Explain the pros and cons of the various procurement routes open to them, and
suggest the most appropriate.
Construction Business and Law refers the process of developing something, building or coming
up with a structure that will be utilized for a specific purpose. In the process one needs to procure
certain materials or services in order for the project to be completed. There are however
procurement routes that one can take in order to accomplish a project, the routes are:
1. One knows exactly what is needed, this route is where the developer knows what they want.
In that there is a design and specification made and there is a slim chance of variation to be made
after the contract has been executed. The supplier will provide a lump sum amount that will not
vary. The developer will therefore operate with a mind a concrete figure that will be used in
coming up with the project.
1. This is a good route of procurement especially when one has sought a loan;
2. The supplier works with timeline and therefore the project will be completed on time;
3. It offers the developers peace of mind since the cost of the development will not be
4. The developer gets what he paid for.
1. The developer cannot change his or her mind since once they enter into a contract with
the supplier, the designs cannot be varied
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2. The developer may not get the best quality out of the contract since the supplier will have
to work with the contract amount and when the prices of certain materials escalate the
supplier will consider cheap but not so good materials.
3. It limits the developer as he or she cannot change his or her mind later during the contract
as the designs submitted to the supplier are final.
2. One expects some work, this is when one known something will be needed but not what,
how much or when it will be needed. The suppliers come up with a mechanism for pricing the
work when they arise. This means that the developer may contract s supplier without making up
his or her mind on what exactly they want.
1. One will get better designs as things are bound to change
2. The quality of material used by the supplier are of good quality
1. The price is not fixed and it is bound to change every time one changes his or her mind
thus making the whole development expensive.
2. The time of completion is not known therefore it might take time before the supplier
3. The variation in the design might have a negative impact on the development.
The appropriate route that should be taken by the developers would be knowing what exactly
they need. This route will be appropriate to them because they will be able to budget with the
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amount that they have received from the bank. With the said amount they might know what
exactly can come out of the project. Unlike the other route which is expensive since the amount
to be used is not known.
Settling for this route will make them utilize the amount they have effectively and also, they will
not incur unforeseen costs as they had agreed with the supplier the total amount to be paid. This
will be effective considering the amount they will be using for the project will be known. The
amount that they had obtained from the bank will be well utilized in achieving their objective.
2. Suggest a standard from of contract they might adopt, with an explanation why.
The contract that can be suggested for the developers would be the JCT contracts. One of the key
reason for considering this standard form of contract is that it is the majorly used contracts of
building in the UK. The contract is used in a wide range of building contracts and it will be
effectively applicable in the development of the project by the developers. The interests of the
developers will be well catered and cared for. This contract ensures that there is standard or
rather maximum protection of the developers, the material of the contract and the cost of the
This contract will be appropriate for the developers because it offers the contractor with the
freedom to perform or carry out the entire project. The developers will have less stress as they
will get the approve the design submitted to them by the contractor. This will lead to saving time
and fast implementation fo the project.
JCT contains a collateral warranty in which it places an obligation on the contractor or a third
party to use specific materials in the actualization of the project and realization of the contract.
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The collateral warranty offers the third party or the contractor a right to claim losses or recover
claims that would otherwise not be recoverable.
3. Outline the obligations, liabilities and powers of named parties within the recommended
standard conditions of contract.
Obligation of the Developer/ employer
1. Provision of contract drawings- the developer has the obligation to provide the contractor
with the drawings of the proposed development for the assessment and further action of the
drawings by the contractor.
2. The developer has the obligation of providing the specific location on where the drawings
are going to be actualized by the contractor. In other words, the developer has the duty of
making sure that he shows the contractor where to undertake the construction.
3. The developer has the obligation of making sure that there is adequate finance to facilitate
1. The developer is liable for any defects that may arise as a result of the drawing
2. The developer is liable for the construction to stall as a result of finances not being
released on time.
3. The developer is liable for frustration of the contract when he or she is unable to
cooperate with the contractor to complete the project.
Powers of the Developer
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1. The developer has the financial power to actualize the drawings.
2. The developer can at any time decide to terminate the contract with the contractor thus
slowing down the completion of the project.
Obligations of the Contractor
1. The contractor has the duty to provide or surrender to the developer a proposal of how
much the project will cost.
2. The contractor has the duty to complete the development once an agreement has been
entered with the developer.
3. The contractor has an obligation to give regular updates to the developer with regards to
Liabilities of the Contractor
1. The contractor is liable for any defect that will arise from poor construction or
2. The contractor shall be liable for any delay that may arise as a result of his actions or act.
3. The contractor shall be liable for any miscommunication or advise given to the developer
and the advice or communication was solely relied upon by the developer to make a
Powers of the Contractor
1. He or she is in charge of the project until completion
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2. The contractor has the power to decide the materials and tools to be used in the
development if the developer has not provided any specifications.
3. The contractor has the power to terminate the contract
They work for the main contractor and it is the main contractor who takes responsibility for their
work. The sub-contractors basically work on what has been designated to them by the main
contractor. They are answerable to the main contractor and therefore their scope of work, power,
liability and duties are determined by the main contractor.
They are the firms that supply labor/plant/materials to aid with the development. Their duties,
liabilities and powers will depend on the scope of the contract that they have entered with by the
contractor. The supplier’s main duty is to supply materials, labor and plant to enable to
construction to take place smoothly and effectively.
They may be employed by the developer or contractor to steer the project. In most circumstances
they are employed by the developer to ensure that the project is constructed as they had
envisioned. Their professional advice comes in handy and helps to make sure that interests of the
developer are safeguarded.
The contract administrator is to ensure that the parties to the contract follow each and every term
stipulated in the contract. The contract administrator in most cases works to ensure that the
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interests of the clients are safeguarded and from time to time the contract administrator will
advise the developer. The contract administrator must make him or herself conversant with the
provisions of the contract. The main duties of the contract administrator are to monitor health &
safety, sustainability, time, cost and quality. The contract administrator will also have to deal
with the change of management.
4. Describe, and explain the use of, necessary contract documents that will have to be
prepared to tender this work. This should advance their understanding of why each
document is required and what they should include.
Specification- this is an essential document as it will present the idea of the developer to the
contractors. The purpose of the drawing when one is preparing to tender for the work is to attract
required skills. The drawing will show how technical the project is at this will attract those that
possess this type of skill to tender for the work.
Pricing Document- this shows the intended budget that the developer intends to use. This will act
as guideline for those that are about to tender for the work the amount of money that they are
tendering from. If the amount is slightly less or lower, it will help in eliminating big sized
companies from making bids. The pricing document offers a guideline to the parties involved in
the contract to know the worth of the contract. It is an estimated amount that the developer
intends to use in the project, it can be varied by the contractor when applying for the tender.
Drawings- this is a document that will contain all the conditions that the prospective contractor
will have to fulfil when awarded the tender. This document is necessary when placing the bid as
it will help the prospective contractor to know the skill and knowledge that he or she will be
required to implement. It will therefore act as guidance to the contractor to know what he will be
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operating on while working on the project. This is an essential document as it prepares the
companies that are making tenders to be aware of the item that they will be operating on when
their tender is considered and also what the developer will be expecting from them. They provide
a clear perspective of how the project should be in the long run.
In summary for the developers to have a successful project they need to have a harmonized plan
and coordination between themselves and the contractors. Construction is a field that has grown
tremendously over the years and it needs to be supported for it to grow further. There are laws
and regulations that seeks to protect, promote and safeguard the interests of the contractors and
developers. This is done with an aim of encouraging all the concerned parties to engage robustly
on construction as they are well protected by the law. The emergence of several aides has made it
a smooth venture for instance the emergence of contract administrators has made it easy for
developers to engage in other activities that may be income generating since their interest are
well taken care of by the contract administrators that they have sought. With the availability of
different standard forms of contract to be selected by the developers and the contractors. The
contract selected will protect the interests of the parties concerned. The developers who are
amateurs in the field of construction will be able to benefit if they consider the above stated steps
and points. This is because the guidelines set in this paper are objective and straight forward to
aid the operations of the developers,