The Beginning of Semester 2

(Projects in a commercial environment)

Introduction to Procurement

Returning to University in the 3rd week of January after a good Christmas holiday, we kick-started the day with an introduction to procurement. Firstly learning that: The Chartered Institute of Procurement & Supply defines procurement as: “Procurement and supply management involves buying the goods and services that enable an organisation to operate in a profitable and ethical manner.” Basically, procurement involves a lot more thought than simply purchasing something, taking more care to consider things such as price, quality, time, location and reputation.

Procurement can be like a process; it requires contracts and relationships between parties and becomes more complicated and thorough depending on the risks involved with the project.

A procurement route is all about deciding on allocation of risks in respect of: Time, Cost and Quality. And has responsibilities of Design, Construction, Management, Operation, Funding

The main characteristic of a traditional procurement route is the “separation of the responsibility for the design of the project from that for its construction.”

The History of Procurement Routes:

The traditional method would consist of competitively priced, staged lump sum payments. This method became popular in the mid-1850s. The lack of co-ordination between trades such as design and build became an obstacle and lead to the decrease in popularity for the traditional method after the 2nd World War. Involving a contractor in the early stages of the project proved to be good.

Another reason that the traditional route began to fail was in 1973 – oil crisis caused major rise in fuel prices and interest rates which meant that people were prioritising quick completion to reduce cost. This led to building work commencing before some plans are complete.

red and yellow tower crane on top of building under construction

Photo by Pedro Sandrini on Pexels.com

The Process:

Preparation – creating a business case and appointing a Project Manager.

Design – Appointing the design team and beginning the design process, it is important to take time and communicate with the design and build teams as rushed plans leads to errors and conflict.

Under the traditional procurement route, design is normally completed:

  • Before competitive tenders are invited.
  • Before the main construction contract is let. But:
  • Contractor may have some design liability, where identified and contractually stipulated.

Preparing and Obtaining Tenders – finalise documentation (BOQ – bill of quantities), specifications, drawings, etc. The design must be fully prepared before the BOQ is created for pricing accuracy and fairness.

Construction Phase – assuming there are no changes, construction cost can be identified with reasonable accuracy.

To ensure good communication throughout the process, the PM should oversee the teams.

 

Advantages of traditional procurement route:

  • Has stood the test of time
  • Understood by many clients, contractors etc.
  • Client able to select the most appropriate design team
  • Client able to have direct influence, thus facilitating a high level of performance and bespoke quality in the design
  • Client can monitor and control all phases of the project
  • High degree of certainty based on the cost and specified performance before a commitment to build

High risk of disruptions and variations, especially in cost if the design is not fully prepared before the tender is obtained or the BOQ is inaccurate.

Disadvantages of traditional procurement route:

  • Design-bid-build sequence takes long period of time
  • Designers design, don’t manage
  • Contractor unable to contribute to the design.
  • No benefit from contractor’s experience while designing the project (buildability)
  • The traditional standard forms are adversarial in nature, mentality of “that’s not my job”
  • Accelerating the process by producing tender documents from an incomplete design, or inaccurate BOQ, can result in less cost and time certainty. Leads to: Variations Time and cost overrun Expensive disputes
  • Client bears the risk of design and cost (quantities)
  • Client can think bid is a lump sum (therefore final cost) but is still vulnerable to claims
  • Strategy based upon price competition, which can result in adversarial relationships developing

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In other, unrelated news – I sold my house! You can see completed pictures in the gallery on my website…

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House Renovation

Since May last year, my father and I have working hard renovating a £86,000 property.

This month, we completed the work, put it on the market and sold it.

It all happened so quickly…

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First thing we did was replace the windows with double glazing…

Next, we moved the door of the bathroom from the left to the right and we fitted the bathroom suite…

Then we started decorating the upstairs bedrooms…

Meanwhile, Dad knocked down the wall between the living room and kitchen…

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Before we designed and booked our blue kitchen design…

Dad built a small downstairs toilet…

 

The upstairs bedrooms were finished…

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pre_load_imgAnd the kitchen fitted…

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Carpets, flooring and bricking up the old porch…

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And then it was a case of finishing up the little jobs. I’ll attach some more photos into the Gallery of my website, feel free to have a browse.

 

Can’t believe it’s sold already, time to say goodbye. But hopefully another one will be on the agenda soon 🙂 🙂

Laura

Blog Challenge 2.3 – Property Progress and Future

In May 2019 myself and my family bought a 3 bedroom house in the south of Scotland. We have been renovating it for the past 6 months and this month I have decided to write a blog to celebrate our 6 month of renovating.

Bathroom:

Inspiration:

Bedroom 1:

Wallpaper Inspiration:

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Bedroom 2:

Master Bedroom:

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Kitchen/Lounge:

Inspiration:

Living Room/Hallway:

Outside:

 

Blog Challenge 2.2 – Budget and Cost

“A budget is telling your money where to go instead of wondering where it went”
For those who may not already know, I have been renovating a property for the past 6 months and at the beginning of the venture I challenged myself to write 4 blog posts on different topics. Now that the house is nearing completion, I have decided to review the process and redo the blog challenge!
I previously wrote a reflection piece just outlining our progress and this week I am going to be writing about the budget.

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So, rewind back to May 2019, I had written my blog post highlighting my expectations for the house and had just been given the keys. We purchased the property for £86,500 and I commented in my blog that we aimed to spend roughly £105,000 in total, so just shy of £20,000 for the restoration. I’ve been keeping good track on receipts and have tallied up nearly all of our expenditure right up to the end of October. However, I am missing receipts for a couple things that we purchased online like the oven, so I would say my record could be out by no more than £1,000, and adding to this, we still haven’t paid the plumber or electrician! But I aim to do another progress report once we have gathered all the costs up, I am not looking forward to scouring receipts and payments!!
Here is the chart I created at the start of the project:

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1st Estimate Finance Chart

I have changed the colours but kept the same numbers, so it is still the same chart.
And this is where we are at now:

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6 Month Rough Spend

I have a little note pad where I record every receipt, I write item bought, the price and the date, if there are multiple products on one receipt, I tend to just label it generically i.e. plumbing equipment, tools, etc. I wish I had been a bit more detailed though because when I came to make this chart it became really difficult to split some receipts into categories as there would have been items bought that went into different areas, so I excluded them from this chart. So, the chart above is just a ballpark figure currently.

According to my records we have spent £99,912 but considering that I haven’t recorded the boiler or cooker yet, we are probably about £100,912. All that we really have left to buy is flooring and of course pay the plumber and electrician so it wouldn’t be too shabby if we finished at around £107,000; £2,000 over our initial budget. In addition to this, we had a rough evaluation a couple of weeks ago to ensure we were not over-spending and the evaluator recommended putting it on the market at £145,000-150,000, so a £38,000 gross profit would be tiddddy.

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Just to quickly debrief my estimates, comparing both charts it’s clear to see that some areas were quite close to my guess, but some were way off the mark. The roof was a pleasant surprise, after gaining a couple of opinions it was confirmed that the roof was dandy and needed little repair work, the money we have spent on it was mostly on replacing the guttering.

The kitchen segments are similar, I set a price of £3,000 in total for the kitchen which we just about reached but not quite, #winning. The bathroom was supposed to be £500 for the main suite and £500 to construct and install a brand new ensuite but we decided to not go through with those plans and instead put a little WC downstairs in the utility cupboard, with just a sink and toilet it fits nicely in there and in budget too – even better!
Also, I have added fees into the updated chart as I didn’t think about the solicitor’s fees and taxes we would be paying. Luckily, we get a discount on council tax due to the property being empty but we haven’t included what we have paid in council tax on the chart yet as I haven’t gotten around to adding it up. The structural changes on the graph have mainly consisted of knocking down the dividing wall between the kitchen and dining room and replacing it with a steel beam and this cost roughly £600. I haven’t included the porch on the new graph because all that my dad did was remove the horrible wooden cladding and brick it up to the roof that it already had using the bricks that had been knocked out of the wall inside, love a bit of recycling ❤ also, we added a window and door to it but those are included in the doors and window category.

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All in all, it’s going well in terms of budget. Hopefully, the only categories to grow before we finish will be the decorating one, the fees (from the sale), the plumbing and electrics. So happy with the project so far and will be a little bit sad to see it go, but I’m sure the pay day will cheer me up… If all goes to plan after all!!

Blog Challenge 2.1 -Renovation Update

6 Month Renovation Update

In May, my family and I were given the keys to our new property in the South of Scotland. This was such a big opportunity, especially for me as it was something I had never done before. My mum and dad had renovated a couple of smaller properties in the past but this one was going to be a learning curve for us all.

We are now 6 months into the project and to follow on from my blog challenge that I did back in May, I am now doing another challenge to celebrate. I will upload this blog every Friday for the remaining 3 Fridays in November to mark our 6-month point!

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VICTORIA HOUSE PROJECT

This first blog is just a recap of what I had outlined in the beginning and comparing it to what we have actually achieved so far. Starting with…

The Bathroom

Here are some pictures of what I was aiming for in regard to the bathroom, I got a lot of my inspiration from Pinterest.

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After we moved the position of the door, I really stuck to the green and white colour palette, but I decided to keep the original wooden boards around the edge of the room after I found a picture with something similar and thought it looked really nice. We did tile a small part of the wall behind the shower, just for practicality really. I incorporated a small line of patterned tiles to break it up slightly, if you look closely you can see a little shiny blue tile that has a little swirl in the middle which was the main reason I chose those tiles because I thought it was fair cute.

The bath suite that we chose was a P-style bath, mum and dad wanted a free-standing bath, which I liked but I preferred the P-style because I just felt it fitted the room better and was cheaper! Win, win.

The Bedrooms

At first, we believed that the bedrooms were all going to be plain magnolia with the original skirting boards and doors painted white. We mostly have stuck to this, but we are going to wallpaper one wall now.

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The Chosen Wallpaper

Additionally, due to the actual struggle of stripping the really thick, embossed, floral wallpaper from the middle bedroom, we decided to leave one wall covered. After painting over it I am soooo glad we decided to leave it because it blends in so nicely with the room, it’s so subtle and just adds a bit of a feature to the room.

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Now most of the work upstairs is complete, bar a bit of painting and wallpapering to do, we moved to the downstairs…

The Kitchen

Whilst we were working upstairs, we were waiting on the plans coming through for the downstairs. If you have read my blog 6-months ago you will have seen the draft plan I made for the changes to the layout of the house, where we planned to knock the kitchen wall down to create a kitchen/diner, I also planned on creating an ensuite upstairs but we decided against it because it just took up too much space and made the bedroom sizes quite awkward. We have put an additional toilet room downstairs in the utility.

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Currently, we have had the planning permission accepted and the wall knocked down with a supporting beam in place. As well as this, we have bought the kitchen from Homebase, French Shaker style in an eggshell blue colour.

It’s going to look lush when it’s built, just waiting on the boiler to be installed before we assemble the units completely.

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The Utility/Lean-to

We settled on bricking up the porch and put in a back door and window, so it’s came together well. Next to the porch is the utility room and like I mentioned previously, we decided to use the space to install a small toilet and sink area. In the remaining space, we have a couple extra kitchen units to put in.

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Sitting Room

This room needs very little work, we have been using it as a bit of a storage room until we complete some more of the work downstairs.

Overall, we have completed most of the major work, except the boiler which should be done in the coming weeks, and then we just have painting and decorating left to do! On Friday I will be uploading my next blog which reviews our budget. Thank you for reading this update, there are more pictures in my website gallery and on my Instagram page: @huntersparkdesign

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