Liam Devine ST09001278 Architectural Design and Technology Management Mr John Counsell Procurement Unit 2: Individual Reflective Report

Contents
1. Introduction 2

2. Summary

3. Life Cycle Costing 3

4. Building Product Evaluation 10

5. Sustainable Procurement Policy 10

6. Procurement Selection and Agreement Process 10

7. Evaluating estimates, bids and tenders and the process of agreement of contracts 10

8. Bibliography

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1. Introduction The aim of this reflective report is to show what has been learned throughout the course of the year regarding the management module, unit 2 procurement. The report will gain an insight into the consideration of the experiences and targets which have been successfully archived in correlation with the learning outcomes set out in the module document. The knowledge and understanding of the learning outcomes has been achieved through critically appraisal of lectures and recommended books from the reading list. Due to the opportunity of gaining work experience in a housing procurement department in July of 2008, I have a current understanding of the processes, roles and responsibilities, which will be described in more depth in the report. Once considering all the experiences and targets, I will conclude this information and provide details of what I was able to learn and how I found the task. Obtaining the conclusions will lead to a specific set of actions of what could be done in the future differently and how could the approaches be changed. There are a total of six learning outcomes, which are addressed throughout this report to achieve the sufficient standard.

2. Summary

3. Whole Life costing Initially in understanding the Life cycle costing, I had to ask the following in order to understand the basics, These simply analytical questions started the in depth research into Life cycle costing through reading case studies and books produced by the OGC.

Image: The graph above shows the typical life cycle cost profile for an asset, from its design to its disposal The Life cycle costing is often abbreviated to LCC, and is referred to as Whole Life costing according to the Office of Government Commence. The LCC has been defined as: Cost of an asset, or its parts throughout its life cycle, while fulfilling the performance requirements. (BS ISO 15686-5, 3.1.1.7) The LCC is a technique or tool that is used for assessing the total cost performance of an asset over time. The costs included are acquisition, operation, maintenance and disposal. The asset regarding construction could be a building, or individual components and materials. LCC is carried out during the project planning, design and construction and during the in-use phases I am able to reminisce from previous work experience, that the main role was to achieve lower costs throughout the housing project taking place in St Asaph. I worked with the procurement department and shadowed the procurement officer. I was set the task of consulting with an M&E engineer regarding a more efficient boiler system than the previous system because this could dramatically lower costs throughout the whole life of the building.

I specifically remember being given a selection of appropriate suppliers and contractors that the company recommended and was told to challenge the prices set out through research and enquiries. During this time, I found that the tasks and methods that where being carried out where just common sense approaches to fulfilling the managers objectives. I can acknowledge and understand that the work I was carrying out was part of the whole life cycle costing process in the design stage and that the major costs do not all occur at the point of acquisition. The key steps of the LCC process is shown below in a systematic diagram

Image:

Towards a common European methodology for Life Cycle Costing (LCC) Guidance Document

Benefits of Life Cycle Costing Analysis evaluation of competing options in purchasing; improved awareness of total costs; more accurate forecasting of cost profiles; and performance trade-off against cost

(http://www.ogc.gov.uk/implementing_plans_introduction_life_cycle_costin g_.asp Accessed 14/04/10 The specific benefits which are listed above will depend on the construction purpose, circumstances of the project, client and asset. The implications that are concerned regarding the client are shown in the long and short term are shown in the image below

In conclusion, Life cycle costing is used throughout the process an asset from the design to disposal. It will provide clients and other

Throughout the lectures, I took direct observation notes to record the information from the presentation slides and oral information from the lecturers knowledge and experience. I achieved a general understanding of the Sustainable procurement policy document, this lead to reading two of the eleven guides provided by the Office Government of Commence (OGC) after the lecture. The guides where ( ) (). In relation to reading the guides, the literature was relatively easy to find the correct information. The sustainable procurement policy is set up to achieve the following:

Ensure long term cost effectiveness; Reduce waste, carbon emissions, energy and water consumption and encourage recycling and reuse in line with targets for the Central Government Estate; Protect biodiversity; Stop the buying of products, such as timber and timber products from unsustainable or illegal sources; Support fair and sustainable economic growth.

(http://sd.defra.gov.uk/advice/public/buying/background/procure-policy/ Accessed ) The decision making skills in relation to the design studio 2 final project in terms of materials and products has been followed in accordance with the sustainable procurement policy. Examples are listed below focusing on environmental concerns:

Incorporating part of the demolition i.e. clay brick into the hard-core for the new buildings foundations will reduce the transport of hardcore materials from another source. Following BREEAM, Choosing materials which are locally sourced and are fully recyclable and knowing where a product is coming from
and how long its lifecycle lasts is important in this decision process.

Following the lecture of procurement two week 8, the allocated group decided to start a discussion in the cafeteria about the Sustainable policy document regarding the basic principles. Some of the group members had not read the Office of Government Commence Guides. Throughout the discussion, there where debates regarding: How will a procurement policy protect the environment What environmental concerns are covered in the policy How will this policy save costs in relation to other policies Does the policy cover any other elements which havent been talked about

These are a few points covered in the discussion. I had discovered and learned that there are significant advantages of working in a group to achieve a similar goal. As the other members of the group had their point of view, there was an increase in debating and discussion which meant a coffee break escalated into finding a computer to look at the OGC guides and relevant websites. I found the people and conversation comforting so I was able to share my own knowledge from reading and critically appraising the relevant documents.

At first the learning outcome was not clear, I was under the assumption that the product evaluation was to identify the evaluation of products of a building and there was no information to support this in the recommended reading list. I read through the OGC guide 8: Improving performance: project evaluation and benchmarking in order to gain the knowledge of product evaluation for a building to satisfy learning outcome 3. This is a supporting guide and covers the main principles and practise of performance evaluation for construction projects. The document is relatively small in size and was easily read in a suitable timescale; the information relating to product evaluation of a building was clear and easily extracted and incorporated in to the research. The evaluation is carried out to check the performance of the project. There are formal reviews which assess the performance in terms of: how well members of the integrated project team perform, how well the facility is performing in terms of realising identified benefits, progress against quality, cost and time, assessment of the clients capability and seeking opportunities to improve over time. (OGC Guide 8 Page 3)

The client has the role of evaluating the project in the form of reviews and decision making processes. _ formal reviews of the project at key stages before the Gateway reviews are carried out by the project team, reporting to the senior responsible owner, as the projects owner accountable for its success, and ultimately to the investment decision maker. These reviews highlight any issues that need to be resolved by senior management and check that the project is proceeding according to plan. The decision to move on to the next stage is further informed by Gateway reviews (see below) _ independent formal reviews at project Gates provide the rigorous evaluation necessary to confirm that the stage of the project just completed has met its objectives and that everything is in place to begin the next stage. Depending on the projects level of risk, Gateway reviews are carried out by an internal or external team; the important point to note is that the Gateway review team is always independent of the project team. _ informal evaluation and reporting should be ongoing throughout the project, particularly during the development and construction stages. This ongoing evaluation aims to provide the key learning mechanism to identify what has worked well, where opportunities for improvement have been missed and what has not gone well. Input from all team members and key stakeholders should be sought

_ evaluation of specific activities such as design or value management aims to provide knowledge and understanding for example an assessment of design quality or about how to approach a new way of doing something, perhaps an innovative technique for construction or how to solve a particular problem.

procurement selection and agreement process

Whilst reading (An Introduction to Building Procurement Systems, 2nd edition Jack W.E.Masterman 2002), I noticed that section nine was based on the selection of building procurement systems, which would allow myself to achieve learning outcome five. The book seemed to cover the topic in depth although I struggled to understand parts of the text such as The information I found regarding the understanding of procurement selection Initially theoretical decision making is used to determine the most appropriate procurement system, to satisfy the clients needs related to the specific project. The procurement system is used to identify the appropriate method of achieving the objectives of the project and value in terms of cost. The aim of a procurement strategy is to achieve the optimum balance of risk, control and funding for a particular project. As I continued researching, the OGC guide 6: Procurement and contract strategies it defined the preferred integrated procurement routes, which are set out by the government: PFI: Where the public sector contracts to purchase quality services, with defined outputs from the private sector on long-term basis, and including maintaining or constructing the necessary infrastructure so as to take advantage of private sector management skills incentivised by having private finance at risk. Prime Contracting: Using a single contractor to act as the sole point of responsibility to a public sector client for the management and delivery of a construction project on time, within budget (defined over the lifetime of the project) and fit for the purpose for which it was intended, including demonstrating during the initial period of operation that operating cost and performance parameters can be met in accordance with a pre-agreed cost model. Design & Build: Using a single contractor to act as the sole point of responsibility to a public sector client for

the design, management and delivery of a construction project on time, within budget (taking account of whole-life costs) and in accordance with a pre-defined output specification using reasonable skill and care The following routes are recommended although the traditional route also referred to as design- bid build can be used if they demonstrably add value in comparison to the three recommended routes. The investigation of these systems would allow the understanding of the basic principles and based upon the decision process to select the most appropriate procurement system to satisfy the clients requirements to the project. The building project in order to succeed can be determined by meeting the clients and end users requirements. The success of a project can only be determined by the degree to which it meets the clients and/or the end-users needs and requirements. With a very competent and experienced project team that has worked together on many similar projects, the choice of procurement system will not always be critical to achieving client satisfaction. However, the majority of project teams do not exhibit all of these characteristics. Therefore, it is suggested that, in most cases, it is necessary to select the procurement system with extreme care by following the procedure described in previous chapters by: Identifying the characteristics and culture of the client and his/her organisation, establishing his/her needs and requirements, and those of the enduser of the facility, together with any internal and external constraints and risks associated with the proposed development and, of course, the project objectives. Ensuring that all of the currently available procurement systems together with their respective characteristics, advantages, disadvantages and means of implementation are identified and known to the person or persons who will be responsible for the selection of the procurement system. Choosing the appropriate system by matching the client and project profiles to the method of procurement with the most suitable and compatible characteristics. Monitoring the effectiveness of the selected procurement method by obtaining feedback from all members of the project team. All of these elements of the procurement selection process are now considered.

(An Introduction to Building Procurement Systems, 2nd edition Jack W.E.Masterman 2002)

Conclusion

Recommendations