Architecture / June 26, 2018 /
The contract documents set out what work must be done, and how, and under what conditions it is to be done. They identify the contractors obligations and liabilities and form the contractual agreement to do the work for the stated price or at the agreed rates. Many if not most financial problems in building originate in inadequate or unclear tender and contract documents, often culminating in disputes between the client and the contractor over what is included in the price for the work.
Procurement refers to the process of obtaining goods and services from another for some consideration. They describe the process as being simple in theory – balancing quality, time and cost priorities, but complicated in practice by legislation, the need to achieve value for money, demonstrate accountability and coordinate consultant and contractual roles and obligations to achieve a satisfactory outcome. The procurement strategy identifies how the project is structured and establishes where responsibility for design is to be placed, how the work is to be co-ordinated, and on what price basis the contract is to be awarded. The procurement strategy also directly affects the level of risk borne by the contractor and leads to choices regarding the conditions under which the work will be executed. These risks must be appraised and managed by the contractor and has a direct impact on the price tendered by the Contractor