Project Management processes and Procurement strategies in a Civil Contracting Company

Project Management processes and
Procurement strategies in a Civil
Contracting Company
Contents
Chapter 1-Introduction & Theoretical Background 1
Background 2
Construction and Civil Projects in UAE 2
Aims & Objectives 3
Research Questions 3
Theoretical Background 3
Chapter 2-Conceptual Analysis & Literature Review 4
Project Management 5
Project Life Cycle in Construction 5
Project Management Process groups 6
Construction Project Management Processes 6
Procurement Management in Civil Construction projects 8
Construction Industry in UAE 10
Procurement in Civil Contracting 10
Issues in procurement 12
Procurement Strategies 12
Impact of project management processes on Procurement 13
Chapter 3-Methodology 13
Data Collection 14
Data Analysis 14
Chapter 4-Results, Analysis & Discussion 15
Chapter 5 - Conclusions, Implications & Recommendations 15
References 15
Appendix 19
Chapter 1-Introduction & Theoretical Background

This chapter explores the foundation of the current research and explains its background, aims,
objectives, questions, and outlines the study. It would also summarize the significance and
deliverables of the current research.
Background
With globalization advancing, multinationals as well as government bodies face major competition
and thus, are coming to consensus where they are assertively operating with each other through public
private partnership agreements. The challenges of project schedule management can be better handled
by private contractors and thus, government projects can take benefit from them with these
arrangements. Fast track construction projects are thus, usually handled with involvement of private
contractors by government project owner.
Faster projects can deliver competitive advantage to the employer but only if the project quality is
well maintained. To improve project quality, UAE government has taken some risk management steps
for fast track projects. This involves establishment of control over projects costs and schedule. A
majority of risk factors are affected at the stage of procurement which makes procurement a crucial
part of project management if the project has to succeed. Procurement activities can include labour,
materials, services and equipment each of which present their own challenges and risks. It is required
to have materials available at right prices and at the right time to ensure control of the budget.
Inefficiencies due to problems like over ordering can lead to wastage and loses thereby affecting the
project costs (Harthi, 2015).
Delays which is seen as the major problem in UAE civil construction project needs a major attention.
Most causes behind project delays can be categorized into client, contractor or consultant related
issues. A client can cause delays by interference, order variations, provisions, and irregular payments.
Consultant can become the source of delays in the cases of incomplete contracting, poor designing,
delayed approvals, and poor communication. Contractors can also cause delays through lack of
professional expertise, lack of coordination, incompetencies, and poor planning. It is important to go
deeper into these issues to understand how they can affect the project progress and if the project
management and procurement management strategies can be selected and developed to tackle them
for increasing the probability of the success of a civil project. Thus, this research would explore the
various challenges that are faced in civil construction projects in UAE and how they would be
managed through the use of appropriate strategies (Queensland Department of Public Works, 2008).
Construction and Civil Projects in UAE
In UAE, construction projects contribute 15% to the GDP which makes the industry one of the drivers
of the economy. Dubai itself contributed 43.6% to the revenues of the UAE construction industry in
2014. However, the construction industry faces major challenges in project management one of which
is delays in construction work. Delays add to the cost thereby affecting profitability of construction
projects in UAE. Another big challenge for developers is that the competition is increasing in the
market as newer players are coming in which makes it essential for construction companies to use
appropriate strategies helping them improve their services. This can be done through improvements in
their procurement strategies and project management processes (Chakrabarti, 2018).
Abu Dhabi government had planned for major developments in 2013 with allotment of AED330
billion funds for social, healthcare, education, housing, and transportation project development. Since
then Dubai has been experiencing major expansions and civil construction projects for building the
supportive infrastructure for economic development. Downtown Dubai, Mohammed bin Rashid City,
and other projects like Business Bay are examples of some of the major projects carried out in the
region (Kamran & Rehman, 2015). Typical construction projects in UAE have a project developer
and a contractor involved where developer also called employer can be real estate developers or
public authorities owned by government. In government based projects, public private partnerships
are formed and are common with projects like water, power and infrastructure development in UAE.

Consultants on the other hand are involved with projects to provide architecture, engineering, project
supervision and management work (Kerr, et al., 2014).
In UAE, there are some standard forms of contracts that are used by most in the industry. They are
mostly based on the International Federation of Consulting Engineers forms of contracts and follow
the conditions accordingly excluding some exceptions like Abu Dhabi Government department which
uses Abu Dhabi Government Conditions of Contract for managing procurement, designing and
construction contracting. Some authorities like Dubai municipality and Roads and Transport
Authority (RTA) have their own conditions defined for contract management. However, major
international construction projects still follow the guidelines defined in FIDIC (Kerr, et al., 2014).
A number of contractual issues can arise during management of civil projects and some of them have
been identified with UAE based projects. Guidelines are also available on how to deal with such
issues. These issues can be related to contractor risks, liabilities, force majeure, material variations,
material delays, and negotiated provisions. Each type of issue presents a different type of challenge
for project management and thus, are important to explore (Ansari, 2015).
A number of lessons can be learned from the projects by exploring what risks they faced in project
management and procurement management and how they were handled. Exploration of best practices
in project and procurement management can help in minimizing the project risks and thus, are
important to explore.
Aims & Objectives
The aim of this research is to understand project management process groups and their application in
construction projects so that the researcher can identify ways to increase efficiency of construction
project deliveries.
This aim of the research can be achieved by fulfilling the following research objectives:
● Identify project process groups in a construction project and analyse them to understand their
impacts on the project
● Identify ways to improve upon project process groups to achieve higher efficiencies and
reduce project risks
● Identifying new strategies that can be used for improving process groups efficiency in project
management
● Implement project management methodology which is most suitable from a civil construction
project and helps in gaining profits
● To increase the procurement management efficiency by making use of the new strategies
● Explore how modifying project process groups can help reduce risks and increase
profitability on a construction project
● Analyse the impact of project management process groups on procurement strategies
Research Questions
The research will answer the following research questions:
● How do different project process groups impact the project in a civil contracting
arrangement?
● How can we increase the efficiency and reduce risks on project?

● What are the strategies that can be used to improve project processes?
● Which project management methodology would be most suitable for e civil project to gain
profits?
Theoretical Background
This research aims to explore project management processes as used in civil construction projects.
Project management process groups are defined by PMBOK framework to represent the phases of a
project life cycle. Each project process group has some defined processes that can help in
accomplishing project goals. As per PMBOK guide there are 47 processes within the project
management discipline and different sets of these processes are further grouped in ten knowledge
areas. These include scope, integration, cost, time, communications, HR, risk, stakeholder and
procurement management.
One of the major knowledge area in project management as per PMBOK methodology is procurement
which is one of the most important factor that contributes to the success of a civil construction project.
Procurement strategies are needed to source all the materials and services at every level in the project.
It would help to explore procurement strategies that are used by the civil construction industry as they
can influence all the other processes throughout the project for it takes care of the project resources.
To understand how project management processes apply to a construction project and how they
contribute to the success of a project, it would be important to first explore the theoretical background
related to construction management, project management and procurement management in civil
construction projects.
Construction project management involves directing and coordination of the project resources so as to
achieve the objectives of a construction work using modern techniques of management. Primary
functions of project management in a civil contract would be resource management, coordination, and
communication management. In UAE, project management has seen much development as large
projects have adopted the best practices of construction project management. It began with its
adoption in defence projects and later evolved to be embraced by other industries (Al-Hajj & Sayers,
2014).
Success of a project is different from the success of project management. While project management
involves assurance of achieving objectives within the constraints of time, budget and quality, project
success is determined by the ability of the project to reach its business objectives. Critical factors that
determine project success could be adaptability, commitment, project selection, planning, leadership,
and corporate understanding as identified by Kerzner (1987). When determining the success of a
project, Pinto and Mantel (1990) identified certain benchmarks that can be useful in the measurement
of success and these include implementation, perceived value, and satisfaction from delivery.
For a successful implementation of a construction or civil project, it is important that right
procurement strategy is selected as it can affect the resources, project communication, and thus, the
probability of the success of a civil contracting project. Procurement strategies can be selected
considering the project constraints and its objectives. Every procurement strategy has its own benefits
and drawbacks that can help identify the right strategy based on the project requirements.
Project management methodologies and strategies can be explored to understand their impacts on the
project by understanding the role they play in shaping the whole project life cycle. A typical project
life cycle of a construction project would have stages of initiation, conceptual design, Construction
design, procurement, construction, commission, operation, and decommission. The research can
explore the factors that can cause the risk of delays on projects and the factors that can ensure the
success of the project by studying the project management literature (Smith, 2016).

This research thus explores the project management and procurement processes and strategies in civil
contracts in UAE (Husain, et al., 2016). It would also explore the major challenges that are faced by
UAE companies in managing their civil projects in order to understand their impacts on the project
output as well as find the solutions.
Chapter 2-Conceptual Analysis & Literature Review
This chapter which gives the theoretical framework to would build the foundation and then explores
the previous researches conducted on the subject of project management and procurement managing
in civil construction projects to understand existing knowledge and identify gaps in literature. The
theoretical framework would be used for understanding the role of project management processes in
construction project management. The chapter begins with an introduction of the PMBOK project
management methodologies with defining of the process groups and their significance in construction
Projects. It also includes deeper exploration of the procurement knowledge area in the project
management methodology. Next, in the chapter is explored the project management and procurement
strategies used in civil construction. The review would explore the previously completed civil projects
in UAE to understand how project management processes and strategies work. This would present
and opportunity to identify a gap that can be filled by the current research.
Project Management
A project has a number of different activities that are interrelated and are constrained by project
schedule, budget, and scope. The project has a defined beginning and end with all activities assigned
to be completed as per a pre-decided schedule. The scope defines the levels of services, operational
considerations and project deliverables that have to be met. A project scope can evolve if project goes
into the different stage of its life cycle. However, ideally the scope is only refined and not changed
because with change can come the problem of scope creep if the scope exceeds the initial plan making
it not feasible to proceed without affecting the schedule and cost of the project (V & , 2012). While
scope refinement is essential, scope creep can cause delays and losses for a construction company.
Researchers believe that scope creep often occurs due to incomplete plan. For instance, in case the
project deliverables are not fully defined or if the work break down structure is unclear, the problems
can later cause an increase in scope which would be more than a subtle change. Some researchers also
add problems in control phase as the contributing factor for scope creep (Moneke & Echeme, 2016).
The project schedule can only be developed after a scope is well defined as it would need assignment
of durations for completion of specific activities within the scope of the project. The sequence of
activities would also be defined to further the schedule which would require a project manager to
understand the relationships between different project activities. A critical path of the project may be
determined with this understanding which can define the schedule. With scope refinement and
fluctuations in resources, budget is also expected to be refined over (University of Minnesotta, 2012).
If project budget is fixed at the planning stage, there can be large variation in the final cost and thus,
project managers often keep some additional amount as contingency when planning a project to take
care of project scope and schedule variations that can affect the budget (Sindi, 2018).
Project management should execute project in a way that deliverables are met within the constraints
of planned budget and scope with acceptable levels of quality, risks, and service. At times, different
objectives of a project can have conflicts and thus, a balance has to be established between them along
the project life cycle. As per PMBOK guide, projects can be managed along six key stages in a
construction project (HEAGNEY, 2011).

The stages of project life cycle includes initiation, planning, designing, construction, commissioning
and close out. In each of these states, a balance needs to be established between project cost, schedule,
and scope with consideration of stakeholder needs and project constraints. Scope creep can be one of
the biggest risks that projects can encounter and thus, it is essential keep a control on the project
scope. Project management plans just have clearly established project change control procedures. It
begins with identification of project needs, constraints, resources, and objectives which is followed by
development of the project plan and then implementation (Shadan & Fleming, 2012).
Project Life Cycle in Construction
A project begins its life cycle when it is authorized to move from Traditional construction projects,
design-bid-build was used with their lifecycle involving initiation, planning, designing, construction,
commissioning, and so on. There could be some overlaps between the different stages in the project
life cycle. The design phase, for example, can continue throughout when it is further analysed and
defined to revise and finalize a modified design based on the variations in the project scope or budget
(Rocca & Strube, 2017). Construction phase could be integrated with the commissioning to ensure
success of the project. Besides the traditional construction methods, alternative delivery methods are
also used in UAE construction projects and most popular of them are design build and design-build-
operate and maintain. Based on the choice of delivery method, specific phases of work are assigned to
a single construction work contractor. In design-build-operate and maintain project delivery method, a
single contractor could be taking care of both the operations and maintenance phase (Walcroft &
Caletka, 2012).
Project Management Process groups
Project management involves application of skills, knowledge, and techniques to fulfil project
requirements. Application needs effective project processes management. Process are the set of
activities that are targeted to achieve a business result. Project management processes can be grouped
based on inputs, techniques, and outputs. As per PMBOK guide, there are five process groups that
include initiation, planning, execution, monitoring and controlling, and closure. These process groups
have 47 activities that are grouped into 10 knowledge areas.
Initiation: This process group involves activities like defining a new project or a new phase. At this
stage, a project charter can be used as a project management tool for evaluating the project
effectiveness.
Planning: In this process group, project objectives and scope are listed down a methods are defined to
accomplish them. Goetz (1949) defines planning as a fundamental choice while Koontz (1958)
defines it as conscious choice of actions to achieve project objectives and Mintzberg (1994) describe
it as a formal decision making process. According to Gibson, Wang, Cho, and Pappas (2006),
effective planning can bring out better performance of the project in terms of schedule, cost and
operations. The methods identified in the plan must be agreed upon by the parties to a contract in any
construction project as per Steinfort and Walker (2007). Shehu and Akintoye (2009) has identified
planning as one of the critical success factors and Serrador (2012) established a strong link between
project plan and project success. Kihneman-Woote (2008) says that if the analysis of the project on
which is based its plan is not adequate then it can lead to the failure of the project. Kihneman-Wooten
(2008) proposed processes for integrating planning with other project management process groups
including execution, monitoring, and control.
Execution: In this process groups, actual performance of the activities planned is involved. Zhang and
Xu (2008) states the importance of execution in project success as dependent on the way information
systems work.
Monitoring and Controlling: This process group follows execution and involves reviewing and
facilitation of the performance of activities. During this phase, a project may require a change ins