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There must be an acceptable level of transparency in the selection of the most suitable procurement and tendering strategy.
G7 would advise KID to adopt Design and Build procurement over Traditional. The nature of the development, site and surrounding infrastructure has been taken into consideration.
There are various reasons why D&B is advantageous as a procurement route. The main appeal is that the main contractor bears more risk, alleviating risk from the client. The contractor is responsible for both the design and build of the project and any financial risk that may arise. This does come at a price; the cost of a D&B project is generally higher than traditional, however for projects likely to have multiple variations it can be more cost effective over the project duration. Further, D&B offers the client greater cost certainty for the client.
G7 advise NEC Option C - Target cost with activity schedule. This allows a pain/gain mechanism where both pain and gain are shared between the client and the contractor. This would incentivise the contractor to mitigate loss and work to keep costs as low as possible throughout the build. This gain/risk is usually capped e.g. 10% either way. Therefore, any loss greater than 10% is suffered by the client solely. Likewise, any gain beyond 10% is benefited by the client solely. Any pain/gain up to 10% is shared between the parties.
To transfer all risk to the contractor would be far too much risk for many contractors to bear, discouraging many from tendering. Further, the cost inflation to counter this risk would be extortionate. By splitting the financial wins and losses, both parties have a common interest of progressing the project according to schedule and as close to budget as possible.
The main contractor is the single point responsibility which causes fewer disputes as they have sole responsibility for any issues that may arise. In traditional procurement, there can be disputes arising over who is responsible for various aspects of the work.
Due to the location of the site and the need to demolish the existing building, we can anticipate many variations to the build programme. The various unknown factors will be sure to cause multiple variations. With D&B, this risk is distributed between parties.
KID stipulated their dedication to sustainability; the environmental impact of the development is a key consideration. By using D&B, KID can ensure that contractors dedicated to sustainability are invited to tender so as to achieve the desired function of the building.
It is worth noting that there are some aspects of traditional procurement that would be beneficial to this development. With traditional procurement, a higher number of contractors are invited to tender, this is because they are pricing the client’s design. This also means that the bids are comparable as they are working to the same design specification. This offers the client a greater selection of contractors and more competitive rates. Tendering a D&B project requires much greater input from the contractors and so fewer will be invited to tender.
Traditional allows the client to regain control of the design and the contractor works to this design. This does allow the client more autonomy and control of the project. In this case, the aesthetic of the development would be in the hands of the client more so than the contractor. Kelham Island has a very industrial, functional aesthetic, in-keeping with its heritage. This is a crucial factor in the design process.
Taking both procurement methods into account, D&B would be advisable for development of the Westpack site. Whilst this is arguably more costly than traditional, there is more security associated with this option. Further, opting for NEC Option C is more cost effective than other Options, such as lump sum. The shared pain/gain between the client and contractor incentivises the client to keep costs under control and stick to schedule whilst not overloading them with risk which would inflate their costs and deter many from tendering.
A full and rigorous analysis of the risks associated with the route selected, taking into account the geographical location of the development.
Sheffield has been subject to severe flooding in previous years, this problem is exacerbating with climate change. The Westpack site is located directly next to the River Don which poses increased flood risk.
The ecological survey has identified the following:
[N.B. Risk ratings are categorised as: Very Low, Low, Medium, High]
Risk of flooding – Medium
1.0 - 3.3% risk *(taking into account existing flood defence systems)
Risk of surface water – High
Environmental Agency identified the site as flood zone 3A – high probability of flooding
Westpack flooded in June 2007, much of Sheffield was affected.
Sheffield City Council are in the process of undertaking a flood alleviation scheme but this has been delayed significantly
Kelham Floods in 2007
Kelham Island - circa 19th Century
Previously, the River Don spanned further and curved round Kelham Island, hence the name. Kelham Island is a man-made ‘goit’ on the River Don. It was constructed in the 19th Century to power water wheels for the local factories and workshops. Whilst the river has retracted from its former isolation of the ‘island’, if subjected to excessive rainfall the watercourse will follow the previous channel as an alluvial river.
Map of Old Kelham and River Don
The threat of flooding is a huge risk and impacts funding and insurance. It also impacts the use of the building. For this reason, residential use is not recommended for the lower floor. There are various flood alleviation and defence systems to mitigate the impact. A good solution would be to utilise piling to raise the structure. This would be a long-term solution to safeguard the building for decades to come. The area under the building (ground level) can be utilised for car parking and waste disposal/recycling. Whilst piling is an effective solution, a high level of investment would be required to provide a unique piling structure to counter the site’s geotechnical risk.
The topographical survey has identified further risk of flooding from the surrounding landscape. Sheffield is situated in a valley with the Peak District to the West. Rainwater run off from the hills will impact the area.
Map of Sheffield and surrounding landscape
The building surveyor has identified poor structural integrity and very poor energy efficiency (EEC) in the current building. Renovating this building is not a viable option, both logistically and financially. It has been concluded that the building should be demolished, the site cleared and rebuilt. This will ensure that the development will achieve the necessary legal requirements for energy efficiency but also deliver the sustainability agenda as the client requested.
Sheffield played a huge role in the industrial revolution in the 18th/19th Century. The city is renowned for its vast steel industry and heavy mining in surrounding areas. Many developments in this region may be impacted by previous mining which can impact foundations on which to build. As the Westpack site is next to the River Don, it is assured that there are no mines in the vicinity. Mining was not carried out near watercourses for risk of mines filling with water. The site is not impacted by any previous mining.
Given the industrial nature of the area there is a reasonable probability of contaminated waste. Westpack has been operating as a packaging plant for many years and the surrounding buildings are mostly derelict with previous use being heavy industry such as steelworks. This will need to be assessed and any contamination identified during the demolition and site clearance. Utility reports have identified that there is a gas holder in the area, this should be noted as it has potential to be a high pollution source.
The Westpack site is on Cornish Street at the end of Dixon Street. The street is quite narrow and two-way traffic would struggle to pass at the same time. Accessibility could be an issue if multiple large vehicles are frequently visiting the site. Also, there is limited parking in the area. Whilst Kelham Island is within walking distance of Sheffield City Centre, those with mobility issues or those travelling from elsewhere may struggle to park.
There must be an acceptable level of transparency in the selection of the most suitable procurement and tendering strategy.
G7 would advise KID to adopt Design and Build procurement over Traditional. The nature of the development, site and surrounding infrastructure has been taken into consideration.
There are various reasons why D&B is advantageous as a procurement route. The main appeal is that the main contractor bears more risk, alleviating risk from the client. The contractor is responsible for both the design and build of the project and any financial risk that may arise. This does come at a price; the cost of a D&B project is generally higher than traditional, however for projects likely to have multiple variations it can be more cost effective over the project duration. Further, D&B offers the client greater cost certainty for the client.
G7 advise NEC Option C - Target cost with activity schedule. This allows a pain/gain mechanism where both pain and gain are shared between the client and the contractor. This would incentivise the contractor to mitigate loss and work to keep costs as low as possible throughout the build. This gain/risk is usually capped e.g. 10% either way. Therefore, any loss greater than 10% is suffered by the client solely. Likewise, any gain beyond 10% is benefited by the client solely. Any pain/gain up to 10% is shared between the parties.
To transfer all risk to the contractor would be far too much risk for many contractors to bear, discouraging many from tendering. Further, the cost inflation to counter this risk would be extortionate. By splitting the financial wins and losses, both parties have a common interest of progressing the project according to schedule and as close to budget as possible.
The main contractor is the single point responsibility which causes fewer disputes as they have sole responsibility for any issues that may arise. In traditional procurement, there can be disputes arising over who is responsible for various aspects of the work.
Due to the location of the site and the need to demolish the existing building, we can anticipate many variations to the build programme. The various unknown factors will be sure to cause multiple variations. With D&B, this risk is distributed between parties.
KID stipulated their dedication to sustainability; the environmental impact of the development is a key consideration. By using D&B, KID can ensure that contractors dedicated to sustainability are invited to tender so as to achieve the desired function of the building.
It is worth noting that there are some aspects of traditional procurement that would be beneficial to this development. With traditional procurement, a higher number of contractors are invited to tender, this is because they are pricing the client’s design. This also means that the bids are comparable as they are working to the same design specification. This offers the client a greater selection of contractors and more competitive rates. Tendering a D&B project requires much greater input from the contractors and so fewer will be invited to tender.
Traditional allows the client to regain control of the design and the contractor works to this design. This does allow the client more autonomy and control of the project. In this case, the aesthetic of the development would be in the hands of the client more so than the contractor. Kelham Island has a very industrial, functional aesthetic, in-keeping with its heritage. This is a crucial factor in the design process.
Taking both procurement methods into account, D&B would be advisable for development of the Westpack site. Whilst this is arguably more costly than traditional, there is more security associated with this option. Further, opting for NEC Option C is more cost effective than other Options, such as lump sum. The shared pain/gain between the client and contractor incentivises the client to keep costs under control and stick to schedule whilst not overloading them with risk which would inflate their costs and deter many from tendering.
A full and rigorous analysis of the risks associated with the route selected, taking into account the geographical location of the development.
Sheffield has been subject to severe flooding in previous years, this problem is exacerbating with climate change. The Westpack site is located directly next to the River Don which poses increased flood risk.
The ecological survey has identified the following:
[N.B. Risk ratings are categorised as: Very Low, Low, Medium, High]
Risk of flooding – Medium
1.0 - 3.3% risk *(taking into account existing flood defence systems)
Risk of surface water – High
Environmental Agency identified the site as flood zone 3A – high probability of flooding
Westpack flooded in June 2007, much of Sheffield was affected.
Sheffield City Council are in the process of undertaking a flood alleviation scheme but this has been delayed significantly
Previously, the River Don spanned further and curved round Kelham Island, hence the name. Kelham Island is a man-made ‘goit’ on the River Don. It was constructed in the 19th Century to power water wheels for the local factories and workshops. Whilst the river has retracted from its former isolation of the ‘island’, if subjected to excessive rainfall the watercourse will follow the previous channel as an alluvial river.
The threat of flooding is a huge risk and impacts funding and insurance. It also impacts the use of the building. For this reason, residential use is not recommended for the lower floor. There are various flood alleviation and defence systems to mitigate the impact. A good solution would be to utilise piling to raise the structure. This would be a long-term solution to safeguard the building for decades to come. The area under the building (ground level) can be utilised for car parking and waste disposal/recycling. Whilst piling is an effective solution, a high level of investment would be required to provide a unique piling structure to counter the site’s geotechnical risk.
The topographical survey has identified further risk of flooding from the surrounding landscape. Sheffield is situated in a valley with the Peak District to the West. Rainwater run off from the hills will impact the area.
The building surveyor has identified poor structural integrity and very poor energy efficiency (EEC) in the current building. Renovating this building is not a viable option, both logistically and financially. It has been concluded that the building should be demolished, the site cleared and rebuilt. This will ensure that the development will achieve the necessary legal requirements for energy efficiency but also deliver the sustainability agenda as the client requested.
Sheffield played a huge role in the industrial revolution in the 18th/19th Century. The city is renowned for its vast steel industry and heavy mining in surrounding areas. Many developments in this region may be impacted by previous mining which can impact foundations on which to build. As the Westpack site is next to the River Don, it is assured that there are no mines in the vicinity. Mining was not carried out near watercourses for risk of mines filling with water. The site is not impacted by any previous mining.
Given the industrial nature of the area there is a reasonable probability of contaminated waste. Westpack has been operating as a packaging plant for many years and the surrounding buildings are mostly derelict with previous use being heavy industry such as steelworks. This will need to be assessed and any contamination identified during the demolition and site clearance. Utility reports have identified that there is a gas holder in the area, this should be noted as it has potential to be a high pollution source.
The Westpack site is on Cornish Street at the end of Dixon Street. The street is quite narrow and two-way traffic would struggle to pass at the same time. Accessibility could be an issue if multiple large vehicles are frequently visiting the site. Also, there is limited parking in the area. Whilst Kelham Island is within walking distance of Sheffield City Centre, those with mobility issues or those travelling from elsewhere may struggle to park.
Created by Charlotte Count
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