TABLE the procurement method 6 2.4. Major

TABLE
OF CONTENT

 

 

NO.                 CONTENT                                                                             PAGE                                                

1.0                    Introduction                                                                            2

1.1.  
                       Project information                                                     2

1.2.  
                       List of stakeholder                                                      3

2.0                    Theoretical
framework                                                            4

2.1.  
                       Project delivery method                                              4

2.2.                          Advantages of the
procurement method                    6

2.3.                          Disadvantages of the procurement
method                6

2.4.  
                       Major problem encounter during construction            7

3.0                    Critique
& discussion                                                              8

3.1.  
                       Client’s,
consultant’s and contractor’s perspective    9

4.0                    Conclusion                                                                              11

5.0                    References                                                                                                        12

1.0             
INTRODUCTION

1.1             
Project information

 

In this
case study, we has choose “Sekolah Menengah Kebangsaan Dato’ Ahmad Arshad” as
our case study. Sekolah Menengah Kebangsaan Dato’ Ahmad Arshad (formerly known
as Sekolah Menengah Kebangsaan Batu Anam) is a secondary school located in the
town of Batu Anam, next to PETRONAS Pekan Batu Anam and Masjid Jamek Syed Alwi.
This school is a “backbone” in educating people in Batu Anam, Johor.
In the year 2014, Kementerian Pendidikan Malaysia (KPM) get a allocation of
funds as much RM15,000,000.00 from Kementerian Kewangan Malaysia to build 3
3-storey building and 1 blok TNB substation in Sekolah Menengah Kebangsaan Dato
‘Ahmad Arshad.

 

KPM use
traditional method procument. They appoint consultant team to get design and estimate
price for this project, Farik Ghafar Architect as a architect consutant, AK
consult as a c consultant, Perunding Exec as m consultant and
QS~Bina consult as qs consultant. KPM have use open tender method to choose the
contractor to complete this project. Amat Taraf Marketing Sdn. Bhd. is the
sucessful contractor for this project. Amat Taraf Marketing Sdn. Bhd get funds
from Maybank as much RM10,000,000.00. The duration of project is 20 months.

1.2             
List of stakeholder

In this case study, the stakeholder for this project
as given below:

 

 

 

 

Amat
Taraf Marketing Sdn. Bhd.

QS~Bina
Consult

Perunding
Exec

AK
Consult

Farik
Ghafar Architect

Kementerian
Pendidikan Malaysia

Kementerian
Kewangan Malaysia

 

 

 

 

 

 

(Quantity Surveyor)

(M & E Engineering)

(Architect)

(C & S Engineering)

 

 

 

(Main Contractor)

 

 

 

 

2.0  THEORETICAL
FRAMEWORK

2.1             
Project delivery method

 

For this project their using
traditional method which is the design work will separate from construction
industry. The developer or client would appoint an architect to complete the
design and produce specifications of the building. The consultant team is appointed
to take control of design and cost. Upon the completion of the design, client
will appoint a main contractor to carry out the works through biding.
Otherwise, they should requires full documentation before the contractor can be
invited to tender for the work. In this project they have chosen selective
tenders method which is certain contractor are invited to tender and these
contractor are selected on their integrity, ability and characteristics before
they are invited to tender. It follows that only firms of sufficient standing
and experience in that particular type of work will be approached.

 

The contractor must prepares the
tender documents base on the specifications and drawings or the bill. The
lowest tenderer usually will be awarded the contract. The contractor need to
take responsibility to all the workmanship and materials which including all
works by the sub–contractors. The clients appoints a professional consultant to
administer the contract on his behalf and to advice on aspects associated with
design, progress and stage payment which must be paid by the client.

 

            Based on the chart that had been
shown above, the client has contractual relationship with all parties. In this
way, the client would have the closer control of the works. However, this may
bring risks in control of works of the project since the client need to be deal
with many points of responsibility.

 

            Firstly, client will appoint a
consultant team which included architect, quantity surveyor and engineers to
come out with the drawings and specifications of the building. The quantity
surveyor in the consultant team will come out with the bills of quantity base
on the drawings that have been provided by the architect and engineer. The
employer appoints the contractor team to be in charge of the construction works
only. Therefore, the contractor team does not need to take responsibility for
the design works. Then, the contractor may appoint other subcontractor to
undertake specialize works.

 

 

2.2             
Advantages
of the procurement method

            The main advantages of using a traditional approach to procurement
are:

·        
Accountability due to a competitive selection.

·        
Competitive equity as all tendering contractors bid
on the same basis.

·        
Design lead and the client is able to have a direct
influence which can facilitate a high level of functionality and improve the
quality in the overall design.

·        
Price certainty at the award of the contract.

·        
Variations (changes) to the contract are relatively
easy to arrange and manage.

·        
A tried and test method of procurement which the
market is very familiar with.

 

2.3             
Disadvantages
of the procurement method

            The main disadvantages of using a traditional approach to procurement
are:

·        
Can be a timely process to produce the full
contract documentation. Tenders documents from an incomplete design can be
produced but can lead to less cost and time certainty, and may lead to
disputes.

·        
Overall project duration may be longer than other
procurement methods as the strategy is sequential and construction cannot be
commenced prior to the completion of the design.

·        
No input into the design or planning of the project
by the contractor as they are not appointed during the design stage.

 

2.4             
Major
problem encounter during construction related with type of project delivery
method.

 

2.4.1       
Contractor’s
perspective

            In our chosen case study type of
procurement which is traditional procurement method, there are some fraud
document submitted from contractor when they submit the required document such
as financial statement. This happened because the mark given for valuation
tender is 50% for financial part, 30% for technical part and 20% for
experiences. The minimum amount for financial part must be at least 5% from
contract sum.

 

2.4.2       
Consultant
perspective

            As for the consultant’s perspective,
there are a few problem occurred during tendering stage. During tender
evaluation, QS consultant under-estimated this factor.

 

            So the parties involve in valuation
tender must look every details for the documents which has been submitted by
tenderer. The amount of open account and closed account in first month must be
tally with second month. When the

3.0        CRITIQUE AND DISCUSSIONS

 

            For our case study, there are
several incidents that can be considered as risks factors faced in the
construction project. Here we will state and elaborate those risks that have
surfaced.

 

            Firstly, the architect refused to
give the drawings softcopy to the other consultants in fear of their drawings
getting infringed. This shows that the trust between consultants of the project
is low, and the project management does not use a reliable software/system so
that the resources can be shared between parties. This may be because of
limitations in technology and as such, the quantity surveyor has to use the
traditional method for measurement.

 

            Next, according to the Bills of
Quantities specifications, contractor is required to use drop hammer machine
for piling works. This is not suitable since there are existing buildings
nearby to the site and it is highly likely that using the machine will cause
harm to them because of the vibration. It will also cause noise pollution, and
with school in session, this method is not appropriate. Adding to that, it is
difficult to transport the hammer drop machine to site because there is a
limited space. In order to overcome these problems, the contractor handed a
Variation Order to use injection pile machine and the Site Officer duly
agreed. 

 

            The contractors also faced a problem
with time because during exam week, they are not allowed to do construction
works that may cause noise and disturb the exam process. The solution to this
problem is to have a proper plan and execution. Other than that, the school
only allow the transport of materials to site on weekends. As such, the project
team planned their works and finish the heavy works before the exam week so
that during the exam week, work on site will not cause noise pollution and the
supply of materials is enough to last for the week before another transport on
weekends. At the same time, the Site Officer has to ensure that the actual
works are in lined with the planned schedule. 

 

            Finally, as the project is at a
school compound, construction site is clearly a hazard for the students
especially, and also everyone in the area. In order to prevent any unwanted
incidents, the project team has to ensure that all the OSHE guidelines are met
for their construction site before undergoing the works. The safety officer was
very strict with this matter and he only gave the green light upon checking
that every aspect passed the requirement.

 

 

3.1             
CLIENT’S,
CONSULTANT’S AND CONTRACTOR’S PERSPECTIVE

            The selection of the most suitable
procurement method consequently is critical for both clients and project
participants, and is becoming an important and contemporary issue within the
building industry (P.E.D. Love, M. Skitmore &G. Earl, 2001).
One of the most factors in construction is the competitive nature of the
estimating and bidding process that exists in most all procurement. The client
will seeks the value at the less cost and within the project financial
constraints but at the same time did not forget about the quality of the
project. Many client will make a comparison estimate with the present market
factors, experience, technical capabilities, and personnel staffing while
selecting the successful contractor to ensure the project will run smoothly.

 

3.1.1       
Client’s
Perspective

            The decision to constructed a new
project can depend on various project delivery methods, most of which affect
the overall cost and time for completion. Variations to these traditional
delivery methods may futher result in specialized or hybrid contracting
methods. To achieve project success, the parties
need to match the various organizational forms to the client’s characteristics,
criteria, and priorities with respect to time, cost, and quality (Shamil G.
Naoum, 1994). Procurement in
construction has high financial conditions and factors that can result in
devastating consequences to the client and can also ripple throughtout the
procurement hierarchy. Contract management, including scope management, and
knowledge of construction law is necessary in order to ensure every problem
that appear can be solve.

 

3.1.2       
Consultant’s
Perspective

            In order to ensure the project is
run smoothly, the client will appoint an experienced consultants team who can
manage and advise on all aspects of a project from its outset through to the
final stages. Consultants must ensure that they are ‘on message’ in terms of
the vision and business strategy while performing their particular roles.
Consultants also must play a major role in managing project risk. While project
delivery methods define formal risk allocation, the use of incentives and
collaboration or partnering arrangements help to establish a collaborative
approach to risk management (Ekaterina
Osipova   Erik Eriksson, 2011). Risk and uncertainty
can be considered in three groups which are people risk, technical risk and
business risk. It is essential that the consultants are able to identify
technical risk early enough to put in place appropriate measures. There is no
project that is not susceptible to business difficulties. The challenge for the
consultants is to identify the sources and consequences of business-related
problems, and to deal with them fully and swiftly.

 

3.1.3       
Contractor’s
Perspective

            The bidding process can be extensive
for a contractor seeking work and bidding process is considered a cost of doing
business for the contracting organization. For successful bids, an agreement,
often dictated by the contract clause, which is established between the client
and contractor. Special attention is needed in managing scope, risk, cost, and
time through the integration processes and activities given the competitive
nature of construction procurement. For that reason, it is necessary that the
organization has the expertise in preparing wining offers. General contractors
generally align their management systems with industry standards, and their
subcontractors should also be aligned with those standard.

 

4.0          CONCLUSION

            As the conclusion for our case study, KPM use a
traditional method procurement as a project delivery method. Hence, there are
two stages in this procurement which is design stage and construction stage.
Within the design stage, contractors are not involved in this stage. Meanwhile,
for the construction stage, all parties will involve.

            There are some of the advantages using this method
because of the bureaucracy issue in Malaysia nowadays. This is the best way to
open the chance to invite all contractors to grab the opportunity to make
profit. In awhile, KPM can choose best contractor which can completed the
project within their budget. Among of all tenderers, Amat Taraf Marketing Sdn.
Bhd. is chosen as a successful contractor.

5.0 
      REFERENCES

 

1.      P.E.D.
Love,M.
Skitmore &
G.
Earl
(2001).
Selecting a suitable procurement method for a building project, Pages
221-233.

 

2.     
Shamil G. Naoum (1994). Critical Analysis of Time and Cost of
Management and Traditional Contracts, Volume
120 Issue 4.

 

3.      Ekaterina
Osipova &Per
Erik Eriksson.
(2011) How procurement options influence risk management
in construction projects, Pages 1149-1158.

 

4.      Encik
Bahar bin Mohamed. Quantity surveyor (QS~Bina Consultant).

 

5.      Encik
Hamid bin Abdullah. Project manager (Amat Taraf Marketing Sdn. Bhd).