Procurement and Housing Construction: Strategies, Analysis and Results

This report delves into the complexities of procurement strategies within the construction sector, specifically focusing on housing. It examines the evolution of construction procurement, highlighting the shift from traditional methods to more strategic approaches. The report explores various procurement routes like traditional and design-build, pricing mechanisms, and the importance of tenders, including value for money and sustainable procurement. It also investigates key themes such as community benefits, collaboration, and the role of SMEs. The study includes a detailed literature review, research methodology, data collection, and analysis, culminating in findings, discussion, and recommendations. The abstract highlights the importance of adapting procurement strategies to address housing shortages, particularly in light of changing societal needs and economic factors. The report also addresses the challenges of providing affordable housing and the role of public procurement in meeting these demands. The study also discusses the importance of LA and HA collaboration to overcome obstacles in the housing development process.

PROCUREMENT AND HOUSING CONSTRUCTION

Procurement
Table of Contents
CHAPTER 1 INTRODUCTION 6
1.1 Research rationale 6
7
1.2 Research Aims 7
1.3 Research Objectives 7
1.4 Hypotheses 8
1.5 Research Questionnaire 8
1.6 Research background 9
1.6.1 Definitions 9
1.6.2 Housing stocks review 10
1.6.3 Budget Houses 10
1.6.4 Analyzing LA procurement 10
1.6.5 LA Housing strategy 11
CHAPTER 2 LITERATURE REVIEW 12
2.1 Introduction 12
2.2 Previous Literature 13
2.3 Related Literature 13
Page 2 of 80

Procurement
2.3.2 Procurement Strategy 14
2.3.3 Definitions 14
2.3.4 Best practice illusion 14
2.3.5 Core procurement strategy 15
2.4 Procurement Routes 15
2.4.1 Traditional 15
2.4.2 Design and Build 15
2.5 Management Contracting and Construction Management 15
2.6 Pricing Mechanisms 16
2.6.1 Change in Fixed price to Reimbursement 16
2.7 Tenders 16
2.7.1 Methods 16
2.7.2 Frameworks 17
2.7.3 New Themes 17
2.7.4 Value for money(VFM), Best Value(BV) and Most Economically Advantageous
Tender(MEAT) 17
2.7.5 Sustainable Procurement 18
2.7.6. SME’s 19
2.7.2 Community Benefits 19
2.7.3 Construction Benefits 19
2.7.4 Collaboration 20
2.8 Summary 20
Page 3 of 80

Procurement
2.9 Key Themes 21
CHAPTER 3 - RESEARCH METHODOLOGY 22
3.1 Introduction 22
3.2 Research Philosophy 22
3.3 Research Approach 23
3.4 Strategies 23
3.5 Methods 24
3.6 Time horizon 24
3.7 Nature of research design 24
CHAPTER 4 DATA COLLECTION 25
4.1 Data Type 25
4.2 Rationale 26
4.3 Public Opinions and Their Objectives 26
4.4 Telephonic Opinions and Their Objectives 27
4.5 Sampling 28
4.6 Limitations 29
CHAPTER 5- DATA ANALYSIS 29
CHAPTER 6 RESULTS 42
Chapter 7- Discussion 45
CHAPTER 8- CONCLUSIONS 48
CHAPTER 9 RECOMMENDATIONS AND LIMITATIONS 49
BIBLIOGRAPHY 50
Page 4 of 80

Procurement
Table 3: Questions based on adaptibility 58
Table 4: Questions based on security and location 59
Table 5: Summary decoded from table 1,2,3 and 4 59
Page 5 of 80

Procurement
Abstract
Construction sector including procurement demands continuous transformation and adaptation to
cope up with the changing environment. Environmental, social and economic factors are
involved in public procurement even which is driven by the key factors like stability, price
worthy and employment for the local or marginalized group. Whereas traditional view of the
evolution of construction procurement evolves risk factors, bulky process, unfinished legislation
increasing cost, untimely completion. To overcome this problem the main things needed are
speed, proficiency, proper planning for procurement. Proper planning also needs strategically
moves including teamwork, supplier’s cooperation, and new policies by government, justified
contracts, customer’s involvement, and partnership for all alternative approaches where trust,
belief and commitment will play the predominant role to maintain the balance in socio-economic
and environmental objectives. Thus this paper discusses on if the new strategies of procurement
will have a slightly better result from the traditional one to get the best result in the changing
society.
The burning problem of house shortage due to over and the increasing population does not really
get proper attention of government neither get some solutions. Experts are in the opine of
excluding the target of more house constructions no other initiative are taken. Now it comes to us
to take a look at this matter in its high time. The paper further looks into the matter of the attitude
and lifestyle of the buyers regarding the downsizing of the houses which firmly demands some
pull and push factors to take into account. To fight with this unsolved problem we need to first
decide houses according to age which needs a slight change in our outlook with the changing
social structure as well as we need to take care of the strategies if anything needs to be changed.
In the end, we may conclude with the condemnation of the future targeted houses.
Page 6 of 80

Procurement
CHAPTER 1 INTRODUCTION
1.1 Research rationale
It is worth mentioning the fact that, the procurement’s basic role is to obtain goods and services
in response to internal needs.
Generally, there are some general objectives which procurement follows :
• Highlight achievements like forecast, demand, market trends, quality, price, delivery with
internal customers to achieve integration.
• Buy products and services at the required specification that meets user’s needs along with the
right quantity and right price for delivery at the right time.
• Developing a strong relationship with other functional groups
• Supporting the organization’s need for a globally competitive base, In this area, the objective
is to support company strategies in key performances area, especially during new product
development.
• Executing business and speed insight implies to identify new sources of value generation
because being a business function it will be benefited from a centralized data repository.
• One of the major objectives of procurement is a transition where the category managers will
involve in major purchases of a delivery model while the rest of the procurement would provide
purchasing assistance.
Page 7 of 80

Procurement
• The final procurement objective is the mix of the most resourceful advisors like excellent
technology focused on customer delight. To fulfil this achievement, organizations invest their
smart technology in their human capital and in technology. Because only a great technology can
improve customer is purchasing experience.
All the procurement objectives are understood the procurement principles since it all
encompasses the theory of effective procurement, transparency, non-discrimination,
competitiveness, accountability, confidentiality, and fairness.
The purpose of Procurement has determined the method that is assigned during the process. With
shifting the factors like marketing conditions and technological advancement the procurement
function has set an example of rapid change. Supply management companies may face a serious
disadvantage if they don’t keep pace. The key benefits like Competitive Advantages, Efficiency,
Effectiveness, Morale, and Retention required thriving in the workplace. Even by changing
landscape, Development Strategies, Virtual Learning likely there is a wealth option and costly
skills can come with a case of development to turn to procurement centric programs.
1.2 Research Aims
The aims of this paper are to contribute to the development of the construction industries.
One of the main aims of procurement is to improve the service process and the purchasing
goods. Parallel it is concerned with the procuring with all the vital services, works and all of
the goods which lead a major role to an organization.
Most of the organizations chase some common aims as follow these are :
• Increasing loyalty and supplier participation
• Minimize rogue spend and increase spend under management
• Enhancing competitive advantage
Page 8 of 80

Procurement
• Eliminating the workaround processes
• Reducing cycle times
1.3 Research Objectives
It is worth mentioning the fact that, the procurement’s basic role is to obtain goods and services
in response to internal needs.
Generally, there are some general objectives which procurement follows :
• Highlight achievements like forecast, demand, market trends, quality, price, delivery with
internal customers to achieve integration.
• Buy products and services at the required specification that meets user’s needs along with the
right quantity and right price for delivery at the right time.
• Developing a strong relationship with other functional groups
• Supporting the organization’s need for a globally competitive base. In this area, the objective
is to support company strategies in key performances area, especially during new product
development.
• Executing business and speed insight implies to identify new sources of value generation
because being a business function it will be benefited from a centralized data repository.
Page 9 of 80

Procurement
• One of the major objectives of procurement is a transition where the category managers will
involve in major purchases of a delivery model while the rest of the procurement would provide
purchasing assistance.
• The final procurement objective is the mix of the most resourceful advisors like excellent
technology focused on customer delight. To fulfill this achievement, organizations invest their
smart technology in their human capital and in technology. Because only a great technology can
improve customer is purchasing experience.
All the procurement objectives are understood the procurement principles since it all
encompasses the theory of effective procurement, transparency, non-discrimination,
competitiveness, accountability, confidentiality, and fairness.
1.4 Hypotheses
The hypothesis is an idea, which proposed as a required explanation to highlight all the
procurement strategies in major importance. The hypothesis generally highlights all procurement
strategies. These procurement strategies used to improve the organization’s profit, reduce raw
materials prices and costs, and identify the better source of supply. There are some
procurement’s strategic perspectives which have taken great importance in multinational
companies.
Page 10 of 80

Procurement
1.5 Research Questionnaire
● What is the research method of the context?
● What are the Key aspects of the research?
● How can we develop a better procurement strategy?
● How hypothesis is related to procurement?
1.6 Research background
1.6.1 Definitions
Affordable’ the word clarifies the fact that something which can be grabbed by everyone
therefore affordable homes is the homes for everyone, less costly than the market price. It can be
for rent or sell commissioned by public sector whereas rented accommodation called by the
name of ‘council’ or ‘social’. The housing affordability first becomes popular in Europe and
North America. Three things are the basic need of a man – food, shelter and clothes. Keeping
this in mind homes need to be in moderate cost which can be afforded by all human being from
all the economic background.
Page 11 of 80

Procurement
1.6.2 Housing stocks review
House Price Index (HPI) BECOME 4.4% in Q3 from 4.9% in Q2 2018 according to the growth
rate of ONS. A lag is showing these differences between these two. There is a 6.1% deduction of
annual new build price up to 6.1% which is quite noticeable regarding 8.1% in Q1 2018. Price
growth of existing properties become 4.8% less which is 8.2% from the previous year. A draft
budget of 2019/20 is proposed for induction the Additional Dwelling Supplement from 3% to 4%
if this proposal is passed in the Parliament the rates will be changed which will be applied by
2019.
1.6.3 Budget Houses
Recession, other financial of private sector issues become the prime factors for affordable homes
where many persons are in need of shelter but economically not in a condition of affording a
commercial home. However, they see a ray of hope when the private sector started to recover.
Different other factors like transformation in social behavior, enthusiasm in single living and
ageing population also inspire the homes to be formed. Speedy recovery of this problem is
started regarding the quality of housing condition and the better neighborhood still according to
the government report there is approx 30000 homeless people with 39% fuel deficiency. To
solve this issue government allotted 6000 fuel annually whereas 4000 for a social rented house.
However, it needs to make an end to the demand more to be allotted with less pricing.
Furthermore, one issue should be taken care of that, ‘zero carbon’ homes production by the
sector.
1.6.4 Analyzing LA procurement
Page 12 of 80