Western Sydney University: Construction Procurement Methods Report

This report examines various procurement methods used in construction projects, focusing on their application within a Building Information Modeling (BIM) framework. It explores three primary methods: small purchase, competitive sealed bidding, and non-competitive negotiation, detailing their characteristics, advantages, and disadvantages. The report provides a comparative analysis of these methods, considering factors such as cost, time, and ethical considerations. It also assesses the perspectives of different stakeholders, including clients, consultants, builders, and end-users. Furthermore, the report offers recommendations on the most suitable procurement methods for different types of construction projects, emphasizing the importance of a well-defined procurement strategy for achieving project objectives within budget and schedule constraints. The report concludes by highlighting the significance of ethical considerations and risk management in the procurement process.

Running head: CONSTRUCTION MANAGEMENT
Construction Management: Procurement Method Report
Name of the student:
Name of the university:

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Introduction
This report depicts the crucial importance of using the concept of procurement
management for accomplishing a construction project based on “building Information Modeling
(BIM)” within estimated budget and allotted time phase. The specific system chosen for this is
the application of BIM in the construction projects. Different procurement methods are there and
based on the construction requirement the most suitable method should have to be adopted by the
project associates.
The process of procurement can be defined as a key factor that helps to run a company
successfully and also helps to meet the business goals and live up the expectation of the
stakeholders (Hornstein 2015). The benefits and problems of procurement methods are all
elaborated in this report including a contrast and comparison. Apart from this, all suitable ethical
considerations must not be compromised while implementing the procurement method in the
BIM based construction project.
1. Different procurement method for the construction projects
Procurement management is referred to as a systematic approach that is utilized for
buying products and avail services required for the projects being sustainable. Appropriate
business values will be added to the business prcatices if the project manager successfully
manages the procurements (de Carvalho, Patah and de Souza Bido 2015). It has been found that
professional business practices can save both the money and time of the projects. The aim of any
successful procurement method is to deliver continuous improvement direction to the business
by integrating some actions like planning, alignment, procurement and manage. The different
procurement methods are elaborated in the below section:

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1.1 Small purchase
It is found that, whenever the construction related project services are all aggregated
values and less than $150,000 (for profit, public and non-profit) then only the construction
projects should adopt and use the idea of this procurement method (Papke-Shields and Boyer-
Wright 2017). The construction project manager will be able to obtain competitive quotation of
price from the sellers as soon as the purchasing agent contact three raw material and other
service suppliers who are known to them. Different from the sealed bidding in those cases where
the bid price should be considered final, price negotiation and the more of suppliers contracted
gets permission. The written contact details and all other information as well as prices should be
demonstrated in the files of the purchase agents. It is the role of the construction project head to
convey all the information to the rest of the project suppliers regarding the purchasing agents file
(Nojavan, Zare and Mohammadi-Ivatloo 2015). For bringing individual purchase that is lesser
than the ordered purchase of $150,000, different small purchase method are not measured as
accurate.
1.2 Competitive sealed bidding
Whenever the expected procurement is found to be more than $150,000 in aggregated
values the services and products related to the construction projects then only this approach
should be selected. Based on the price the procurement should be designed. In order to conduct
a sealed biding the steps to be followed include bid specification preparation, procurement
publicizing opening of the bid and contract awards (Pheng 2018). Based on the specific
requirements of the contract the IFB should have to be approved by the contractor of the
construction project. As it is difficult to send the IFB to all the associates therefore, it is
acceptable to rotate the supplier’s lists. For the successful publicizing of the procurement a

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formal advertisement should be processed by the construction project manager. As per the
competitive market analysis it can be said that, a low bidder must be awarded till the bidder is
found as a non responsive one. Moreover, it can be said that this kind of contracts are always
requires to be well documented.
1.3 Non-competitive negotiation
This particular procurement process will be referred to as a valid one whenever, any
natural disaster committee prevents or the delays the publicizing process. Not only for this case
but also for the services and products which have only one source his particular approach of non
competitive negotiation is applicable (Heldman 2018). The contracts have more than $150,000
utilizing the non competitive negotiation should approve the contract.
2. Recommended procurement method
All three of these procurement methods have some negative influence and the
competitive negotiation will be appropriate whenever the procurement is predictable to be more
than $150,000. This is the most suitable recommended procurement methods among the
different. The complex technical nature of the procurement document can be completely
resolved with the successful implementation of the competitive negotiation approach (Papke-
Shields and Boyer-Wright 2017). For the factors such as research, development etc this
procurement approach is suitable enough. The steps that are to be followed accordingly for the
successful delivery of the competitive negotiation are as follows:
 The RFP prepared by the contact agency should represent the requirements and
the objectives clearly to the rest of the project associates

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 The procurement approach is formally advertised as well as the RFP’s are sent to
the suppliers who are known to the contractors. The formal details of the
advertisements are comprises of name, address, contact details, contract
requirements and other bidding requirements. If any new amendments are allowed
to the existing IFBs then the other should be informed about the details (Nojavan,
Zare and Mohammadi-Ivatloo 2015).
 Where the bids are to be submitted are all stated through the functional product
specifications. The details of the legal notices are all delivered and edited through
the help of the project procurement planning.
 Whether a newly prepared bid is acceptable or not from the project perspectives
are measured and evaluated through the project procurement method.
 In order to make any specific bid price contingent well as conditional over the rest
of the factors authorization is requires (Ahmed 2015). The benefits and the
problems associated to this factors are illustrated in the below section.
3. Benefits and problems for the clients
While using the concept of the procurement management different challenges and
benefits may rise and those are illustrated as follows:
Benefits:
In case of documented design procurement method, the project owners are responsible to
procure the design which is completely suitable to gain statutory construction and development
objectives. The design can be protected successfully with a lower level of risk margin from the

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builder’s end. In addition to this he rate of price can be easily compared through procurement
method.
A project compliance risk regarding construction designs always provides higher value
opportunities to the builders (Morozov and Liubyma 2016). The successful and buildable design
allows the builders to start the constriction before the completion of the deign details.
Another advantage for procurement method is that, for the foregoing method a lowest
rate of investment is require. It can give accountability due to competitive selection and at the
same time competitive equity can also be generated due to the contractors bidding. Again the
manageability and arrangement for necessary variation and changes will be defined as relatively
easier.
Problems:
 The design document method requires huge capital investment as well as risk
management program to resolve the operational challenges. The project cannot be
commenced until the successful completion of the document. If risks errors are not
re-set then that may cause project errors.
 It has been analyzed that currently the process of procurement management is facing
increasing numbers of complexities. In order to produce full documentation for the
contract is timely in manner. Improper and incomplete design planning can lead to
massive project level disputes.
 If in the project design and development phase any additional changes are needed
then incorporation of those changes may interrupt the project success.
Risk management

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For successful procurement management risk is a serious factor, which is one of the basic
concerns for the construction project managers. The preliminary financial status of any project
must be focused by the project manager (Dalcher 2016). For a successful industry prcatices these
are to be well managed. If the project heads fail to establish a strong relationship along with the
tier one suppliers then
4. Positive and negative aspect of the system
During the progress of any construction project it has been found that, tendering process
for most of the major contracts gives huge set of opportunities to the project owners. It is the role
of the clients to grab advantages from these opportunities. It is found that, streamlined project
procurement can lead a project towards enhanced business efficiency as well as lowering cost
also. At the same time in order to establish competitive business advantages, the contractors
utilize their experts throughout (Yakovlev et al. 2016). Moreover, it can be said that the
successful procurement method can deliver competitive advantages, economic efficiency and
transparency at the same time. For making successful decision for the construction project tender
and design bid build are the methods to be considered. In order to choose suitable contractors for
the projects floating tenders should be chosen after getting approvals. The issues of time and cost
management get minimized as soon as proper project procurement method is applied.
On the other hand, different negative aspects are also associated to the construction
procurement method such as intense competition can raised in the global market of construction.
Nontariff barriers as well as enhancing trends towards the integral service are the other negative
aspect for the procurement management method (Nojavan, Zare and Mohammadi-Ivatloo 2015).
This approach has relatively low managerial capabilities. Many consequences are also associated

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to bad project procurement methods. Both short term as well as long terms problems can occur
with an implementation of bad procurement method. It is the responsibility of the project
manager to make sure that the mist suitable and appropriate method of procurement is being
selected for accomplishing the project.
5. Position of the associated project stakeholders
The stakeholders associated to the project are required to be more focused to their job
roles and it is their responsibility to accomplish their assigned jobs within the estimated time and
budget (Sorunke, Omojola and Adeleke 2016). If the project manager and project team members
fail to do this then the designed objectives and framework will not be meet accordingly. For
different project activities separate stakeholders should be assigned depending on their skills and
knowledge. The association of the stakeholders to the project activities is elaborated in the below
section:
Name of the
stakeholders
Interest Medium Purpose Roles and
responsibility
Project manager To accomplish
the project by
meeting the
project
objectives
Email, face to
face meeting and
presentation
To submit the
final
procurement plan
To control and
monitor the
project progress
Finance manager To make
feasibility
analysis of the
Email, face to
face meeting and
presentation
Company’s
standard
documentation
To develop the
budget of the
project based on

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project presentation project
specifications
Architect To design and
develop the
blueprint of the
project
face to face
meeting and
presentation
Blueprint of the
construction site
To design the
outline in such a
way so that it can
attract the
consumers
Contractor To coordinate the
project with the
objectives and
other
specifications
face to face Successful
bidding
To gain
competitive
advantage and
commercial
success
Conclusion
From the overall discussion it can be concluded that three different procurement methods
selected for this project are competitive sealed bidding, small purchasing and non competitive
negotiaton. A modern process of procurement is recommended for the selected system. It is
expected, that if the position of the stakeholders are properly presented for the selected project
then, the project will be a successful one. It can be said that the issues associated to three of these
procurement methods are resolved with the competitive negotiation procurement approach. This
report also elaborates the profit and losses related to project procurement method. Expect the
mentioned three procurement method the construction project manager and the contractors

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should utilize the process of competitive negotiation procurement approach to avoid further
business clashes and financial losses. Not only this but also the ethical obligations that are to be
considered by the project manager of the construction project are also illustrated in this project.

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References
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