Construction Procurement Methods Compared

wrench Procurement Methods CompargondProcurement is comes from the word of procure which is means to bring about and to acquire. Method is about organized regularity, technique, bidding or procedure (Rosli Abdul Rashid 2006). Procurement method is an over all in all focusing social organisation and specific focusing practices used in the estimate such as houses, office grammatical expressions, shopping complex, roads, bridges etc.Traditionally, knobs who wished to lead estimates constructed would invariably commissioning a marker, normal an architect for edifice projector an engineer for civil applied science projects. The intenter would score drawings for the proposed plan and, where the project was a sufficient size, a quantity surveyor would prep ar estimates and documentation on which asseverators could prep atomic number 18 their prices. Each of the disparate methods has been used at both(prenominal) succession in the industry. New procural systems will plow to be developed to meet new fates and demands from clients, contactor and the professions (Allan Ashworth, 2008).thither be m whatsoever more types of procurance systems used in the reflection industry nowadays. However, the focus is only on the type of procurance systems that commonly used in Malaysia for example traditional system, c at a agept and build, heed spying and reflexion management.2.1 Concept of Traditional SystemTraditional System is alike known as stick out-Bid- manikin (DBB). It is most common use in the turn industry. With this option, the client ap take an architect to prepare a brief, a scheme outline and shiting drawings, and to invite bids and administer the project though upshot instructions, inspecting the work under construction and preparing certificates for payment. In an another(prenominal) word, architect is to prepare build proposals to meet the client requirements. The architect whitethorn as well, with the clients approval, app oint other consultant such as quantity surveyor and structural engineers. The affirmer, who has no responsibleness for the determination, will usually be selected by competitive tendering. The purpose group work self-supportingly from the contractor, who is responsible for executing the construction work in accordance with the groups of the contract (Allan Ashworth, 2008).2.1.1 Contractual relationships of Traditional SystemThe client is in direct contractual relationship with the consultants on the bingle hand and the contractor on the other. Any contractual links for only where they clients make nominations is it prudent to recommend collateral consentments to protect his interests in respect of any matters which exponent lie outside the building contract (Stanley Cox and Hugh Clamp, 2003).2.1.2 focal point kinship of Traditional SystemThe figure 2.3 is the management relationship of the traditional system. house decorator is as the lead objecter to coordinate with Engineers on the part of M E plant life. Architects are also to ensure that the trope complies with the local pronouncement requirements. Besides that, Architects is to manage the whole project and supervise the works. Contractors to execute and make out the building works based on the design and specifications in the contracts. Contractors are to coordinate with the nominated Sub-contractors (NSC) on specializer works.2.1.3 Advantages of Traditional SystemThe flavour of work is crack by thickening.Client can achieve the outflank price with competitive tendering.Clients can 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 inauguration to cessation of the project need relatively longer period.The communication channel among various(a) consultants may be incompetent.Client maybe too difficult to coordinate with the various consultants.2.2 Concept of jut BuildDesign Build (D B) is a procurement system where a single transcription undertakes the responsibilities and risks for both the design and construction phased. There may be various levels of make use ofer involvement in the design in the pure 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, pay up to(p) in monthly installments, based on a terms 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 presumable 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 of import contractual link is betwixt client and the contractor and the clients agent 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 exclusively responsible for their performance, both in terms of design and construction, there might be less need for collateral agreements mingled with them and the clients (Stanley Cox and Hugh Clamp, 2003).2.2.1 Contractual relationships of Design BuildWith a design and build emplacement, instead of using and architect or engineer for a weaken design service, the client chooses to betroth a contractor directly for an all-in design and construction services. It may also be necessary and desirable to employ independent professional advisers to monitor the progress and part of the contractors work and to agree the value of interim certificate for payment purposes (Allan Ashworth, 2008).2.2.2 caution 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 dilate design and prepare the cost proposals to the client. Therefore, successful D B contractors are responsible for designing, planning, organizing, constructing and subordinationling the whole project. The scope of the design obligation take to be set out as cl earliest as viable.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 period and cost of construction.The contractors experience with the project from inception.The option for contractor s to allow in their constructing capability in the proposed design.No claim for possible delays due to a lack of drawn information.2.2.4 Disadvantages of Design BuildDesign possibilities are not explored in full and ten d to be restricted by the D B Contractors standard design and construction method.Quality of materials may be compromised in view of the D B Contractors profit.Client is discouraged to aver any variations of works.Client must select only D B Contractor with good reputation and track record.2.3 Concept of Management spyingThe 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 twisting in return for a fee. The contractor does not therefore put down 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 oscilloscope up of the site and the costs normally associated with preliminary works.Because the contractor is apply on a fee basis, the appointment can take adjust early during the design stage. The contractor is therefore able to provide a substantial input into the practical aspects of the building technology process. Each divvy up required for the project is tendered for independently by subcontractor, either upon the basis of the mensurable work packages or a lump sum. This should therefore result in the lowest cost for each occupation 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 t he client and the construction director, with all flip-flops contractors in direct relationship with the agent (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 hardened overheads. Normally MC does not undertake the construction works by himself. Consultants prepare the design MC determines construction/management method. This method is frequent 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 speeding of design and construction2.3.4 Disadvantages of Management ContractingPressures on design team in preparation of various tender docume ntation and tender evaluation.2.4 Concept of saying ManagementThe contractual disposition 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 effective 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, making the role of the construction management more like a consultant than a contractor. The arrangement is used particularly by experience 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 ManagementThe construction manager is appointed after a studious selection process and is paid a management fee. One fundamental 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 absolute 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) alternate designer in administration of contract except design/ attestation matters. CM distils on manag ing time/ cost using his unique construction expertise. Clients selects all trade contractors and CM managers the project for a fee.2.4.3 Advantages of Construction Management independent 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 power and responsibilities.2.5 synopsisTraditional expedite 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 sealed sub-contractors are used.Clients require reliable 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 boastfully depends on the tot up of the detail in the clients requirements. Construction time reduced because design and building proceed parallel.QualityA sufficient single contractual arrangement integrating design and construction expertise in spite of appearance one denumerable 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 pop off 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 his unique construction expertise.QualityConstruction Manager replace designer in administration of contract except design/ certification matters.2.5.1 compactTraditional tractableness Clients control design and variations to a large extent. inference Certainty in cost and time before allegiance to build. Clear accountability and cost monitoring at all stages. province 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 inside information 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 modify or develop design requirements during construction. Managing contactor can adjust programme and costs.CertaintyClient is committed to get going building on a cost plan, project drawings and specifications only.Responsibility victory 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 digestTraditionalAdvantages The quality of work is control by Client and Client can achieve the best price through competitive tendering.Disadvantages From inception to comp letion of the project need relatively longer period.Summary Benefits in cost and quality but at the expense of time.Design 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 endAs a conclusion, the traditional approach to construction has been to appoint a team of consultants to pre pare a design and estimate, and to select an independent constructor. The concluding would calculate the actual projects 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 stainless 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 circle 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 beingness recommended in order to develop good practice in procurement and to improve the image of the industry.