Professional Documents
Culture Documents
Procument Notes
Procument Notes
PROCUREMENT (PART 1)
By
Sr Ang Fuey Lin
1
Lecture 3 - Procurement
Introduction
Traditional Method
Management Contracting
Construction Management
Design and Build
2
Introduction
What is Procurement?
Dictionary definition states that
procurement is ‘acquiring or obtaining by
care or effort’. In building circles, the
purchase of goods & services is commonly
known referred to as procurement
Clients who have made the major decision
to build will wish to procure the construction
works that they require with the most
advantageous arrangement.
3
Procurement
5
Client Procurement needs
B) TIME risk
C) QUALITY risk
6
Procurement
7
Procurement
8
Traditional Procurement Method
9
Prime Cost Sum
Developer Consultants
Contractor
Domestic Nominated
Sub-Contractors Sub-Contractors
Contractual Relationship
Coordination
11
Traditional Procurement Method
ADVANTAGES
Certainty of construction cost (except works
under P.C. and provisional Sum) as the
tender will be based on completed design.
( high level of price certainty for the client)
12
.
Traditional Procurement Method
Advantages cont’d
13
Traditional Procurement Method
DISADVANTAGES
Design process has to be completed before
calling of tender and award. This will take a
longer time frame. ( a relatively lengthy time
from inception to start on site)
Full design with minima variation in actual
practice cannot be achieved due to the
short time frame set by developer and lack
of resources in some consultant firm.
(problems relating to design error, the risk
relating to the design lies with the client. Post
contract design changes are frequently
abundant & resultant delays & disputes are
common )
14
Lack of single point responsibility
and control for development. There
are many parties involved in the
consultant teams as well as in the
contractor team, each with different
and vested interest. (lack of
involvement of the contractor in the
design process)
15
Management Contracting
A Management Contract is an agreement
between an Employer and a Building Contractor
under which the Building Contractor is engage to
plan, co-ordinate, organize, supervise and
generally to manage the construction activities of
the Project.
17
Management Contracting
Developer Consultants
Management
Contractor
Works Packages
Contractors
Contractual Relationship
Coordination
18
Management Contracting
As an indication of the price the Employer will pay
for the project, a contract cost plan is prepared by
the Q.S. based on a specific set of drawings and
specification and upon agreement with the M.C.,
will be treated as the estimated prime cost
whereby the M.C.’s remuneration, either based
on a fixed fees or a percentage fee of the
estimated prime cost is established.
19
Management Contracting
ADVANTAGES
The M.C. can participate in the early stage of
design process and contribute its expertise on
construction methods. ( Early involvement of the
M.C. the contractor can provide substantiate input
into the practice aspects of the building
technology process )
20
Advantages cont’d
23
Construction Management
Like Management Contracting, the Construction
Manager can be brought in at early stage of the
development alongside other consultants to
provide their expertise in management of the
design development and project implementation,
and advising on “buildability” aspect of the
consultants’ design. They are acting as a member
of the consultant team.
25
Construction Management
Developer
Construction Consultants
Manager
Package
Contractors
Contractual Relationship
Coordination
26
Construction Management
ADVANTAGES
28
Summary of Construction
Management
Similar with Management Contracting,
however difference is that the individual
trade contractors are in direct contract
with the client.