6.7. Delivery, Contracting and Procurement Strategy (Stage B)

Rule 6.16

1. The site constraints, logistics, complexity of the Project and interdependency of works mostly decide how the packages need to be clubbed together under one Contract. For example, it is always better to club the Public Health Engineering (PHE), Electrical and Fire Fighting (FF), services under one Contract. It is suggested to include WTP in the PHE vendor scope for better coordination and integration works, especially during the T&C stage. The Electrical HT system up to the Ring main unit to be included in the HT contractor scope and not in the MEP vendor scope, so as to avoid dilution of statutory norms. Similarly, HVAC & ELV packages should be under same MEP vendor. These needs to be detailed and agreed with the site team. All of them have inter-dependency of commissioning and operations. Many of these works are shaft based and are component/parts of one integrated system.
2. Sometimes, only by clubbing all the activities connected to that element under one Contract, can the project's elements functionality be guaranteed. The main Contractor may still sub-contract specialised packages within the Contract to another vendor. For example, we might give Contract for waterproofing to the civil Vendor for the civil works' overall performance say a water tank. In contrast, the Civil Vendor might sub-contract the waterproofing to a specialised vendor such that the functionality of the Work still remains with one Contractor.
3. Sometimes, the works might involve coordination dependency between the vendors. In such cases, it is always better to pool all such works and give it to one Contractor such that the coordination can be better managed. For example, the finishing works might involve multiple smaller Vendor of varying trades. It is not advisable to divide those packages and award separately.
4. Gaps in Contract emerge when we divide the Work into parts and award to two separate contractors. It is impossible to achieve 100% perfection in arriving at the scope so that there is absolute clarity on the division of responsibilities. There are many a situation where the division is not clear, or it overlaps. To avoid duplication of cost and the gaps in the scope, it is better to award the Contract as a single contract. For example, the supply of chiller is done a vendor who is different from the one erecting the pipeline to supply the chilled water to the floor. Though both are of different trade, it is better to award these two packages as one single Contract. It is vitally crucial in MEP services to tie all the contractors together in commissioning the system, which should come under the General Contractor's overall responsibility.
5. The Contract should always be wholesome. Other than the GC's general attendance, the Scope of Work should include everything required to deliver the results at site. For example, specialised scaffolding for lift erection should be part of the scope of the Lift vendor. It should not be separated unless GC takes the responsibility to provide the same as part of General attendance or services with back charging to the Contractor.
6. Supply and erection are two sides of the same coin. Unless it is essential, never separate supply and erection from each other. Even if Phoenix can procure the material at a cheaper rate from another supply-only Vendor, the same should be tied up and novated under the main Contractor to avoid the coordination and specification issues. Phoenix’s focus should always be the system's functionality as a whole and not the assembly of vendors. In contracting one plus one is never two but less than two. The gap that gets generated by splitting the Contract can have a significant impact on cost and time.
7. The pyramid of various contracting strategies and their impact on cost and risks is given hereunder.Our endeavour should always be to balance the risk and cost.