Royal Institution of Chartered Surveyors

Assessment of Professional Competence

Critical Analysis

Issues encountered during a retail development for Retailer Europe

Limited XX at XX Dundrum, Ireland

Candidate’s name: Insert Name Here

Candidate’s membership number: Insert Membership Number here

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1 Introduction

This report is submitted to fulfil the requirements of the Royal Institution

of Chartered Surveyors’ Assessment of Professional Competence
(APC), and in accordance with the APC Candidates and Employers
Guide (July 11).

1.1 Confidentiality Statement

The following document contains confidential information included for

the purpose of the Assessment of Professional Competence.
‘RETAILER Europe Ltd’, hereinafter termed ‘the client’ and Cost
Consultant Ltd have given their consent to disclose details for the
critical analysis on the basis that the information is not to be used for
any other purpose or by any person other than those authorised by the
Royal Institution of Chartered Surveyors.

1.2 Declaration

We confirm the critical analysis document is a true representation of

the candidate’s own work and involvement in the project detailed
herein.

Candidate: Date:

Supervisor: Date:
Supervisors Name: Simon Wilson Membership number:

Counsellor: Date:
Counsellor’s Name: Maria Govorusa MRICS Membership number:

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2.0 Project Overview

The project comprises the redevelopment of a single storey retail unit

which involved the fit-out of an existing, empty shell for RETAILER
Europe to provide a standard specification store achieving 75% net
sales space from a GIFA of 32,000ft2 (see Appendix 1 for store layout
and photographs of the building). The site is located in Dundrum City
Centre, Republic of Ireland within a busy retail outlet with occupying
tenants adjacent to the works. The client is an international retailer
experienced in this type of project. This store formed part of their wider
expansion plan being one of five new stores in the Republic of Ireland
during 2014.

Project Details:

● Contract Sum Approximately £1.7m

● Contract Period 8 Weeks
● Form of Contract JCT Intermediate 2011 with CDP
● Collateral Warranties / Bonds Contractor to Landlord
● Construction Category A & B fit-out of steel
frame structure with composite
panel cladding

2.1 My involvement and responsibilities

I was involved in the project during the design development stage and
attended design team meetings to suggest value engineering options
and review the contractor’s proposals. I liaised with the design team to
obtain information on the condition of the existing building shell in order
to generate a scope of works and updated the cost plans accordingly.

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Once the design was complete and cost plans finalised, the client
approved the project for tender. I was involved in negotiating tenders
on behalf of my client using approved suppliers listed under a JCT
2011 framework agreement.

I was also involved in post contract duties including administering the

change control procedure, conducting valuations and producing cost
reports.

3 Key Issue 1 Background

Following agreement of the feasibility with RETAILER, cost targets

were set for each element of works with the aim of being within circa
5% cost accuracy of the contract sum agreed with each supplier.
However on receipt of tenders for Fire Sprinkler and Detection
equipment, both prices appeared inflated and were circa 14% and 72%
above the cost limits respectively. It was initially thought that the
inflated tender prices received were caused by a lack of pricing
competition within the framework.

Capital
Expenditure Value of Initial
Bid Received vs
Scope of Works Budget (Cost Tenders
Capex %
Estimate) Received

Fire Sprinklers £53,960.00 £76,769.00 42.27

Fire Alarm & Detection £28,196.00 £48,734.67 72.84

Equipment

As both tenders were significantly above the agreed cost targets, it

caused issues for my client and did not appear to represent good value
for money. I conducted a tender analysis to determine why they

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appeared inflated by firstly reviewing quantities against the drawings
and checking to see if any front loading or competence errors were
apparent. It was obvious that detection and sprinkler equipment for
installation within the ceiling void were abnormally high. I subsequently
forwarded the contractor’s design onto the client’s Fire Safety
Consultant who confirmed that the high levels of sprinkler and fire
detection equipment within the void were necessary as the ceiling void
depth was in excess of 800mm due to an irregular layout of structural
beams above the sales floor.

Original Elevation Drawing

The ceiling height shown at 3200mm above FFL creates a void depth of 1350mm.

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Original Fire Protection Drawing

High quantities of void protection above the sales floor were proposed due to the void
depth being in excess of 800mm. This caused both tenders for fire alarm and
sprinkler protection to be significantly in excess of the feasibility.

3.1 Key Issue 1 - What options are available in order to reduce the
cost of the Fire Alarm and Sprinkler protection works?

I was involved in advising the client on the various options available to

them, as a result of the aforementioned key issue.

3.2 Evaluation of Options Available

3.3 Option 1 – The works would be re-tendered under the NJCC code of
procedure for Single Stage Selective Tendering with six contractors
shortlisted by myself and sent to the client for approval.
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Option Summary

This option was considered as it would have been beneficial to gain

competitive tenders based on current market rates with local suppliers
based in Republic of Ireland. The suppliers listed within RETAILER’s
framework were based in England and their tenders were subject to a
percentage uplift to cover the additional cost of travelling, delivery and
working within ROI.

Reason rejected

Whilst this option would have provided competitive tender prices and a
potential discount on the tenders initially received, an impending
commencement date did not afford sufficient time to conduct the
necessary pre-qualification and tender interviews in order to add
additional suppliers onto the RETAILER Framework and negotiate a
contract sum. This option was therefore not practical and was quickly
dismissed.

3.4 Option 2 – Omit the suspended grid ceiling above the sales floor to
negate the need for fire sprinkler void protection and reduce the
quantity of fire detection equipment.

Option Summary

Omitting the suspended grid ceiling above the sales floor would have
eradicated the ceiling void, meaning that all void sprinkler equipment
could be omitted and less fire detection equipment would be required.
The exposed services above the sales floor would need to be sprayed
out for decorative purposes but the cost savings achieved by omitting

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the suspended grid ceiling and void protection equipment would have
achieved a nett saving of circa £24,500.

Reason Rejected

Omission of the suspended grid ceiling would have left mechanical and
electrical services exposed above the sales floor in the line of sight of
customers. Whilst we proposed that these services were sprayed out to
match the structural soffit for decorative purposes, this design was not
in keeping with RETAILER’s standard store specification and despite
the prospect of achieving significant savings was rejected by
RETAILER’s design team.

3.5 Option 3 – Increase the ceiling height to reduce the void depth to less
than 800mm in order to omit the sprinkler void protection and reduce
fire detection equipment required.

Option Summary

By raising the ceiling height over the sales floor to 3822mm from
3200mm, a ceiling void space of less than 790mm would be formed.
With the advice of RETAILER’s fire safety consultant this would mean
that the sprinkler protection within the ceiling void could be omitted and
fire detection equipment reduced.

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Revised Elevation Drawing

The revised ceiling height shown at 3822mm above FFL creates a void depth of
728mm. On approval with RETAILER’s fire consultant this meant that sprinkler void
protection could be omitted.

Revised Fire Protection Drawing

The quantities of void protection in comparison to the original proposal are

significantly reduced following the revised ceiling height.

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Proposed Solution for Key Issue 1

With the consent of RETAILER’s design team and fire safety

consultants we proposed that the ceiling height over the sales floor was
raised to 3822mm. This meant that sprinkler void protection could be
omitted and detection equipment was significantly reduced whilst still
providing RETAILER with the desired store layout with provision of a
suspended ceiling for aesthetics purposes. A bulkhead and lowered
section of suspended grid ceiling of circa 40m2 was formed around the
irregular beam layout which still required fire sprinkler and detection
equipment however this still resulted in a significant saving as fire
sprinklers above the remaining sales floor were no longer required.

3.6 Conclusion for Key issue 1

It was thought that this option provided the best outcome in terms of
delivering improved value for money, the correct RETAILER store
layout and also mitigated any delays and risks if the work had been re-
tendered with local but unfamiliar suppliers. RETAILER were satisfied
with this solution
and the savings achieved of £7,710.00 and £21,474.19 on sprinkler
and fire detection tender prices respectively.
Value of
Value of Negotiated
Initial Tender
Scope of Works Saving
Tenders following Ceiling
Received Height
Adjustment

Fire Sprinklers £76,769.00 £56,059.00 £20,710.00

Fire Alarm & Detection £48,734.67 £25,260.48 £23,474.19

Equipment

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4.0 Key Issue 2 Background

The second key issue I encountered was managing the post contract
cost control of the project. Due to the high frequency of variations and
lack of understanding of the change control procedure, it was
extremely difficult to monitor and raise change requests in a timely
manner. This impacted on the accuracy of cost reports and did not
provide RETAILER with the levels of cost certainty required.

When variations were submitted by the contractor, they were not priced
in accordance with the agreed framework rates or supported with
substantiation. Variations were often submitted by e-mail without a
breakdown which meant that rates from the framework had to be
identified in addition to requesting further information and drawings.
This prolonged negotiations in respect of agreeing variations and
caused the cost reporting of the project to be less accurate. In some
cases instructions had been made directly to the contractor from an
appointed building control consultant. Despite these instructions having
no contractual validity, the contractor had acted on them and requested
that a change request was raised.

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Invalid Instruction Pathway
4.1 Key Issue 2 - How can the change control and cost reporting of
the project be improved?

4.2 Evaluation of Options Available

4.3 Option 1 – Communicate the current change control procedure

to the contractor requesting that variations were submitted in a timely
manner and supported with the correct substantiation.

Option summary

By holding a meeting with the contractor’s surveyor, I could explain the

correct change control procedure and stress the importance of
submitting variations within a timely manner. I would explain that when
submitting variations by e-mail they needed to be clearly priced in
accordance with the framework rates and supported with a breakdown.
I could make them aware that they were only permitted to act upon the
instructions of the contract administrator and instructions received by
other consultants would hold no contractual validity.

Reason rejected

This option was rejected as it would leave the presentation of variations

open to the interpretation of the individual compiling the
documentation. Due to the contractor’s surveyor being on annual leave
at various stages of the project, changes in project staff would
potentially create a future lack of understanding around the change
control process and would not form an effective solution for the
duration of the project and future schemes. This option would also do
little to improve the speed at which variations could be assessed, as
the framework rates would still need to be searched for and cross-
checked. Due to the revised Irish Building Control Amendment
Regulations (2014), the contractor was under pressure to act on
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instructions from the appointed certifier despite them not being
permitted to do so. This option would not have supported the contractor
through this issue as the appointed certifier may have continued to
issue instructions.

4.5 Option 2 – Introduce a standardised change control document to

assist in the validation of variations. This would include a presentation
to the project team briefing them on the change control procedure.

Option Summary

Introducing a standardised change control document to be completed

by the contractor would act as a prompt to provide the correct
substantiation and confirm that the change had been signed off by the
contract administrator. Holding a meeting with the project team would
ensure the correct change control procedure was adhered to and
would reduce the likelihood of the building control authority issuing
instructions directly to the contractor.

Proposed Solution for Key Issue 2

Introducing a standardised change request form (appendix 2) meant

that as each variation was raised, the necessary substantiation,
framework rates and authorisation were included rather than having to
be identified and queried. This would allow variations to be assessed
and agreed more quickly and increase accuracy of the cost reports for
RETAILER. The autonomy of this process would mean that if new
project team members became involved in future, they could be briefed
on the change request form to reduce the prolongation of submitting
and agreeing variations.

Presenting the change control process document (Appendix 2) to the

project team would make everyone aware that variations were to be

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raised and agreed in a timely manner. I reminded the team that any
instructions other than those issued by the contract administrator would
hold no contractual validity and that in future they needed to be
authorised by the contract administrator within 48 hours of becoming
apparent.

4.6 Conclusion for Key Issue 2

Introduction of the standardised change request form assisted with

negotiating and agreeing variations in a timely manner as relevant
information was enclosed with the change request instead of having to
be searched for. The meeting reaffirmed the importance of reporting
and agreeing variations in a timely manner on behalf of my client.
Future change requests were authorised by the contract administrator
to ensure the correct administration processes were followed.

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Valid Instruction Pathway incorporating standardised process document
5 Reflective Analysis of Key Issue 1

5.1 Why did the problem arise?

The initial site visit was undertaken by a colleague who had previously
left the company; when reporting findings from the visit, the irregular
nature of the structural beam layout was not mentioned within their
report. The structural beam layout caused the need to allow provision
for additional fire protection and caused higher than anticipated tender
prices. The tendering contractors were based in mainland UK and were
entitled to a percentage uplift to cover the additional costs of working
within the Republic of Ireland. These costs would not have been
incurred had the contractors been based in the Republic of Ireland. The
lack of time apportioned to undertaking the tendering process meant I
was unable to competitively tender the works which could have
delivered further savings.

5.2 How could this have been prevented?

As the initial site visit was undertaken by a colleague I was unaware of

the layout and depth of structural beams. If attending site I would have
been sure to pay particular attention in measuring the depth of
structural beams from soffit height. This would have allowed the cost of
void protection to be estimated more accurately at feasibility stage.
RETAILER would then have been able to make a fully informed
decision in whether to proceed with the acquisition of the unit by
knowing in advance the cost of void protection was likely to be inflated
in comparison to other stores.

If additional time had been allocated for the tendering process, the
works could have been competitively tendered in accordance with
NJCC single stage guidance. By tendering the works with suppliers
based in the Republic of Ireland, the need to pay an uplift to suppliers
based in mainland UK would have been negated.
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6 Reflective Analysis of Key Issue 2

6.1 Why did the problem arise?

A lack of understanding of the change control procedure meant that

during the first two weeks of the project, variations were not being
executed in accordance with the administration procedures defined
within the contract. This was caused as new team members were
unaware of the procedures they were required to adhere to. I had
assumed in this period that the team were well briefed on the change
control procedure and the importance of controlling project expenditure
to my client.

Due to the Building Control Amendment Regulations (2014), various

elements of the project needed to be signed off by the assigned
certifier. This had put the contractor’s project management team under
pressure to act on instructions from the authorising person despite not
being permitted to do so. Changes in members of the project
management team created further confusion during this period as the
contractor’s surveyor was on annual leave.

6.2 How could this have been prevented?

By holding a meeting prior to project commencement, the change

control procedure could have been reaffirmed to the project team to
ensure they understood the process. This would have improved
awareness of the standards required and reduced the likelihood of
invalid instructions and prolongation in agreeing variations.

The standardised change control document could have been issued to

any new members of the project team to improve their awareness and

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offer an opportunity to address any queries rather than assuming they
were aware of the process.

7 Lessons learnt

A key lesson learned is the importance of undertaking an in depth site

survey to determine the risks associated with proceeding with a project.
This would have highlighted the irregular structural beam layout prior to
preparing the feasibility study and allowed RETAILER to make a fully
informed decision on whether to proceed with the acquisition of the unit
knowing that high levels of void protection would need to be installed.

My experience has highlighted the importance of communication to

ensure that each member of the project team is aware of their
obligations, rather than assuming they know what is required of them.
Communicating the required standards at project commencement can
improve each team member’s awareness of the procedures in place.
Time should also be taken to brief new team members.

Utilising standardised process documents can assist in ensuring

members of the project team are fully aware of the information they
need to present in support of raising change requests to improve the
levels of post contract cost control.

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