Our tips for a successful Design and Construct project
10 July 2019
At
Northrop, we regularly partner with
builders on projects to provide the best value for the end client.
Design and Construct (D&C) contracts are a great way to streamline
projects by delegating responsibilities to the builder. That said, we’ve
all had a few troublesome projects - held up with changes or costs that
weren’t planned. Northrop Principal and
Sydney Regional Manager, Todd Halliday, offers his tips to ensure a
successful D&C project, minimising any potential dramas.
Be clear about what you want – early!
This is the foundation of a successful project. Putting in time upfront,
clear communication and well-defined deliverables, are critical to
ensure that the client and D&C team are on the same page. Detailed
performance and outcome-based scopes need to define the “what” but not
the “how” of the project. Lack of clarity often blows up into pricey
variations later, or worse, the client may have to live with something
that is not quite right. Whilst letting go of the design responsibility
can be tough for the client, it’s essential for allowing the designers
and builders to be creative and innovative so that they can deliver what
you expect.
Be open about the big risks
The builder and their designers need to properly understand, accept and
price any potential risks accurately. To do this, the client must be
clear when providing the criteria for this risk.
From a financial point of view, it’s far better to address big risks
prior to going to
tender. It’s at this phase that the successful builder
can adequately price the risk, propose alternatives and come to an
improved agreement. It’s paramount that these risks aren’t hidden or
lacking clarity in scope. The result? The tender team over prices them,
potentially missing out on the project entirely, or fails to consider
them properly, possibly leading to serious consequences down the track.
D&C tendering is expensive – use your time wisely!
Submitting tenders is an expensive process, and D&C is particularly
costly because of the detail required upfront. We have found successful
developers will already have relationships in place from which they
select the top two or three to tender. Once a developer calls for more
than three tenders, they inevitably are focused on the bottom line.
There is less incentive for tenders to put significant effort in
optimising the design and build. Save your time for worthwhile projects
and avoid open tenders which can feel like a race to the bottom.
Enjoy it!
D&C can be a very enjoyable way of working as a team. We get to be
actively involved and rewarded for collectively providing value. It is
fun for both builders and design engineers. The partnerships bring new
ideas and helps to lock down interface issues with design faster and
less painfully. Laying good groundwork through quality relationships can
transform a hard project into an easy one. Establishing clear client
deliverables upfront, solving problems on the fly and avoiding disputes,
are all achieved through open communication and respectful
interdependence. Of course, part of that respect is shown by ensuring
that everyone is rewarded financially in the process.
A well done D&C project can be a perfect example of a modern, common
sense solution. At Northrop, we always enjoy being part of collaborative
teams and look forward to more partnerships on innovative projects.
--ENDS--
Source: Northrop - www.northrop.com.au
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