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LCQ1: "Design-and-build" procurement method

     Following is a question by the Professor Hon Patrick Lau and a reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (May 16):


     Some members of our sector have relayed to me that due to constraints imposed by the building contractors responsible for controlling construction prices, architects who undertake the design of some works projects tendered through design-and-build (D&B) contracts are unable to give full play to their due role in ensuring that the works' quality is commensurate with the design.  Members of the sector have also relayed that contractors allowing multi-layer subcontracting of works and subcontracting works items to subcontractors with the lowest bids in order to control costs have led to delays in works, incessant works to rectify defects and poor overall construction quality.  In view of this, members of the sector propose that the Government should review all public works projects carried out under the D&B approach, including the one for the new Broadcasting House of Radio Television Hong Kong (RTHK), to avoid recurrence of similar faults.  In this connection, will the Government inform this Council:

(a) whether it will change the D&B tendering approach for the aforesaid public works projects, including the one for the new Broadcasting House of RTHK; if it will, of the details; if not, the reasons for that;

(b) of the improvement measures put in place by the authorities to prevent problems of delays and poor quality of public works projects arising from contractors allowing multi-layer subcontracting of works and the award of contracts to bidders with the lowest prices under the D&B tendering approach; and

(c) whether it will enhance the participation of architects in public works projects and allow them to give full play to their due role in ensuring that the works' quality is commensurate with the design; if it will not, of the reasons for that?



     For public works project, the Government will carry out the works in accordance with established guidelines and adopt different procurement methods and contractual arrangements, with a view to meeting the specified needs and limitations of a project as well as achieving its value for money target. In connection with the concerns raised by Professor Hon Patrick Lau, we shall focus the discussion on two main categories of procurement methods, namely the more traditional "first design then build" and the increasingly popular "design and build" (D&B). Under the "first design then build" procurement method, the Architect responsible for the design (irrespective of whether he is an inhouse Architect or externally engaged Architect) can first discuss with the client department on the project requirements. The Architect will then carry out the detailed design work before inviting tenders for the building works based on the completed design. For the D&B procurement method, design work and building works will be bundled as a single contract in the tendering exercise. The successful contractor will also be responsible for engaging the Architect to carry out the detailed design work.

     The above quoted two different contract procurement methods have their own merits and limitations.  The "first design then build" procurement method allows the Architect to discuss with client departments and define technical specifications and requirements of the proposed works before inviting tenders for the building works. During the construction stage, the Architect will monitor the work according to the original detailed design or may propose design changes which may lead to a longer construction period. The possibilities of claims from contractors may increase due to incompatibility between the Architect and the building contractor.  For the D&B procurement method, the overall design and construction period would normally be shorter than the "first design then build" procurement method.  Contractors could also provide their expertise input on application of building materials and specialised working techniques so as to enhance quality and cost effectiveness of the proposed works.  However, these current procurement methods may give rise to the concerns raised in the question by Professor Hon Patrick Lau.

     In connection with Professor Hon Patrick Lau's concern, Architectural Services Department (ArchSD) has commenced a study on the D&B procurement method early this year to analyse projects that had been completed in the past few years.  The result revealed that different contract procurement methods would deliver different results.   The Client Satisfaction Surveys also show that the Average Overall Satisfactory Index for those projects completed by the D&B procurement method is comparable to projects completed by using methods other than D&B. Notwithstanding the above, ArchSD has also reviewed projects to be submitted to the Public Works Subcommittee for consideration in the next three years to determine the most suitable form of procurement method.  ArchSD plans to change the procurement method from the original D&B to "first design then build" approach for two projects, namely the Control Point at Liantang / Heung Yuen Wai and New Territories East Cross-District Community Cultural Centre.  The major reason for the change is that the specifications and technical requirements for these two projects cannot be finalised at the current stage.  Therefore, the "first design then build" approach will be adopted to reduce variations after tenders are called. ArchSD will apply for funding for engaging a consultant Architect to carry out the detailed design work for these two projects. The general technical specifications and requirements will be prepared based on the requirements of the client departments. Upon completion of the design, further application for funding for the building works will be made.

     My reply to the three parts of the question is as follows:

(a) After considering the review mentioned above and consulting with RTHK, ArchSD has decided not to change the original plan to adopt the D&B procurement method for the proposed RTHK Broadcasting Building. The reason that the current RTHK staff, with technical expertise and operational experience on the latest digital broadcasting techniques, are able to specify in tender documents the complex requirements on radio/television information and broadcasting technology such as protection of electronic signals, sound quality from interference, provision of sound-proof insulation and vibration-proof facilities.  With the use of the D&B procurement method, contractors could draw on their expertise to submit a design that is cost-effective, technically feasible and creative. Moreover, the relevant departments have completed a lot of preparatory work for the new Broadcasting Building. The tender invitation exercise is expected to commence shortly. Any change to the procurement method at this stage will certainly delay the completion of the project.

(b) Generally speaking, I wish to point out that the Government would only enforce contract conditions with main contractors, including those relating to delay in works progress or poor workmanship.  For sub-contracting arrangements between main contractors and sub-contractors that are on the approved list, the Government does not have a role to play on the procurement methods and consideration to be adopted by the main contractors.  The Government always put emphasis on quality of work. Works departments should strictly enforce quality control, inspect and accept the works according to the contract requirements, established procedures and standards. For D&B tenders,  departments will clearly set out the technical requirements in the tender documents, including the experience of tenderers and the professionals proposed for the design and project management (including architects and other designers) etc. After a contract is awarded, unless there is a special reason (for example, resignation of the designers or health reasons), contractors cannot alter the original proposed design team at their discretion. On the practice of subcontracting at works sites, there is a strict control for public works contracts to avoid excessive layers of subcontracting, resulting in problems like delays, unsatisfactory quality etc.

(c) According to the current tendering conditions, the proposals from the contractors in their tenders will go through stringent assessment and approval processes to ensure compliance with requirements in various aspects.  To further ensure the quality of the construction works conforming to the design, ArchSD will adopt the following measures: (1) contractors shall clearly list out the responsibilities of their partnering professional design teams in their tenders.  The architectural designer shall co-ordinate all the project design details to effect proper implementation of proposed works in the construction stage, for ensuring works quality; and (2) for individual large scale or comparatively complex projects, experienced directorate grade professional officers will join the tender assessment panel to select the best technical proposal to ensure design and works qualities.

Ends/Wednesday, May 16, 2012
Issued at HKT 17:08


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