1.1 Introduction
The important decisions will be taken in building process at the initial stage in the project, sometimes even before the feasibility stage. Such decisions will significantly impact on the successful completion and also some optional ways frontward needed to be contemplated prior to go on board of the project.
Moreover, selection of Procurement Strategy is one of the key important factors and the primary consideration in the choice of a procurement strategy should be prime objective to acquire overall value for money and resources throughout the entire life cycle of the service/facility (ARCHITECTS, Royal Institute of British, 2001)
Construction procurement methods practiced in the industry have been subjected to change to meet contemporary requirements of the clients. Wide verity of factors affects the use and development of procurement systems in any construction industry. Thus, it is interesting to discover different systems being used in different instances and here the attention has been drawn to discuss the current procurement trends and the underlying factors that affected the change of procurement systems.
1.2 Procurement strategy Changes over Time
Table 1 below demonstrates that the behaviour of the procurement system with respected to time and the prevailing economic condition and it has a direct relationship with milestones of the specific time period. Therefore analysis of these factors reveals the reasons to timely changes in the procurement strategy.
Date Milestone Procurement Trends
2001-2008 1. Globalisation.
2. Sustained economic growth.
3. Growth of Eastern economies 1. High construction activity.
2. Increased use of partnering
3. Design & Build variants
4. Framework agreements e.g. BAA
5. E-p...
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...tration collaborative role with the employer and contractor
03 Contractual provisions subjected to Fair and reasonable 2.28,5.3 Mutual trust and corporation 10.1
04 Variation Can overcome discrepancies between contract documents and change project scope 2.13 – 2.18 Can only change project scope
05 Provisional Sums Allows 3.16 Not allows. PM shall manage through early warning or risk register
06 Quality Control Issued timely information Set various conditions 21,23,26
07 Construction Programme Not included in contract documents 2.9 Part of the contract document 11.2
08 Defect correction Contractor shall rectify in reasonable time 2.38 Employer specify defect correction period 40.5,43.2,45.1
Table 2.1 1
Awareness of these analysed significant differences would be higher advantage to employer, consultants and contractor when they are dealing with both contracts.
Based on the textbook and my understanding, whenever there are negotiations between a procurer and a supplier regarding a competitive bidding, the first thing that might be favored is the scope of the project, meaning both will sit down and discuss the entire project prior the work begins. Meanwhile, during the negotiations, evaluation criteria should be clear, and stated and defined. As the evaluation is based on the criteria stated and the procurer can request or ask the supplier’s opinions on certain specifications and where things can be improved.
The two main issues in this case are the project analysis and financial forecasting. The project should be analyzed before doing the forecasting, because any recommendations on the project will affect financial forecasting for the next two years.
There were three main factors used for choosing this project. First, its low initial investment that makes
The concept of building constructing may be impaired without a good knowledge and successful management and impact of the environmental factors influencing the performance of such projects.
By eliminating uncertainty and ambiguity between the contractor and the contracting officers, the government could get rid of the divergent interpretations that inflate the cost. Realizing it is to the contractor’s advantage to pass on all expenses it can to the buyer in order to maximize profits every opportunity to clarify criteria for cost, reduce disagreement, and set clear limits are necessary. The difficulty in writing a contract to get rid of all unexpected cost is evident but doing it will cut down on the confusion over the life of the agreement. Defining costs allowed and which are not along with potential penalties for delayed service delivery will yield a better
The design-bid-build method is performed in the three distinct phases of design, construction and commissioning, with little overlap between the first two in particular. This process begins when an owner retains an architect to develop a design which meets their performance and budget specifications. An important note is that there is typically no constructor involvement during the design process and that the cost estimates provided by the architect are often very rough. The inherent lack of constructor input during the design process is a key weakness of the design-bid-build delivery method. In fact, constructor involvement begins following the completion of the design documents in a process of competitive bidding. The complete construction documents are made available to a number of competing contractors and the one who returns the lowest cost for responsible completion is awarded the project. The main benefit of this delivery system is that it removes any appearance of impropriety in the awarding of contracts. It has also been traditionally believed that the design-bid-build method yields the lowest possible cost. Recent successes of alternative delivery methods however, have challenged this assumption. The design-bid-build approach provides a transparent and simple to understand delivery system best suited for inexperienced owners or agencies legally bound to its use.
According to this project there is no need for an early completion. There is also a risk of late completion because there are many subcontractors involved so if one or many fails to complete their jobs within the allocated time it could extent the project period. In management procurement the work is done by hiring experts.
To get a better understanding of project management we will look into a few templates and tools. Because construction projects are so common to the average person, I believe this would be a good industry to use to explain how this templates and tools relate to project management. We will take you the five phases of building a house or any other typical construction project. These ...
Vrijhoef, R. and Koskela, L. (2004) ‘The four roles of supply chain management in construction’, European Journal of Purchasing & Supply Management, 6(3-4), pp. 169-178 ScienceDirect [Online]. Available at: http://www.sciencedirect.com/ (Accessed: 6 February 2010).
Traditional procurement usually involves a client that will appoint some consultants to produce a design as well as select a trusted contractor and supervise the work through the different stages until its completion. The contractor that is appointed usually selected through competition and is solely responsible for the facility delivery and quality of the work that is done and the materials used, this also includes the subcontractors. This process has been used several times over the last while and continues to be a very popular method. Procurement is traditionally is used in a vast range of projects including ones that have great risks attached to them, which in advance the contractors would not be able to establish, they are often used on such projects as refurbishment, heritage and alteration. The approach that is taken to this is probably not being suited to these complex projects that require advanced management systems, skill and structure. The developers as well as the employers can take advantage of the in-house design and management services or they can also choose to repeat an existing standard design may favour the approach to this.
The physical- financial entity is a balance of two different components working towards the same common goal. Each one has their areas of focus and attributes to contribute to the project. If one has more influence than the other, an imbalance could occur and result in problems with the development and its success. The physical side must work with the architects, engineers, and construction team to create the schematic design and budget possibilities for the project in the predevelopment stage. This will include alternatives and rough preliminary designs. When the development moves over to the document development stage, they become responsible for the construction documents, budgeting, and schedules for the actual construction of the project. The financial side of the development involves the business side of the project. This is where the market and marketability studies will be conducted and various feasibility and investment analysis reports will be submitted. The financial entity of the development will continue to work through the predevelopment and document development stages to put forth the best suited analysis for the market, feasibility, and marketability studies.
Definitions of procurement are abundant. For the sake of this paper, I will use the definition given by BusinessDictionary.com, which states that procurement is the act of obtaining or buying goods and services. The process includes preparation and processing of a demand as well as the end receipt and approval of payment. Procurement may be further classified according to the sector that it serves such as public or private.
This paper explores what it takes to be a construction manager and the responsibilities of being a construction manager and the skills that a construction manager should have. It also explores what good construction managers do to have success on their construction projects and the steps that a construction manager must follow to end a project and meet their deadlines at the same
(2014) deduced that procurement performance can be assessed by focusing ondelivery,flexibility, quality, cost and technology. Optimal performance attainment is dependent onhow current suppliers`relationships aremanaged so asto ensure constant availability of needed quality supplies at the organization. This will ensure that sourced materials are indeed procured at the right costand atthe right time. Procurement performancestrives toenable improvements in the procurement process at the organizationso as to improve on qualitydelivery of firm products and servicesatleast possible time and
However, there are some disadvantages in the processes. First, it is very consume time in the pre contract process due to the strategy is sequential and construction cannot be started before the completion of design. Also, the contractor is not appointed in the design stage, so the contractor and supply chain are no input into the design or planning of the project. Mo...