Procurement methods and recommendations

This part summarises the procurement methods and recommends for Taylor’s University. As the dictionary definition stated that procurement is the act with the purpose of “to bring about” and “to acquire”. The process includes preparation and processing of a demand and often be used by a company as a strategy to purchase certain materials or services. A business will not be able to survive if the profits are lesser than the price of procurement.

In construction industry, the client has the major choice to make decision on how to procure the construction works that with most advantageous arrangement like for example an architect as the building projector, an engineer for civil engineering projects, a quantity surveyor with preparations of cost estimates and designer with preparation of drawing for the proposed scheme. There is a lot of procurement systems used in the construction industry now a day because it is the process which includes the steps of determination the criteria for the project, setting the contractual framework, preparation tender and tendering process and awarding a contract that is very highly required in the construction industry.

Procurement methods like traditional contract, design & build contract, management contract and construction management contract are commonly used in construction industry in Malaysia. However, the focus is only procurement methods that commonly used to be adopted in carrying out project of building a multi-storey car park building in Taylor’s University campus. The two procurement systems that can be considered as commonly used in construction industry are Traditional Contract and Design & Build Contract.

1.1 Concept of Traditional Method

As we know that the word of “traditional” is defined as long- established which means traditional method is the most common form of method that be used by different firms in past years. Traditional method in procurement system is also known as Design-Bid-Build (DBB). The construction is separated from design which means by the contractor of the project has no responsibility for the design works because client has control over the design through their appointed consultant as the consultants are work independently from the contractor in this method.

This is the way how it works, firstly the client will appoint consultants to produce a full design, documentation and cost control. For example, architect will prepare a brief to the client about the scheme outline and working drawings, quantity surveying will prepare cost estimate for client and so on so forth. After that the client will invite tenders and administer the project by instructing and inspecting the construction works. By using this traditional method, the client is able to have an in direct contractual relationship with both the contractor and consultants.

1.1.1 Advantages

High standard quality and better control of works

By using this traditional procurement method, client will be able to have a high standard quality and better control of the construction works because client is able to request any variation of works to contractor and consultants.

Familiar with its working

Besides that, traditional method has been commonly used in construction industry now a day so everyone will be familiar with its working. This is because many construction firms have been using it since many years ago.

Cheaper cost of construction

However for the cost of construction work, is usually be cheaper than other method however the design risk is taken up by the employer because it is done under the client’s requirement.

Client’s interest is protected

On the other hand, client’s interest is protected by the consultant quantity surveyor, who serve as an advisor for client in the building contracts.

1.1.2 Disadvantages

Outdated method

Now a day traditional method has be considered as an outdated method for current construction industry which has been a standard practice in construction industry for many years. Getting more and more better procurement method occurs in construction industry for example: D&B method and construction management method.

Creates a “Them & us” attitude

This method has creates a “Them & us” attitude in the construction team because contractor and consultants are doing their works separately as the contractor with the construction building works and consultants with the preparation of design and cost control works.

Difficulty to communicate

There will be incompetent communication channel among the various consultants and cause the client difficult to coordinate with them.

Longer duration of construction work

However, the construction works will be more longer duration because there are a lots of phases like contractor have to wait for the design to start the construction works.

1.2 Concept of Design & Build Method

Design and build method is a procurement system that construction works and design works occur in parallel which means an organization undertakes the responsibilities and risks on both construction and design phased. This is because there are always problem arise in construction industry and when there is a problem arise, the contractor will start to blame on the consultants and vice versa. The employer may end up the half of project with the losing party. Besides that, there is a document called “Employer’s Requirement” which is an agreement between Employer and Contractor. Contractor design and build a project in accordance to the requirements stated in “Employer’s Requirements”.

In this Building & Build method, client will appoints consultants to prepare requirements, cost advice, evaluate and select tenders. Then client’s contractor will have to produce a full design and completes the design in parallel with the construction works. If the contractor has no design expertise in-house to do the design, he might have to hire consultants to do the design job for him or take over the client’s consultants through a process known as “novation”. With this design and build method, client will have to appoint one contractor who completes all the designs and construction works. Client may appoints independent advisor to monitor and administer the construction progress and quality of the work.

1.2.1 Advantages

Single point responsibility

By using this design and build method, the single point responsibility laid on the contractor who responsible on both design work and construction services. So if there is any problem occurs, neither contractor nor consultant shall put the blame on each other.

Saving time and cost

On the other hand, design and build method is able to save more time and cost of construction because it is not essential for client to appoint consultants as the contractor have to do both design and construction works.

Easier to communicate

Besides that, the client will be able to have a better communication channel with the contractor because client only have to communicate with one party. The contractor will control over the subcontractors by himself.

Speed of procurement

Other than that, the procurement will be faster because the design and construction work overlaps in construction industry. The faster completion of the project brings benefits on the completion of procurement.

1.2.2 Disadvantages

Quality of works and design will be compromised

Due to all the works are prepared by the independent contractor, so the quality of works and design will be compromised in the view of contractor’s profit.

Higher professional fee outlay

Besides that, even the cost of construction works are lesser but the fee to employ a professional experienced contractor is much higher compare with other methods. Better experienced independent contractor is required to complete a full project which includes design and construct works.

Not flexible on design and construction work

Other than that, it will be much little flexibility to change on the design and construction method because it all done by one contractor so the design possibilities are not explored in full.

Minimise the involvement of the client

Because of all the job will be completed by the independent contractor which includes design and construction works, client will be seldom involve in the construction project.

1.3 Recommendation

Throughout the explanations above, Traditional method undergoes by client appoint a team of consultants to prepare the design works and cost estimate, and select one independent contractor. This method would bring the client a more accurate project cost, able to finish the project within the duration that listed down in the contract, have a proper management on the material and workers and also able to construct the project as the standard quality specified in the contract documentation. Although this method brings a lot of disadvantages like it was an outdated method in construction industry, difficulty on communication and longer duration of work but they will still able to continue and develop to change and challenge the needs of society and construction industry.

However for the Design and Build method, even though it was a relatively fast method but there are still a lot of disadvantages like quality of material and work comprised, high professional fee outlay and not flexible on design and construct work. These problems are hardly solve because now a day in construction industry, getting more and more professional independent contractors and there are a lot of choices for client to choose whether which contractor has a better experience and production work. Besides that, client has no direct power on control over the contractor’s performance and the contractor design expertise might be limited because client has little say in the choice of contractor on choosing the specialist sub-contractors.

So, as a director from Super QS Consultant Sdn. Bhd., I would like to recommend Traditional procurement system because it is the better procurement system that should be considered. However, a proper evaluation on procedures is recommended to develop a good practice in procurement and also improve the reflection in construction industry.