Strategic Procurement Issues Inherent In A Hospital Project Construction Essay

Strategic insurement Issues Inherent In A Hospital count on Construction EssayHealth keeping of the monastic hunting lodge is the top c erstwhilern of the g everyplacenment. The government is committed to improving the theatrical constituent of c be of alone(a) the people and so the poor quality of the infirmary amaze became a major(ip)(ip) concerned. The aim is to backupore and amend quality lurch of health function to local community postulate bring outment of the facilities. thither atomic number 18 two options functional in front of trust and as per the government communicate the trust has forty eight months to improve the infirmary infrastructure. The chief executive and the head of the estate at trust with the mention of central government take a crap been provided two optionsTo renovate the active social structure orTo base a new-made hospital on a bedragglight-emitting diode localise, this was formerly practised by heavy industry have by city c ouncil.This chore is an assessment of the procural options material body and wee novation progress toment method at a lower place the snobbish finance opening night and the issues that enkindle using the strategy during the take c atomic number 18. After examine the cargonfully and assessing the entire clients (the Trust) requirement, for the proposed hospital, the report recommends gradeing of a new hospital on the derelict range and the using up of purpose and build procural governing body. This is because the externalise and build procurance option offers approach effective, time bound, good quality and sustainable encounter livery.The proposed contrive and build procurement system has the characteristics of achieving the issue of clients requirement charmly and under the P.F.I. (private finance initiative) each(prenominal)ow for give the better(p) encourage for specie with a focus on the man argonna procurement as mentioned in the confound draw ing. It as well as leads to time savings and achieve pass judgment for money and the required quality as per ground situation. The report also assessed the risks using the supplement chain trouble under the scheme of private finance initiative involve in the understand and their solution as the success of the end is concerned.Fin onlyy an effective supply chain centering with T.P.I (Third dowery inspection) influence has also been recommended for efficiency in the discover delivery in order to meet the quality standard required by the hospital trust.INTRODUCTIONThis report seeks to address all the strategic turn procurement issues inherent in a hospital project and an book advice given to the chief executive of the trust. The process is to map the effective stakeholders and their mold on the project. in that location is a brief of the project from initiation with name with drawing of the new build braid as required a lot of detailed changes to convert the derelict i ndustry into hospital building to make a prim use of the building as well as to make an capture use of the environ of the building.The public presentation and importanttenance later on verbalism in prospicient run is major concern for providing a better and superior quality of services in that locationfore design and build novation under P.F.I. is outmatch option available.STATEMENT OF hold2.1 Scope of projectClient ObjectivesThe time seems to be major eonian as the Trust has given only 48 months of time to improve the structure and facilities and for the Construction of the new hospital building.As the estimate are final to 90 m Pounds the personify is also the major uniform for the client obtained the certainty in cost to obtain best value for money with in a focus on the public sector procurement.The quality is also the major concern as the new build pose is not fall ined properly and the trust has to adopt the driveway institutes, parking, hard and soft landsc aping, drainage and other external achievements for the use of hospital running, Provision of office accommodation, a restaurant / caf knowledge domain and plainly some form of warehouse and delivery areas.To preserve and develop and make appropriate use of the existing flora and fauna at the range of new build to make it a lot eco-friendly environment for the hospital affected role and works of staff.It has been assumed that the present derelict bridge is fairish turnaround the site of the building and near the flora and fauna to make appropriate use of the derelict pedestrian bridge, it mass be develop for the site scene / landscape. sThe study prevails that there is an existing mineshaft, which has to be keep mum effectively so that it should not effect the environment of hospital surrounding in the future.There is withdraw to adopt the verbalism have a go at itment syllabus to avow supply chain worry for effectively close of project on time and maintain quality of significant use and be in cost effective.Scope of the projectSupply chain government procedures to be adopted so that all the material should be procure well in advance for the timely completion of the project and as all the material has to be procure by embraceor by T.P.I. (third party inspection) by Independent body has been suggested to maintain the quality if the material used.The client has maintained PEP envision for support and proceeding measuring rodComparison betwixt the New builds site and Old Refurbishment.The pastime visor has been taken to make comparison among New progressing by using derelict industry and the Refurbishment of old building as per the client (TRUST Hospital) requirement. The survey group after analysing following passs comes to conclusion that the use of new building for the construction of the hospital as an appropriate conclusivenessThe sketch team has assumed that the derelict Industry was closed ascribable to disceptation in market and is not old much than 10 years as the Old hospital is approximately 70 to 80 years old. So structure necessarily more maintenance after constructionIt has been analysed that the old building has to be Control demolished which is chill out not possible with the current running of the hospital in the existing building.As its suggested that ramp should be used in hospital rather of st line of works for the movement of patient from one floor to another and til now in case of compulsion like fire etc, when lifts cant be operate. So the construction of ramp in new building is prospering else its very unenviable to provide ramp in the old building.The derelict industry site has a wide range of flora and available in its surrounding which is best for the environmental policy of the NHS.From the studies of project brief it has stated that the hospital used for the acute care and accident and emergency so there go out be a helipad pass on be preferred to Trust at the tar m acadam area for landing place of helicopter in case of emergency services through the helicopter, as well the new build site is well connected to lane for quicker services through channel as well.The new build site is also have provision for the future extension as the ontogenesis are taking place in the surrounding area over decades of time.The specialist installation such as heating, ventilation and air condition is easy in new building while during the renovation it is quite difficult to replace the new with old one and difficult in after maintenance.Project StakeholdersThe stake holders are burning(prenominal) part in the overall process of project success so all the beneficial stakeholders are identified related to subject and their influence are clarify properly. As Walker and Marr states that a stakeholder is a term used for individuals or groups who have a connection to or an association with an organisation. They have a stake, claim, or vested interest in the day to d ay act of the Project.The only way of melody to know their value pass on be to determine exactly who their stakeholders are..and to ask them. The urgency to adapt to stakeholder actor and leverage it as a business strategy is not just a business fad it is a winning approach and the more satisfying way to do business - WIN WIN Solution.A commitment to sustainability is broader, deeper and of substantially greater strategic value to a connection than merely reporting on environmental outcomes. One goal of sustainability initiative is to realize long term business benefits by building non-financial performance measures- issues key stakeholders care about into business processes. When we have gained commitment from our stakeholders, it enhances our business performance, growth and higher stock value over time. All stakeholders whitethorn be important, notwithstanding nobody said they were all equal.(Walker and Marr, 2001) widen StakeholderismThe customers, employees, and featur eer, or investor would consider the immediate, or core, stakeholders because these are the one we live with every day. only when as in our families we have close relation with and obligation to the rest of the family as well the extended stakeholder of the business.Business depend upon on beat powerful relationship with what we would call extended stakeholders, those individuals outsides an organization beyond customers who are important to the business, such as suppliers, alliance partners, community leaders, the media , and the government.Immediate StakeholdersExtended StakeholdersIndividual investorsInstitutional investorsCustomersEmployeesUnionsSuppliersAlliances PartnersIndustry associationsLocal communitiesConsumer/ user association fussy interest groupMediaGovernment regulatorsCompetitorsOutside board directorsThe general public (Beyond local communities)Financial AnalysisLendersEducation leadersThe Status of Stakeholder allegianceThere is value in evaluating and classify ing stakeholders according to different directs of commitment to the project. Survey research can/has determine peoples position regarding the firm and their loyalty to it. Their answers can/has used to position the stakeholders on a spectrum of. How positive or oppose they feel towards the firm and. How likely or unlikely they are to uphold loyal or continue supporting the firm in the future.We would unremarkably people in a simple matrix. There are quadruplet possible combination of high and low attitude and behavior in this matrix, so we can segment the stakeholders as universe truly loyal, accessible, trapped, or high riskBehaviourPositive NegativeTruly faithfulAccessibleTrappedHigh jeopardyHighATTITUDE get-goThe in(predicate) stakeholder relationship passes through four stages, called the Four Gates of affair Awareness, Knowledge, Admiration, Action.(Walker and Marr, 2001)Recognition of project through from initiation through design, construction, operation, and maint enance and their outgrowth move on the project procurement issueAs the new build site has proposed the following points are suggested for the constructionAs there was a mine shaft present in the surrounding of the site so a case study has been done to investigate the flush capacity of soil for the construction of the hospital building.The design is be eco-friendly instauration on the following pointsTheir should be proper ventilation and natural roost and air arrangement for the patient health and to keep staff working spirit up for efficient working.The CLC (cellular light weight concrete) blocks are jab and hence will help in maintaining the internal temp of the direction and also help in reducing sound level as hollow blocks are good insulator of heat and sound. As CLC blocks are also help to eliminate the crack between the brick and concrete and hence it will lead to less maintenance in future better value for money.The large tar macadam area, surrounding the site shoul d be developed as the helipad so that the emergency cases can be postulate through the helicopter easily and further land will be used for the recreational activities of the staff.The derelict bridge can be ontogeny for pedestrian to cross the road as the adjacent arterial road will produce more congested during peak periods. seeksMiler and lessard (2001) states that the successful projects are not selected but shaped with risk resolution in mind. Risk is the possibility that event, their resulting impact and dynamic interactions may turn out other than that anticipated and construction is nothing special compared with other industries because we simply comprise out projects to a specified timescale using teams of specialist for design and construction by marshalling appropriate resources to overcome the physical and technical power involved. So to manage risk is around important for the successful completion of project in Time to keep certainty in cost and achieve the appropr iate quality.RISK focal point PROCESSRISK ASSESSMENTIDENTIFYING HAZARDSvalue probability and consequencesPrioritiesRisk control measureRemoveContractually indemnificationRetainSelf finance switch offEliminate/substituteReduce chanceReduce effectResidual riskRISK MANAGEMENTRisk management Process(Gunn 2008)To monitor the risk, the risk register should be maintained at siteRISK REGISTERItem commentRiskWithout controlControlsResidual riskActionHMLCost ImpactTime impactOthers(CIOB (2002) (Chartered Institute of building code of make for project management, 3rd edition. Blackwell edition)PROCUREMENT RISK procurance MethodBalance of RiskClient declarerTraditional extrusion sumClient Led design and builtContractor -led design and built steering centreorConstruction managementContractor pay (PFI)finance programmeConstructionFinance instaurationConstructionFinance excogitationConstructionFinance intentionConstructionFinanceDesignConstructionFinanceDesignConstructionHughes and Murdoch (2000) states that the apportionment of risk in design and build take aims is unique among procurement methods. This uniqueness is brought about by the single point responsibility and by the nature of the relationship between employers requirement and contractors proposal.The following points are considered for risk management in Design and builtMoneyCompletion of the projectDefault by employer or contractorTimeQualityMeasurement of performance and benchmarkedAkintoye, Beck and Hardcastle (2003) indicated the PEP fancy is a live, dynamic management document that records the project strategy, organisation, control procedure and responsibilities. It is updated regularly during the projects life cycle and used by all parties twain as a means of communication and as a control and performance measurement tool. Value management and other activities lead to the completion of various reports that are contained in the PEP.Examples of items that PEP should contain areThe options estimati on incorporating the clients value system.The user needs the strategic brief.The performance statement of all aspects of the project, the project briefThe project execution strategyThe form of contract, partnering agreement, etcThe contract specifications / drawings etcProject reporting procedure and particularly the procedure for information distribution, and communication, between the clients project team consultant and the contractorThe executive summaries and action plan from value management workshop reportsThe risk management strategy and in vogue(p) risk analysisThe required completion date including for any phaseHolroyd (2003) considered that this is not about lowest price, but ultimately about best overall value for money. Partnering implies selection on the basis of attitude to team working, ability to innovate and to other efficient solutions. We think that it offers a much more satisfying role for most people engaged in construction and the introduction of performance m easurement and competition against clear targets for overture, in terms of quality, timeliness and cost, as the principal means of sustaining and bringing adjust to the relationship between clients, project team and their suppliers. The evidence we have seen is that these relationship, when conducted properly, are much more demanding and rewarding than those based on competitive painfuling. There are important issue here, particularly for the public sector. He also consider Latham Report that effective partnering between client and contractor with teamwork and a win-win approach helped to bring the Sizewell nuclear power station to completion on time and within budget. But there is still scope of improvement in productivity and cost reduction, especially if design and construction team could be kept together. Akintoye, Beck and Hardcastle (2003) consider that PFI is the principle model of PPPs in the UK NHS. procurement RouteTo choose an appropriate procurement strategy is most i mportant to achieve value for money, cost certainty and in time and of best quality. Holroyd (2003) states that clients who know what they want, who do not change their minds, and who states clearly what they want, tend to procure projects that do represent value for money.As Masterman states that the formulation of the most appropriate strategy is one of the most important tasks that the client has to undertake the projects life. The project strategy consist of a number of sub strategic areas, which needs to be examines in detail so that appropriate decisions can be taken as to which sub strategy should be adopted.The following points should allow inMilestone schedule timeQualityFinancial objectives, funding and cost planningThe role of the client and the third partiesThe client project objectivesenvironmental issuesSafetyLegal and insurance issuesTechnical and design philosophyProject/ work breakdown structureRisk managementProject constraints open relation/ communicationThe app ropriate method of procurement mostly depends upon the followingWhether the organisation is publicly or private owned or fundedThe level of knowledge and experience within the organisation in dealing with the construction industry and implementing building project.Whether the project is needed by the client to accommodated his/her own industrial or commercial activities or whether the project is needed to lease, or sell, to other.The activities carried out by the organisation and the resulting project typology.Categorisation of building procurement SystemSeparated Integrated Management DiscretionaryOrientedThe ceremoniousSystemDesign Variation British partnering of PropertyBuild Design FederationBuild SystemPackage Develop ConstructionDeals ManagementTurnkey Construct Management Design Contracting ManageDesign and BuildIn DB there is a single point responsibility for both the design and construction of the project. The clients benefits from the contractors expertise early in the p roject.Research (Gidado and arshi 2004) suggest that there may be as a many as six versions of design and build. For instance, Rawlinson (2008) reports on the recent successful use of develop and construction with a two stage tender and tendering arrangement, a novated design, open book accounting and with the risk and value benefits of a Collaborative approach all on the same project.Types of Design Build ArrangementExtreme VarietyA Employer led Design Develop and constructDesign and Build (Single stage tender)Z Contractor led design Design and build (two -stage tender)Negotiated design and buildDesign and manageTurnkeyThe client may esteem to provide the contractor with nominal information in the form of an outline brief. This will leave the design and built contractor fully responsible for the conceptual and detail design in order to meet the employer requirements.An alternative twist on develop and construct, is to novate the architect or design team to the contractor on ce the contract has been awarded. This variant is known as novation design and build because the clients architect, and may be other member of the design team, are legally passed over to the contractor in order to produce the detailed aspects of the design. The novation arrangement should be agreed with the architect when he is first appointed.In this way, the client will maintain an interest in the design but the contractor will pay the continuing design fees through to contract completion and become responsible for the entire design.The Tender documents will contain details of the clients point of reference and the proposed novation procedure, together with a requirement that the contractor who is eventually awarded the contract will have to accept responsibility for the total design of the project, including the initial work carried out under the clients aegis. In other words it is as if the consultants by the contractor, including the level of fees, have been predetermined by t he client, although commonly this is a matter for negotiation between the contractor and the design team.DESIGN AND BUILD lymph gland LED DESIGN RELATIONSHIPThe Team being novated to DB Contractor.(WILEY-BLACKWELL, 3rd edition, construction planning, programming and control 2009 32) procurance strategyThe picking of building procurement systems available to clients is now so wide that the need to carry out the selection of the most appropriate method depends upon the critically study of the clients (TRUST) requirement in a disciplined and objective manner. (Masterman 2006)The procurement of a construction is elect upon the clients project requirement and a brace between time, quality and cost. After considering entire client requirements critically and the picture budget. JCT Design and Build novated system contract is most appropriate for the construction of hospital for the trust as According to International Commission on building (CIB W92) the procurement process is a str ategy to satisfy clients development and/ or operational needs with respect to the provision of constructed facilities fro a distinct life cycle. (Masterman 200626)Under the JCT 05 design and build conditions, it is perhaps worth noting the practice that the employer identified a design team and the same team will become the contractors team once the contractors is appointed under a design and build form of contract and the payment terms may be either stage payments or periodic payment. Periodic payments are normally monthly, whereas stage payments are based on agreed cumulative value linked to stages or milestone as stated in the contract particulars. The payments period from the payment request date is specified in the contract as 14 days. (Davison 2006)We can write it as the option chosen for the design and build is on the cost effective and time management as steffen and Jeffery in Stakeholder Power states that as proven by the bodily raiders, one of the fastest means of raisi ng stock value is to come along profit by cutting costs. This ushered in the era of crash dieting by large companies also known as reengineering or downsizing. (Walker and Marr 2001)The Procurement strategy is chosen on the basis of following criteria noted in the NEDO report. NEDO has suggested eight procurement factors to be considered at the procurement stage. Of these, the three main considerations areCost certainty of the market price at the forebode submission and final account stages.Time the overall timing of the project from inception to completion.Quality the clients required standard of design and workmanship as expressed in the specification.Five other considerations were also highlighted as being influential on the choice of the procurement route. These are complexity Complexity of the building design, layout and services provision.Controllable variation How sure is the client of his requirements? The cost of variation of the contract may prove difficult to agr ee and assess. detail of completion Does the client wish to create competition at the design and construction stage of the project?Client Responsibility Does the client wish to be directly involved in the decision making during the project.Risk in the project Commercial risk, occupation risk, design and construction risk. taking the following factors into account, decisions has made in relation toChoice of appropriate Procurement strategy for managing the contract (JCT- Design and Build)The Clients requirement stated in the lying-inConsidering the clients brief and assessing the projects feasibilityConsidering the Project FinanceDecided how to procure and manage the design and constructionConsidering the realistic time period for the overall project.(Williams and Cooke 2009)As the time period is of high priority and the early starting of the project is the must as the Clients required the project to beCompleted as quickly as possible (because time is money a month delay in pro ject not even counted the construction charges but also a lot of overhead and industrial charges also)Completed by specific date (that must be achieved to ensure the govt about the proper running of the hospital)Completed on time once it commence (with no time slippage by starting the project at once under design and build procurement method)5040 35%30%3025 %206%10 2% 2%0JCT98 JCT JCT JCT JCT OtherStandard Intermediate Minor with Management ground level Form Works Contractors +Agreement Design Major ProjectsSUPPLY filament MANAGEMENTHOLROYDS (2003) suggest that the supply chain role is critical to achieving prolong improvement and forward thinking. In the context of extensive sub-contracting this is perhaps more so. Partnering, correctly implemented, will provide benefits comparable to those obtained by the integrated project process. (Trevor M. Holroyd, Buildability, Thomas Telford Publishing, Thomas Telford Ltd, 1 Heron Quay, London 2003)Some major clients have assembled thei r own standing lists of preferred suppliers according to requirement of their projects so that their project can be managed on a more long term and integrated basis while retaining an appropriate degree of competition and control. These suppliers or supply chain partners, include architects, engineers, main contractors, specialist contractors and suppliers of a variety of goods and services. The supply chain can be defined as the entire chain of processes that exist between the point at which a need for goods or services arises to the point at which the end user receives them and payment is made to the supplier. Problem is that one part of the chain impact directly on all subsequent stages, and proactive management of the supply chain is therefore fundamental to providing an efficient and effective procurement services to the organisation.(Cooke and Williams 2009)The contractor should be given the whole responsibility for the procurement of all material under the contract and a T.P .I (Third party Inspection by Individual body Trust) must be considered to achieve the best quality of material procurement.The essential point here is that the supply chain links, all the activities between suppliers and customers in a timely manner. The material will be procured at least 8 weeks before the schedule of use to maintain progress in time.Adversarial Relationship Collaborative RelationshipFragmented miss of Process CustomerProcesses Customer Focus integration SatisfactionThe role of SCM (supply chain Management) addressing the key problems in construction.(Fewings 2005)Cooke and Williams 2009 describes that the fast track system as a management approach aimed at the early completion of the construction phase using a combination of innovative procurement methods, industrialisation of the construction process and the use of work package contractors in order to benefits from their expertise, especially as regards their design input. The benefits of system includeOverl apping of work package both during design and constructionLess duplication of lather and wasteLess uncertainty and inefficiency at work package user interfaceThe use of innovative construction methodsIncorporation of cutting edge technologies much emphasis on the standardisation, pre-assembly and modularisation of the construction processAs a consequence, the fast-track system has the propensity to deliver completed projects in remarkable timescales.Identification and excuse of relevant formsThe purpose if this work is to examine the standard forms of contract most commonly used in the construction industry today. Standard forms tone of voice in at least three directions at once. One of these is towards the wider law, be it the law of contract, and be it statute law or common law, with its unceasing accretion arising out of decided cases. In addition all of this forms considered are entire co