In Construction Industrial Procurement System Construction Essay

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1.0 Introduction

In construction industrial, procurement system is a method from client to choose a suitable contractor to construct of the project. The main consider are time, cost and quality. However, the selection of an appropriate procurement method used in the construction, all depends on the client's intentions and objectives. Client should be considered in order of priority from the time, cost and quality of which is the most important first. Second factors should be borne determining the most appropriate procurement methods are external factor such as economic, commercial, technological, political, social and legal factors. At the same time project characteristics such as size, complexity, location and uniqueness of the project of selection for use.

Time

Quality Cost

Procurement Triangle

At the following, we will detail to discuss the common type of procurement system, contractual arrangements and tendering procedures. Then we will analyze their advantages and disadvantages in general situation. At the last, we will summary all the relevant factors to the system procurement systems, contractual arrangements and tendering procedures for client to choose.

Traditional contracting -Lump Sum

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This contract is by the client appoint an architect, quantity surveyor, services engineering, structural engineer are consultants for the construction design and cost control, and main contractor according to consultants design drawing, specification and with/without bill of quantity for carrying out the works. It includes allocate all work to subcontractors and suppliers to construction of the building. (Ref: fig.1) Generally the main contractor undertakes to carry out a defined amount of work in return for an agree sum. Moreover, this contract all of the activities are sequential and without any overlapping (Ref: fig.2). Therefore this contract within the time is longer for completion.

Employer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Architect

Quantity

Services

Structural

Main contractor

Surveyor

Engineers

Engineer

 

 

Sub-contractor and

Suppliers

Contractual relationships in Traditional System (fig.1)

Legend: Contractual relationship

Co-ordination only

CONCEPT

FEASIBILITY

DESIGN STAGE

TENDER PREPARATION

CONSTRUCTION

Tradition project delivery system (fig.2)

Advantages of traditional contracting

The advantages are client has cost commitment from contractor to cost & time before commencement of construction, clear to classified different parties has a different liability on those work. It can variation (change) to the contract are relatively easy to manage. Therefore, this method of contract is quite popular and most of the employers and contractors are often to use it based on have firm quantity.

Disadvantage of traditional contracting

The main disadvantages of general contracting include split responsibility between construction and design. These leads to disputes about whether defects are really design defects by design team or defects in materials and workmanship by contractor. Is often difficult to distinguish between who liability. At the final account stage, the construction costs often increase quite much give client aspect. Concurrently, overall project duration may be longer than other procurement method as the strategy is sequential and construction cannot be commenced prior to the completion of the design.

Design and Build:

In the design and build procurement method, the client appoint a contractor doing both the design and the construction work. The contractor will from the design stage to the complete all of construction work. However, the contractor is responsible for design and construction through the client's brief idea. After that all of detail design from contractor to develop the building for construction. Therefore this method is becoming increase popular with clients because it offers single point responsibility for clients. The organization chart is show as following.

Employer

 

 

Employer's

Contractor

Advisers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Architect/

Quantity

Services

Structural

Sub-contractor and

Designers

Surveyor

Engineers

Engineer

Suppliers

Legend: Contractual relationship

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Co-ordination only

Advantage of design and build

The advantage of this method is permitted of maximum overlap between design and construction. It is able to shorter the length of the project within the design and construction stage for completion. That resulting in fast project delivery and hence owners' savings in interest payments for lock-up capital and earlier monetary rewards due to earlier completion. At the same time when the design fault generate the construction works cannot continuous toward of other works. It is relative use a short time to solve the problem compare other contracts system. The reason of this contract is one line responsibility to complete all of design and construction works. As a result, most clients often use it when they have not enough concepts, and time is very tight of the project.

Disadvantage of design and build

This type of contract, the tendering cost is very expensive. All the design is a direct responsibility for his own company, if the project is very large and complex designs when the company cannot afford to overload project. It may leads to this type of contractor will terminate the contract. In the final, the contractor will affect the overall project progress. Moreover, this type of contract is very expensive when the client's have any design changed.

Management contracting has classified into two types of procurement. It include are

Management contracting

Construction management

Management contracting

This is a fast track strategy which overlaps the design and construction stages and allows early elements of the construction process to be commenced before design has been completed. The Management Contractor is engaged to manage the overall contract in return for a fee. The Management Contractor can therefore be appointed early in the design and can advise on buildability and programming. In addition to the contract with the Management Contractor, the contracts for the individual work packages are between the Management Contractor and the individual sub-contractors. A cost plan is utilised to control the development costs although actual costs cannot be obtained until the final work package has been awarded. The organization chart is show as following.

Employer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Architect/

 

Quantity

 

Services

 

Suructural

 

Management

designers

Surveyor

engineers

engineers

contractor

 

 

 

 

 

 

 

 

 

Legend:

 

 

Contractual relationship

works package contractors

 

 

Co-ordination only

Construction management

This is also a fast track strategy where individual elements of the project are let before the design of later work packages or elements have been completed. The provider will appoint a Construction Manager to manage the overall contract in return for a management fee as with Management Contracting. Also, as before, the project can benefit from early involvement of the Contractor. In this process the contracts for the sub-contractors are placed directly between the Client and the sub-contractor and the Client will need to have a high level of involvement during the design development and the construction phases of the work. As with Management Contracting, the final costs will only be known once the final work elements have been awarded. The organization chart is show as following.

Employer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Architect

 

Quantity

 

Services

 

Structural

 

Management

 

work package

Surveyor

engineers

engineers

contractor

contractors

Legend:

 

 

Contractual relationship

 

 

Co-ordination only

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