Discuss About The Strategic Emergent Construction Procurement?
The methods of procurement have not been modified considerably through the past 20 years. Although, overruns of costs and time still remain prevalent through the whole industry. Disputes have often arisen and in an action to lower these incidents of cost and time overruns, procurement methods like alliancing and partnering have been recently advocated. However, not all procurement methods for projects of particular types because the priorities and objectives of clients often differ invariably. The choice of a procurement system arises from an effective match between the objectives of the clients and their priorities. It is an essential requirement that all the characteristics of several procurement methods. The methods of selection that are available should be properly understood by the clients before selection. The report presents the characteristics of the modern procurement systems discussing their advantages and disadvantages. The methods are steered by the government guidelines and the Australian Local Government Procurement Guide and the Western Australian Department of housing and works.
Constructing a new building is necessary when there is no other existing building. A situation where a building already exists and seems that it will meet the needs of the client will only necessitate adapting or renovating (Roberts, 2010). A project is implemented to deliver auditing solutions to the particular needs of the client whether investment, improving efficiency or expansion. A client can decide to opt for a new building to forego renting, purchasing an existing structure from real estate and leasing.
In this system, the contractor will accept some or all responsibility for a design. The contract states expressly the responsibility accepted to clearly outline the extent of liability. The contract may state otherwise depending on the objectives and interests of the client and agreed upon by both parties. Liability in the design and construct procurement system is absolute under which the contractor will warrant fitness for the intended purposes (McDermott, 2016).
Some forms of this procurement method can limit the liability of the design of a contractor to ordinary duty as a profession requiring the exercise of ordinary skill and care. When an independent consultant is engaged by the main contractor do not have liabilities which is higher than the normal. Liability acceptance in form of indemnification is more likely to be worthless if not backed by an indemnity insurance cover. It is, therefore, necessary to crosscheck for a valid cover before the appointment (Sourani, 2012). In most cases, contractors don’t have in-house designers, the identity of external designers who will be used must be established before acceptance of the tender (Smith, 2013). The requirements of the client are simply a schedule of accommodation and a site plan clearly demarcating their detailed specification. It is the choice of the client to restrict the input of the client to take the supplied scheme. He/she will be left with the task of developing details of the scheme and the production information. It is, however, advisable for the client to rather specify the performance requirements and leaving the full responsibility for design and choice to the contractor (Masterman, 2003).
The design and construct method gives certainty about the sum of the contract and also offers benefits on cost. There is a close integration between this method and the relative freedom which the contractor has to use their knowledge of the market and purchasing power. These abilities a competitive price for the client. It is easy to attain a fast start on the site and the ability to formulate a closer integration will result in effective programming. However, preparing a suitable combination of requirements and comparing of schemes of competing tenders will consume a great deal of time. After signing the contract, further changes by the client will be implemented (Mohsini, 2013)
Management procurement covers contracting, construction, design and management. Operations contracting gives the contractor direct links to contract with the work contractors and is responsible for all the works. Construction management involves payment of a professional fee to manage a program, develop it, coordinate design and construction and improve the constructability of the project by facilitating collaboration (Tookey, 2011).
The client will employ a professional team which is independent together with a management contractor who will act as advisers at the preconstruction stages and executors of works when construction kicks off by the use of direct works contracts (Masterman, 2003). There is an enabled possibility of making an early on-site leading to achievement of early completion. Flexibility is increased and the client can change design during progress because matters of details and the drawings may be adjusted and completed while work is proceeding. The success of this type of contracting requires trust and collaboration between the client, the contractors, and consultants. Appointment of the contractor should be done before the outline of the design stage. His role is to advise on design, tendering, delivery and construction. The contractor submits written documentation of fees and will be employed after an interview with the design team and the client (Georghiou, 2007). The fee should include total service as a percentage of total cost. The service covering preconstruction should not proceed to the site. Work is undertaken on basis of cost plan, project drawing, and specification. Certainty about program and costs forcing the client to accept almost all the risks. The works packages will be facilitated by competitive tenders with bills of quantities as lump sum contracts.
A contractor will be carefully selected after payment of management fee. Work contracts are direct between the works contractor and the client. The client, therefore, has a greater control and similarly accepts a great deal of risk. The role of the management contractor is to act as an agent and not to project completion within time and costs (Greer, 2002). The construction management has the following advantages as listed below.
The contractor accepts responsibility for works contractors and the design team after being paid a fee. The contractor manages the organization and creates project design. He manages works and delivers the project for a fee by employing sub-contractors to for designing and construction. The consultant for project designing and management is the agent to the client who also obtains sub-contracts from works contractors through tenders, who will enter into direct contracts with the client (Dulaimi, 2001).
Also called the relational system, this type of procurement develops and gains strength from the investigation and perception showing that the industry is fragmented, incapable, adversarial and ineffective (Dainty, 2007). One firm will, therefore, practice by teamwork and partnering. The principles in collaborative procurement should be established at an early stage of the project with the help of independent advisers. The appropriate procedures should be set up and documented. These activities are done to assist selecting procurement route, contracting and formation of tender documents (Goulding, et al. 2012). The implementation of the practice should be discussed in a detailed manner in the pre-contract meetings, start-up meetings of the consultant teams, the special contractor. The construction strategies of the government public projects to adopt design and pre-contract type procurement routes and initiatives of private finance since they are more collaborative. The traditional non-collaborative systems are considered to be adversarial (Bröchner, 2005).
Success requires the parties to be dependent on one another necessitating a change in attitude, culture, and procedures in the procurement process. It is mostly applicable to projects which are large, long-term and have a high risk (Maltz, 2002). Strategic partnering involves a multiple-project relationship whereas the project partnering refers to a specific project. The system has clear established routes of authority and communication with pre-formed conventions for preparation and distribution of information. Putting of the contractor and consultant team into a common target for cost creates joint pain and joint gain thereby creating a financial motivation (Angappa, 2008). It involves co-location of team members and an initiative for the reward of the clients’ teams with assessment done on basis of the normal activities. The recognition and reward system keeps the individuals in the team motivated. Communication is enhanced through regular team meetings and workshops to develop teamwork. Warning procedures are based at the start of a problem and resolution is based on the solution. Continuous benchmarking, assessment, target marking, adaptation, and feedback ensure continued improvement of the building project (Manley, 2004).
Conclusion
The client has an open freedom to choose a system that best satisfies his objectives and should seek the services of an independent advisor. A consideration which should be put in practice is the identification of all prevalent risks and formulate an early solution to overcome. The factors that influence the selection of a strategy to selected involve the external factors of economy, commerce, technology, and the social and legal frameworks. The resources that the client has, the characteristics of the project and the level of flexibility are significant considerations. Other considerations will include cost issues and timing.
References
Angappa, G., 2008. Concurrent engineering: a strategy for procuring construction projects. International Journal of Project Management, 16(6), pp. 375-383.
Bröchner, J., 2005. Managing information flow in construction supply chains. Construction Innovation, 5(1), pp. 71-82.
Dainty, A., 2007. Perspectives of UK housebuilders on the use of offsite modern methods of construction. Construction Management and Economics, 25(2), pp. 183-194.
Dulaimi, M., 2001. Empowering innovative improvements through creative construction procurement. Engineering Construction and Architectural Management, 8(5), pp. 325-334.
Georghiou, L., 2007. Public procurement and innovation—Resurrecting the demand side. Research Policy, 36(4), pp. 949-963.
Greer, J., 2002. Partnerships and public procurement: building social capital through supply relations. Public Administration, 80(3), pp. 503-522.
Jack Goulding, Girma Zawdie, 2012. Construction innovation and process improvement. 7 ed. New Jersey: John Wiley & Sons.
Maltz, A., 2002. Becoming an” interesting” customer: Procurement strategies for buyers without leverage. International Journal of Logistics, 5(2), pp. 177-195.
Manley, K., 2004. Key influences on construction innovation. Construction Innovation, 4(3), pp. 143-154.
Masterman, J., 2003. An introduction to building procurement systems. , .. 5 ed. New York: Routledge.
McDermott, P., 2016. Strategic and management issues in construction procurement. Procurement systems, 4(1), pp. 3-26.
Mohsini, R., 2013. Knowledge-based design of the project-procurement process. Journal of computing in civil engineering, 7(1), pp. 107-122.
Roberts, J., 2010. The economics of modern manufacturing: Technology, strategy, and organization. The American Economic Review, 21(4), pp. 511-528.
Smith, A., 2013. Building procurement. 2 ed. New Jersey: John Wiley & Son.
Sourani, A., 2012. Barriers to addressing sustainable construction in public procurement strategies. Building procurement, 2(17), pp. 93-107.
Tookey, J., 2011. Construction procurement routes: re?defining the contours of construction procurement. Engineering Construction and Architectural Management, 8(1), pp. 20-30
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