This study will depict assorted factors act uponing the choice of procurement systems for the racetrack undertaking of Janus Leisure Plc. at Melchester. Janus leisure Plc, one of the UK ‘s largest operators of horseracing which hosts 5000 guineas bets every twelvemonth. They are suggesting programs for the redevelopment of their grandstand and besides enlargement programs. Renovation and enlargement play an of import function on the undertakings long term program. In order to accomplish the undertaking goals a suited procurance method is indispensable and this could be achieved by analysing the cardinal procurance issues for Janus leisure Plc to reexamine undertaking success. Besides provide comprehensive assessment of possible procurance methods for both design and building of Phase 1 ( refurbishment option ) and Phase 2 ( New building Option ) . The choice of procurance system will be done to achieve the client objectives with regard to clip, cost and quality. The type procurance systems that have been described in the study are the traditional method, Design and Build Method, Management undertaking system and collaborative Method. The success of the undertaking depends upon the choice of an appropriate procurance method. The choice standards used for taking an appropriate procurance method are speed, certainty, flexibleness, quality degree, complexness, hazard turning away & A ; duty, Price competition. Design and Build is considered to the best signifier in footings of accomplishing the client ‘s demand for the stage 1 ( refurbishment option ) . Risk Assessment is besides described which will be good for undertakings success. Design and construct will be able to cover with the clip and cost demand, so as to better the efficiency of the undertaking bringing and run into the quality criterions a supply concatenation direction is besides recommended. Phase 2 ( New building option ) is a 120 bed hotel installation and casino and whose of import factors are cost clip and quality. Time & A ; cost will be the most of import factor so as to get down trading earlier for hotel and casino. To run into the criterions of the building industry for hotel installations and casino legion advisers will be involved. In order to run into all of these demands design and construct will be the best option for the Phase 2.
1. Overview of the work:
The work has been divided into the stages depending on the demand of its completion.
Destruction of bing grandstand
The building of new 5 storey grandstand to include an extended conference and exhibition Centre ( 1000m2 sum ) and associated external plants ( Budget ?25M )
Renovation of two bing bases circa 100 old ages old ( Budget ?5M ) .
Construction of a new 120 – bed hotel installation and casino ( Budget ? 12M ) .
1.1. Goals of the undertaking:
Janus Leisure Plc portfolio includes one of the oldest authoritative races in the universe, the 5000 guineas bets, every bit good as other high profile race meetings throughout the twelvemonth it aims that stage 1 building of 5 storey grandstand and renovation of two bing bases circa was set to accomplish for the 2012 5000 guineas bets, scheduled for mid- September. Besides the hotel installation and casino to be made operational for 2013 5000 guinea bets meeting in mid September. The undertaking is aimed to be completed within the agenda and given budget. It besides expects high quality and functionality in order to obtain value for the undertaking.
1.3. The classification of client:
The three chief client divisions are as follows:
Public experienced clients, Private experienced clients and Private partly experienced and inexperient clients. The classification of client is shown in Appendix 1. The Public Experienced Client is farther sub-divided into Primary ( Cardinal Government funded ) and Secondary ( cardinal and local authorities funded ) .
On the other manus, private clients are sub-divided into Private Experienced ( both primary and secondary ) and partly experient and inexperient. In the populace sector the clients ‘ accent is normally on minimising cost, public answerability, value-for-money and certainty of concluding cost and day of the month. In the private sector, the most of import characteristic is standards such as certainty of the building completion day of the month, the degree of the client ‘s engagement in the undertaking, commercial answerability and value for money.
1.4 Clients Requirement:
Undertaking within Scheduled Timetable: As Janus Leisure plc hosts 5000 Guinea bets every twelvemonth and hence the completion is expected to be done in stipulated period of clip.
Undertaking within Scheduled Budget: As Janus leisure Plc is invariably puting in all of its locales and besides aims to spread out his group in coming old ages. The client needs value for money.
Undertaking with high quality, Contemporary installations and functionality: Client requires grandstand maintaining in position of alteration and besides to upgrade the installations. Client wants the locale to be provided with a munificent entryway, more seating infinites, and proper circulation infinites. Client besides wants conferencing and feasting installations so as to delight the viewing audiences and ease them with the best.
2. Procurement Methods:
‘A procurance system is the organisational construction adopted by the client for the execution, and at times eventual operation, of a undertaking. ‘ as defined by Masterman ( 2002 ) . Different types of procurance methods are described below:
2.1. Traditional Method:
This attack involves the pre-assumption of the client that the contractor carries out the plants. Designs are prepared by the advisers and the cost control and contract disposal are besides taken attention of by them. The contractor, on the other manus, takes attention of the craft, stuffs which besides involve subcontractors and providers.
The contractor has the full liability of the public presentation where the client selects the sub-contractors to be employed by the contractors. They are besides responsible in some manner or the other for a indirect guarantee between the client and the sub-contractor.
The contractor can either be appointed through dialogue or old work relationship but in most of the instances it is selected after a competitory command and after supplying complete information. Negotiated tendering is besides known as “ Accelerated traditional method ” . This method has its ain pros and cons. On one manus it allows design and building to run parallel to each other but the downside to this procedure is that the uncertainness of the undertaking cost additions significantly.
There are several factors associating to procurement techniques which can impact a undertaking end product. In the traditional attack, the cost factor is more certain at the nascent phases of the undertaking. The client is in a comfort zone in this instance since he has entree to a competitory monetary value and the design and working drawings are elaborate and complete prior to directing out a stamp. This helps in get rid of any sort of abnormalities which frequently leads to overall budget alterations. Wherever the measure of measures is used, it leads to a fairer command competition and the undertaking cost sums up to be lower. There is better cost control all about as fluctuations are minimized, except for instances where the work is disrupted due to unforeseeable fortunes. The downside of the traditional attack is the clip issue. Since the procedure is like a one-way street, it has been identified as one of the slowest procedures. The top is that it does give a clear image of the design, building, quality and the costs involved. It consequences in a longer pre-contract phase ; the technology squad every bit good as the client gets more clip to overview the full procedure.
2.2. Design & A ; Build Approach:
Design and physique is one of the most popular procurance paths in building now-a-days. In this procurance method the client appoints one contractor who is entirely responsible for both design and building. This helps to minimise the authorization of duties and client do non hold to fault different parties for any job if arises. The contractor takes all the duties of design development and besides plays a function to provide work and stuff. Here contractor appoints interior decorator, advisers and other working organisation and so he is responsible for any add-on and changes in the design and during building. As one individual house is responsible for all facets there is proper communicating and co-ordination between the members of the squad. Design and construct helps to fulfill client ‘s demands and present the undertaking as fast as possible and at a lower cost.
Single Point Responsibility: Client has advantage of covering with one individual organisation which would be responsible for all facets of the advancement.
Cost Certainty: Contractor can non do any claims for loss or disbursals as a consequence of late reception of direction from architect/client.
Speed: In this attack item design is carried out when the work really starts on site. As contractor is non trusting on other parties for design or for the supply of information work can be started earlier on site.
Time: Contractor is responsible for presenting the undertaking on clip and therefore small hazard of claims.
Concluding Cost: Cost certainty is greater as any alteration in client ‘s demand will impact the contract amount.
Benefits on Performance: As Interior designers, contractor, calculators and advisers all work together they can portion knowledge of current market state of affairs and monetary value in order to better the public presentation of the undertaking.
2.3. Management Method:
The most common method among the several direction procurance practiced are direction catching and building direction.
In direction undertaking the direction contractor is appointed early in the design phase through stamps and interviews
Management contractor is non straight responsible for the building work but is responsible to pull off the executing of the work.
The contract for single work bundles is between Pull offing contractor and the single sub-contractor.
Even though cost program is utilised to command the development costs, existent cost can non be obtained until the concluding work bundles has been awarded.
Here besides project benefits from the early engagement of the contractor.
In this method client will name a direction contractor who will strictly transport direction map.
The building trough will be responsible for co-ordination of design, stamp and building procedure.
There is a high hazard of Cost as there is no fixed cist at the start of the undertaking ; merely a cost program is prepared by measure surveyor.
Collaborative procurance has long been seen as the theory to salvage money. Partnering is one of the methods of collaborative attack. It besides focuses on the demand of the client provided that benefits all the organisations involved in the undertaking. Partnering empowers interior decorator and fortes to construct good will and trust bettering co-operation in teamwork.
Benefits of partnering:
Working Together increases the efficiency of the undertaking
Minimal alterations agenda helps in completion of the undertaking within clip.
Entire focal point of squad is on demands of the client and cost efficiency.
Even though there are benefits for the partnering, concluding cost is non agreed and therefore there is high cost uncertainness in this procurement attack as compared to other attacks.
3. Evaluation of the Procurement Methods:
To minimise the impacts and heighten the long term public presentation of value of building cardinal factors should be considered in rating and choice procedure. After all the consideration of the procurance systems it has been seen that design and physique seems to be appropriate procurance system for the undertaking.
The Factors those are necessary to be considered while make up one’s minding the procurement way include: ( Masterman 2002 )
Hazard Avoidance and duty
Monetary value competition
As per the demand of the undertaking each of the factors will be discussed in item. In order to accomplish an appropriate procurance method for the undertaking, it is advisable to first discourse all the factors and their influence on different types of procurance methods. This will give us the clear thought of which procurance method is likely to be good for the successful completion of the undertaking.
Janus Leisure plc. group is invariably seeking to develop its concern forward and besides puting in undertakings so as to develop their other installations. The primary purpose of the undertaking should see velocity of the undertaking as of import factor as client purposes to finish the undertaking within scheduled clip. To take a procurance method that will profit the undertaking in footings of velocity will depend upon building clip required in the peculiar procurance path. Shorter building continuance can be achieved by acceleration or fast- tracking some cardinal stages in the building undertaking, and this would prefer the usage of design and construct or direction catching ( Rowlinson and McDermott, 1999 ) .
2. A ) Certainty of Monetary value:
As the client expects to finish the undertaking in given undertaking, an appropriate procurance method which will render an effectual cost certainty has to be selected. Our client type being a private client certainty of monetary value is of import since they can command their fiscal budget by acquiring the certainty in monetary value.
In order to accomplish client ‘s nonsubjective, it is besides of import to concentrate on specifying the undertakings and prioritization of the aims. Harmonizing to Turner ( 1990 ) , “ Certainty “ should non be conceived as an absolute aplomb, but alternatively a comparative or skiding scale i.e. “ how certain ” the monetary value that a procurement attack could offer. Design and construct or traditional ball amount method can offer highest monetary value certainty.
2. B ) Certainty of clip:
Time certainty is of import for those undertakings that tend to finish on clip for a peculiar event. Janus Leisure Plc. besides keeps his demand in stage 1 to finish the building for 2012 5000 Guineas bets, Scheduled for mid – September. Procurement methods offering greater velocity can offer high certainty of clip.
Flexibility is needed where there is deficiency of consideration of exact demands of the undertaking. It is peculiarly needed in big and complex undertakings. Some undertakings require flexibleness to enable design alterations.
Management catching allows more fluctuations to be introduced without arousing important contractual claims.
Quality degree of the undertaking depends on demand of undertaking in footings of:
Degrees of quality of stuffs
Workmanship and Design
Invention and Creativity
It depends upon the type of the client and his demand for the undertaking whether quality should be considered of import factor. If quality of undertaking is of import traditional method of procurance will profit the undertaking. Design and construct will profit the undertaking where early completion is required and so quality will be affected. The contractor ‘s huge experience and cognition can assist in accomplishing advanced quality solutions through direction catching.
While taking an appropriate procurance method complexness should be considered as procurement method required for simple undertakings might change from complex undertakings.
Complexity of the undertakings depends on the undermentioned factors:
1. High Specialization
2. Degree of engineering
3. Undertaking Activities ( extremely serviced )
Private client demand for higher complexness of undertaking because their precedence is chiefly on the prestige value of the undertaking. Traditional and direction type procurance attacks may be utile for higher complexness of the undertaking.
Hazard Avoidance and Responsibility:
It is of import for client to cognize how, and to what grade hazard has consciously been passed to another organisation or how it is been shared in some proportion between him and organisation ( Turner 1990 ) . Hazard turning away is considered to be an of import factor towards undertaking success by private clients. The most important demand of private client is elimination and decrease of fiscal hazard. All hazards of design, direction, cost and clip slippage or mistakes can be handed over to individual organisation, In design and construct all hazard can entirely with the contractor. In traditional method hazard will be by and large just balanced between parties to the contract. Most of the hazard will be retained in direction catching method.
Monetary value Competition:
Every phase of building sets forward a competition in edifice procedure.
Building interior decorators, constructing builders will vie on certain issues related to them. Issues that will cover monetary value competition are as follows:
Value for money
Quality of Service
Private clients largely require competition for obvious commercial grounds. Turner ( 1990 ) .Turner ( 1990 ) nevertheless asserts that the degree of monetary value competition may be restricted by the velocity, clip, certainty, quality degree and the complexness of the edifice.
4. Procurement Selection and options:
The contractor or adviser are selected in two ways either competition or by dialogue with a individual organisation. Selective competition is the traditional and most used method for presenting building contracts. In this method several reputed and capable houses are invited to offer against each other for a undertaking. To make a short list of interested houses to ask for for stamp followers points are to be considered: ( 1A Procurement Practices – Learning Package )
Repute on old similar type undertakings
Adequacy of direction
Adequacy of capacity
5. Consequence of Procurement systems on the public presentation of undertaking:
As Janus is be aftering to travel his concern frontward, he tends to spread out the group and develop several of their other installations over approaching old ages. So the undertaking had to be delivered on clip. During the renovation of Phase 1, 2011 Guineas bets meeting and others will be relocated to other classs but he desires 2012 5000 Guineas bets scheduled for mid – September return to Melchester. Therefore procurance scheme developed should run into all the demands of the undertaking sing the standard ‘s carrying hazard. Harmonizing to the brief, the cardinal standards interdependent and frequently in hazard are listed below with the factors to be considered:
Time: ( phased completion, Completions dates, Speed )
Cost: ( Price certainty, Variations, Final cost )
Quality: ( Performance & A ; Function )
The above listed standards being really of import and besides client ‘s indispensable demand demands to be managed decently and be given indistinguishable importance in order to avoid its negative impact upon each other. Harmonizing to the clients requirement the most of import and hazardous standards is to be determined.
6. Choice Criteria for Procurement Method for stage 1 & A ; phase 2:
The factors that are responsible are listed above and explained in item and which procurance system has got better public presentation on what factors is besides explained in item. Sing these factors and their influences over different procurement methods enables us to take the best suitable methods for the several Phases. This will be done through a determination chart ( Appendix 2 ) , integrating assorted public-service corporation factors, which is intended to be completed as follows: ( Masterman 2002 ) .
Once all the clients precedence inquiries are considered, and standards is rated in the column on a graduated table of 1 to 20
The precedence evaluation is so calculated for each standard by spliting single precedence evaluations by the amount of all evaluations and entered into the chart. The sum of all rationalized precedence evaluations should ever be equal to 1.
All precedence evaluations are so multiplies by each of the public-service corporation factors for the assorted procurement waies and the consequences are entered into the chart
The consequences for each procurance system are so totaled and ranked on the footing that the most appropriate method had the highest entire Mark.
6.1Procurement Option for Phase 1: ( Refurbishment Option )
After careful considerations of the choice standard ‘s chart for Phase 1 in appendix 1.2 and besides advantages and disadvantages of the procurance systems, it can be believed that Design and Build procurance system is suited for the Janus Plc Leisure. It can be adopted for Janus as it offers individual point duty and high grade of cost certainty which is required for the undertaking ; a design squad will be involved throughout the undertaking development which will assist to accomplish a greater focal point on quality. As the building will get down at early phase and at the same clip detailed drawing will be done in analogue, opportunities struggles between interior decorator and builder will be reduced which will assist to present undertaking faster than any other procurance system. As design and construct gives greater cost certainty, undertaking will be completed in given budget. As contractor, interior decorator, adviser, calculator will work together right from the start of the undertaking it will assist to accomplish cost effectivity, quality control and deliver undertaking within the scheduled clip.
Design and construct procurance system can increase the value for money that the edifice provides across its whole life. It involves finishing the undertaking to run into the demands of clip, cost and quality.
Time: In order to accomplish the value for money clip is one of the indispensable facets of the undertaking as 2012 5000 guineas bets has to return to Melchester by mid- September 2012.The most of import concern of client is timely completion of the building. As both design and building tally parallel and contractor is the lone 1 who controls the building clip every bit good as the clip required for designing of the undertaking, reduces the overall continuance if contract. In this type of procedure contactor has got experience and cognition of the design which will assist him to cut down the building clip.
On the contrary if the undertaking design fails, it will hold direct impact on the clip public presentation. That is why a proper co-ordination between the design and building is required which will assist us to accomplish undertaking aims in specified clip.
Cost: Cost is one of the most important facets for accomplishing value for money. ( Flanagan & A ; Tate ) states cost should non merely be monitored but needs to be controlled and managed from the early design phase through undertaking completion. A undertaking can be worked out in given budget merely by developing efficient and effectual cost control system. ( Oberlender, 1993 ) concurs placing that cost control is far more than commanding outgo. Cost control includes the control of gross doing certain that all possible and justifiable income is recovered from the client and that no preventable wastage of money or unauthorised addition in cost is allowed to go on.
In this type of procurance, cost is fixed at the clip of the stamp phase. Even if design is capable to alter, one time accepted the stamp monetary value will be concluding contract amount and will non alter unless fluctuations required by client. However cost economy in this type of procurance system is possible through the decrease of the overall development period. Contractor ‘s cognition and huge experience will assist to simplify the design which will finally ensue in considerable cost nest eggs.
High quality design & A ; functionality: As the contractor is responsible for both designing and building he uses the best manner to do design simple and better the quality of work. Therefore if the demand of the design is of High quality, design and physique may non be the appropriate option.
Quality in the context, so, may include the undermentioned:
Degree and type of services provided – air conditioning, communications, lightning and the similar.
Performance of services – how good the services fulfill their intended maps
Flexibility – the capacity for re-use or alteration of usage
Fitness for purpose – how good the concluding merchandise serves the intended maps
Singularity: this may hold value if edifice is corporate central office or had some other symbolic function e.g. as a theoretical account of environmentally sensitive design.
Exclusion of external climatic factors – air current, rain, temperature extremes.
A suited supply concatenation direction will be proposed for effectual bringing undertaking and to obtain quality of work.
6.2 Procurement method for stage 2: ( New Construction )
Harmonizing to the considerations of the Decision chart in appendix 1.3 and demand of the undertaking Design and Build will be preferred. This methods can be used in order to accomplish the efficiency of work with cost effectivity within a stipulated period of clip can be achieved. Janus Leisure Plc. is be aftering to construct a new 120- bed hotel installation and casino with a budget of ?12M and besides expects it to be operational for 2013 5000 Guineas bets meeting in mid-September. Important factors are categorized as Speed clip certainty, cost certainty, flexibleness, Quality, hazard turning away & A ; duty, complexness, monetary value competition. Time will once more play an of import function in cordial reception industry. It will be good for trading of hotel every bit good as casino if they are completed in short period. For a budget hotel cost & A ; clip are both really of import. As the hotel will further immense conference suites, guestrooms and other installations there will be great accent on current market rate in order to run into the overall budget, comfort and degree of design. As a trade name new hotel installation it will hold to run into the demands of current high criterions in hotel industries. In order to run into the clip demands and to finish the undertaking within the budget it will hold to compromise on quality but spend more on expensive coatings. This is will assist to better the quality criterions. In add-on, a supply concatenation direction in order to better the undertaking bringing and to better the quality of the undertaking. Bettering criterions and high engineering required for hotel installations and casino there will be figure of advisers involved applied scientists, interior decorators, Quantity surveyors, landscape interior decorators, environmental efficiency assessors will be required to be appointed. As design and construct method facilitates early engagement of contractor and is responsible for both building and designing. This will assist Janus to cover with one individual organisation who is responsible for all the facets of the undertaking. Cost and clip being the most of import design and construct procurement method is adopted for this stage.
Design Build will profit the undertaking and besides supply good value for money in footings of cost, clip and quality. This will be described below:
Time: Completion day of the months are ever of major importance in hotel undertakings. Earlier the completion of the undertaking and short period required more will be the benefits gained. As hotel will be holding conference suites and run intoing suites they might be booked prior to the completion of the undertaking. If non done so it would hold an inauspicious consequence on the fiscal and repute of the hotel. In design and construct method, item design existent starts when work is carried out on the site and as contractor is non trusting on any other organisation for design inside informations or for the supply of information. This allows contractor to continue good and take his ain determinations and finish the work in scheduled period.
Cost: As Janus is be aftering for 120 bed hotel installation and casino cost will be most of import factor for the undertaking as it will be required to earlier completion so that the hotel and casino are ready for trading. As design and physique provides better cost certainty it can be used for budget hotel undertakings. Hotel will provide guestrooms, conference suites, meeting suites, feasting halls and other landscape gardening inside informations to heighten and fancify the hotel and its installations. This will necessitate proper cost planning and cost certainty and will be gained in Design and physique.
High Quality and functionality: Bing a hotel undertaking it should run into the current market criterions of star hotels. It would be hard to accomplish desired quality in design and physique undertaking. Use of high quality coatings can supply the undertaking and enable us to run into the quality criterions of the hotel installation and casino. Contractor ‘s huge experience and cognition can assist the undertaking to hold a functional and good design. Advanced thoughts can better the quality of the undertaking.
A strong teamwork and good co-ordination between the squad members will assist accomplish the demands of the undertaking and finish the undertaking within clip and given budget.
Although hazard can ne’er be eliminated it can be reduced. Clients ever tend to reassign the hazard to contractor which may non be ever good as rating of hazard is decisive. The hazard attached to this attack is lack of control over quality in design. As contractor is responsible for all the facets there is small range for alterations in design for advisers and interior decorators. Clients should besides curtail to do any alterations as it will be add cost to the budget. Management of hazard is possible by sing the undermentioned factors:
8. Supply Chain Management:
The supply concatenation is the web of organisation that are involved, through upstream and downstream linkages, in the different procedures and activities that produce value in the signifier of merchandises and services in the custodies of ultimate client ( Christopher,1998 ) . The proper direction of supply concatenation helps to accomplish the undertaking within the budget and besides to present it within the scheduled clip. This finally helps in accomplishing the cost and clip marks. In order to accomplish an effectual undertaking bringing and quality of work an effectual building supply concatenation for Janus Leisure Plc is recommended.
8.1An Effective Construction Supply concatenation for Janus Leisure Plc:
Design and physique system will supply of the strongest platform from which supply concatenation direction can boom. In order to finish the undertaking on clip Janus should follow a supply concatenation which will take less clip for building every bit good as cut down the cost required. A design and build contractor is party to all of import relationships, upstream and downstream and is in best place to take the attempt to add value and cut down costs. To increase the possible for successful usage of supply concatenation direction client demands to convey contractor in the procedure of undertaking at a really early phase. The early interaction of contractors with all advisers will assist in to run supply concatenation direction successfully.
8.2Effect of procurance method on supply concatenation direction:
In supply concatenation direction the existent competition is between the supply ironss. As one organisation is responsible for design and building uncertainnesss are reduced. All inside informations of bringing of stuff at which topographic point and what clip is all known by one organisation which helps in holding effectual public presentation for building. In design and Build type of procurance method contractors may hold old contacts with the providers who can assist him to secure stuffs on clip and besides at good rates. This will in bend aid in salvaging of money and clip. As there will common apprehension and trust developed between the provider and contractor which will be good to hold effectual communicating, dialogue and better apprehension for the demand for the undertaking type.
Recommendation and Decision:
The study outlined that as Janus Leisure Group is invariably seeking development of their racetrack in stages: Phase 1 ( Refurbishment Option )
& A ;
Phase 2 ( New Construction option )
Based on findings and critical analysis the study recommends that design and construct procurement method as the best for Phase 1 ( refurbishment option ) . Design and construct will enable the timely completion of the undertaking and besides supply effectual cost for the undertaking. The study besides recommends hazard appraisal which is really of import for the success of the undertaking. In order to heighten the quality of work and accomplish efficient undertaking bringing, supply concatenation direction is besides recommended.
After successful choice of the procurance method for Phase 1, it was besides of import to take best option for stage 2 ( new building option ) . The study recommends that as per the demand of clients cost clip and quality are of import factors. Design and Build will supply a better option as cost and clip are considered to be most of import. Quality will be compromised but may be improved by usage of high quality coatings. In design and construct method contractor will be involved earlier and will be responsible for design and building, one individual responsible organisation which will be responsible for all the facets of the undertaking will be good for the successful completion of the undertaking.