Construction Procurement Methods Compared

reflexion Procurement modes Comp atomic number 18dProcurement is comes from the word of procure which is means to bring about and to acquire. Method is about organized method, technique, process or procedure (Rosli Abdul Rashid 2006). Procurement method is an overall counseling structure and specific forethought utilisations utilise in the escort such as houses, office buildings, shopping complex, roads, bridges etc.Traditionally, guests who esteemed to have fuddles constructed would invariably commission a material bodyer, normal an architect for building run acrossor an engineer for genteel engineering projects. The fountain would prepare drawings for the proposed scheme and, where the project was a sufficient size, a quantity surveyor would prepare estimates and documentation on which arrangementors could prepare their prices. Each of the opposite methods has been used at some sentence in the industry. New procurement formations result continue to be developed to meet new urgencys and demands from clients, contactor and the professions (Allan Ashworth, 2008).There are many more types of procurement systems used in the construction industry nowadays. However, the focus is only on the type of procurement systems that commonly used in Malaysia for example traditional system, determination and build, caution subscribe toing and construction direction.2.1 Concept of Traditional placementTraditional System is in any case known as figure of speech-Bid-Build (DBB). It is nearly common use in the construction industry. With this option, the client appoint an architect to prepare a brief, a scheme outline and working drawings, and to invite tenders and allot the project though issuing instructions, inspecting the work under construction and preparing certificates for hire. In another word, architect is to prepare design proposals to meet the client requirements. The architect may also, with the clients approval, appoint other adviser su ch as quantity surveyor and structural engineers. The contractile organ, who has no responsibility for the design, will usually be selected by competitive tendering. The design team work independently from the contractor, who is responsible for executing the construction work in accordance with the teams of the contract (Allan Ashworth, 2008).2.1.1 Contractual family human relationships of Traditional SystemThe client is in direct contractual relationship with the consultants on the one hand and the contractor on the other. Any contractual links for only where they clients make nominations is it advisable to pr distributively collateral agreements to protect his interests in respect of any matters which might lie outside the building contract (Stanley follow and Hugh Clamp, 2003).2.1.2 oversight Relationship of Traditional SystemThe figure 2.3 is the management relationship of the traditional system. Architect is as the lead designer to coordinate with Engineers on the part of M E works. Architects are also to ensure that the design complies with the local authority requirements. Besides that, Architects is to manage the whole project and supervise the works. asseverators to execute and complete the building works based on the design and specifications in the contracts. Contractors are to coordinate with the nominated Sub-contractors (NSC) on specialist works.2.1.3 Advantages of Traditional SystemThe flavour of work is control by Client.Client put forward achieve the best price through competitive tendering.Clients dope easily request any variation of the works.Clients interest is protected by the Consultants who serve as advisors and independent certifies in the building contracts.2.1.4 Disadvantages of Traditional SystemFrom inception to completion of the project need relatively longer plosive consonant.The communication channel among various consultants may be incompetent.Client maybe too difficult to coordinate with the various consultants.2.2 C oncept of object BuildDesign Build (D B) is a procurement system where a single organization undertakes the responsibilities and risks for both the design and construction phased. There may be various levels of employer involvement in the design in the clear form of D B, the client engages a building contractor at the outset who is then responsible both for the design and the construction of the work. The typical payment method for D B is a lump sum, payable in monthly installments, based on a cost document that forms part of the Contractor s Proposals which is itself a tendered or negotiated response to the Employers Requirements, documents that form the basis of the contract (W.Hughes, 2006).With D B, it is likely that in the absence of in-house professional staff, the client will wish to engage outside consultants to advise on the preparation of requirements and to evaluate and select tenders etc. the main contractual link is between client and the contractor and the clie nts divisor or representative has only a limited role. The contractor might also have a contractual link with his own design consultants, and with sub-contractors and suppliers. As the contractor is wholly responsible for their performance, both in terms of design and construction, there might be less need for collateral agreements between them and the clients (Stanley cox and Hugh Clamp, 2003).2.2.1 Contractual relationships of Design BuildWith a design and build arrangement, instead of using and architect or engineer for a separate design service, the client chooses to employ a contractor at one meter for an all-in design and construction services. It may also be necessary and desirable to employ independent professional advisers to observe the progress and quality of the contractors work and to agree the value of interim certificate for payment purposes (Allan Ashworth, 2008).2.2.2 Management Relationship of Design BuildThe figure 2.5 is the management relationship of the D B. Clients state his requirements through his consultants who prepares the Employers Requirement or conceptual design. D B Contractor is prepares the details design and prepare the cost proposals to the client. Therefore, successful D B contractors are responsible for designing, planning, organizing, constructing and controlling the whole project. The scope of the design obligation needs to be set out as clearly as possible.2.2.3 Advantages of Design BuildEase of communication- Client only needs to liaise with one party i.e DB Contractor, it is direct contact with the client.Saving in time and cost of construction.The contractors experience with the project from inception.The option for contractor s to include their constructing capability in the proposed design.No claim for possible delays due to a privation of drawn information.2.2.4 Disadvantages of Design BuildDesign possibilities are not explored in full and tend to be restricted by the D B Contractors threadbare desi gn and construction method.Quality of materials may be compromised in view of the D B Contractors profit.Client is discouraged to order any variations of works.Client must select only D B Contractor with good reputation and track record.2.3 Concept of Management ContractingThe term management contracting is used to describe a method of organizing the project team and operating the construction process. The management contracting acts in a professional capacity, providing the management expertise and buildability requirement to the overheads and profits involved in return for a fee. The contractor does not therefore participate in the profitability of the construction work itself and does not directly employ any of the labour and plant, except possibly for those items involved in setting up of the site and the costs normally associated with preliminary works.Because the contractor is assiduous on a fee basis, the appointment potentiometer take place early during the design stage . The contractor is therefore able to provide a solid input into the practical aspects of the building technology process. Each barter required for the project is tendered for independently by subcontractor, either upon the basis of the measured work packages or a lump sum. This should therefore result in the lowest cost for each trade and thus for the construction work as a whole. The management contractor assumes full responsibility for the control of the work on site (Allan Ashworth, 2008).2.3.1 Contractual relationships of Management ContractingThe contractual relationship in a management contract is between the client and the management contractor, with all works contactor in direct relationship with the latter. It may also be desirable to establish a contractual relationship between the client and each work contactors by means a collateral agreement. In construction management the contractual relationship is between the client and the construction passenger vehicle, with al l trades contractors in direct relationship with the former (Stanley Cox and Hugh Clamp, 2003).2.3.2 Management Relationship of Management ContractingThe figure 2.7 is the management relationship of the Management Contracting. Management contractor (MC) is to manage construction works for a management fee that comprises a percentage for profit and fixed overheads. usually MC does not undertake the construction works by himself. Consultants prepare the design MC determines construction/management method. This method is popular used in UK.2.3.3 Advantages of Management ContractingEarly appointment of contractor as a member of design team to provide management skill.Better coordination control of project through improved management qualities.Shorter project period because increase speed of design and construction2.3.4 Disadvantages of Management ContractingPressures on design team in preparation of various tender documentation and tender evaluation.2.4 Concept of Construction Managem entThe contractual arrangement and services rendered by a construction management firm are not dissimilar from those under management contracting. But relieving such an organization of contractual risk for the performance of sub-contractors is much more effectual if they are not contractual intermediaries. Thus, the most significant characteristic of construction management is that there is no general contractor instead there is a series of direct contractual links between the client and the trade contractors, reservation the role of the construction management more like a consultant than a contractor. The arrangement is used particularly by experienced clients on projects with short lead-times (W.Hughes, 2006). The construction manager is responsibility for the overall control of the design team and the various trade contractors, throughout both the design phase and the construction phase of the project (Allan Ashworth, 2008).2.4.1 Contractual Relationship of Construction Managem entThe construction manager is appointed after a careful selection process and is paid a management fee. One basic difference from a management contract is that the trades contracts, although arranged and administered by the construction manager, are direct between the client and the trade contracts. The construction manager is a coordinator, and usually cannot guarantee that the project will be finished to time or cost. The clients direct the project and the client is also likely to carry the greatest burden of the speculative risk (Stanley Cox and Hugh Clamp, 2003).2.4.2 Management Relationship of Construction ManagementThe figure 2.9 is the management relationship of the Construction Management. Construction Management is separating consultants/designers from management of the project. Construction Manager (CM) replace designer in administration of contract except design/ certification matters. CM concentrates on managing time/ cost using his unique construction expertise. Client s selects all trade contractors and CM managers the project for a fee.2.4.3 Advantages of Construction ManagementIndependent management function.Reduction in project durations and costs.Design team able to concentrate on design.No conflict of interest between design and production.2.4.4 Disadvantages of construction ManagementAdditional management cost.Erosion of Architects place and responsibilities.2.5 SummaryTraditionalSpeed not the fastest of methods. complexity Desirable to have all information at tender stage. Consider two stages or negotiated tendering.Quality Basically straightforward, but complications can rise if the client requires that certain sub-contractors are used.Clients require certain standards to be shown or described. Contractor is wholly responsible for achieving the stated quality on site.Design and BuildSpeedRelatively fast method.ComplexityPre-tender time largely depends on the amount of the detail in the clients requirements. Construction time reduced beca use design and building proceed parallel.QualityA sufficient single contractual arrangement integrating design and construction expertise within one numerable organisation.Client has no direct control over the contractors performance. Contractor design expertise may be limited. Client has little say in the choice of specialist sub-contractors.Management ContractingSpeedEarly start on site is possible, long before tenders have even been invited for some of the works packages.ComplexityDesign and construction skills integrated at an early stage. Complex management operation requiring sophisticated techniques.QualityClient requires certain standards to be shown or described. Managing contractor responsible for quality of work and materials on site.Construction ManagementSpeedRelatively fast method. The individual trade contractors are in direct contract with the client.ComplexityDesign team able to concentrate on design.Construction Manager concentrates on managing time/ cost using h is unique construction expertise.QualityConstruction Manager replace designer in administration of contract except design/ certification matters.2.5.1 SummaryTraditionalFlexibility Clients control design and variations to a large extent.Certainty Certainty in cost and time before commitment to build. Clear accountability and cost monitoring at all stages.duty Can be clear-cut division of design and construction. Confusion possible where there is some design input from contractor or specialist sub-contractor and suppliers.Design and BuildFlexibilityVirtually none for the client once the contract is signed, without heavy cost penalties. Flexibility in developing details or making substitutions is to the contractors advantage.CertaintyThere is a guaranteed cost and completion date.ResponsibilityCan be clear division, but confused where the clients requirement are details as this reduces reliance on the contractor or design or performance. Limited role for clients representative during construction.Management ContractingFlexibilityClient can dispose or develop design requirements during construction. Managing contactor can adjust programme and costs.CertaintyClient is committed to start building on a cost plan, project drawings and specifications only.ResponsibilitySuccess depends on the management contractors skills. An element of trust is essentials. The professionals team must be well coordinated through all the stages.Construction ManagementFlexibilityClients selects all trade contractors and CM managers the project for a feeCertaintyUsually cannot guarantee that the project will be finished to time or costResponsibilitySuccess depends on the Construction Manager.2.5.2 SummaryTraditionalAdvantages The quality of work is control by Client and Client can achieve the best price through competitive tendering.Disadvantages From inception to completion of the project need relatively longer period.Summary Benefits in cost and quality but at the get down of time.Des ign and BuildAdvantagesSaving in time and cost of construction.DisadvantagesQuality of materials may be compromised in view of the DB Contractors profit.SummaryBenefits in cost and time but at the expense of quality.Management ContractingAdvantagesIncrease speed of design and construction, hence shorter project period.DisadvantagesPressures exerted on design team in preparation of various tender documentation and tender evaluation.SummaryBenefits in time and quality but at the expense of cost.Construction ManagementAdvantagesReduction in project durations and Design team able to concentrate on design.DisadvantagesAdditional management cost and erosion of Architects power and responsibilities.SummaryBenefits in time and quality but at the expense of cost.2.6 ConclusionAs a conclusion, the traditional approach to construction has been to appoint a team of consultants to prepare a design and estimate, and to select an independent constructor. The final would calculate the actual projec ts costs, develop a programme to fit within the period laid down in the contract, organise the workers and materials deliveries and construct to the standards quality specified in the contact documentations.The client would prefer single point responsibility and a truly fixed price and for projects to be completed as required. Procurement procedures remain is a dynamic activity. They will continue to develop to meet the changing and challenging needs of society and the circumstances under which the industry will find itself working. There are no standard procurement solutions, but each individual projects needs to be considered independently and analysed accordingly. However, is a need to evaluate more carefully the procedures being recommended in order to develop good practice in procurement and to improve the image of the industry.