Project Procurement Methods - EPM

Project Procurement MethodsA CLIENT GUIDE

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TABLE OF CONTENTS

INTRODUCTION 2

CHALLENGE 2

STRUCTURE 2

DISCUSSION 2

PART 1 - Project Procurement Methods 2

PART 2 - Strengths & Weaknesses of Procurement Methods 4

PART 3 - Selecting the Preferred Method 4

PART 4 - Risk Allocation 6

PART 5 - Project Administration Considerations 6

SUMMARY OF GUIDING PRINCIPLES 8

ABOUT THE AUTHOR 8

APPENDIX 1 – Strengths & Weaknesses of Procurement Methods 9

APPENDIX 2 – Early Contractor Involvement 13

Modern Project Procurement Methods - A CLIENT GUIDE | 2

© epm Projects Pty Ltd

INTRODUCTIONThis client guide describes the most common methods for procuring building projects. It serves to assist clients of EPM to make informed decisions and thereby provide clients the opportunity to make their projects a success. It considers the strengths and weaknesses of each method, important matters in selecting a method, and key elements for managing the selected method. It concludes with a summary of seven guiding principles. It reflects almost 100 years of collective experience of EPM Projects management team in project management.

CHALLENGEProperty development is unquestionably risky business. How then does the project procurement method influence this risk? Answering this question before selecting a procurement method should set the project on a course for success.

STRUCTUREThis guide is structured in five parts as follows:

PART 1 - Project Procurement Methods

We explain the most common methods for procuring projects.

PART 2 - Strengths & Weaknesses of Procurement Methods

We discuss the strengths and weaknesses of, and risk mitigation measures for, each of the methods discussed in Part 1.

PART 3 - Selecting the Preferred Method

We discuss our view about the principles that should guide the selection of a method.

PART 4 - Risk Allocation Considerations

We discuss our view of the principles of risk allocation as this relates to selecting a preferred method.

PART 5 - Project Administration Considerations

We discuss our view about matters that should be considered when managing projects and administering contracts under the various procurement methods.

DISCUSSIONPART 1 - Project Procurement Methods

Successful project delivery depends on deliberate and careful management and administration of the selected procurement method. It demands an appropriate focus on the areas that give rise to the greatest risk, a clear understanding of the procurement method, and the reasons it was selected over other methods.

The Procurement Practice Guidelines published by the NSW Government Procurement Office point to ten methods that are used by the government to procure construction projects. In our experience, the four most common of these methods used by private enterprise are:

1. Construct Only

2. Design Finalisation & Construct

3. Design & Construct

4. Managing Contractor

What do these mean, and in what context do they work best?

To understand these methods, it is first necessary to understand the meaning of the following terms.



• Concept Design – The initial high-level response to a project brief, used to test whether the requirements are likely to be able to be feasibly achieved.

• Developed Design – This stage of design moves beyond being conceptual or schematic to a greater level of detail. It illustrates how the design might respond to various constraints and opportunities. The process is often iterative, with each iteration leading to further development of the design.

• Documented Design – Once a developed design is agreed it must be documented suitable for use by external parties. Ordinarily it would satisfy one or more of three purposes – tendering, construction, and/or certification. The documented design shows the components of an object or building element. It shows how the components fit together. Documented design includes a corresponding commentary or set of instructions (commonly referred to as a specification).

• Construct – The Oxford Dictionary defines the word “construct” to mean “build or make (something, typically a building, road, or machine)”. While this may seem obvious, a clear understanding of the meaning of this term is important in managing risk associated with selecting and administering project delivery methods. This will become clearer later in this guide.

Constructing includes procuring all the components in the shape, size and composition depicted in the documented design, having regard to the instructions (specifications). When arranged in the ways shown in the documented design, the components form a true physical representation of the documented design and thereby meet the intentions of the designer.

So, how do each of the four methods work? Moreover, how do they differ from each other?

Method 1 - Construct Only

Under this method, someone other than the party that has the responsibility to construct, undertakes the documented design. Typically, the project owner procures the design and then engages a builder to construct the design.

While the industry uses the term ‘construct only’, this does not mean that a contractor does not have any design responsibilities. This is because there is inevitably an element of design that can only be undertaken by a builder in consideration of the specific circumstances at the time. For example, a builder is required to prepare drawings for the manufacture of windows or joinery. These ‘workshop drawings’ as they are commonly known, are used to reflect the manufacturing process, materials and systems used in that particular building element. Workshop drawings incorporate design and yet are the responsibility of the builder.

Nevertheless, the inference is that under the Construct Only method, the design should be sufficiently documented (or detailed). This enables a competent and experienced builder to interpret the design in a manner that enables it to construct. The risk for errors and omissions in the design rests primarily with the party that is responsible to procure the design, generally not with the builder.

Method 2 - Design Finalisation & Construct (DF&C)

Here, the responsibility to procure the design (that is a concept or scheme) is distinct and separate from the responsibility to procure the developed design, the documented design and then to construct. These latter phases rest with the builder under this method.

This method substantially shifts the risk relating to errors and omissions in design to the builder. However, to the unsuspecting, this method also creates a different dimension of risk which will be considered later in this guide.



Method 3 - Design & Construct (D&C)

Under a D&C arrangement, the responsibility to develop design based on a concept, document the design and to construct resides with the builder. Typically, the concept or scheme reflects what are commonly referred to as ‘user’ or ‘project’ requirements. This is a written statement, communicating the performance standards and requirements to be met by the completed building. This is normally prepared by, or on behalf of, the client and accompanies the concept design.

This is one of the most common methods used to shift risk associated with property development to the builder. While not criticising this method, in our experience it has the potential to create more risk than it solves. This is particularly so in circumstances where ownership and operation will remain in the same hands (e.g. a school, or an aged care facility).

Method 4 - Managing Contractor (MC)

This works under an arrangement where the builder is responsible to manage the procurement of the concept or scheme, the developed design, the documented design and to construct. However, unlike other methods where the builder has responsibility to procure design, in this case the builder generally does not take any risk associated with the suitability of design. Similarly, the builder does not take responsibility for many of the other risks that are usually associated with “contracting” (e.g. price, delays, subcontractor performance, industrial disputes and inclement weather).

PART 2 - Strengths & Weaknesses of Procurement Methods

There are inherent risks with each procurement method. No one method will suit every circumstance. This means that it is important to understand the strengths and weaknesses of the various methods before deciding a preferred method. The table in Appendix 1 sets out our experience-driven view about the strengths and weaknesses of each method. We also show ways in which to mititgate risk.

PART 3 - Selecting the Preferred Method

Time, cost and scope are the three essential elements in decisions about project delivery methods. In our experience, one will eventually be compromised to obtain the other two. Consider the following examples;

Cost & Scope before Time

A new building can be constructed within one year at a cost of $15.0 million. If, however, the owner wanted to reduce the cost while maintaining the same scope, they would need more time to investigate alternative building materials and source alternative quotes. Thereby trading off time to meet cost and scope objectives.

Time & Scope before Cost

The owner wants to bring forward the completion date while maintaining the same scope. This would incur additional cost for overtime labour, in this case trading off cost to meet time and scope objectives.

Cost & Time before Scope

If the owner wanted to bring forward the completion date without increasing cost, they would need to reduce the scope of the project, thereby trading off ‘scope’ for ‘cost’ and ‘time’.

Clearly there are strengths and weaknesses of each delivery method. No single method is right in all circumstances. Therefore, it is important to decide the priorities first before choosing a procurement method. This is because the chosen method will largely determine the extent of your control over time, cost and scope.



The diagram in Figure 1 below serves as a general guide to the preferred method in consideration of the priorities.

Figure 1 – Guide to Method Selection

The diagram in Figure 2 below shows the point in the project lifecycle at which each method is typically introduced relative to the risk in the project at that point.

Figure 2 – Project Lifecycle

The contracting method should be selected having regard to your priorities.

General Selection Principals

1. Increasing control over COST & TIME will reduce control over SCOPE

2. Increasing control over COST & SCOPE will reduce control over TIME

3. Increasing control over SCOPE & TIME will reduce control over COST

Note: “scope” includes “quality”.

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The foregoing diagram demonstrates that risk diminishes as certainty increases over the course of time. Importantly, the diagram also demonstrates that the extent to which design influences risk (project and operational) increases as the project moves through the project lifecycle.

PART 4 - RISK ALLOCATION

We hold the view that risk should be managed by those who are best placed to manage it. It follows that transferring risk to someone who is unable to manage that risk will place them in a position where they are highly likely to fail.

If scope (or quality) is one of the two priorities that should not be compromised, then we question the wisdom in a method that makes the builder entirely responsible for design (at any point). In our view, selecting such a method would simply be incongruous with the priorities for the project.

In our experience, a better way to manage the risk in the quality of design, is to appoint an experienced and well-resourced team of consultants. They should be properly (and expertly) briefed and managed and given the time to appropriately finalise the design.

The cost of consultants typically ranges between 10% and 15% of the overall cost of a project. This investment will significantly determine the risk in the project. Saving (say) 10% of the cost of consultants at the expense of good quality design conflicts with the priorities of a project where scope (quality) should not be allowed to be compromised. This is illustrated in Figure 3 below:

Figure 3 – Cost of Consultants

We believe that an investment in good quality design will assist to manage the risk in construction. Making a builder responsible for design does not necessarily minimise such risk.

Over the last decade, a method that is referred to as ‘Early Contractor Involvement’ (ECI), has gained prominence in an effort to maintain a client’s control over scope while minimising the risk that arises out of poor quality design. ECI is a hybrid of Construction Management combined with Design Finalisation & Construct. The table in Appendix 2 describes the view of EPM about the strengths and weaknesses of ECI.

In the experience of EPM ECI, like any other method, should be selected having regard to the priorities of the project. It should not simply be an attempt to shift risk to the builder if the builder is unable to manage the risk.

PART 5 - Project Administration Consideration

In our view consideration should be given to the following matters when administering a project under any of the previous methods:

1. Principal’s Project Brief – A client should articulate the requirements for the project and the design of the buildings from the outset. When asked to offer an opinion about design, our general response is to ask “… does the design meet your requirements in terms of function and form? Is it likely that it can be constructed within your budget”? Suprisingly, few clients can answer this question with confidence, one way or another.

X 10% = 1.5%

[In this example, a 10% saving in the cost of consultants equates to a 1.5% saving in the cost of the Project – but at what risk?]

Cost of Building

‘Work ~ 85%X 10% = 1.5%

[In this example, a 10% saving in the cost of consultants equates to a 1.5% saving in the cost of the Project – but at what risk?]

Cost of Consultants

~ 15%



We generally recommend that the client’s architect is made responsible as the lead design consultant to coordinate all elements of design. We also recommend the preparation of a “Design Brief” (in the case of a Construct Only method, before progressing beyond the concept and design phase), or a “Statement of User Requirements” (in the case of a “Design and Construct” method). There is a subtle difference between a Design Brief and a Statement of User Requirements. The former will be more prescriptive about how something is to be designed. The latter will provide “performance criteria” to be satisfied by the design thereby giving greater opportunity to achieve the design objectives through any one of a number of ways.

2. Consultant Services Brief – In the case of a Construct Only method, it is critical that designers are clear about the requirements for the design of the buildings, and the services that they are to provide. We believe consultants are often poorly briefed, sometimes by no more than a two line email requesting a proposal for design work without any proper accompanying services brief. In such cases, it is not surprising that design is also of poor quality.

Consultant Services Briefs should clearly set out the scope of the required services, and integrate. The average building project commonly requires upward of 15 to 20 consulting disciplines. This means that the coordination of all of the services offered by these consultants is a good starting point for good quality design. Good quality design will be relatively free of errors, omissions, inconsistencies, ambiguity and discrepancies. This will lead to more reliable pricing by the builder, minimising delays and claims for variations during building. It will also minimise disagreements and disputes and improve the overall quality of building work.

3. Time to Design – Irrespective of the delivery method, design requires time to “get it right”. This is a case where the phrase “more haste, less speed” rings true.

When using a method that involves a builder in design, it is important to establish the following rules:

• Design Reviews – Regular joint reviews of design with the builder and its design consultants.

• Design Approval Gateways – Don’t permit design to proceed from one phase (or stage) to another until the builder has demonstrated that the design complies with the Principal’s Project Requirements (PPRs) or Statement of User Requirements.

When using a method that involves a builder in design, it is important to verify that the requirements for the project are in fact achievable, particularly in a Design Finalisation & Construct arrangement where the client may be responsible for a portion of the design.

4. Design to a Cost – A builder that has responsibility for design will be highly motivated to ‘design to a cost’. Unfortunately, this is where many projects delivered under a Construct Only method fail. The reason for the failure is that, rather than ‘designing to a cost’, the delivery team ‘costs a design’. That is, the design is not engineered to a price. Often it’s not until receipt of tenders (market prices) that the cost is properly understood. At this point it is difficult to make changes without affecting time and quality. It is important for the design team to actively engage with cost consultants in an endeavor to design to a cost. At the least, this will enable the project owner to make choices and plan for their impact on its business and the project. Designing to a cost increases the prospects for successful delivery of the project.

5. Careful Administration – It is often said “… let’s just put the contract in the bottom drawer” or “let’s not be contractual”. To us, that would be like saying “… let’s just put the drawings in the bottom drawer”. Irrespective of the chosen delivery method, diligent and careful administration of the contract by the client, the project manager and the builder, coupled with clear communication, is fundamental to successful project delivery.



SUMMARY OF GUIDING PRINCIPLESThis guide can be summarised in the following seven guiding principles:

1. Decide and communicate your priorities early.

2. Carefully consider the strengths and weaknesses of each delivery method.

3. Take care when attempting to shift risk through a selected procurement method that you do not create more risk than you solve.

4. Make sure there is a clear and detailed statement of the requirements of the project owner for the project.

5. Carefully brief the design consultants.

6. Allow as much time in design, in order to spend less time in construction and minimise risk.

7. Adopt diligent and careful contract administration practices.

ABOUT THE AUTHORAndrew Graham is the CEO of EPM Projects Pty Ltd. Andrew’s project management experience includes work in a range of organisations including Leighton Contractors, the Sydney Organising Committee for the Olympic Games and Optus Communications. It includes a large number of projects across the commercial, education, and aged care sectors. A portfolio of the work carried out by Andrew and his team at EPM can be found at www.epmprojects.com.au. Andrew can be contacted by email at [email protected] or by telephone +61 2 9452 8300 or on mobile phone at +61 419 732 021.

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n of

co

nsul

tant

s to

th

e bu

ilder

to e

nsur

e m

utua

l rec

ours

e by

th

e pr

ojec

t ow

ner

and

build

ers

to

cons

ulta

nts

thro

ugho

ut

proj

ect

and

beyo

nd.

4.

Proj

ect

owne

r en

gage

s se

para

te

cons

ulta

nts

to

revi

ew

desig

n do

cum

enta

tion

prod

uced

by

th

e bu

ilder

.

5.

Requ

ire

appr

oval

of

‘d

esig

ners

’ en

gage

d by

D&

C s

ubco

ntra

ctor

s.

6.

(to

faci

litat

e A

dvan

tage

N

o.6)

th

e de

velo

pmen

t con

sent

mus

t inc

lude

the

abili

ty to

issu

e m

ultip

le (s

tage

d) C

C’s

(o

r equ

ival

ent).

APP

EN

DIX

1St

reng

ths

& W

eakn

esse

s of

Pro

cure

men

t Met

hods

(con

tinue

d)

Mod

ern

Proj

ect P

rocu

rem

ent M

etho

ds -

A C

LIEN

T G

UID

E

|

11

© e

pm P

roje

cts

Pty

Ltd

Met

hod

Adva

ntag

esD

isad

vant

ages

Miti

gatio

n

Bu

ilder

can

also

ass

ist w

ith d

evel

opin

g in

form

atio

n to

sup

port

appl

icat

ions

for

sta

tuto

ry a

ppro

vals.

6.

In c

ontra

st to

the

Con

struc

t Onl

y m

etho

d,

this

met

hod

give

s op

portu

nity

fo

r co

nstru

ctio

n to

com

men

ce b

efor

e de

sign

has

been

fully

doc

umen

ted.

3.

Des

ign

& C

onst

ruct

(D

&C)

Typi

cally

th

e bu

ilder

is

re

spon

sibl

e to

de

velo

p de

sign

fo

r al

l pu

rpos

es

for

whi

ch i

t is

req

uire

d ba

sed

on a

con

cept

an

d a

stat

emen

t of

the

pro

ject

ow

ner’s

re

quire

men

ts

prep

ared

by

th

e pr

ojec

t ow

ner.

1.

Invo

lves

eve

n le

ss u

pfro

nt in

vestm

ent i

n de

sign

in c

ompa

rison

to th

e fo

rego

ing

met

hods

in o

rder

to g

ain

even

gre

ater

up

-fron

t ce

rtain

ty a

bout

the

pro

babl

e co

st of

the

proj

ect.

O

ther

wise

as

with

‘Des

ign

Fina

lisat

ion

&

Con

struc

t’ ex

cept

that

:

2.

In c

ontra

st to

the

for

egoi

ng m

etho

ds,

the

risk

for

com

plia

nce

of d

esig

n w

ith

statu

tory

dev

elop

men

t sta

ndar

ds a

nd

code

s is

usua

lly b

orne

ent

irely

by

the

build

er.

3.

In c

ontra

st to

the

for

egoi

ng m

etho

ds,

the

risk

of d

elay

s to

the

pro

ject

and

co

st im

pact

s br

ough

t abo

ut b

y de

sign

is us

ually

bor

ne e

ntire

ly b

y th

e bu

ilder

.

1.

As

with

DF&

C e

xcep

t tha

t the

risk

that

de

sign

does

not

mee

t the

requ

irem

ents

of th

e pr

ojec

t ow

ner a

re e

ven

grea

ter.

1.

As

per

Con

struc

t Onl

y Ite

ms

1 an

d 2

and

as p

er D

F&C

Item

s 1,

2 a

nd 4

.

2.

Det

aile

d de

sign

prog

ram

me

iden

tifyi

ng

timin

g fo

r re

quire

d cl

ient

inp

ut a

nd /

or

app

rova

l.

APP

EN

DIX

1St

reng

ths

& W

eakn

esse

s of

Pro

cure

men

t Met

hods

(con

tinue

d)

Mod

ern

Proj

ect P

rocu

rem

ent M

etho

ds -

A C

LIEN

T G

UID

E

|

12

© e

pm P

roje

cts

Pty

Ltd

Met

hod

Adva

ntag

esD

isad

vant

ages

Miti

gatio

n

4.

Cons

truc

tion

Cont

ract

or

(Incl

. Con

struc

tion

Man

agem

ent)

The

build

er w

orks

col

labo

rativ

ely

with

the

pr

ojec

t ow

ner a

nd it

s con

sulta

nts d

urin

g th

e de

sign

pro

cess

, and

arr

ange

s an

d m

anag

es

the

trad

e co

ntra

ctor

s.

1.

Is th

e m

ost

colla

bora

tive

met

hod

betw

een

the

proj

ect

owne

r, de

signe

rs

and

build

er t

o m

anag

e tim

e, c

ost

and

qual

ity.

2.

Prov

ides

th

e gr

eate

st in

cent

ive

for

a bu

ilder

to

pr

ovid

e in

nova

tive

way

s in

whi

ch t

o de

liver

the

pro

ject

with

out

cutti

ng c

orne

rs.

3.

In c

ontra

st to

the

Con

struc

t Onl

y m

etho

d,

this

met

hod

give

s op

portu

nity

fo

r co

nstru

ctio

n to

com

men

ce b

efor

e de

sign

has

been

fully

doc

umen

ted.

1.

The

prob

able

cos

t an

d tim

ing

of t

he

proj

ect a

t the

com

men

cem

ent o

f bui

ldin

g w

ork

is le

ss c

erta

in t

han

in a

ll ot

her

met

hods

.

2.

The

risk

of th

e pe

rform

ance

of a

sup

plie

r or

trad

e co

ntra

ctor

rests

with

the

proj

ect

owne

r in

clud

ing

the

risk

cons

eque

nt t

o a

supp

lier o

r tra

de c

ontra

ctor

bec

omin

g in

solv

ent.

3.

The

risk

that

co

sts

that

sh

ould

be

bo

urne

by

the

build

er b

ecau

se th

ey a

re

over

head

s be

com

e tra

de c

osts

bour

ne

by th

e pr

ojec

t ow

ner.

1.

Requ

ire t

he b

uild

er t

o co

ntra

ct d

irect

ly

with

trad

e su

pplie

rs a

nd c

ontra

ctor

s.

2.

Ensu

re th

at o

verh

eads

that

are

incl

uded

fro

m i

n th

e bu

ilder

’s

fee

are

clea

rly

defin

ed.

Also

co

nsid

er

an

arra

ngem

ent

whe

reby

th

e bu

ilder

is

enga

ged

unde

r a

lum

p su

m

pric

e th

at i

nitia

lly c

ompr

ises

the

build

er’s

m

anag

emen

t fe

e, a

lum

p su

m f

or m

argi

n an

d ov

erhe

ads,

and

pro

visio

nal

sum

s fo

r tra

de w

orks

, an

d th

at p

rovi

siona

l sum

s ar

e pr

ogre

ssiv

ely

subs

titut

ed w

ith a

gree

d lu

mp

sum

s as

and

whe

n th

e tra

de w

orks

are

let

(re

ferre

d to

as

“Pro

gres

sive

Lum

p Su

m”)

.

APP

EN

DIX

1St

reng

ths

& W

eakn

esse

s of

Pro

cure

men

t Met

hods

(con

tinue

d)

Mod

ern

Proj

ect P

rocu

rem

ent M

etho

ds -

A C

LIEN

T G

UID

E

|

13

© e

pm P

roje

cts

Pty

Ltd

APP

EN

DIX

2Ea

rly

Cont

ract

or In

volv

emen

t

Early

Con

tract

or In

volv

emen

t (EC

I) –

A b

uild

er is

app

oint

ed b

y th

e pr

ojec

t ow

ner t

o w

ork

with

the

proj

ect o

wne

r and

its

cons

ulta

nts

to id

entif

y w

ays

in w

hich

the

desig

n ca

n be

mad

e m

ore

effic

ient

(bui

ldab

le).

It is

mor

e co

mm

only

ass

ocia

ted

with

a D

F&C

met

hod.

Ther

e ar

e w

ays

to m

itiga

te th

e fo

rego

ing

risks

. How

ever

, the

se n

eed

to b

e w

orke

d th

roug

h w

ith th

e pr

ojec

t tea

m in

con

sider

atio

n of

the

prio

ritie

s an

d sp

ecifi

c ci

rcum

stanc

es o

f the

pro

ject

.

Adva

ntag

esD

isad

vant

ages

1.

If do

ne p

rope

rly,

shou

ld m

ake

the

desig

n m

ore

effic

ient

(bui

ldab

le) t

han

desig

n th

at is

not

in

form

ed b

y a

build

er a

nd tr

ade

cont

ract

ors.

2.

If do

ne p

rope

rly, s

houl

d m

inim

ise c

osts

from

var

iatio

ns a

risin

g ou

t of e

rrors

and

om

issio

ns in

de

sign

proc

ured

by

the

proj

ect o

wne

r.

1.

Dep

ends

on

a bu

ilder

giv

ing

up it

s IP

. Thi

s in

turn

dep

ends

on

an u

p-fro

nt c

omm

itmen

t by

the

proj

ect o

wne

r tha

t the

pro

ject

ow

ner w

ill n

ot ‘s

hop’

(see

k co

mpe

ting

pric

es fo

r) th

e id

eas

of

the

build

er.

2.

Dep

ends

on

a co

rresp

ondi

ng, u

p-fro

nt c

omm

itmen

t by

the

build

er to

sele

cted

trad

e co

ntra

ctor

s th

at m

ay c

ompr

omise

the

abili

ty o

f the

bui

lder

to o

btai

n co

mpe

titiv

e pr

icin

g fo

r tra

de w

orks

.

3.

The

earli

er in

the

proj

ect t

ime

lifec

ycle

that

a b

uild

er is

ask

ed to

pric

e its

mar

gin

(pre

limin

arie

s,

over

head

s an

d pr

ofit),

the

grea

ter

the

risk

to th

e bu

ilder

and

hen

ce th

e m

ore

likel

y th

at th

e m

argi

n w

ill b

e in

flate

d or

qua

lified

in a

way

that

in it

self

give

s ris

e to

risk

that

the

proj

ect

owne

r tha

t it w

as h

opin

g to

avo

id.

4.

If th

e bu

ilder

’s m

argi

n is

not a

gree

d up

fron

t (w

hich

is d

ifficu

lt fo

r the

reas

ons

set o

ut in

Item

3

abov

e), t

hen

the

proj

ect o

wne

r may

form

the

view

that

the

pric

e is

unco

mpe

titiv

e. T

his

may

fo

rce

the

proj

ect o

wne

r to

seek

com

petin

g pr

ices

. Th

is co

uld

be d

ifficu

lt if

the

proj

ect o

wne

r is

unde

r tim

e pr

essu

re o

r has

mad

e a

com

mitm

ent t

o th

e bu

ilder

for t

he re

ason

s set

out

in It

em

1 ab

ove.

5.

The

build

er w

ill n

atur

ally

be

mot

ivat

ed to

mak

e it

wor

k w

hile

mai

ntai

ning

its

profi

t tar

gets.

Th

is m

ay m

otiv

ate

the

build

er to

pro

mot

e m

etho

ds a

nd m

ater

ials

that

are

less

than

idea

l in

the

shor

t ter

m a

nd lo

ng te

rm (c

ausin

g m

aint

enan

ce is

sues

).

6.

If af

ter a

ll th

e ef

fort

to m

ake

it w

ork,

the

proj

ect o

wne

r is

not s

atisfi

ed th

at th

e pr

ice

is rig

ht, i

t m

ay fi

nd it

diffi

cult

to o

btai

n co

mpe

ting

pric

es fr

om th

e m

arke

t as

by th

at ti

me

ther

e m

ay b

e a

perc

eptio

n in

the

mar

ket t

hat t

he p

roje

ct is

trou

bled

.

Contact Uswww.epmprojects.com.au

PO Box 1034Suite 2, Level 2, 146 Arthur StreetNORTH SYDNEY NSW 2060Ph: (612) 9452 8300Fax: (612) 9452 8388

Key ContactsAndrew GrahamCEOMobile: 0419 732 021 Email: [email protected]

Johan O’Brien COOMobile: 0414 917 904Email: [email protected]

Mark BlizardGroup ExecutiveMobile: 0438 126 778Email: [email protected]

Ryan MooneyGroup ExecutiveMobile: 0423 835 253Email: [email protected]

Documents

Project Procurement Methods - EPM