Discussion
Peach Computer Company intends to build a $6 million 120,000-foot building near Dayton, Ohio. In the past, the company has purchased similar buildings. The method used for the purchase of the previous buildings has been using plans and specifications. These are provided by an A&E firm and are used as the basis for bidding from contractors who actually build the building. The plans and specifications provided by the A&E firm are also used as the standard on which quality measures are made. The cost of this approach is approximately 8% of the estimated cost of construction. Donald bright the supply manager for the company has come across an option for this approach to purchasing the building. This is an interesting option for the company. Performance specifications is where the company will give the use of the building and minimum requirements to prospective bidders for the building contract. The bidders will come up with their different interpretations of the performance specifications and give their own designs, a fixed price for development, and a set completion date.
Question 1: Should Don get any additional information? Explain.
Don should get additional information. The company has previously worked with the plans and specifications approach. It is therefore more comfortable with this approach and has already reserved an A&E firm, which is responsible for the development of the company’s specifications for buildings. However, Don has only gathered information about the performance specification method from a journal. Being an edited journal, it is likely that there is information that is left out or not explained in detail. Don therefore needs to seek a professional in the building industry and ask for more information about how this method works. For example, he needs to know the level of details the company needs to give when giving performance specifications.
Question 2 Discuss the inherent advantages and disadvantages of using performance specifications.
The main advantage of using the performance specification method is that the company will not need to hire an A&E firm in the first place. The A&E firm will usually give a final design, which the contractors who actually build the building will have to follow. However, the performance specification method will result in a number of firms coming up with their own interpretations of the performance specifications. The company will therefore have a choice over a number of designs in addition to the choice of cost and completion date. The main disadvantage of using the performance specification method is that the winning bidder is the designer and the building contractor. These two cannot be separated and therefore the choice of the company is limited in choosing either a contractor or the design. For example, the preferred builder may not present the best design. This would mean the company would have to do with the builder with the best design.
Question 3 Discuss the inherent advantages and disadvantages of the plans and specifications method of describing quality.
The A&E firm that comes up with the plans and specifications will have worked closely with the company. They will therefore be able to capture the needs of the company in the proposed building. This means that the plans and specifications given for the proposed building will be as close as possible to the needs of the company. These specifications are then used in the bidding for a contractor who is expected to go with the plans and specifications provided. This means that all the contractors will bid to work on the same plans and therefore this method can offer a good opportunity for the company to compare costs. However, this method can have a problem with implementation as the people who came up with the plans and specifications are different from those implementing the plans by doing the actual building. This can lead to quality problems where the actual contractor interprets the plans differently from what was intended.
Question 4: Assuming that Don’s investigation and analysis indicates that both methods are practical for use by Peach; discuss which approach Don should recommend
The company has previously worked with the plans and specifications approach in the past and it has been effective. However, the performance specification provides an opportunity for the company to try a new approach in purchasing its building. Don should recommend the performance specifications method. The company knows what the building is expected to accomplish. With this information, they will give the performance specifications and bidders who are also going to be the contractors will interpret these specifications. This will allow the company to have a wide variety of designs from different perspectives to choose from. The consolidation of the whole design and construction process in this method allows the company to save time. This method is also likely to result in lower costs for the overall project.
Question 5: Explain why one method will require more active involvement on Don’s part than the other approach.
The performance specification method would require less involvement from Don than the plans and specifications method. In the plans and specifications approach, Don will have to liaise closely with the A&E firm in order to ensure that their design corresponds to the needs of the firm. This can be time consuming, as Don will have to go through every little detail during the design face with the A&E firm. After the design is approved, Don will also have to ensure that the wining contractor complies with the specifications given. In the performance specifications approach, Don will only need to come up with the expected performance requirements for the building. Bidders will come up with their own designs but ensure that the building meets the performance requirements given by the company. Since the winning designer will also be the builder, it will be easy for them to comply with their plans and require less supervision from Don.
Reference:
Peach Computer Company. N.P.
/
