Discuss about the Construction Procurement for Goal and Objectives.
The construction management procurement is one of the most important aspects of the construction project, and it plays a vital role in the successful accomplishment of the goal and objectives of the construction project. It helps in managing the construction cost as well as support in completing the project on its predefined schedule. The construction industry is increasingly growing from last few decades because several infrastructure development projects are taking places. The infrastructure development has brought flow in the construction industry (Baguley, 2008). However, where there are several construction projects are continuing the need and demand of the people is also growing. In this context, the construction industry also feels the heat of competition. In order to reduce the competition, the construction companies implement several different strategies. Additionally, those strategies support the companies in obtaining necessary competitive advantages. Moreover, in this matter procurement is one of the most important aspects of the construction project. Effective procurement helps in reducing the cost of the construction projects as well as support in completing the construction project within the predefined schedule. In order to effective procurement for the construction projects, there are several approaches have been taken, which help in improving the construction procurement process. Several constructions companies adopt several strategies, which help in gaining important advantages from the market (Baily, 2015). The strategies for procurement in construction have been changed over the years, and the construction companies adopt more efficient procurement strategies in order to gain important advantages from the market. Therefore, the costing of the project can be managed efficiently as well as the construction processes are carried out successfully in their defined schedule. In this matter, management procurement approach is most crucial as it provides requisite benefits and advantages that keep the construction project ahead of the competitor’s project. Like other developed and developing countries in UK, also construction procurement management is popular in the construction industry as it is essential for the contraction project.
The management construction procurement is an efficient model that helps in improving the speed of the construction process, improve flexibility, increase control over the design and quality. This model has less adverse impact on the construction process and support in smoother development of the project. This model is more efficient than the traditional construction model. The design of the management construction procurement indicate the appropriate expansion of the responsibility and the structure can be designated with setting the design liability in a clear way (Bower, 2010). The management construction model usually applied for the construction project, where the owner of the construction appoint a manger and the manger is responsible for the whole project (Charrel and Galarreta, 2007). The construction project manager has the full authority in the whole project. The procurement is also the responsibility of the project manager and the manager possess entire control over the procurement and it helps in improving the quality of the raw materials for the project. Besides this, it supports in controlling the cost of the materials thus, the cost of the project use to be competitive. The improvement of the design and the construct method is applied for ensuring the quicker start on the site and thereby the close integration of the design and the construction is being depicted for the enhancement of the requirements (Clough, Sears and Sears, 2005).
Figure 1: Management construction procurement, Source: (Hughes, 2013)
In difference to the traditional model, in this model Client appoint a manager for the whole construction job and the manager is responsible for the entire project. Under the manager the architect, design consultant, quantity surveyor, and construction manager work. The construction manager is responsible for dealing with the suppliers for procurement of construction. In this way, the project manager has direct control over the entire construction job and it helps in improving the efficiency of the construction project along with the procurement process. The report of Egan also advocate for committed and efficient leadership in construction industry, which improve the focus on the consumer. It supports integrated procedures and terms, quality driven schedule. Besides this, it advocates for the need of improved management and the project manager should have efficient supervisory skill. Apart from this, Egan report suggests long-term relationship with the suppliers instead of relying on competitive tendering.
In this case, the competition is observed in the tenders, and thereby the appraisals are being made for the possible tenders and also the tendering is being obtained by the aid of only one tender. The process of the tendering is depicting the enhancement of the project, but it results in the achievement of only one tender (Cox, 2009). The construction management model is more efficient model, where the project manger coordinates and handles the entire project including procurement. For the reason the project manager should be experienced enough to handle the project efficiently. It decreases the management and coordination risks related to the construction project. It also helps in reducing the time and cost of the project and the owner of the project can retain high degree of control over the project.
The Novation is represented as the design, construct or to novate, and this is being undertaken by the contractor who is being used for the depicting the previous contract for the purpose of designing the work. The completion of the construction is appropriately made with depicting the design and the construction of the work (Hamimah Adnan., Mohd Nidzam Rahmat. and Abdul Hadi Nawawi., 2009).
Therefore the design and the contract process is being undertaken for the study which enables the recognition of the procurement processes and also it enables the enhancement of the contracts that are undertaken by the contractor (Harbhajan Singh, 2009). The single point is being described for enhancing the atmosphere of the business. Therefore, the design of the model seems to be enriching the study of procurement appraisal.
The construction work requires a synchronize model for the procurement so that the procurement process can be suited with the other important process of construction. The traditional approach of construction was largely different, which had several drawbacks, loopholes so that the traditional approach to the procurement management in the modern competitive industry cannot be carried out. In this context, the management procurement approach is effective. The management procurement is an effective management approach, which helps the management to coordinate the procurement process in a harmonized way (Harris, McCaffer and Edum-Fotwe, 2013). In this matter, the Building information modeling (BIM) support the management team by providing essential building information so that help in taking efficient procurement decision. The Building Information Modeling (BIM) is an efficient and intelligent process based on the 3D model. Moreover, the model supports the construction professional with the knowledge and tools for planning, designing, constructing and managing the undertaken building and infrastructure project more efficiently. The management procurement approach put great emphasis on the information system as in this competitive world information play vital role in the successful accomplishment of the aim and objectives of the project. The management contracting is efficient as in this approach the contractor has a direct contractual connection with the entire job of the construction work. In this particular approach, the customers employ independent professional team along with a management contractor for carrying out the construction project. The management contractor is responsible for the construction work, and with his or her effective administration, the construction process carried out in a smooth way (Hughes, 2013). The procurement is also the responsibility of the management contractor, and with effective collaboration with the construction team, the construction procurements along with other construction process run successfully. The management procurement approach, for this reason, is most crucial for this competitive construction industry as it provides required competitive advantages to the project by managing its procurement cost substantially. In this way it limit s the total construction cost and help in offering a competitive price to the consumers and thus provide competitive advantages.
The procurement system is a system of assigning specific authorities and responsibilities to people and organizations. The procurement system can be categorized as traditional, design and construct, management and collaborative. The systems can be sub-divided as per the demand in the market. The determination and evaluation of procurement system is very much important for successful completion of the project. In construct and design procurement forms the contractor considers the construction and design of the project. Construct and design variations exist where the design risk level can be apportioned (Johnsson, 2012). There should be a balance, but if the higher risk were to be assumed by the project manager, then the cost of the tender would be higher. In the traditional approach, the project manager accepts the design work, which would be different from the construction. The consultants are appointed for cost control and design, and the contractor carries out all the works. Suppliers and subcontractors allocate the tasks to the workmanship, which includes all the work. The competitive tendering appoints the contractor on complete information. The traditional method uses negotiated tendering and two-stage tendering. In this method, the construction and design run parallel. Under the traditional method of procurement, there are three types of contracts: lump sum contracts, measurement contracts, and cost reimbursement (Maltzman and Shirley, 2011).
The contractor or project manager carries out all the works of the project in return for an agreed sum of amount. The cost of the project depends on the raw materials used, the cost of labor and technical costs. In the measurement contracts, the contractor undertakes the work that is estimated before tendering. The most effective measurement contract involves the least risk to the employer. The measurement contracts can be based on the schedule of rates and drawings. The employers have to accept the risks in the project and the cost of the project. The contractor also carries out work on the basis of cost plus contracts in which they are paid the actual or prim cost of plant, materials, and labor. The contract is paid to recover the cost of overheads, operating expenses and management (Maylor, 2010). The traditional approach requires that the production of a set of documents before the tender are considered. The consultant prepares the design of the project in the traditional method. The consultant is appointed by the employer to give advice on all the matters of cost and design and controlling the quality and design requirement. The contractor relies on the available information and the instructions from the architects. All matters of payments and valuation are the responsibility of the consultants of the employer.
The employer selects the management contractor to carry out the project appropriately and efficiently. The main difference is between the work contracts, and management contractor administers it. The management contractor does not ensure that the work will be accomplished on time. The procurement system for the constructions provides support for the selection of an appropriate contracting and procurement strategies, preparation of the tender contracts and documents on the basis of standard forms, selection of consultants and contractors with applied performance records, effective contract management and maintenance of performance management system through reporting and monitoring (Senaratne and Sexton, 2011). However, the procurement systems are categorized into traditional, management, collaborative and design and construct. There are many factors that influence the procurement strategy such as external factors, client resources, project characteristics, cost issues, making changes and timing. The establishment of the procurement strategy requires the identification of the key objectives of the project as well as the risk associated with it. The identification and evaluation of the factors will decrease the risk of the project. Thus, the choice of procurement is very much important for successful completion of a project.
General contracting is the traditional method of procurement in which the contract enters into an agreement to develop the design of the project that is given by the employer. The price of the contract is based on the bill, which is provided by the employer. The method provides an opportunity to employ an independent professional to monitor and control the project (Smyth and Pryke, 2008). The main disadvantage of this method is break up responsibilities between design and construction. The design and build responsibility are taken by the contractor in which the contractor focuses on the design and construction of the building on the basis of the requirements. Apart from the management, construction procurement in construction the management uses the Building Information Modeling (BIM) software. The BIM provide digital description of each aspect of the building property.
The management procurement model is immensely popular as well as efficient construction procurement model and it can be applied in diverse context. Therefore, it is assumed that the management procurement model can be suited to the international context. When an organization procures or provides services to another organization outside the country, then it is called as international procurement. It is more complicated in comparison to other. The organization seeks to determine the most effective manufactures or organizations all across the globe. The main of international procurement is to increase the performances of the organizations in the international market. The organizations enter into the agreement to provide the services. One organization gives the project to another on an agreed amount. The procurement process is based on the selection of the suppliers in an honest and fair manner. The organizations have to follow the international rules, regulations, and laws. The construction industry is growing all across the world and the importance of efficient procurement in construction is also enhancing. Moreover, in this context the management construction procurement model is important and can play vital role in improving construction efficiency.
Conclusion
The construction procurement management is important as it supports in improving the value of the project. It helps in improving the cost effectiveness of the construction project, so the project gain required competitive advantages from the market. In the UK, mainly the management procurement approach has been implemented as this provides a management approach, which integrates the entire construction processes. It supports in meeting the quality need of the construction project at the same time it limits the cost of the construction project. Besides this, it takes an important role in managing the project so that construction project can be finished on its predefined schedule (Wysocki, 2004). The approach is very effective and can be implemented in another part of the world as per the requirements and characteristic of the construction project. The information play vital role in all sphere of business and construction industry the information is significant as it provides essential knowledge about the progress of a construction project and the present situation of the project. Therefore, help in making the effective decision for the construction project that improves the competitiveness of the project. In this matter, BIM is important and play a vital role in the modern construction industry. The BIM software plays vital role in the construction process by making as well as controlling the entire information of the construction project before, during, and after completion of the project.
References
Baguley, P. (2008). Project management. London: Hodder Education.
Baily, P. (2015). Procurement. Pearson Education Limited.
Bower, D. (2010). Management of procurement. London: Thomas Telford.
Charrel, P. and Galarreta, D. (2007). Project Management and Risk Management in Complex Projects. Dordrecht: Springer.
Clough, R., Sears, G. and Sears, S. (2005). Construction contracting. New York: Wiley.
Cox, A. (2009). Strategic procurement in construction. London: Thomas Telford Ltd.
Hamimah Adnan., Mohd Nidzam Rahmat., and Abdul Hadi Nawawi., (2009). Procurement. Shah Alam: Pusat Penerbitan Universiti, Universiti Teknologi MARA.
Harbhajan Singh, (2009). Construction project management. Chandigarh: Abhishek Publications.
Harris, F., McCaffer, R. and Edum-Fotwe, F. (2013). Modern Construction Management. Chicester: Wiley.
Hughes, W. (2013). Procurement in the construction industry. New York: Taylor & Francis.
Hughes, W. (2013). Procurement in the construction industry. New York: Taylor & Francis.
Johnsson, H. (2012). Construction Purchasing and Supply Chain Management. Construction Management and Economics, pp.1-2.
Maltzman, R. and Shirley, D. (2011). Green project management. Boca Raton: CRC Press.
Maylor, H. (2010). Project management. Harlow, England: Financial Times Prentice Hall.
Revaluing Construction. (2008). Construction Management and Economics, 26(12), pp.1325-1326.
Senaratne, S. and Sexton, M. (2011). Managing change in construction projects. Chichester, West Sussex, UK: Wiley Blackwell.
Smyth, H. and Pryke, S. (2008). Collaborative relationships in construction. Malden, MA: Wiley-Blackwell.
Wysocki, R. (2004). Project Management Process Improvement. Norwood: Artech House.
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