7202ENG PROJECT CONTROL AND EVALUATION GOLD COAST LIGHT RAIL

CONTRACT STRATEGIES

ALMTHAMI, KHEDHER S2187371 MARISSA ADRAINCEM S2850497

FRIDAY 25/05/2012

OUTLINE
DESIGN BUILD DESIGN-BID-BUILD DESIGN-BUILD-OPERATE-TRANSFER CHOSEN CONTRACT STRATEGY COMMENTS & QUESTION

CONTRACT STRATEGIES
There are several contract strategies that could be adapted to best suit the rapid transit project, the following three strategies will be assessed to determine the most suitable strategy.

1) DESIGN BUILD 2) DESIGN-BID-BUILD 3) DESIGN-BUILD-OPERATE-TRANSFER

1. DESIGN BUILD
Design-build can be considered a two-step contract in this strategy 1. The design 2. Construction of a project Both are completed by a single company.

1. DESIGN BUILD
THE SIGNIFICANT DIFFERENCE BETWEEN DESIGN BID BUILD
is also the one problem that can plague the project, due to the one company designing the project then completing construction of the project there is a great amount of trust that is placed in the company from the client.

ADVANTAGE
Reduced delivery time from a design bid build contract, due to the nil effects of putting the construction element out to tender.

2. DESIGN-BID-BUILD
DESIGN-BID-BUILD CONTRACTS APPOINT A COMPANY TO
1. Complete the design 2. and then following a tender 3. and approval process an additional contract is awarded to a second company to complete the construction aspect of the project of the project.

2. DESIGN-BID-BUILD
THIS PROCESS ALLOWS THE CLIENT TO HAVE
a second company check the work practices of the other and therefore this will REDUCE THE RISK of poor workmanship and short-cuts devaluing the final product.
DIFFERENCE BETWEEN DB & DBB

Design bid build carries a SIGNIFICANTLY LONGER PROCESS THAN design build as the additional bid step in the program. This step can be summarised as the tender stage and has the potential to add months to the projects practical completion date.

3. DESIGN-BUILD-OPERATE-TRANSFER
The Design-Build-Operate-Transfer has the ability to reduce construction time, therefore, maintaining the clients cash flow.

3. DESIGN-BUILD-OPERATE-TRANSFER
THIS SYSTEM IS SIMILAR TO THE DESIGN BUILD STRATEGY however, prior to the project being transferred to the client it is operated by the contractor to produce revenue as part of the contract payment.

3. DESIGN-BUILD-OPERATETRANSFER
This allows the design company to reduce their tendered price and attempt to make up this difference at the completion of the project.

THIS

STRATEGY

CARRIES

THE

MOST

AMOUNT OF

risk for the contractor, as it is reducing the number of consumers the rail system has and reducing the income for the contractor.

CHOSEN CONTRACT STRATEGY

THE MOST APPROPRIATE CONTRACT STRATEGY FOR THE LIGHT RAIL PROJECT WOULD BE

The design build operate transfer.

CHOSEN CONTRACT STRATEGY

SEVERAL FACTORS INFLUENCE THIS DECISION
1.The risk of loss in profits following completion is transferred to the contractor.
2.The current global debt crisis, this also maintains government revenue as the principle construction expenses are shared with the contractor. 3. The deliver time of the project will be a top priority of the contractor as they seek to deliver the project earlier to eliminate potential costs associated lengthy loan period