Procurement Systems Report: Analysis for Oakland Crossing Rail Project

This report provides a comprehensive analysis of various procurement systems for construction projects, focusing on assisting inexperienced public sector clients in selecting the most suitable method for the Oakland Crossing Rail Project. The report meticulously defines and outlines the key characteristics of four procurement systems: traditional, management contracting, design and build, and joint venture/partnering. It further details the implementation process of these systems, emphasizing the contractual and functional relationships involved. A significant portion of the report is dedicated to a comparative analysis, highlighting the advantages and disadvantages of each procurement system to facilitate informed decision-making. The report concludes with a summary of the findings and recommendations to aid in the selection of the most appropriate procurement strategy for the specific needs of the Oakland Crossing Rail Project.

Running head: PROCUREMENT SYSTEMS
Project management: Procurement systems
Name of the Student
Name of the University
Author’s Note

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Executive Summary
The paper mainly reflects on the analysis of different procurement systems for selecting the best
procurement system for Oakland Crossing Rail Project. The project aims to analyze different
procurement systems by defining their characteristics. In addition to this, the paper discuses the
process of procurement system implementation including contractual as well as functional
relationships. Furthermore, the paper compares both the advantages as well as disadvantages of
each of the procurement system effectively.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Definition and key characteristics of procurement system..........................................................3
2.1 Traditional procurement system............................................................................................3
2.2 Management contracting system...........................................................................................4
2.3 Design and build....................................................................................................................6
2.4 Joint venture and partnering..................................................................................................7
3. Process of implementing procurement system............................................................................7
4. Comparison referring to advantages and disadvantage...............................................................9
5. Conclusion.................................................................................................................................14
References......................................................................................................................................16

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1. Introduction
The paper mainly reflects on the development of a procurement system which is one of
the digital applications that is mainly utilized for regulating the purchase of different types of
goods and services. The main aim of the paper is to assists inexperienced public sector clients by
devising suitable procurement system for Oakland Crossing Rail Project. The paper analyzes
four different procurement system including traditional procurement system, management
contracting system, design and build system as well as joint venturing and partnering system by
highlighting its key characteristics. In addition to this, the paper also highlighted the procedures
of implementing the procurement system by successfully elaborating both the functional as well
as contractual relationship. In addition to this, both the advantages as well as disadvantages of
each of the procurement system are elaborated so that the comparison between different
procurement system can be done successfully.
2. Definition and key characteristics of procurement system
It is found that four different procurement systems are elaborated by highlighting their
definitions as well as key characteristics such that the team members of Oakland Crossing Rail
Project can determine the most applicable procurement system for their project.
2.1 Traditional procurement system
According to Dim and Ezeabasili (2015), traditional procurement is one of the system in
which the design work generally gets separated from the construction work. The developer as
well as client generally appoint proper architect for completing the design successfully and for
producing proper specification about the building.

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Characteristics of traditional procurement system
It is found that the traditional procurement system generally comes with very much high
quality of the work as the client has proper as well as closer control to the works. Beside this, all
the advices as well as construction advices which is mainly provided by the contractor as well as
consultant such that the client can be able to properly compare as well as considered which
budget as well as design for the project is more suitable (Bakar et al. 2016). In addition to this, it
is found that in traditional procurement system, all the tenders generally help in producing a
tender that is dependent on the same details and therefore the customers generally can be able to
get best or the lowest price with the help of competitive tendering. Besides proper construction,
cost will mainly be considered much accurate as the tender is dependent on the entire
specification as well as design (Coggburn 2017).
If proper comparison is made with all the different types of procurement method then the
traditional methods will be considered to be quite easier for the process of adoption. It is mainly
because this particular system had generally been utilized for a long time so both the consultant
team as well as contractors can generally remain very much familiar for solving issues and for
facing different types of risk that generally occur during the proper procurement of construction
project progress (Rajeh, Tookey and Rotimi 2015).
2.2 Management contracting system
According to Willging et al. (2016), management contracting is defined as one of the
procurement routes where the project client employs different subcontractors for the project
directly and it is mainly considered as an agreement between the project owners as well as
investors.

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Characteristics of Management contracting system
A management contract generally consists of three different components which are
elaborated below:
Conditions of the contract: The conditions of the contract are considered as the
lengthiest as well as most detailed part of the management which determines the parties in which
they are involved and the various functions which are being transferred to the management
company (Jefferies and Rowlinson 2016). This further outlines a number of rules as well as
responsibilities of both the parties and proper detail about the extent in which the party can be
able to properly influence the various operational functions.
Duration of the agreement: This particular section generally helps in specifying the
project duration for which the entire company of the management generally requires proper
enterprise charge which generally ranges from months to years. Therefore, it is necessary to set
some of the specific conditions.
Calculation of management fees: The contract which is management based must
discuss the method of compensation quite effectively. As per the discussion, the methodology
that is associated with computing the management fees generally ranges from a set of percentage
which is one of the specified sums which is mainly related to performance (Ferreira and Amaral
2016).
Additionally, in this particular form of contract system, the client generally employs one
of the management contractors in order to contribute from very early stage with other
consultants. In addition to this, the management contractor generally provides proper advice as

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well as expertise with the construction angle for positively influencing the design as well as for
successfully managing construction.
2.3 Design and build
It is stated by Deng et al. (2015) that the procurement system of design and build is
defined as proper arrangement where one of the specific contracting organization mainly takes
the entire responsibility on a lump sum of fixed price for proper bespoke design and for the
construction of the client projects. It is found that design and build contractors generally organize
their activities in various ways.
Characteristics of Design and build
One of the basic as well as important concepts that is associated with proper design and
build procurement is that it generally requires the project to be properly contracted to a particular
organization that is mainly responsible for design; procurement as well as engineering based
commissioning (Poirier, Staub-French and Forgues 2015).The first and the most important step
for the selection of the procurement method is that it must analyze the different project
characteristics on a global basis including all the technical requirements for proper design as well
as construction. In addition to this, the project generally ensures that the entire context in which
the entire project is delivered must be successfully understood as well as accounted for proper
plans in project.
An owner of the project must properly obtain a building which is generally helpful in
satisfying the needs of various goods as well as performance. It is identified that proper
performance generally helps the project in forming proper quality within the agreed time quite
effectively. Furthermore, it is found that design and build generally helps in meeting the various

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quality requirements for various types of complex as well as innovative building rather focussing
on simple, standard as well as traditional building (Tran et al. 2016).
2.4 Joint venture and partnering
According to Park and Kwak (2017), a joint venture and partnering system mainly
involves two or more number of business in order to pool their resources as well as expertise for
a achieving a particular goal. The main reason behind the formation of the joint venture is that it
generally includes proper business expansion, proper development of new product as well as
moving into new markets. This helps the business for its potential growth.
Characteristics of Joint venture and partnering
It is found that joint venture as well as partnering is considered as one of the best choice
for procurement. The proper focus of partnering based arrangement for properly elaborating the
various types of services which are required by properly leaving the private sector in order to
decide how properly the design as well as construction facility will be done (McKee, Wilson and
Dahl 2015). In addition to this, joint venture and partnering mainly involves proper private
financing which is considered quite suitable for smaller capital projects. The cost that is
associated with proper setting as well as management of partnering arrangement are generally
required for assessing the entire project value such that the benefits which will be effectively
derived from adopting the approach is successfully compared with the approaches of traditional
procurement.

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3. Process of implementing procurement system
It is found that in order to successfully implement a proper procurement system for the
Oakland Crossing Rail Project in Australia, a number of steps are undertaken which are
elaborated below:
Engage end users: Although, a number of innovative systems are generally used, most
of the people generally forget about the end users. It is found that there is no time that is mainly
scheduled for the employees in order to know the various changes. It is found that lack of
engagement is mainly visible during the initial phase of the project (Nurmandi and Kim 2015).
The lack of engagement is mainly visible during the project initial phase. Furthermore practical
experience reflects that people on the operational position at the beginning of the implementation
procedure generally considered important.
Methodological management: The next step in effective implementation is to properly
appoint a project manager. It is found that proper selections of a decision maker on the side of
the client are generally helpful in improving the both external as well as internal communication
(Ayhan and Ustuner 2015).Moreover, it is found that a project manager generally needs to
properly engage within the change management procedure by drawing up proper agenda by
successfully monitoring particular project phases.
Automate gradually: It is found that there are a number of benefit of procurement
process automation as it is quite essential to do it quite reasonably. It is found those proper
procurement platforms are considered flexible that means there are a number of exceptions
within an organization (AlKhalifah and Ansari 2016). Furthermore, automation generally helps

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in eliminating a number of issues for providing proper solutions that answers end user real needs
that may be considered difficult for defining the beginning of the entire project.
Defining real needs: After successfully defining the various real needs, it is analyzed
that B2B systems are considered as an important key. It is found that too many excessive needs
vs. real needs that generally have a negative impact on the organization. It is found that
switching on a number of functions are going to be used to a small extent is considered as one of
the main reasons of implementing failures.
Quick implementation: Every company generally requires proper implementation with
the help of the method that is considered to be quite quick, effective as well as low cost. As
implementation can be done effectively but it generally requires very much high cost. The
decision that is mainly associated with the cost generally needs to be made with the help of the
customers quite reasonably (Puentes and Sabol 2015). In order to successfully complete
procurement-based platform implementation objectives, it is generally suggested not to rush.
Focus on one problem as well as on its solutions: During the procedure of
implementation, one may meet with a number of expectations that one particular system can be
able to solve all the issues. It is found that the specification generally gets extended such that the
results in the budget get extended. Therefore, proper definition of problem that we want to solve
and properly focussing on its elimination is quite needed during the implementation of the
procurement system.
4. Comparison referring to advantages and disadvantage
It is found that in order to assists inexperienced public sector clients by devising proper
procurement system, it is necessary to properly compare four different types of procurement

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system by elaborating for selecting the most applicable procurement system for Oakland
Crossing Rail Project in Australia.

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4.1 Advantages of procurement systems
Traditional procurement
1. In traditional procurement, the construction costs are initially unknown and the costs can be
certainly achieved later.
2. In context to control, it is found that this procurement system the owner generally retains
proper control over the design as well as construction.
3. It is found that designs as well as construction are quite sequential which further results in
longer project schedules (Ambaw and Telgen 2017).
4. The owner generally acts as one of the arbiters for proper design as well as construction
related issues which generally occurs within each of the company.
Management contracting
1. A management contracting procurement system generally helps in providing continuity for
reducing the chances of disruption (Petersen, Houlberg and Christensen 2015).
2. Management contracting generally helps in saving money and especially when one needs to
pay the company as per the profits that are generated.
3. It helps in saving both time and money as management contracting generally frees up the
staffs and generally let them focus on priorities which will be helpful in establishing the
position of the company (Lonsdale et al. 2016).
4. One of the most important benefits of management contract is that they generally help in
reducing the maverick purchase and helps in minimizing supply risk.