The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0969-9988.htm
ECAM
26,9
2060
Received 10 April 2018
Revised 17 September 2018
24 February 2019
Accepted 5 March 2019
Engineering, Construction and
Architectural Management
Vol. 26 No. 9, 2019
pp. 2060-2083
© Emerald Publishing Limited
0969-9988
DOI 10.1108/ECAM-04-2018-0154
Procurement strategy and
outcomes of a new universities
project in South Africa
Samuel Laryea
School of Construction Economics and Management,
University of the Witwatersrand, Johannesburg, South Africa
Abstract
Purpose – Construction project management outcomes in the literature typically portray significant
deviations from expected outcomes. Various theories from studies that focus superficially on causes of project
cost and time overruns rather than root causes have not addressed this problem. The need is for a better
understanding of how procurement strategy provides a fundamental means to address this problem. The
purpose of this paper is to examine the procurement strategy used to deliver a new universities project in
South Africa within budget and to ascertain its influence on the outcomes.
Design/methodology/approach – A case study was designed to provide a comprehensive and intensive
methodology to identify and examine the construction procurement strategy and its influence on the project
outcomes. Document analyses and semi-structured interviews were used to collect data on the construction
procurement strategy and outcomes from the client team.
Findings – The evidence brought forward demonstrates that the successful outcome was largely a
consequence of the client team, procurement strategy and systems of delivery. However, the collaborative
procurement strategy formed the basis of the successful project delivery and outcomes. A general observation
from the data is that an appropriate construction procurement strategy developed by an experienced client
team and proactively implemented by an integrated delivery team working collaboratively is likely to achieve
the intended project outcomes.
Practical implications – The findings show three critical keys to achieving intended outcomes – people,
procurement strategy and systems of delivery at the governance, portfolio, programme and project
management levels.
Originality/value – The value of this paper lies in using a comprehensive methodology to study the
relationship between procurement strategy and outcomes. The findings can be applied by client teams to
achieve better outcomes and value for money in infrastructure projects.
Keywords Integration, Case study, Project management, Strategic management
Paper type Case study
1. Introduction
Project management outcomes reported in the construction management literature typically
portray significant deviations from intended outcomes, which places value for money for a
project at risk. This phenomenon is a common occurrence in the construction industry and
various theories arising from several studies on causes of project cost and time overruns have
proved insufficient to address this perennial problem over time. One reason for this may be
due to the observation that a majority of the studies on this phenomenon have tended to focus
superficially on the symptoms rather than root causes (see Flyvbjerg et al., 2018).
The current study examines the procurement strategy as a root cause of deviations
between expected and achieved outcomes in projects. Limited literature on the subject of
construction procurement strategy is mainly experiential in nature and shows that the
purpose of a procurement strategy is to identify the best way to achieve the objectives of a
project and value for money (OGC, 2003; ISO 10845, Watermeyer, 2012). It is argued in the
current study that if this strategic exercise is well crafted and implemented, then the gap
between expected and actual outcomes should be as close as possible (see Laryea and
Watermeyer, 2014). However, clients continue to experience the problem of poor outcomes and
there is a need for a better understanding the empirical relationship between procurement
strategy and outcomes which will inform a more successful approach to the delivery of New
infrastructure projects. universities
The case of Phase I of a new universities project in South Africa is examined to probe project in
deeply into the procurement strategy used to achieve its delivery within budget; and its
influence on the project outcomes. The value and main contribution of this research lies in South Africa
using a comprehensive and intensive methodology to examine the relationship between the
procurement strategy and outcomes of a new universities project. This is currently a gap in 2061
the literature relating to this subject which the findings of this study help to illuminate.
The starting point for this paper was the observation that an R1.5bn ($100,000) project had
been delivered within budget using alternative delivery approaches that had been adopted in
the procurement strategy for the project. This phenomenon is not the norm in South African
where significant deviations from expected outcomes are often reported on projects especially
large public sector infrastructure projects (see, e.g. publications by Nkado, 2010; Thomas,
2013; Public Protector, 2014; Fombad, 2015 which examine significant cost overruns in
projects such as the 2010 FIFA World Cup Stadia, Gautrain project, Nkandla project).
However, also in the context of the wider construction management literature, many academic
researchers have reported on poor outcomes in infrastructure projects (see demonstrated in
the literature review section). Hence, the phenomenon of poor project outcomes extends
beyond the South African environment into other international jurisdictions. Therefore,
research was needed to investigate how this particular project was delivered within budget;
and then attempt to theorise from it a general statement on practices which contributed to the
successful project outcomes.
A preliminary enquiry showed that the procurement strategy adopted by the client’s
team was one of the fundamental keys to the successful project outcome. Hence, the purpose
of this study was to examine the nature of the procurement strategy underpinning the
successful delivery of the project and its influence on the project outcomes.
The specific objectives were to:
• examine the nature of the procurement strategy developed by the client team to
achieve the intended outcomes of the project;
• analyse the project outcomes as a means to assess the efficacy of the procurement
strategy for the project; and
• discuss any empirical observations on the relationship between procurement
strategy and outcomes.
The scope of this paper is limited to the construction works delivery. The procurement of
professional services and goods will be dealt with in another paper.

2. Literature review
The international standard for construction procurement (ISO, 2010) defines construction
procurement as the process through which contracts are created, managed and fulfilled.
This process entails establishing what is to be procured; deciding on procurement strategy;
soliciting tender offers; evaluating tender offers; contract award; and administering
contracts and confirming compliance with requirements.
The academic literature generally does not portray the construction industry as one
where the majority of projects are delivered according to the expected time, cost and quality
specifications. Studies by Frimpong et al. (2003), Koushki et al. (2005), Lee (2008), Ameh et al.
(2010), Bhargava et al. (2010), Nkado (2010), Memon et al. (2010), Pourrostam and Ismail
(2011), Memon et al. (2011), Love et al. (2012), Thomas (2013), Sweis et al. (2013), Doloi (2013),
Shrestha et al. (2013), Ismail et al. (2014), Shehu et al. (2014), Rajan et al. (2014), Cheng (2014)
and Fombad (2015) show evidence of significant deviations between expected and actual
ECAM outcomes in infrastructure projects in, for example, Australia, China, Ghana, Iran, Jordan,
26,9 Kuwait, Malaysia, Nigeria, South Africa, South Korea and the USA.
Several theories have been put forward by academic researchers to explain reasons for
the perennial wide deviations clients experience between expected and actual outcomes in
infrastructure projects. The majority of such theories are found in studies on causes of
project cost and time overruns. These include poor cost estimation, lack of information in
2062 the early stages, design changes and scope creep, technical difficulties, optimism bias,
managerial incompetence, strategic misrepresentation, inability to accurately identify and
quantify risks, lesser reliance on data mining, heavy reliance on contractors’s performance
alone for cost performance (see Frimpong et al., 2003; Ahiaga-Dagbui and Smith, 2014).
A paper by Flyvbjerg et al. (2018) stated that psychological and political bias are the
underlying reasons for cost overruns in projects. However, Love and Ahiaga-Dagbui
(2018) counter argued that cost overruns are largely a result of errors caused by scope
changes and complexity.
Procurement strategy has not been comprehensively examined by academic researchers
as a root cause of poor outcomes in infrastructure projects – although some practitioners
have (see, for example, a paper by Watermeyer, 2012 on “Changing the construction
procurement culture to improve project outcomes”). The World Bank (2016) also appears to
have identified this key issue and now requires a project procurement strategy for all its
funded projects since publishing its new procurement guidelines in 2016. The World Bank
(2016) prucurement guidelines describes this as “the overall design of ‘fit for purpose’
procurement to award contracts that deliver the project development objectives and value
for money. This includes the procurement arrangements, procurement risk management,
contract strategy, market engagement, requirements drafting and contract management
(where appropriate)”.
This paper argues that cost and time overruns are largely symptoms of a more
underlying root cause which this paper argues to be procurement strategy, that is, either a
lack of procurement strategy or an inappropriate/inadequate procurement strategy. A
construction procurement strategy identifies the best way to achieve intended outcomes and
value for money (OGC, 2003; ISO, 2010). If this strategic exercise is competently designed
and executed, the gap between intended and actual outcomes should be as close as possible.
However, other root causes have been argued by other researchers. For example, in
specific relation to the root cause of cost overruns in infrastructure projects, Flyvbjerg et al.
(2018, p. 10) argued as follows: “Your biggest risk is you, according to behavioural science.
The root cause of cost overrun is human bias, psychological and political. Scope changes,
complexity, geology, archaeology, bad weather, business cycles, etc. are causes, but not root
causes. If you don’t solve the problem of cost overrun at the root, you will not end overrun”.
The current study agrees that dealing with causes or symptoms will not necessarily
address the root cause(s). However, assuming that the human bias variable was properly
addressed in a project, an appropriate construction procurement strategy is still required to
set the basis to achieve intended project outcomes. A private sector infrastructure project
may not be fraught with the problem of psychological and political bias but still experience
deviations from expected outcomes due to a lack of (or inadequate) appropriate procurement
strategy. It should be clarified here that a procurement strategy is not the same as
procurement method or route which relates more to the systems of organisation of
contractual roles and responsibilities for infrastructure project delivery (see Hughes et al.,
2015). According to OGC (2003), “the procurement route delivers the procurement strategy.
It includes the contract strategy that will best meet the client’s needs”. The choice of
procurement method or route will therefore fall under one of the five components of a
construction procurment strategy (see explained in ISO, 2010). The rest of this section looks
at some key literature on the procurement strategy.
2.1 Procurement strategy New
There is a fairly well-developed body of knowledge on the concept of procurement strategy universities
generally in the context of commercial transactions and specifically in the construction project in
industry context. The existing body of knowledge on procurement strategy can substantially
be found in 184 articles published between 1978 and 2018 (as found through a systematic South Africa
search in Scopus conducted in September 2018). Each of the 184 articles has the phrase
“procurement strategy” in the article title. The articles can be found in a wide range of sources 2063
relating to different academic fields and industrial sectors such as aerospace, commerce,
defence, engineering, information technology, production and public procurement.
This paper is focused on construction procurement strategy and in this regard, 8 of the 184
articles relate to procurement strategy in the construction industry context. This literature
review here covers a general overview of meaning and principles from the broader concept of
procurement strategy and then focuses specifically on the research studies and current extent
of knowledge on the subject of procurement strategy in the construction industry.
The 184 articles indicate that a procurement strategy generally refers to the strategic
approach designed to obtain required works, goods and/or services in the most appropriate way,
taking into consideration several factors and values of the client such as the time, funding and
budget, risks and opportunities, among others. In a construction industry-specific context,
procurement is the process through which contracts are created, managed and fulfilled
(ISO, 2010). Therefore, a construction procurement strategy relates to the overall strategic
approach developed by the client’s project leadership team to achieve intended objectives and
best value. Three publications connected with the literature on construction management
provide definitions of a construction procurement strategy: ISO, 2010; BSI, 2011 and OGC, 2003.
OGC (2003) publication on Procurement and Contract Strategies (Achieving Excellence in
Construction Procurement Guide 6) explains that a procurement strategy “identifies the best
way of achieving the objectives of the project and value for money, taking account of the
risks and constraints, leading to decisions about the funding mechanism and asset
ownership for the project. The aim is to achieve the optimum balance of risk, control and
funding for a particular project”. The guide goes on to explain the relationship between the
procurement strategy, procurement route and contract strategy. The procurement strategy
determines the most appropriate procurement route, including the contract strategy, to fit
the project objectives and current circumstances. The procurement route delivers the
procurement strategy. It includes the contract strategy that will best meet the client’s needs.
An integrated procurement route ensures that design, construction, operation and
maintenance are considered as a whole; it also ensures that the delivery team works together
as an integrated project team. The contract strategy determines the level of integration of
design, construction and ongoing maintenance for a given project, and should support the
main project objectives in terms of risk allocation, delivery and incentivisation.
It seems clear that the contracting strategy may be influenced or limited by the specific
standard form of contract employed in the project delivery. That is one reason why the choice of
a standard form contract should be carefully approached (Fitzgerald and Hodgson, 2010. In
South Africa, the Construction Industry Development Board’s (CIDB) endorses the use of two
international forms of contract (FIDIC suite of contracts and NEC family of contracts) and two
local forms of contract (SAICE’s General Conditions of Contract for Construction Works (GCC)
and the JBCC suite of contracts)). The Construction Indusry Development Board (CIDB) (2016)
survey of construction industry indicators in South Africa shows that while all four forms of
contracts are significantly used by clients, the JBCC form of contract is typically used for
building projects while the rest are typically used for civil engineering and local government
projects. This is probably influenced by traditional perceptions or categoration of contracts into
building contracts and civil engineering contracts. However, there is an increasing use of NEC
contracts in South Africa (see Laryea and Watermeyer, 2014, 2018).
ECAM According to the ISO (2010) family of standards for construction procurement, “a
26,9 procurement strategy consists of the selected packaging, contracting, pricing and targeting
strategy, and procurement procedure for a particular procurement”. ISO (2010) outlines five
key components of a construction procurement strategy as packaging (organisation of work
packages into contracts), contracting (nature of the relationship between the parties), pricing
(how to secure financial offers, build up tender prices, and remunerate contractors), targeting
2064 (procedures for promoting secondary procurement objectives) and procurement procedure
(how tender offers are solicited). Various options available for dealing with each of the
components of a construction procurement strategy are outlined in ISO (2010) and also
explained in an experiential-based paper by Watermeyer (2012) in which a framework for
developing a construction procurement strategy was presented. The paper by Watermeyer
(2012) explains that procurement strategy is about the choices made in determining what is to
be delivered through a particular contract, the procurement and contracting arrangements
and how secondary procurement objectives are to be promoted. As such, a construction
procurement strategy comprises of the strategies relating to packaging, contracting, pricing,
targeting and procurement procedure for projects. The purpose is to satisfy the client’s
functional needs in the most appropriate way.
The British Standard on Construction Procurement (BSI, 2011) defines a construction
procurement strategy as a “plan of action for funding, organisation, management, selection
and payment of supply chains for the design, fabrication and which may include the
operation of constructed facilities to achieve a desired objective”. BS 8534 notes that the
choices made in relation to funding, selection method, price basis, responsibility for design,
responsibility for management and supply chain integration informs the strategic
procurement approach and project outcomes.

3. Research problem and question

As demonstrated in the literature review, project management outcomes reported in the
construction management literature typically portray significant deviations between expected
and actual outcomes. Various studies have been conducted by academic researchers
attempting to provide solutions to this problem. However, most of them have focused
superficially on causes of project cost and time overruns, and the results obtained have not
proved sufficient in tackling this problem over time. This paper argues that cost and time
overruns are predominantly symptoms or consequences of a more underlying problem
relating to procurement strategy. A construction procurement strategy identifies the best way
to achieve intended outcomes and value for money (OGC, 2003; ISO, 2010). It provides the
fundamental key to achieve intended outcomes or closer tolerances between intended and
achieved outcomes. Therefore, a root cause of the problem may lie in the lack of procurement
strategy in projects or inability of client teams to develop an appropriate procurement
strategy for infrastructure projects. Currently, little empirical knowledge exists in the
literature on the relationship between construction procurement strategy and outcomes.
A detailed search of the literature revealed no comprehensive study examining the
relationship between procurement strategy and outcomes; and this relationship is currently
poorly understood in the construction management literature. This study addresses that gap
by examining the procurement strategy used to deliver a new universities project in South
Africa successfully within budget. The research question was:
RQ1. What was the procurement strategy, and how did it influence the project outcomes?

4. Research design and methods

The purpose of this study was to examine the procurement strategy for the new universities
project and its influence on the project outcomes. A suitable research design was needed to
provide a framework to collect and analyse measures of the variables specified in the New
research problem which were procurement strategy and project outcomes. A precise universities
measure of the impact of procurement strategy alone on the end outcomes is complex due to project in
the presence other intervening variables during implementation like quality of contractor,
quality of project management, quality of project delivery systems – although a good South Africa
procurement strategy will provide the basis for choices relating to these other variables.
Therefore, the practical approach taken in this study was to examine the procurement 2065
strategy, examine the outcomes achieved, examine what was stated in the procurement
strategy regarding the intended outcomes sought to be achieved, interview members of the
project management team to obtain their perspective on the influence of the procurement
strategy, in particular, on the project outcomes, and then discuss any empirical observations
on the relationship between the procurement strategy and the outcomes achieved.
A case study research strategy was appropriate for this study relating to one project in terms
of the evidence required to address the research question (Saunders et al., 2016). A case study
provided a comprehensive, intensive and inductive means to probe deeply into the complex
relationship between procurement strategy and outcomes. The research methodology needed to
be comprehensive to help capture the whole project procurement strategy and outcomes. It
needed to be intensive to help probe deeply into the complex relationship between procurement
strategy and outcomes. And it needed to be inductive to help develop a general statement on the
influence of procurement strategy on outcomes from a study of a specific project which was
delivered within budget (as found in Mintzberg, 1973).
The main data required to address the research question were:
(1) Project documents from which the overall information regarding the procurement
strategy could be obtained.
(2) Project specific documents from which information on the project teams,
procurement strategies and delivery management systems for each project could
be obtained.
(3) Final accounts from which project outcomes could be calculated.
(4) Semi-structured interviews with the NUPMT members and cost controllers to obtain
their insights on the procurement strategy and its influence on the project outcomes.
Each interview lasted for more than 90 min and provided an opportunity to obtain a
detailed account on the procurement strategy, contracting strategies, project
outcomes, value of the procurement strategy to the outcomes achieved, and also an
opportunity to clarify questions from the document analysis. The transcribed
interviews were analysed using content analysis and interpreted qualitatively.
(5) Lastly, the NUPMT members gave presentations on the project to professional
industry groups and infrastructure procurement and delivery management officials
as it progressed and also on successful completion of the project. These
presentations explained the strategic approach of the NUPMT, alternative delivery
approaches that have been adopted and the outcomes achieved from application of
these strategies. The researcher attended four of such presentations between 2014
and 2017. Appropriate notes were taken during these sessions to supplement the
data obtained through the methods already described.
The researcher also visited the project sites to observe the progress of the projects under
construction and this provided a useful opportunity to interact with contractors on the sites.
Therefore, this study entails a comprehensive process of observation and interactions over a
period of four years. Collecting data using different methods provided a comprehensive
means which enhanced validitiy of the findings.
ECAM A major factor which helped with the data collection for this study was a new
26,9 universities project website where much of the information about project, tenders, contract
strategies and progress reporting was made publicly available (www.newuniversities.ac.
za/). Furthermore, upon completion of the project, a close report was published by the New
Universities Project Management Team (NUPMT) (2018) and this comprehensive
document also provided useful information on all aspects of the project. These documents
2066 provided much of the data needed for the document analysis component of the study.
Document analysis is a low-cost way to obtain empirical data as part of a process that is
unobtrusive and non-reactive (see study by Bowen, 2009 which examines the function of
documents as a data source in qualitative research).
The new universities project was planned to be fully developed over a period of
10 years. The NUPMT was assigned with responsibility for Phase I of the project which
involved the initial planning and construction of facilities to get the universities started
(see Figure 1). However, as the new universities progressed in their establishment and had
their own councils and executive management teams, responsibility for the projects was
gradually transferred to the universities themselves. The client function was therefore
assumed by the new universities themselves with support from the NUPMT. Role of
the client has been identified as a significant variable influencing project outcomes
(ICE, 2009). Therefore, in order not to distort the analysis and to control for any effect of
the client variable, the analysis presented here is limited to projects implemented by the
NUPMT (Wits). According to Hughes (2001), it is important to ensure that the research
design isolates what is being measured from other effects, or, at the very least, identifies
the inter-relationships between the effect under scrutiny and other effects. Therefore,
designing the study in a way that isolated projects implemented by Wits from projects
implemented by the new universities themselves helped to control for any effect of the
client variable on the analysis.

Client/Sponsor
Department of Higher Education
and Training (DHET)

Implementing agent
Wits governance and oversight
Wits Director of Campus Planning
and Development

Technical consultants/advisors Client delivery manager Administrative

Procurement and Delivery Advisor Project director support
Procurement Advisor Project Office Admin
Programme and Project Manager Admin Assistant
Development and Stakeholder Advisor Admin Support Officer
Institutional Planning Management
Figure 1. Spatial Planning Advisor Accountant
Roles and Academic Planning
relationships in the Architectural Services Advisor
implementing agent Engineering Services Advisor
function ICT Services Advisor
Furniture Project Management
5. Data collection, analysis and results New
The two new universities whose procurement strategy and outcomes are examined in this universities
paper are Sol Plaajte University (hereafter referred to as SPU) located in Kimberley, project in
Northern Cape Province and University of Mpumalanga (hereafter referred to as UMP)
located in Nelpruit and Siyabuswa both in the Mpumalanga Province. South Africa
Results of the study are presented in this Section of the paper. The data presented in
Sections 5.1–5.3 are predominantly from various project documents collected and examined 2067
including the procurement strategy documents and close out report of the project. The data
presented in Section 5.4 and Tables I and II were analysed from various sources including
individual project documents, final accounts of the project and the NUPMT (2018) close out
report. Some of the data on specific procurement and contract strategies used in the different
buildings was collected from project documents whilst the remaining was collected
through interviews with the NUPMT members. In some instances, some of the information
in Tables I and II needed to be clarified through discussion with some of the NUPMT
members to obtain a better understanding or explanation of the records in the documents.
The data presented in Section 5.5 and Table III are a summary of key texts from the semi-
structured interviews with core members of the NUPMT.

5.1 Context of the new universities project

The South African Government decided in 2011 to create two new universities in the
Provinces of Mpumalanga and the Northern Cape as part of government’s long-term
commitment to expanding higher education capacity. Subsequently, the Department of
Higher Education and Training (DHET) assembled the required project management
capacity for the planning and construction of the new universities. As the project sponsor
and client, the Minister of Higher Education and Training and the Director-General of the
DHET assumed overall responsibility and accountability for the successful establishment of
the new universities.
A brief explanation on the way that public infrastructure projects are typically
implemented in the South African context is necessary. Laryea and Watermeyer (2018,
p. 4) explained that infrastructure projects in the South African public sector are typically
delivered using an implementer such as a National or Provincial Department of Public
Works or a state-owned enterprise. Where such delegation or assignment is made, the
“sponsor” and the “implementer”, although being different organs of state, collectively
function as the “client”. Typically, the “implementer” assumes responsibility for
programme management, procurement, payment of contractors and professional service
providers, overseeing the administration of contracts and the provision of technical advice
and inputs.
However, in the case of the new universities project, the DHET appointed Wits
University in 2012 to project manage the development and establishment of the two
Universities. Consequently, Wits (through its Campus Development and Planning Unit)
constituted a New Universities Project Management Team (NUPMT) that was responsible
and accountable for the delivery of the agreed implementation plan. The decision to appoint
a university to undertake infrastructure project implementation is unconventional as such
work is not part of a university’s core mandate. However, the appointment of Wits was on
the basis of a remarkable performance in delivering its own capital projects programme
between 2008 and 2012. And Wits’ acceptance of the appointment reflected a willingness on
the part of one university to avail its infrastructure delivery capacity in support of building
additional capacity in the higher education system (NUPMT, 2018).
The NUPMT comprised of a team under the leadership of an experienced infrastructure
delivery manager reporting to the Wits Director of Campus Planning and Development
(see Figure 1). Core team members were selected for their expertise, which had been
 26,9

2068

Table I.
ECAM

contract strategies
SPU procurement and
Time Control Price
variance budget variance Targeting
(% (agreed target (% Design Contract strategies (LPG
Planned Actual increase price when Final increase allocations and (a); B-BBEE SG
Description of Start completion completion or order was account or (responsibility pricing Procurement (b); LDEG (c);
Project works date date date decrease) issued) price decrease) for design) strategy procedure SDG (d))

Framework contract for the services of a management contractor for the refurbishment, extension or alteration of existing buildings on the Sol Plaatje University precincts –
HSH Construction (Pty) Ltd
Renovation of 2013 – 2016 – R86.5 R86.1 m −0.4 DBE ECC-F FC-Open a
existing tender FC-
buildings and Negotiated
upgrading works
(17 Package
Orders)
Framework contract for upgrading of infrastructure – Roburn Construction Trust 2
Upgrading of 2013 – 2016 – – R16.49 – DBE ECC-SC FC-Open a
infrastructure (5 m tender FC-
Package Orders) Negotiated
Framework contract for the construction of buildings on the Sol Plaatje University’s precincts in Kimberley – Murray and Dickson Construction, Trencon Construction,
Qualicon Construction
C001 New build 13 15 Jan 2016 2 Mar 2016 +10 R218 m R210 m −4 DBE(e) ECC-C FC-Open a, b, c, d
(residential, retail, Oct (460 days) (508 days) tender
laundry) 2014
C002 New build (mixed 13 15 Jan 2016 5 Jul 2016 +31 R244 m R232 m −5 DBE(e) ECC-C FC-Open a, b, c, d
use – residence, Oct (460 days) (602 days) tender
teaching venue, 2014
offices, retail)
C003 New build (mixed 13 15 Jan 2016 8 Apr 2016 +18 R174 m R172 m −1 DBE(e) ECC-C FC-Open a, b, c, d
use – residence, Oct (460 days) (544 days) tender
classrooms, 2014
auditorium,
offices)

(continued )
 Time Control Price
variance budget variance Targeting
(% (agreed target (% Design Contract strategies (LPG
Planned Actual increase price when Final increase allocations and (a); B-BBEE SG
Description of Start completion completion or order was account or (responsibility pricing Procurement (b); LDEG (c);
Project works date date date decrease) issued) price decrease) for design) strategy procedure SDG (d))

CX01 New build (site 27 15 Jan 2016 20 May +49 R90 m R82 −9 DBE(e) ECC-C FC- a, b, c, d
infrastructure for Apr (264 days) 2016 (390 Negotiated
C001, C002, C003) 2015 days)
R812.5 m R782.1 −3.74
m
Notes: SPU, Sol Plaatje University. The control budget includes construction cost, a provision for price adjustment for inflation, a contingency amount of 5 per cent,
VAT, and a professional fee estimate based on the tendered fees. The final account price is based on actual costs. Contract and pricing strategy: ECC – NEC3 Engineering
and Construction contract; ECC-C – Main Option C (Target contract with activity schedule); ECC-B – Main Option B (Target contract with bill of quantities); ECC-F –
Management contract; SC – NEC3 Supply contract; ECC-SC – NEC3 ECC Short Contract; Design allocations (Responsibility for design): DBE – Works designed by the
employer; and DBE(e) – Works designed by the employer with early contractor involvement. Packaging strategy: FC – Framework contract; FC-Call off – Call off from
framework contract; FC-Negotiated – Negotiated target; Targeting strategies: LPG, local participation goal; B-BBEE SG, broad-based black economic empowerment
spend goal; LDEG, local direct employment goal; SDG, skills development goal

Table I.
universities

2069
South Africa
project in
New
 26,9

2070

strategies
Table II.
ECAM

and contract
UMP procurement
Time Control Price Targeting
variance budget variance strategies
(% (agreed (% Design Contract (LPG (a); B-
Planned Actual increase target price Final increase allocations and BBEE SG (b);
Description of completion completion or when order account or (responsibility pricing Procurement LDEG (c);
Project works Start date date date decrease) was issued) price decrease) for design) strategy procedure SDG (d))

Framework contract for the services of a management contractor for the refurbishment, extension or alteration of existing buildings on the University of Mpumalanga
precincts – Norse Projects (Pty) Ltd
Total Renovation of – 2013-2015 – – R28.7 R26.74 −6.97 DBE ECC-F FC-Open a
of MCs existing m tender
buildings (8
POs)
Construction of orchard and water course – Norse Projects (Pty) Ltd
Orchard 2013 – – – R2.2 m – DBE ECC-SC Open tender
campuses
Renovation and expansion works by framework contractors – Siyabuswa Campus – Murray and Dickson (Pty) Ltd
Phase Refurbishment – 2012/2013 – – R19 m R19 m – DBE ECC-D FC-Open a
I of three tender
residential
units and other
upgrades work
Phase Refurb of – 2013/2014 – – R40 m R40 m – DBE ECC-D FC- a
II remaining negotiated
residences plus
upgrade of
classrooms/
dining halls
Phase Additional – 2014/2015 – – R80 m R80 m – DBE ECC-D FC- a
III residences negotiated

(continued )
 Time Control Price Targeting
variance budget variance strategies
(% (agreed (% Design Contract (LPG (a); B-
Planned Actual increase target price Final increase allocations and BBEE SG (b);
Description of completion completion or when order account or (responsibility pricing Procurement LDEG (c);
Project works Start date date date decrease) was issued) price decrease) for design) strategy procedure SDG (d))

Phase Water and – 2015 – – R18 m R18 m – DBE ECC-D FC-open a

IV electricity tender
infrastructure
plus sports
amenities
Framework contract for the construction of buildings on the University of Mpumalanga precincts in Nelspruit – Trencon Construction, Norse Projects
L001 New build 1 15 5 February +13 R100 m R92 m −8 DBE(e) ECC-C FC-Open a, b, c, d
(student November December 2016 (462 tender
residence) 2014 2015 (410 days)
days)
L004 New build 27 June 18 24 March +15 R48 m R47 m −2 DBE(e) ECC-C FC- a, b, c, d
(Auditorium 2014 February 2016 (272 Negotiated
and office 2016 (237 days)
block) days)
L006 Renovation 27 October 17 2 February +20 R184 m R180 m −9 DBE(e) ECC-C FC- a, b, c, d
and New build 2014 November 2016 (464 Negotiated
(science lab and 2015 days)
faculty
laboratory)
R360.7 m R345.74 −4.14
M
Notes: UMP, University of Mpumalanga. Delivery of projects on Siyabuswa campus was managed by the Mpumalanga National Institute of Higher Education (NIHE).
NUPMT played advisory role
universities

2071
South Africa
project in
New

Table II.
ECAM Themes Summary of key texts from interview transcripts
26,9
Procurement strategy Procurement strategy is driven by the client. You need a strong client
Procurement strategy is demand driven. A lot of it is driven by your time, cost
conundrum and your demand management – how much budget have you got and
how do you achieve?
Procurement strategy also involves your portfolio, programme and project
2072 management strategies
Set procurement strategy to match your strategic intents. What are we building,
What are the skills we need – Should be procured at competitive and
market-related prices
Our strategy was to go collaborative
We changed principal agents to project managers
In many places, there is no procurement strategy in place. Anytime you ask about
options, there are no options. It is a one size fits all approach
Packaging strategy Packaging strategy is whether you want individual contracts or package in a
framework. Too many relationships to manage if you have too many individual
contracts to manage
Packaging was the long-term relationship to achieve value. We really wanted long-
term relationships with collaborative working
We went for framework contracts – subject to satisfactory performance, more work
is given to the same contractor
Framework contracts because we did not have the time and space to procure
everything as a single project – and there was opportunity for contractor to
participate in everything provided he meets the performance criteria
Contracting strategy We wanted to have a culture of collaboration towards shared goals
The main question here was: How do we bring the contractors on board?
Risk sharing with the contractor was a key thing that helped to deal with cost
overruns and all of those issues. It is a partnership. What we bought in the
framework contract was a relationship. Builder became part of the project
Framework contracts gave us the ability to have early contractor involvement (ECI)
in the design development
The main thing here was early contractor involvement and integration of the design
and contractor teams – in the context of a design by employer contracting strategy
We wanted to test the design consultants from a buildability point of view. ECI was
about bringing the specialist to the table. The real value comes from the
construction partner. The value engineering you can only do from a practical
perspective. There is a level of skills and expertise your contractor has which has to
come to the table. The New Engineering Contract (NEC) contract provided a tool to
bring these things to the table and have a discussion between everyone. Under
traditional contracts, the contractor is not welcome at the design table and gets
blamed for everything
Pricing strategy We set a very strict control budget. Setting the control budget is an iterative
process. Control budget as opposed to a budget. That will be way before tendering –
you go to the market only once you know what your control budget is – when we
tender for a purchase order, we tender against an estimate
Build up realistic project budgets with appropriate contingencies
The main pricing strategy we have used is NEC Option A and C. We have gone
according to what the NEC offers. The pricing strategy is linked with the
sophistication of the market that you are going to engage with
We wanted collaboration and shared risk. We went for target cost because of the
partnership we wanted to establish. There has to be joint responsibility. With target
cost, you get a good understanding of the cost make-up. Target cost helps to take
the risk out of the pricing. You pay for actual costs here
Part of the pricing strategy is to price things upfront and find a way of managing
Table III. it – finding a way to deliver within your budget
Summary of key texts
from interview
transcripts (continued )
Themes Summary of key texts from interview transcripts
New
universities
Construction is all about information flow – provide sufficient information to price project in
The pricing strategy affects risk allocation between parties. We use the NEC six options –
choose your main options and then your secondary option. Our risk tool is working South Africa
through NEC options. The question is who is at risk for design, quantities, rates, etc.
Targeting strategy Targeting strategy is first of all – the socio-economic. We used targeted
procurement procedures – BEE, small business, women-owned business, bursaries, 2073
participation of local enterprises, skills development, etc.
Tendering/selection Competitive negotiation procedure. For first framework contract – we used
procedures expression of interest
Open tenders
Good screening/eligibility criteria. And we did framework from that. You do not
just use contractor gradings – use turnover, show us three jobs you have done of x
amount, etc. Table III.

demonstrated in the successful delivery of the Wits capital projects programme. This expertise
included programme management, project management, procurement and spatial planning. The
core team was then expanded to include academic, institutional and development expertise,
some of whom were identified by the DHET.

5.2 Primary and secondary procurement objectives

Construction procurement can be used to promote both primary and secondary objectives.
The primary objectives of a project relate to the core reasons for the procurement and are
often associated with the cost, time and quality specifications. Secondary procurement
objectives can be defined as procurement policy that promotes objectives additional to
those associated with the immediate objective of the procurement itself. These can include,
for example, promotion of local enterprises, poverty alleviation, job creation, economic
development, skills development, environmental standards and others (ISO, 2010). While a
majority of cases may focus on primary objectives, Watermeyer (2012) states that a
deliberate effort needs to be made when developing a construction prourement strategy
for infrastructure projects to ensure the strategic promotion of secondary objectives.
The documentary analysis helped to identify the primary and secondary procurement
objectives for the project. Six primary objectives were stated as follows:
(1) deliver the universities within a control budget;
(2) ensure that expenditure is within the amounts allocated in each financial year of the
MTEF period and is capable of being accelerated should additional funding become
available;
(3) ensure that teaching spaces are capable of being occupied at the start of the required
academic year;
(4) provide works that are capable of being readily maintained;
(5) make use of expertise within universities to ensure that the designs of the teaching
spaces are aligned with current and future best practice; and
(6) the quality of facilities is such that maintenance costs are minimised.
Three secondary procurement objectives were stated as follows:
(1) promote broad-based black economic empowerment (B-BBEE);
ECAM (2) promote and support local (provincial wide) participation throughout the supply
26,9 chain and local employment through the delivery of the works; and
(3) support skills development by increasing the number of people who have part
qualifications, national qualifications and professional designations awarded by
statutory councils.
These primary and secondary objectives formed the basis of the procurement strategy for
2074 the new universities project.

5.3 Procurement strategy designed to achieve objectives

The NUPMT based its procurement approach on the experience gained by Wits University
in delivering its substantial capital works programme over the period (2008–2012) preceding
the new universities project. It was indicated in NUPMT (2018) that key learnings carried
over from the Wits capital projects programme to the new universities project was that the
project objectives can best be achieved when:
(1) the design of the buildings and associated site works are managed by the employer
and his agents, and the main contractor has limited responsibilities for the design;
(2) discipline-specific design specialists are appointed by the employer to provide the
required design inputs;
(3) fragmentation in design is addressed by involving the contractor wherever possible
in the development and finalisation of the design;
(4) a conscious decision is taken to move away from the pre-planned traditional
contracting approach (“them-and-us”) towards an integrated project team which
works together over a number of years, taking learnings from one project to another,
and supporting a collaborative team culture; and
(5) a flexible construction service (three-year contracts are established with the capacity
to respond rapidly to changing demands and constraints as the projects unfold).
These fundamentals underpinned the specifics of the NUPMT procurement strategy crafted
to achieve the primary and secondary objectives. Specific development goals were integrated
into the construction procurement strategy in addition to the broader requirements to ensure
competent, cost-effective and timely completion of buildings and infrastructure. The
development goals were translated into four key performance indicators (KPIs) and these
specifications formed part of the requirements for appointment of contractors:
(1) Local participation goal (LPG) relating to the employment of local people, local
subcontractors and local suppliers of between 30 and 50 per cent (provincial wide)
participation throughout the supply chain and local employment through the
delivery of works.
(2) Broad-based black economic empowerment spend goal (B-BBEESG) of 60 per cent
calculated in accordance with the scorecard for preferential procurement. The
Broad-Based Black Economic Empowerment Act (Act 53 of 2003) establishes a
legislative framework for the promotion of black economic empowerment. The
Preferential Procurement Policy Framework Act (Act 5 of 2000) provides a price
preference mechanism to promote B-BBEE, i.e. up to 80 or 90 points for price and up
to 20 or 10 points for preference for tenders, depending upon the value of the tender.
(3) Local direct employment goal (LDEG) (percentage of the total number of equivalent
days worked by people on the site who are local) of between 30 and 95 per cent with
sub-targets for youth and women.
 (4) Skills development goal (SDG) (provide skills development opportunities by New
increasing the number of people who have part qualifications, national qualifications universities
and professional designations awarded by statutory councils) of 250 h per million project in
Rand expenditure.
South Africa
Damages for low performance were contractually stipulated in order to penalise contractors
should they fail to achieve a specific KPIs. The low-performance damages mechanism was
based on the NEC3 contract Option X17. 2075
According to ISO (2010), the components of a construction procurement strategy are the
selected packaging, contracting, pricing, targeting and tendering strategy for a particular
procurement. A systematic breakdown of the specific procurement and contract strategies
used in individual projects are summarised in Tables I and II.

5.4 Analysis of the project outcomes

The analysis of projects completed at SPU and UMP is presented in Tables I and II. The
information presented relates to: expected and actual completion time for contracts
(months), expected (what was agreed in the contract) and actual cost for each project, party
responsible for design (and whether there was early contractor involvement in the design
development), contracting strategy, pricing strategy, procurement (or tendering) procedure
and the targeting strategies (socio-economic development targets) in each project.

5.5 Summary of interviews

The data on the construction procurement strategy could be obtained from the core
members of the NUPMT who developed it and oversaw its successful implementation. That
is, the Project Director, Director of Campus Planning and Development and the Procurement
Consultant. These three people were the appropriate persons to interview in order to obtain
the relevant knowledge. Each interview lasted for about 90 min and was transcribed for a
qualitative analysis and interpretation.
A content analysis method was used to analyse the transcribed interviews. The purpose
of content analysis is to organise and elicit meaning from the data collected and to draw
realistic conclusions from it (Bengtsson, 2016). Therefore, the text from the transcribed
interviews was organised under six themes for qualitative interpretation of the key points
emerging from the data. The themes were “procurement strategy” and then the five
components of a construction procurement strategy as outlined in ISO (2010). Thematic
organisation of text in the interview transcripts enabled the collation of key statements
pertaining to each theme in order to draw necessary interpretations from the data.
Some data on the procurement strategy was earlier presented in Section 5.3. The
interviews provided further context and specific information relation to the packaging,
contracting, pricing, targeting and tendering strategies. A summary of key texts from the
interview transcripts is presented in Table III. The results demonstrate that an appropriate
construction procurement strategy was designed to achieve the project objectives at
portfolio, programme and project management levels. An appropriate procurement strategy
is demand driven, driven by the client, and should be matched to the strategic intents of the
client. The evidence in Tables I–III shows the range of packaging, pricing, contracting,
targeting and tendering strategies. The evidence shows that a range of options was applied
to different situations and these are discussed in the next section.

6. Discussion of results
The research aim was to examine nature of the procurement strategy used to deliver the
new universities project and its influence on the project outcomes. The data presented in
ECAM Tables I and II summarise the procurement strategy and project outcomes in terms of time
26,9 and cost performance. Three points are brought forward for discussion.

6.1 Key contributors to the successful project outcomes

The evidence from the strategic procurement approach developed for the project and the
interview findings demonstrates that procurement strategy provided the underlying key to
2076 achieving the intended outcomes. However, a combination of factors contributed to the
overall outcome. It is important to begin with a high-level discussion of key contributors to
the successful delivery of the R1.5b infrastructure project within the control budget.
Evidence from the research demonstrates the key contributors as follows:
• having a project leadership team with the right skills and chemistry;
• experienced and strong client delivery manager who drives the process;
• effective oversight and project governance structures;
• setting clear primary and secondary procurement objectives;
• establishing key principles to guide the procurement strategy and tactics;
• appropriate procurement strategy matched to the strategic intents of the client;
• shift from traditional procurement methodology to a relationship and value-based
approach based on modern project management and management science principles;
• management of building projects by project managers rather than principal agents in
the South African context;
• adoption and successful management of several procurement innovations within the
construction procurement strategy: framework contracts, early contractor involvement,
target cost contracts, management contracts, activity schedule pricing strategy, NEC3
contracts, competitive negotiation tendering procedure;
• integrated project teams based on a philosophy of collaboration, shared risk, teamwork
and need to address the problem of fragmentation;
• setting a realistic control budget and proactive cost management and value engineering
involving the whole team; and
• joint risk management and proactive review of costs and programme.
These contributing factors reveal three critical keys to the successful project outcomes –
people, strategy and systems of delivery (at governance, portfolio, programme and project
management levels). These findings connect with findings contained in an ICE (2017) report
by the Infrastructure Client Group on how to deliver high performing infrastructure
projects. Case studies of UK projects procured using collaborative strategies were reported
to result in significant cost savings to the client.
A study by Construction Industry Institute (2002) examined the impact of different
project delivery systems on cost, schedule and quality. That study concluded on three
critical keys to successful projects which are a knowledgeable, trustworthy and decisive
facility owner/developer; a team with relevant experience and chemistry assembled as early
as possible, but certainly before 25 per cent of the project design is complete; and a contract
that encourages and rewards organisations for behaving as a team. The evidence from the
current study demonstrates that all three conditions were present in the case of the new
universities project and each one contributed to the positive outcomes. Figure 1 showed the
core skills and expertise in 15 different areas assesmbled by the client to provide leadership
for the project.
 Projects are built by people and are unlikely to succeed without effective leadership by New
a competent and experienced team. The findings confirm an assertion in the ICE (2009) universities
Client Best Practice Guide that “The role and performance of clients is the single most project in
important factor in determining the success of construction projects and capital works
programmes, regardless of their size, complexity or location”. In relation to the South Africa
Construction Industry Institute (2002) critical keys for success, the following points should
be noted. First, the client in this case was adequately capacitated by an experienced team, 2077
most of whom had successfully delivered the Wits capital works programme. Second, the
NUPMT members had successfully worked together before in the Wits capital projects
programme and had the requisite experience and chemistry to provide the leadership
required for success. For example, the procurement strategy for this new universities
project was informed by five key learnings from the Wits projects. Third, the use of a
partnering approach and NEC3 contracts fostered collaboration, teamwork and shared
risk. Therefore, all three conditions were fulfilled in the case examined and the evidence
here confirms the continuing importance of these keys to project success.

6.2 Nature of the construction procurement strategy

The second discussion point relates to the nature of the construction procurement strategy
developed to achieve the primary and secondary procurement objectives. The procurement
strategy and choices of the NUPMT were informed by lessons learnt from the Wits projects
in relation to how project objectives can best be achieved. These learnings pointed to the
need for a strategic approach based on the principles of design by employer, collaboration,
integration of project teams to overcome fragmentation, longer term relationships, flexibility
and adaptability to change and integration of specific development goals to achieve socio-
economic outcomes. To realise the secondary procurement objectives which were important
in the geographical and political context of the project, four KPIs were integrated into works
contracts and low-performance damages were built into the contract to penalise contractors
who failed to achieve the development targets.
According to ISO (2010), a procurement strategy consists of the selected packaging,
contracting, pricing and targeting strategy and procurement procedure for a particular
procurement. The specific strategies applied in each project in the case of both SPU and
UMP are summarised in Tables I and II. Qualitative descriptions of key aspects of the
procurement strategy are summarised in Table III.
Five observations from the procurement strategies adopted are as follows. First, in
terms of packaging strategy, the extensive use of framework contracts demonstrates a
partnering approach. Second, two main contracting strategies based on NEC3 contracts
were used for all projects, with management contracts and target contracts adopted for
refurbishment and capital works respectively. Third, four different pricing strategies were
adopted namely price lists, bill of quantities, cost plus fixed fee and activity schedules.
Fourth, three different types of tendering procedures were applied namely open tender,
competitive negotiation (restricted competitive negotiations) and negotiation. Fifth, four
different targeting strategies were used to promote socio-economic development in the
geographic location and communities of the new universities. It can be seen that the
client’s team applied a mixture of procurement and contract strategies to achieve the nine
primary and secondary objectives within a complex project environment. These reflect a
procurement strategy that was mainly collaborative in nature and project management
led. A consideration of the outcomes achieved demonstrates a procurement strategy that
was appropriate to the client’s objectives and fit for purpose. While an appropriate
procurement strategy is fundamental to achieving intended objectives, the
implementation should be driven by a strong and competent client delivery manager
capable of directing the entire supply chain and unblocking obstacles to progress.
ECAM The procurement strategy proved successful in integrating the project teams,
26,9 incentivising and getting performance out of the supply teams (similar to a new project
enterprises approach advocated by the ICE, 2017 to achieve high performing infrastructure
projects). Judging from the key contributors to the successful outcomes, it may not have
been possible to achieve delivery within budget and the high performance reported without
the adoption and successful implementation of a collaborative approach. The procurement
2078 strategies incentivised joint effort and solutions to problems by everyone across the supply
chain. The challenges relating to the tight timescales, complexity, and high standard of
delivery and productivity required to start the universities were successfully managed
through collaborative working practices.

6.3 Influence of the procurement strategy on project outcomes

The third discussion point relates to the relationship between procurement strategy and
outcomes. An experiential-based paper by Watermeyer (2012) titled “Changing the construction
procurement culture to improve project outcomes” and a “Client guide for improving project
outcomes” by Watermeyer (2018) both provide a good starting point for discussion. Watermeyer
(2012) notes “There are a number of different approaches to procuring construction works, each
of which can result in different outcomes. Procurement strategy is all about the choices made in
relation to the procurement and contracting arrangements and how secondary procurement
objectives are to be promoted”. The literature (OGC, 2003) showed a relationship between
procurement strategy and outcomes, however, the empirical nature of this relationship is not
sufficiently illuminated in the literature and this study provides some evidence to illuminate it
based on the case examined.
The collaborative procurement strategy adopted helped to deliver the works within the
control budget (see Tables I and II). In total, 33 package orders comprised of 26 different
refurbishments, renovation and upgrade projects; 1 site infrastructure works project; and
6 new buildings projects. How did the procurement strategies adopted contribute to risk and
cost control in the project? One reason the procurement strategy adopted proved successful
may lie in its capacity to help control risk particularly in the context of a fast track project of
this nature. Construction is a risk-prone industry. Therefore, effective risk management is a
fundamental requirement if the intended objectives of a project are to be achieved. Generally
speaking, nearly all of the strategies adopted by the project team (see Tables I and II) helped
to manage risk in different ways. A collaborative construction procurement approach
requires everyone in the supply chain to work together as a team – teamwork was a
contributor to successful risk management in the project. The use of framework contracts
enabled early contractor involvement, which allows the client and design team to benefit
from the contractor’s skills, insights and experience in the design development stage (see
Laryea and Watermeyer, 2016). This helps to deal with some of the construction risk
relating to constructability. Furthermore the use of framework contracts helped to reduce
procurement cost/time and enabled the client’s team to work with contractor(s) from one
project to the next one, providing an opportunity for the team to transfer lessons learned
and minimise risk. Target cost contracts provided a mechanism for sharing the financial
risk in projects. The extensive use of target cost contracts can be said to have contributed to
risk management by facilitating joint effort, incentivisation of the contractor to control
production costs and sharing of financial risk. The activity schedule pricing strategy may
have facilitated more careful pricing by contractors as they had to assume risk of the lump
sum prices for various activities (Laryea and Murray, 2017). Risk management also requires
the selection of appropriate partners to deliver services, works and goods. It can be argued
that the competitive negotiation method provided an effective means to select appropriate
partners and it also helped to reduce risk pricing by the contractors (see a paper by Laryea,
2017 on impact of tendering procedure on price formation in construction contracts).
Therefore, the procurement strategies summarised in Tables I and II can be said to have New
provided an effective framework for managing much of the project risk successfully. universities
The procurement strategy adopted also enabled the problem of fragmentation to be project in
addressed, to some extent, through supply chain integration. One key conclusion from a
study conducted by the Construction Industry Institute (2002) was that in order for projects South Africa
to succeed, the problem of fragmentation needs be addressed. The procurement strategy
adopted enabled the problem of fragmentation to be addressed in a majority of projects 2079
through early involvement of the contractor in design development and finalisation. Such
early contractor involvement was enabled by framework contracts which were used to
engage contractors in longer term partnering relationships (see explained in Laryea and
Watermeyer, 2016).
The management contracting strategy used in the initial phase proved suitable for
delivering various refurbishment, renovation and upgrade works within the tight timescales
available for the academic start of the universities. Studies by Naoum (1994) and Ward et al.
(1991) had earlier described management contracting as a system suitable for refurbishment
projects. A recent study by Laryea and Watermeyer (2018) further demonstrated the
suitability of management contracts for carrying out maintenance, upgrading and repair
work in 122 schools across the Western Cape Province of South Africa.
An examination of the current case shows that a conscious objective was set made to
“deliver the universities within a control budget”. This aligns with the principle explained in
one interview: “Set procurement strategy to match your strategic intents”. The strategic
approach developed by the NUPMT was designed to deliver the intended objectives. The
principles which informed the procurement choices were based on proven knowledge from the
Wits projects on “how objectives can best be achieved”. The strategic choices proved
successful in helping to deliver the project within the control budget. The procurement
strategy adopted led to the outcomes achieved – in the context of other factors that also
contributed to success of the project. The documentary and interview data both show a link
between the procurement strategy and outcomes. A general observation or statement
developed based on this case is as follows. An appropriate construction procurement strategy
developed by an experienced client team and proactively implemented by an integrated
delivery team working collaboratively is key to achieving the intended project outcomes.
The findings here overlap with some of those presented in Flyvbjerg et al. (2018) on how
cost overrun can be best avoided in infrastructure projects. They state that “Cost overrun is
best avoided by getting the front-end of capital investments right, including using reference
class forecasting or similar methods to establish reliable, de-biased estimates of cost that fit
the client’s risk appetite, establishing an incentive structure that encourages all involved to
stay on budget and hiring a delivery team with a proven track record for the specific type of
capital investment in question”. The front end condition links with effective planning and
procurement strategy. The incentive structure condition links with framework contracts and
target cost contracts which are both incentive mechanisms. And an experienced delivery team
links with the client and contractor teams responsible for the project. However, a further
dimension from the case study here is that such a team must be integrated to address
fragmentation and work collaboratively towards the end outcomes.

7. Conclusions
The research aim was to examine the procurement strategy for the new universities project
and its influence on the project outcomes. Key conclusions on the three research objectives
are as follows.
First, the data summarised in Tables I and II show a collaborative procurement strategy
where contractors were mostly appointed on framework contracts in line with the long-term,
value-based collaborative approach the client wanted. Refurbishment projects in the initial
ECAM stage of the project were based on management contracts (NEC Option F). Capital works
26,9 projects were mostly procured using target cost contracts (NEC Option C) which is an
incentive contract with an element of joint responsibility for financial risk. Alternative
strategies were used in a few projects where other strategies were more appropriate. This
“horse for courses” approach reflects procurement strategy which is different from the “one
size fits all” approach that tends to prevail in South Africa.
2080 Second, the project outcomes achieved through the procurement strategy were analysed
and summarised in Tables I and II. The data show a portfolio of 33 package orders or
individual projects successfully delivered within a control budget of R1.5bn.
Third, a precise measurement of the impact of procurement strategy alone on the
end outcomes is complex and this one case provides limited knowledge on this complex
relationship. A stated primary objective was to “deliver the new universities within a
control budget”. The conscious effort and choices made to put together an appropriate
collaborative procurement strategy which “could best help to achieve the intended
objectives” shows a relationship between procurement strategy and outcomes. Successful
delivery of the project outcomes demonstrates that the procurement strategy was fit for
purpose. Based on the evidence in the case examined, a general observation or statement on
the relationship between procurement strategy and outcomes is that: an appropriate
construction procurement strategy developed by an experienced client team and proactively
implemented by an integrated delivery team working collaboratively is likely to achieve
intended project outcomes.

Acknowledgement
Gratitude is due to the Wits University Campus Planning and Development Office and the
New Universities Project Management Team for the significant asistance which made this
study possible. The author also wishes to thank the anonymous reviewers whose comments
greatly helped to improve this paper. This work is based on the research supported in part
by the National Research Foundation of South Africa (NRF). The grant holder
acknowledges that the opinions, findings and conclusions or recommendations expressed
in any publication generated by NRF-supported research are that of the authors and that the
NRF accepts no liability whatsoever in this regard.

References
Ahiaga-Dagbui, D.D. and Smith, S.D. (2014), “Rethinking construction cost overruns: cognition,
learning and estimation”, Journal of Financial Management of Property and Construction, Vol. 19
No. 1, pp. 38-54, available at: https://doi.org/10.1108/JFMPC-06-2013-0027
Ameh, O.J., Soyingbe, A.A. and Odusami, K.T. (2010), “Significant factors causing cost overruns in
telecommunication projects in Nigeria”, Journal of Construction in Developing Contries, Vol. 15,
pp. 49-67.
Bengtsson, M. (2016), “How to plan and perform a qualitative study using content analysis”,
Nursing Plus Open, Vol. 2, pp. 8-14.
Bhargava, A., Anastasopoulos, P.C., Labi, S., Sinha, K.C. and Mannering, F.L. (2010), “Three-stage least-
squares analysis of time and cost overruns in construction contracts”, Journal of Construction
Engineering and Management, Vol. 136 No. 11, pp. 1207-1218.
Bowen, G.A. (2009), “Document analysis as a qualitative research method”, Qualitative Research
Journal, Vol. 9 No. 2, pp. 27-40, available at: https://doi.org/10.3316/QRJ0902027
BSI (2011), BS 8534:2011: Construction Procurement Policies, Strategies and Procedures: Code of
Practice, BSI, London.
Cheng, Y.M. (2014), “An exploration into cost-influencing factors on construction projects”,
International Journal of Project Management, Vol. 32 No. 5, pp. 850-860.
Construction Industry Development Board (CIDB) (2016), Construction Industry Indicators (CIIs) Report, CIDB, New
Pretoria, available at: www.cidb.org.za/publications/Pages/Construction-Industry-Indicators.aspx universities
Construction Industry Institute (2002), BMM2002-10 – Measuring the Impacts of the Delivery System project in
on Project Performance – Design-Build and Design-Bid-Build, Publication BMM2002-10,
Construction Industry Institute, Austin, TX. South Africa
Doloi, H. (2013), “Cost overruns and failure in project management: understanding the roles of key
stakeholders in construction projects”, Journal of Construction Engineering and Management, 2081
Vol. 139 No. 3, pp. 267-279.
Fitzgerald, P. and Hodgson, S. (2010), “Funding higher education infrastructure investment: the case of
Wits University, South African Regional Universities Association (SARUA)”, Leadership
Dialogue Series, Vol. 2 No. 2, pp. 28-42.
Flyvbjerg, B., Ansar, A., Budzier, A., Buhl, S., Cantarelli, C., Garbuio, M., Glenting, C., Holm, M.S.,
Lovallo, D., Lunn, D., Molin, E., Rønnest, A., Stewart, A. and van Wee, B. (2018), “Five things you
should know about cost overrun”, Transportation Research Part A Policy and Practice, Vol. 118,
December, pp. 174-190, available at: https://doi.org/10.1016/j.tra.2018.07.013
Fombad, M.C. (2015), “Governance in public–private partnerships in South Africa: some lessons from
the Gautrain”, Journal of Southern African Studies, Vol. 41 No. 6, pp. 1199-1217, doi: 10.1080/
03057070.2015.1117240.
Frimpong, Y., Oluwoye, J. and Crawford, L. (2003), “Causes of delay and cost overruns in construction
of groundwater projects in a developing countries: Ghana as a case study”, International Journal
of Project Management, Vol. 21 No. 5, pp. 321-326.
Hughes, W. (2001), “What makes a good research paper?”, ARCOM Newsletter, Vol. 16 No. 3,
pp. 1-4, available at: www.arcom.ac.uk/newsletters.php
Hughes, W., Champion, R. and Murdoch, J. (2015), Construction Contracts – Law and Management,
5th ed., Routledge, London.
ICE (2009), Client Best Practice Guide, Thomas Telford Limited, London, ISBN: 978-0-7277 3650-5.
ICE (2017), From Transactions to Enterprises, A New Approach to Delivering High Performing
Infrastructure, Infrastructure Client Group, London.
Ismail, I., Memon, A.H. and Rahman, I.R. (2014), “Expert opinion on risk level for factors affecting time
and cost overrun along the project lifecycle in Malaysian construction projects Int”, Journal of
Construction Technology Management, Vol. 1, pp. 10-15.
ISO (2010), ISO 10845-1:2010: Construction Procurement – Part 1: Processes, Methods and Procedures.
ISO, Geneva.
Koushki, P.A., Rashid, K. and Kartam, N. (2005), “Delays and cost increases in the construction of
private residential projects in Kuwait Constr”, Management Economics, Vol. 23, pp. 285-294.
Laryea, S. (2017), “Impact of tendering procedure on price formation in construction contracts: case study
of the competitive negotiation procedure”, in Laryea, S. and Ibem, E. (Eds), Procs 7th West Africa
Built Environment Research (WABER) Conference, 16-18 August, Accra, Ghana, pp. 853-869.
Laryea, S. and Murray, A. (2017), “Tendering and administering activity schedule-based NEC3
contracts”, Civil Engineering, Vol. 25 No. 1, pp. 43-48.
Laryea, S. and Watermeyer, R. (2014), “Innovative construction procurement at Wits University”,
Proceedings of the ICE - Management, Procurement and Law, Vol. 167 No. 5, pp. 220-231.
Laryea, S. and Watermeyer, R. (2016), “Early contractor involvement in framework contracts”, Proceedings
of the Institution of Civil Engineers – Management, Procurement and Law, Vol. 169 No. 1, pp. 4-16.
Laryea, S. and Watermeyer, R. (2018), “Comparison of two infrastructure project implementation models
in a developing country”, Proceedings of the Institution of Civil Engineers – Management,
Procurement and Law, Vol. 171 No. 1, pp. 3-17, available at: https://doi.org/10.1680/jmapl.16.00029
Lee, J.K. (2008), “Cost overrun and cause in Korean social overhead capital projects: roads, rails,
airports, and ports”, Journal of Urban Planning and Development, Vol. 134, pp. 59-62.
ECAM Love, P. and Ahiaga-Dagbui, D. (2018), “Debunking fake news in a post-truth era: the plausible untruths
26,9 of cost underestimation in transport infrastructure projects”, Transportation Research Part A:
Policy and Practice, Vol. 113, pp. 357-368, available at: https://doi.org/10.1016/j.tra.2018.04.019
Love, P.E.D., Wang, X., Sing, C. and Tiong, R.L.K. (2012), “Determining the probability of project cost
overruns”, Journal of Construction Engineering Management, Vol. 139, pp. 321-330.
Memon, A.H., Rahman, I.R., Abdullah, M.R. and Azis, A.A.A. (2010), “Factors affecting construction cost
2082 performance in project management projects perspective of project management consultant”,
International Journal of Sustainable Construction Engineering Technology, Vol. 1, pp. 30-35.
Memon, A.H., Rahman, I.R., Asmi, A. and Azis, A.A.A. (2011), “Preliminary study on causative factors
leading to construction cost overrun”, International Journal of Sustainable Construction
Engineering Technology, Vol. 2, pp. 57-71.
Mintzberg, H. (1973), The Nature of Managerial Work, Harper and Row, New York, NY.
Naoum, S.G. (1994), “Critical analysis of time and cost of management and traditional contracts”,
Journal of Construction Engineering and Management ASCE, Vol. 120 No. 4,
pp. 687-705, doi: 10.1061/(ASCE)0733-9364 (1994)120:4(687).
New Universities Project Management Team (NUPMT) (2018), “Close out report of the new universities
project management team on the development of new universities in Mpumalanga and the Northern
Cape”, 1 November 2011–31 July 2017, available at: www.wits.ac.za/ipdm/guides/close-out-report/
Nkado, R.N. (2010), “Cost escalation of major infrastructure projects: a case study of Soccer City
Stadium in Johannesburg”, in Laryea, S., Leiringer, R. and Hughes, W. (Eds), Proceedings of West
Africa Built Environment Research (WABER) Conference, Accra, Ghana, WABER Conference/
University of Reading, Reading, pp. 265-270.
OGC (2003), Procurement and Contract Strategies: Achieving Excellence in Construction Procurement
Guide 6, OGC, Norwich.
Pourrostam, T. and Ismail, A. (2011), “Significant factors causing and effects of delay in Iranian
construction projects”, Australian Journal of Basic and Applied Sciences, Vol. 5 No. 7, pp. 450-456.
Public Protector (2014), “Secure in comfort, report on an investigation into allegations of impropriety
and unethical conduct relating to the installation and implementation of security measures by
the Department of Public Works at and in respect of the private residence of President Jacob
Zuma at Nkandla in the KwaZulu-Natal province”, Report No: 25 2013/2014, March 2014, ISBN:
978-1-920692-15-5, Pretoria, available at: www.publicprotector.org
Rajan, T.A., Gopinath, G. and Behera, M. (2014), “PPPs and project overruns: evidence from road
projects in India”, Journal of Construction Engineering and Management, Vol. 140, pp. 1-10.
Saunders, M., Lewis, P. and Thornhill, A. (2016), Research Methods for Business Students, ISBN:
9781292016627, Pearson Education.
Shehu, Z., Endut, I.R., Akintoye, A. and Holt, G.D. (2014), “Cost overrun in the Malaysian construction
industry projects: a deeper insight”, International Journal of Project Management, Vol. 32 No. 8,
pp. 1471-1480.
Shrestha, P.P., Burns, L.A. and Shields, D.R. (2013), “Magnitude of construction cost and schedule
overruns in public work projects”, Journal of Construction Engineering, Vol. 20, pp. 1-9.
Sweis, G.J., Sweis, R., Rumman, M.A., Hussein, R.A. and Dahiya, S.E. (2013), “Cost overruns in public
construction projects: the case of Jordan”, Journal of American Science, Vol. 9 No. 7, pp. 134-141.
Thomas, D.P. (2013), “The Gautrain project in South Africa: a cautionary tale”, Journal of
Contemporary African Studies, Vol. 31 No. 1, pp. 77-94, doi: 10.1080/02589001.2013.747292.
Ward, S.C., Curtis, B. and Chapman, C.B. (1991), “Advantages of management contracting – critical
analysis”, Journal of Construction Engineering and Management, Vol. 117 No. 2, available at:
https://doi.org/10.1061/(ASCE)0733-9364(1991)117:2(195)
Watermeyer, R. (2012), “Changing the construction procurement culture to improve project outcomes,
keynote address: joint CIB W070, W092 and TG72 international conference on facilities
management”, Procurement Systems and Public Private Partnerships, Cape Town, 23-25 January.
Watermeyer, R. (2018), Client Guide for Improving Infrastructure Project Outcomes, Johannesburg: New
School of Construction Economics and Management and Engineers Against Poverty, 1st ed., universities
April, ISBN: 978-0-620-79292-9, School of Construction Economics and Management,
Wits University, Johannesburg. project in
Watermeyer, R.B. (2012), “A framework for developing construction procurement strategy”, South Africa
Proceedings of the Institution of Civil Engineers – Management, Procurement and Law,
Vol. 165 No. 4, pp. 223-237, available at: http://dx.doi.org/10.1680/mpal.11.00014
World Bank (2016), Project Procurement Strategy for Development, Long Form Detailed Guidance,
2083
1st ed., The World Bank, Washington, DC, available at: www.worldbank.org

Further reading
Abd El-Razek, M., Bassioni, H. and Mobarak, A. (2008), “Causes of delay in building construction projects
in Egypt”, Journal of Construction Engineering and Management, Vol. 134 No. 11, pp. 831-841.
Barnes, M. (2000), “Civil engineering management in the new millennium”, Proceedings of ICE, Civil
Engineering I38, pp. 73-78, Paper I 2 IO9.
Gill, J. and Johnson, P. (2010), Research Methods for Managers, 4th ed., Sage, London.
Guest, G., Namey, E.E. and Mitchell, M.L. (2013), Collecting Qualitative Data: A Field Manual for Applied
Research, Chapter 3, Participant Observation, Sage, London.
Hasanzadeh, S.M., Hosseinalipour, M. and Hafezi, M.R. (2014), “Collaborative procurement in
construction projects performance measures, case study: partnering in Iranian construction
industry”, Procedia – Social and Behavioral Sciences, Vol. 119, 19 March, pp. 811-818.
Joint Building Contracts Committee (2005), Principal Building Agreement, 4th ed., JBCC, Johannesburg.
Rahman, I.A., Memon, A.H. and Karim, A.T.A. (2013), “Significant factors causing cost overruns in
large construction projects in Malaysia”, Journal of Applied Science, Vol. 13, pp. 286-293.
Saunders, M., Lewis, P. and Thornhill, A. (2012), Research Methods for Business Students, 6th ed.,
Pearson, Harlow.
The New Engineering Contract (1993), “Done in the interview transcripts Table”, Thomas Telford Ltd,
London.

Corresponding author
Samuel Laryea can be contacted at: samuel.laryea@wits.ac.za

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com