Cats Constructions - Tender Preparation

1. Introduction

1.1 Project information

The Department of Justice and Regulation (DJR, the department) is trying to find an appropriate Managing Contractor for the Youth Justice Redevelopment Project (YJRP). The major purpose of the project is to build a fit-for-purpose youth justice facility in Cherry Creek. The Government allocated $288.7 million on the project. The Managing Contractor will be primarily responsible for the design, construction, commissioning and completion of the new youth justice facility.

1.2 Company information

CATS Constructions is an Australian construction company which have abundant experience in presenting projects around Australian. CATZ was established by two brothers in 1992, and has accomplished more than 2,500 projects. The currently annual revenue is $1.1 billion. CATZ has established offices in Sydney, Melbourne, Perth and Brisbane and employed more than 3,00 staff. CATZ is a famous private company and its CEO is Richard Hazel, an experienced construction engineer and manager. In the article, CATZ will demonstrate their will and ability to comply with the requirements of the YJRP.

2. Perspective I: The Owner

2.1 Form of contract

Based on the features of the project, we use Government Funded Design & Construct contract as the procurement strategy to efficiently proceed the project.

2.1.1 Benefit analysis

Limited number of parties – The design & construct approach provides a single source for the project.  The owner need to select a contractor to finalize the design, bid the project, and then deliver the construction process. The design & construct approach enhances teamwork and communications since only two major parties are involved in the project. Any problems occurred can be quickly traced back to the origin and resolved accordingly.  

Budget management – In the form of a design & construct approach. Budget is discussed and managed during the design phase. This will help to keep the project within in the set budget. Also, the communication between the owner and the contractor will ensure the final project price will be controlled by the owner. As the project is issued by a government department which has sufficient experience in similar projects and the budget is strictly limited to a certain amount, a design & construct contract will help to eliminate the probability of going over budget.

Faster project completion – design & construct approach can reduce the completion time of the project since the bid time is reduced and we can schedule for the project before design is finalizing the design phase. Also, the contractor can arrange preliminary works and start construction sooner. The time span for the project is from August 2017 to the commencement of 2021 according to the project timetable. The nominated contract form will help to complete the project within the schedule.

De-Risk the project – In some other contracting forms, the owner is responsible for select the design agency and risks of errors or defaults made by the design team. Since the contract is set to be a D&C contract, the responsibility and the risk will be transferred to the D&C contractor. Moreover, since the designer, engineer and builder are from the same firm, it is easier to control the quality of the entire project delivery.

Innovation- The D&C approach enables the owner to gather different specialist both in design and construction together. In consequence, it is more feasible for the owner and the contractor to deliver an innovative construction project.

2.1.2 Risk analysis

Earlier Requirements Definition – With D&C contract, the owner need to specify and validate its requirements much earlier. If the owner is not clear with the demands, the project may be stagnated at the first stage.

Compliance with Subcontractors – It is required for contractors to include subcontractors’ information and estimated cost of subcontractors in their bids. This can be a problem for a D&C contractor since pricing subcontractors’ work is difficult at the first stage. The contractors are obliged to provide a list of subcontractors in their bids. Moreover, if the detailed design drawings are not developed, the subcontractors cannot precisely estimate costs.

Less competition – To accomplish a D&C contract, the owner required the contractor to gather an effective design-build team. In addition, efficient management is regarded very important to ensure performance and the payment of bonds on the project. In consequence, the number of qualified candidates is reduced, hence, the markup the contractor charges will increase in response. The total cost of the project will also rise.

2.1.3 Project timeframe

Table 1: Project timeframe

The procurement process should include two stages to select a contractor to deliver the project. The first stage is pre-qualification. In the project timeframe, this stage will be conducted from 24 August 2017 to October 2017. The evaluation team of the owner will select qualified candidates based on the pre-published criteria and release to RFT to them afterwards.