Forms of procurement procedures

Design Bid Build
1. Characteristics
  1. Clear distinction between employer and contractor
    1. Employer designs and controls
    2. Contractor builds
2. Advantages
  1. No discussion, standard contract clauses
3. Disadvantages
  1. The contractor doesn't contribute in any other phase
  2. Irregularities between design and construction
4. Position in the building process
5. Liabilities
  1. Employer for the design
  2. Contractor for the construction
    1. Remains liable in case of damages to the project for a period of time after construction
Design-Build
1. Characteristics
  1. Employers involvement concerns mainly the definition and quality assurance system of the project
2. Advantages
  1. Employer
    1. Deals with only one party
    2. Cost ant time estimates are more reliable
    3. Consultancy costs can be reduced
    4. Execution of works is improved
  2. Contractor
    1. Put themselves in a strategic market position
    2. Project harmony is improved, design-construction
3. Disadvantages
  1. Employer
    1. Limited competition, not many companies can do this
  2. Contractor
    1. All responsibilities
4. Position in the building process
5. Liabilities
  1. Unknowns belong to the employer
  2. Uncertainties belong to the contractor
Design-Build (with repayable performance)???
1. Characteristics
  1. Most risks are assigned to a single party
  2. Fixed price based on an initial concept
    1. Associated with some preformance targets
    2. Price is based on expected uncertainties, but not unforseable ones
  3. The employer prescribes how performance will be measured
  4. The model relies on performance measurements made during the building process and completion
    1. Extra work is paid by a predefined formula taking possible variations into account
2. Advantages
  1. Employer
    1. He does not pay for risks that do not occur
    2. There is competition in a value-price basis
    3. He has influence on the product
  2. Contractor
    1. Higher level competition
    2. Less risks
  3. Room for innovation
3. Liabilites
  1. Every party deals with their own work, no overlapping
Build Operate Transfer
1. Characteristics
  1. Similar to EPC model + maintenance and exploitation stages
  2. Consortium of parties
    1. Contractor
    2. Investor
    3. Operator
    4. Financer and/or project developer
  3. Feasible when there is a need for a project but no funds to start it
2. Advantages
  1. The government can provide for a social need without carrying the financial burden for it
  2. Public facility obtained without investing any funds in it
3. Disadvantages
  1. Depends on external factors such as economy, politics, social context and environment
4. Liabilities
  1. All risks are responsibilities of the consortium
5. Position in the building process

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Forms of procurement procedures

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