Western Sydney University: Procurement Methods Report 300053

This report provides a comprehensive analysis of three primary procurement methods used in construction projects: traditional, design and build, and management contracting. The report begins with an executive summary and table of contents, then delves into the characteristics, advantages, and disadvantages of each method. It considers the benefits and problems faced by various stakeholders, including clients, developers, consultants, builders, subcontractors, and end-users. A comparative chart highlights the key differences between the methods, followed by recommendations on which methods are best suited for different project types. The report concludes with a discussion of ethical obligations and is supported by references using the WSU Harvard system.

Procurement Method Assignment
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Executive Summary
The Procurement process is considered the term that could be used for describing the activities
performed by the clients during the process of construction. The primary three methods are
traditional, build and design as well as the management contractor. The traditional method of
procurement is as old as the construction industry, and their primary characteristics of this are
that the effective design process is separated from the construction. The design and build method
effectively provides the view that the contractor is responsible for getting both the design as well
as the construction in return of the amount. The method of procurement is generally based on the
client appointing the consultant for the preparation of project drawing as well as the project
specification.
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Table of Contents
Introduction.................................................................................................................................................3
Traditional Method......................................................................................................................................3
Characteristics of the method..................................................................................................................3
Advantages and disadvantages................................................................................................................3
Benefits and problems for stakeholders...................................................................................................4
Design and Build method............................................................................................................................4
Characteristics of the method..................................................................................................................4
Advantages and disadvantages................................................................................................................5
Benefits and problem for the stakeholders...............................................................................................5
Management Contracting method................................................................................................................6
Characteristics of the method..................................................................................................................6
Advantages and disadvantages................................................................................................................6
Benefits and problem for the stakeholders...............................................................................................7
Compare and contrast the three procurement...............................................................................................7
Recommendations.......................................................................................................................................8
Conclusions.................................................................................................................................................9
References.................................................................................................................................................10
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Introduction
Procurement is considered the term that could be used for describing the activities performed by
the clients during the process of construction (Naoum, and Egbu, 2016). The primary concern of
the procurement in the construction project is to complete the project on time then maintain the
cost of the project and even maintain the quality of the project. The primary purpose of the paper
is to discuss the three primary procurement methods that have been used within the construction
project. The paper even provides comparisons among the three methods are providing a better
understanding of the process.
Traditional Method
Characteristics of the method
The traditional method of procurement is as old as the construction industry, and their primary
characteristics of this are that the effective design process is separated from the construction
(Naoum, and Egbu, 2015). The primary character of the method is that;
 The competitive tendering process primarily appoints contractors
 In this, the design needs to be fully prepared that also ahead of time
 The client is having full control over the design
 The duration of the construction project generally tends to be effectively long due to the
separate sequential process (Molavi, and Barral, 2016)
 The cost of the construction is much ahead of time
Advantages and disadvantages
The advantages of the method are as follows;
 Accountability which is known as the result of the competitive selection
 The price has certainty during the award of the contract
 The variation within the contract is considered to be relatively easy to manage as well as
arrange (Ross, and Yan, 2015)
 The entire process is considered to be design lead where the client is having the total
influence as well as the control
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The disadvantages of the method are as follows;
 The effective process for producing the full contract needs to be done timely
 The duration of the overall project can be longer than the other procurement method
 The contractor did not have any input in the design of the project
 Because the general contractor is brought to the team right after the design, therefore, the
opportunity regarding the input on the alternates are relatively low
Benefits and problems for stakeholders
The stakeholders of the construction project are considered to be the client then the developer,
consultants, than the builders, along with the end-users of the project. The stakeholders face
numerous benefits as well as problems due to the use of traditional procurement methods within
the construction of the project (Torvinen, and Ulkuniemi, 2016). The primary advantage of the
method for the stakeholders is that the clients can maintain full control over the project design.
The benefits to clients are considered to be the problem of this method for the contractor as they
did not have any influence over the design of the project. The price certainty during the contract
award is considered to be benefits for the stakeholders to gain effective value during the tender
period (Salem, Salman, and Ghorai, 2018). The other problem faced by the stakeholder is
regarding the tenure of the project as it might take a long time for completion.
Design and Build method
Characteristics of the method
The design and build method effectively provides the view that the contractor is responsible for
getting both the design as well as the construction in return of the amount (Ogunsanmi, 2016).
The characteristics are as follows;
 The contractor in this method are generally appointed by the two-stage tendering
 The clients can effectively change the design during the design stage
 The design, as well as the construction, can effectively proceed in a parallel way
 The valuation along with the payment solely consisted with the contractor (Ruparathna,
and Hewage, 2015)
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 The contractor must complete the project that also within the prescribed time for
maintaining the client value
Advantages and disadvantages
The advantages of the method are;
 The client effectively address to the one firm which reduces the need for committing to
resources as well as time
 In this, the price certainty is effectively obtained
 The builders are effectively involved within the design process (Park, and Kwak, 2017)
 It has a faster project delivery process
 The communication system is much better as compared to another method
 This method consists of fewer disputes as well as litigation
The disadvantages of the methods are;
 This method provides the limited assurance of the quality control
 It is highly subjective for the contract award
 It has limited access for the small contractor within the market
 The typical project management issues like liability establishment then writing contract
as well as estimation and scheduling can be viewed in this method
 This even consists of the conflict of interest as well as the ethical issues
Benefits and problem for the stakeholders
The stakeholders get effective benefits as well as a challenge while dwelling with this method of
procurement. The primary benefits achieved by the stakeholders of the construction are the fact
that they can address one firm at a time which provides entire focus on the development of the
project. The contractor generally faces the problem as they have limited access to the
development of the construction of the project as compared to the clients (Tran, Molenaar, and
Gransberg, 2016). The stakeholders, especially the clients, are having the benefits of changing
the design at the designing stage for the betterment of the construction project. In this method,
the contractor has to some of the problems like the financial risk that is associated with the
architect taking for the construction of the project (Hastie, Sutrisna, and Egbu, 2017). It is highly
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essential for the stakeholders of the project to maintain their activity and deal with the business
value most suitably.
Management Contracting method
Characteristics of the method
The method of procurement is generally based on the client appointing the consultant for the
preparation of project drawing as well as the project specification (Forcada, Gangolells, Casals,
and Macarulla, 2017). The primary characteristics of this method are as follows;
 The management contractor have the independence as well as reinforces with the
consultancy relationship especially with the clients
 The payment is eventually made to the contractor as per the cost of the work package
along with the agreed fees (Wong, San Chan, and Wadu, 2016)
 The success of this method entirely depends on the team to maintain the construction
project
 The entire process of the design along with the construction is generally of shorter time
Advantages and disadvantages
The advantages of the method are;
 It effectively deals with the timesaving then the operational continuity as well as the
knowledge of the construction project
 This method effectively hand out the operational control of the specific function ticks out
the specific operational from the business process (De Araújo, Alencar, and de Miranda
Mota, 2017)
 This method helps to save time as well as the resources at the construction project
 The cost of the management is eventually less as compared to the hiring of full time
accountant for the business
The disadvantages of the method are;
 The price certainty is effectively not achieved until the final work package of the
construction project has been let by the clients
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 The lack of time as well as information control for the project
 It consists of the privacy issue regarding the information as well as the relationship with
the company management team
Benefits and problem for the stakeholders
The management contract eventually provides benefits to the stakeholders by distributing
responsibility in the most effective and better way. The other benefits of the stakeholders are to
maintain the organisation with the expertise as well as the experience for dealing with the
construction project within the market. In this situation, there are also some of the problems that
have been faced by stakeholders like the privacy issue and the financial risk (Rahmani, Maqsood,
and Khalfan, 2017). It can be seen that the management contract mainly from outsourcing, which
leads to the privacy issue within the project construction process. The maintenance, as well as
the control of the construction project, needs to be effectively maintained by the stakeholders for
dealing with the activity within the market (Perrenoud, Lines, Savicky, and Sullivan, 2017). The
stakeholders have suitable benefits as well as the problem for dealing with the management
process to deal with the situation most effectively and suitably.
Compare and contrast the three procurement
Traditional Design and build Management
contractor
Suitable projects The complete tender
documentation is
available before the
contract
It has a clean tender
requirement
It is complex and
large scale process
that require additional
expertise
Suitable developers The client always
want control over the
quality as well as the
design
The experience clients
can appraise the
tender design
The experienced
clients with their team
can make a suitable
decision
Design and
construction time
Long project time Construction and
design run in parallel
which provides
Minimum project time
with the suitable
project team
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shorter project time
Competition on the
cost
Separate competition
for the work as well
as the design service
Competition for the
job along with the
post-award services
High competition for
the work, subcontract
package along with
design
Management along
with quality control
The designer set as
well as monitor the
quality for the clients
A higher level of the
buildability with the
completion of the
design
Highest level of the
buildability as the
contractor gets
involved before the
invest
Flexibility The client keeps
flexibility for the
design changes
Contractor flexibility
in term of detail
developing as well as
solution proposal
Client keep the
flexibility for the
change in design
Certainty of price No cost certainty at
the time of the design
phase
Best for the price
certainty
No firm price at the
time of commitment
to the construct
Summary Better for the quality
as well as cost
Better for the time
along with the cost
Better for the quality
along with time
Recommendations
The procurement methods help the contractor to find a suitable way of dealing with the
construction project within the market. It is highly recommended that for the massive project
which requires better quality as well as the cost, the traditional method is highly suitable like the
road construction project. It is also recommended that the construction project, like building a
house and another medium scale project where the time and the cost play a vital role in the use of
design and build is highly essential. Furthermore, it can be recommended that for the hotel
management and other management construction project the use of management contractor is
highly suitable as this deal with the quality along with the time for providing the best project to
the clients.
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Conclusions
It can be concluded from the paper that all the three procurement methods are highly applicable
for the diverse construction project according to the time, quality and cost. The traditional
method is best known for providing a better quality of the project at a suitable cost, but it took a
long time. The design and build method generally took less time as compared to traditional
method as the design and construction run parallel. The management contractor is suitable for
the short time project, but the cost is relatively high for the construction project as there is
management team that works to provide the best quality of the project to the clients.
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References
De Araújo, M.C.B., Alencar, L.H. and de Miranda Mota, C.M., 2017. Project procurement
management: A structured literature review. International Journal of Project
Management, 35(3), pp.353-377.
Forcada, N., Gangolells, M., Casals, M. and Macarulla, M., 2017. Factors affecting rework costs
in construction. Journal of Construction Engineering and Management, 143(8), p.04017032.
Hastie, J., Sutrisna, M. and Egbu, C., 2017. Modelling knowledge integration process in early
contractor involvement procurement at tender stage–a Western Australian case
study. Construction Innovation, 17(4), pp.429-456.
Molavi, J. and Barral, D.L., 2016. A construction procurement method to achieve sustainability
in modular construction. Procedia engineering, 145, pp.1362-1369.
Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in construction
journals. Procedia Economics and Finance, 21, pp.6-13.
Naoum, S.G. and Egbu, C., 2016. Modern selection criteria for procurement methods in
construction: A state-of-the-art literature review and a survey. International Journal of
Managing Projects in Business, 9(2), pp.309-336.
Ogunsanmi, O.E., 2016. Risk classification model for design and build projects. Covenant
Journal of Research in the Built Environment, 3(1).
Park, J. and Kwak, Y.H., 2017. Design-bid-build (DBB) vs. design-build (DB) in the US public
transportation projects: The choice and consequences. International Journal of Project
Management, 35(3), pp.280-295.
Perrenoud, A., Lines, B.C., Savicky, J. and Sullivan, K.T., 2017. Using best-value procurement
to measure the impact of initial risk-management capability on qualitative construction
performance. Journal of Management in Engineering, 33(5), p.04017019.
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Rahmani, F., Maqsood, T. and Khalfan, M., 2017. An overview of construction procurement
methods in Australia. Engineering, Construction and Architectural Management, 24(4), pp.593-
609.
Ross, T.W. and Yan, J., 2015. Comparing public–private partnerships and traditional public
procurement: Efficiency vs. flexibility. Journal of Comparative Policy Analysis: Research and
Practice, 17(5), pp.448-466.
Ruparathna, R. and Hewage, K., 2015. Sustainable procurement in the Canadian construction
industry: challenges and benefits. Canadian Journal of Civil Engineering, 42(6), pp.417-426.
Salem, O., Salman, B. and Ghorai, S., 2018. Accelerating construction of roadway bridges using
alternative techniques and procurement methods. Transport, 33(2), pp.567-579.
Torvinen, H. and Ulkuniemi, P., 2016. End-user engagement within innovative public
procurement practices: A case study on public–private partnership procurement. Industrial
Marketing Management, 58, pp.58-68.
Tran, D., Molenaar, K.R. and Gransberg, D.D., 2016. Implementing best-value procurement for
design–bid–build highway projects. Transportation Research Record, 2573(1), pp.26-33.
Wong, J.K.W., San Chan, J.K. and Wadu, M.J., 2016. Facilitating effective green procurement in
construction projects: An empirical study of the enablers. Journal of Cleaner Production, 135,
pp.859-871.
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