In today’s fast-paced world, construction projects are becoming more complex endeavors that require meticulous planning, coordination, and execution. In the case of large construction projects, (those projects where the overall built-up area is more than 2 million SFT) there can be multiple stakeholders involved and unforeseen changes that can give rise to non-tendered items.
Non-tendered (NT) items are those materials or services not initially included in the original tender or the bid package. In this article, we will deep dive into the concept of NT items in construction, explore why an item becomes an NT, and how the same can be managed effectively.
Understanding Non-tendered (NT) items:
NT items refer to those components or elements of a particular package that are not explicitly specified in the initial tender documents or the finalised bill of quantities (BoQs) but become necessary for the project’s completion. This can be due to (but not limited to) continuous design evolution and improvements, the inclusion of a better and more advanced product to cope with the latest technology, unforeseen site conditions, practical difficulty in executing the initial design and modifying it, etc.
A typical case would be the strengthening of a podium slab to accommodate the additional load on account of landscaping elements. As per the original design, the loadings were miscalculated leading to a deficiency in steel rebar, and punching shear was observed which could lead to structural collapse, if not addressed. To rectify the same, strengthening of the slab was to be done and this service was not included in any of the BoQs issued and the activity had to be considered as an NT item.
Another example would be the non-inclusion of acoustic properties in the gypsum partitions in a typical interior fit-out construction. Let’s assume, the BoQs are awarded, and vendor onboarding is complete. Now the client intends to appoint an acoustic consultant to ensure the meeting rooms and cabins are of the required decibel (dB) levels. This acoustic property to achieve the desired dB levels inside the cabins was not included in the original design of the gypsum partition and had to be operated as an NT item.
Impact of NT items:
NT items can have significant impacts on construction projects and some of the most severe issues include:
- Cost implications: As the items are new and were not a part of the original BoQs, this will cost additional expenses to the vendor/contractor. Perfect assessment and pricing are crucial to avoid cost overruns and to ensure it is not a loss to the contractor. In the case of large projects, where the design phase itself may take more than 12-14 months, followed by the procurement, and construction phase, there can be significant design evolutions that can scrap the earlier design to a new design, thereby causing a change in the initial design and an additional cost to purchase the new items, negotiate and arrive at a final cost.
- Schedule overruns: These are caused by the additional/extra time needed to research new requirements and finalize them through multiple mock-up rounds, ultimately affecting the schedule. The original baseline schedule may not account for these delays, as such buffers are often not included, leading to significant impacts on project timelines.
- Contractual Issues: As these items are new and were not accounted for in the original BoQs, there can be potential disputes on the unit rate between the vendor and the client. Finalisation and agreement of the rates can delay the issuance of the revised purchase order (PO) for the vendor to source the new item.
Best practices in the Management of NT items:
Some of the ways through which we can manage and reduce the impact of NT items are:
- Detailed Project Planning: Meticulous planning and assessment of risk at regular intervals are essential. Open discussion with the Client on the anticipated changes can help minimize surprises.
- Contractual provisions: Along with the main items that are included in the original BoQs, it should also capture those items that may at some point turn out to be NT items by including them as rate-only (R/O) items. This shall require thorough brainstorming by the architect and client during the detailed design phase.
- Procurement Expertise: For large projects, skilled procurement professionals (a cost consultant team) are to be onboarded to deal with NT items as they can source the NT items at competitive prices. This can be done by sourcing a BoQ with the NT item operated at some other project and adding on the overhead charges (normally 10%) to the vendor. The other way is by deriving a rate for the new item from the cost consultant.
- Contingency Budget: There should be a separate budget kept aside to accommodate NT items to provide financial resilience in case of changes.
- Documenting changes: Accurate and detailed documentation is essential from an audit point of view in the closure of the items. One of the best ways which has proven effective is to set up a folder system as follows:
- The item description and vendor details – This will be a small write-up on how the item was included as an NT item with details of the vendor
- Initial GFC (Good for Construction) – This shall include the complete list of the initial drawings which were shared as a part of the original package
- Final GFC – Includes the final drawing based on the revised requirement as a part of the change. This may also be a shop drawing, approved by the architect
- Item admissibility approval – This includes the technical approval from the client side to ensure that the same has been accepted by the client and is good to go for commercial discussions
- Vendor quotes – This phase has the various quotes submitted by the vendors until the vendor’s final quote
- Recommendation – This recommendation includes the involvement of the cost consultant and project management consultant (PMC) with their rates based on their research
- Commercial Approval – After the vendor’s final quotes and the recommendation by the cost consultant and PMC are received, the final decision is to be taken by the client. This forms the final approval and post which, the BoQs are revised and new or modified POs are issued.
Effective Project Management through CPM Scheduling:
In the realm of construction project management, the implementation of robust scheduling methodologies is paramount. One such indispensable tool is the Critical Path Method (CPM). CPM scheduling plays a pivotal role in foreseeing potential challenges, including the incorporation of non-tendered (NT) items, and ensuring projects stay on track.
CPM scheduling allows for a comprehensive visualization of project timelines, highlighting critical tasks and their interdependencies. By utilizing CPM, project managers can identify potential delays caused by NT items and adjust schedules accordingly. This proactive approach aids in minimizing schedule overruns, a common repercussion of unforeseen changes in construction projects.
For a detailed exploration of how CPM scheduling contributes to efficient project management, you can refer to this in-depth guide on CPM Scheduling in Construction. This resource delves into the intricacies of CPM, providing valuable insights into its application and benefits for construction projects of varying scales.
Integrating CPM scheduling into your project management framework, alongside the best practices discussed earlier, can significantly bolster your ability to navigate the challenges posed by non-tendered items and other dynamic aspects of construction projects.
Conclusion:
Non tendered items are inevitable in most construction projects due to the very dynamic nature of the projects. While this can adversely lead to challenges in going ahead with the planned timelines and original budget, effective management through proper planning and documentation of the changes can help minimize their negative impact.
