after award
7. Changes with
the intention
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6. Disadvantage-
Design & Build

Contractor has to face the
consequences if designers breach the
design liability

professional indemnity insurance does
not cover for `fit for purpose, so
Contractor is deemed to compensate
the Govt.

Employer will face more problems if
Contractor ceased to exist
8. Problems with
Design Liability

leads to many misunderstanding and
confusion during implementation
9. Unfamiliarisation
To Practitioners
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6. Disadvantage-
Design & Build
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7. Option - CONVENTIONAL OR DB?
Treasurys Circular
Conventional
tender
Design & Build
tender
SPP
5/2012
Meet Criteria?
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No. Description Answer Approach
1. Time for procurement &
construction required shorter
time period
Design &
Build
2. Try to involve in during the
design stage i.e. before the
selection of the Contractor
Conventional
3. Involve specialist as the
Nominated Subcontractor
Conventional
4. Employer prefer to change the
project brief during design
and/or construction stages
Conventional
5. Client & consultant able to
supervise project directly
Conventional
7. Option - CONVENTIONAL OR DB?
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No. Description Answer Approach
6. The scope of work too complex
and specialised expertise that is
not in the Department
Design &
Build
7. Design of building / structure is
determined by the equipment
system
Design &
Build
8. Special projects to be completed
in a short time due to the national
interest
Design &
Build
9. Standard plan/design Conventional
7. Option - CONVENTIONAL OR DB?
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