Project Management Processes and Procurement Strategies

This project delves into the intricacies of project management processes and procurement strategies within a civil contracting company, specifically focusing on the context of the UAE construction industry. The research begins with an introduction that explores the background, aims, objectives, and research questions. It then moves on to a theoretical background of project management, construction project management, and procurement management. Chapter 2 provides a conceptual analysis and literature review, examining project management methodologies, project life cycles, and procurement strategies. The methodology chapter outlines the data collection and analysis methods employed in the research. The results, analysis, and discussion are presented in Chapter 4, followed by conclusions, implications, and recommendations in Chapter 5. The project aims to identify ways to increase the efficiency of construction project deliveries by analyzing project process groups, procurement management, and exploring strategies to reduce project risks and increase profitability. The research explores the challenges faced in UAE civil construction projects and offers potential solutions for improving project outcomes.

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

scope or schedule which would need changes in planning. According to Pinto and Slevin (1989),
appropriate monitoring through timely feedback on execution can help establish control over
information and also avoid any crises or conflicts that can affect the project success.
Closure: This is the last stage of the project and involves formal closure of the project activities and
release of project resources.
Amponsah (2010) had a study conducted on project management practices used in construction
sector in Ghana. The study used project management process groups for managing project
requirements, planning, monitoring, evaluation, and project closure. It explored the impacts of process
groups on the project success. The study found that these process groups have strong impact on the
probability of project success. With increase in initiation activities, the likelihood of project success
increases as found in the study. The study also found that other process groups like executing,
monitoring and control increase chances of project success. Bakar, Razak, Abdullah, Awang, and
Perumal (2010) identified some factors that affect project success include effective project
monitoring, appropriate resource allocation, realistic scheduling, effective problem solving (Singh &
Singh, 2017).
Construction Project Management Processes
Project management activities are categorized into some key process groups and ten key knowledge
areas as per PMBOK project management methodology. The process groups include initiation,
planning, execution, monitoring, and completion but these are subject to modification based on the
type of the project. In case of construction projects, the stages are modified as of initiation, conceptual
design, Construction design, procurement, construction, commission, operation, and decommission.
Each process group is managed to maintain the project quality requirement and constraints of cost,
time and scope (Shyamala & Kothai, 2014).
Initiation: This is the first stage of any construction project which involves understanding of the
business value of the project and the feasibility study. Project managers usually prepare a business
case document to justify the need of the project and the business benefits that it would get to the
project owner (BIS, 2010). Feasibility study involves evaluation of the project with respect to project
objectives, costs, and timelines.
Designing: Deigning phase includes the initial conceptual design which ones approved is refined to
create the construction design. When comparing with basic project stages, designing can be
considered as the part of the planning. In the initial concept design, surveys and site appraisals are
performed. A lead designer may present the initial concepts to the project owner. Basic design options
are recorded and elemental cost plan is prepared for each accordingly. A number of steps are taken for
conceptual designing and these include formation of design problems, analysis for refining problem
definition, identifying potential solution, evaluation of alternatives, design selection, and modification
if needed (HEAGNEY, 2011). A functional design is later prepared considering project goals, risks,
resources, and responsibilities. The approach to designing could be top-down such that a reference
model is referred to from past experience and resources are allocated accordingly by diving major
tasks into sub-tasks. A bottom-approach can also be taken involving identification of basic elements
of a civil project and then their zoning into specific categories to move upwards in planning (Carnegie
Mellon University, 2003).
Procurement: In this stage, the materials, goods, and services required to complete the project are
procured. When comparing with basic project stages, procurement can be considered as the part of the
execution. Based on needs of a project, different procurement options can be identified. These can be
traditional methods, design-strategy, management contracting or public private partnership. In
traditional procurement system, the process is design is separated from construction and is the first
step which is followed by bid and build. The project owner or client controls the project design. It
follows sequential steps which makes it a lengthy process. In design and build method, design and
construction both are assigned to a single contractor at a fixed price (PMI, 2013). It typically involves

two stages of tendering. The client does not have any direct control over the construction design.
Management procurement contracts involve consultants who help in preparing design and define
construction project requirements. The consultants do not take care of construction as it is handled by
another contractor. Construction design and specifications can changes based on the constraints of
project budget. Public private partnerships involves collaboration between private and public entities.
The private sector is responsible for project financing, risk management, project design, management
and operations. Public sector determines project requirements, assesses proposals from the private
sector, support construction, monitor project and take care of payments (Nwatchukwu, 2012).
Construction: At this stage, the construction of a civil project begins and is completed by the end of
the stage. When comparing with basic project stages, this stage is also the part of the execution.
Construction stage begins with a pre-construction meeting in which decisions are taken about working
hours, material storage, site access, and construction quality control. During construction, contractors
are often paid based on the part of work completed. Each agent involved in project deliveries is
assigned a specific timeline for deliveries (Kerr, et al., 2014).
Commissioning: traditionally, it is also a part of the project execution but is recognized as a different
stage in a construction project. There can be different types of commissioning methods that can be
used including new construction commissioning, re-commissioning, retro-commissioning, and
monitor-based commissioning. In new construction commissioning, a systematic process of
verification and documentation of facilities is involved. It begins with predesign followed by a
warranty period during which construction is delivered. A project that has already been commissioned
earlier is repeated with re-commissioning to enhance optimization. Retro-commissioning is used for
systems or building that are already built but have not followed commissioning. Monitoring based
commissioning involves technologies for tracing project progress and integrated energy and other data
that helps in resolving any performance issues (Lindstrom & Schwartz, 2014).
Operation: Traditionally, a construction project is considered to be completed and at the stage of
closure when it is operational. However, from the point of view of the project life cycle of a
construction project, the life cycle stages go beyond the construction and thus, may also include
operations (LEVELSET, 2019).
Decommissioning: It is an additional phase in the construction project which involves release of the
project (Kerr, et al., 2014).
Procurement Management in Civil Construction projects
As per PMBOK guide, there are ten key knowledge areas in project management that include
integration management, scope management, cost management, time management, quality
management, resource management, communication management, risk management, procurement
management, and stakeholder management (Hossain, 2016).
Procurement is one of the important knowledge areas in project management which involves
purchasing and acquisition of resources for the project. In the initiation phase of a construction
project, decisions are taken on whether to make a part of purchase it from a supplier. A cost- benefit
analysis is usually performed to take a decision on procurement. Procurement management has some
key components that including planning, contract, controlling, closing, and documentation (JAVED &
GONZÁLEZ, 2017). Typical activities it would involve include planning procurement, soliciting
sources for procurement, selection, administration of contract, and closing.
A procurement strategy may be defined at the planning stage which would involve creation of a
contract in a way that it supports achievement of all the project requirements and minimization of

risks during implementation. There can be several alternatives to choosing an appropriate
procurement strategy. These include management of separate contracts for separate suppliers, single
responsibility general contract, and hiring of prime contractor who in turn manages other sub-
contractors. Each alternative may be evaluated for pros and cons to decide on which strategy would be
most suitable for the project. Contracts are then developed with considerations of responsibilities and
risks (Ewan, 2013).
In civil construction and engineering projects, materials and machines are procured and services are
taken from contracts. A procurement plan would define what is to be procured, what method to use
and when procurement should happen. The objective of a procurement plan is to ensure that
procurement strategy is favourable to the project such that it allows acquisition of goods and services
at appropriate cost while maintaining the needs of quantity, quality, and schedule (AAI, 2018).
A procurement manager needs to create a balance between different project variables and the risks
involved. A software can be used for planning so that procurement can be tracked and managed
timely. If planning is efficient, it can save time, reduce costs, deliver better quality, ensure meeting of
client needs and reduce wastage. Studies on procurement management across different countries have
identified some challenges in procurement such as lack of effective operating procedures, lack of
integrity, lack of procurement specialists, cost control challenges, and poor remuneration to workers.
Procurement is a key area that can contribute to the success or failure of a project. As per Eriksson and
Nilsson (2008), procurement procedures used at every stage of the buying process can affect the
project outcomes. There is often a choice that has to be made between cooperation and
competition in the governance form. Eriksson has formulated a framework for procurement
processes that identifies six key buying stages that include design, bidding invitation, bid evaluation,
contractor selection, compensation, and project performance evaluation. 30% of the cost overruns
and schedule overruns are caused by defaults in design (Eriksson, 2008).
A project owner chooses the details to be included in the designing and at times fail to specify some
details which can later cause rework. In design build contracts, the bidding process is based on
contractors are hired based on initial drawings that are not detailed enough. Post this, the
contractor can perform a detailed evaluation of project to come up with a detailed design to avoid
any design defaults before the procurement can begin. However, the influence of the client on the
design aspects of the project is reduced. In design-bid-build, the control is higher as the designs are
finalized between the two parties in collaboration. To ensure better quality of design and avoid
design errors, it is recommended that construction companies involve the contractor at an earlier
stage of procurement (Lessing, et al., 2017).
Bid invitations can be open to all contractors to submit quotes or closed tendering. Open invitations
provide transparency and allow competition but also hamper building of relationships with specific
contractors which is possible in closed bidding due to limited contractors participation. Fewer are
the contractors, better is project quality, work environment, and time performance (Cameron &
Duff, 2007). Once bids are received from the vendors or contractors for procurement, the next stage
is evaluation. 70-80% of the costs incurred in a construction project goes into procurement of
materials and services from contractors and sub-contractors and thus, selection of right contractor is
very important for which proper evaluation of bids is required. (Eriksson & Laan, 2007). A number of
factors based on which the bidders are evaluated could be price, competence, management
capabilities, experience, quality, collaboration skills, and financial stability. The evaluation can help
carve a path for collaboration between the project owner and the contractor which is critical to the
success of the project. Better collaboration reduce the risks of conflicts between parties and thus,
reduce probabilities of change orders thereby reducing costs related risks and enhancing profitability
(Alderman & Ivory, 2007).

Selection of the form of compensation can have cost impacts on the project. Fixed price contracts
can pose risks of conflicts affecting cooperation between contractors and project owner.
Compensation that is based on the incentives connected to the mutually decided objectives, on the
other side, can facilitate economic performance on the project. With appropriate selection and right
compensation model, one can expect good performance of the contractor. This needs a level of
monitoring by the project owner which can suggest how contractor is performing. Performance
evaluation gives some control to the client instead of leaving it completely on the contractor.
However, tight monitoring from the beginning of the project can pose risks to cooperation.
Appropriate procurement procedures may be chosen based on the success criteria of the project
determined by the performance on parameters like cost, time, quality, environment and innovation
(Eriksson & Nilsson, 2008).
In a civil construction project, the components to procurement management could be tendering,
planning, inventory management, and so on. A suitable method for procurement needs to be identified
so that the cost, quality and schedule of the project can be optimized. If a software is used for
managing or planning then its efficiency would also affect the results. Technologies used for
construction management today are designed with a principle of productivity in mind such that it
should assist a project team in reducing time needed for data analysis and project implementation.
ERP systems and software like Primvera and Microsoft Project can help increase productivity of
procurement activities. ERP can help improve transparency in an organization through information
sharing (Chong & Preece, 2014)
Construction Industry in UAE
A project is considered as successful only when it is completed on time and within budget as planned
as well as is able to meet all the project delivery and quality requirements. The construction industry
of UAE is very fragmented and thus highly complex. The industry is labour driven and thus, the
efficiencies of the projects are largely determined by how people perform on a project. Contractual
arrangements play a significant role in the process as they define the scope of work and
responsibilities of those involved (Markgraf, 2018).
The industry is however plagued by the delays that have become common on projects such that there
are very few projects that could be successfully completed within the planned schedule. This not just
affects the profitability of a construction project but when put together, it has a significant impact on
the economic development of the region. The delays on project can cause many problems in
construction projects such as cost overruns, time overrun, disputes, arbitration, abandonment and even
litigation in cases. Thus, it is essential to understand the factors that cause these delays and work to
improve them so that delays can be avoided (Friedlander, 2003).
A study conducted by Kabir, Al-Shayeb, and Khan (2016) found some factors that cause delays in
construction projects. These are design changes between projects, staggered flow of cash, and delays
in payments to suppliers and contractors (Assbeihat, 2016). Kaiser (2017) classifies delays into four
categories based on the source or factor of delay and these include consultant related, client related,
contractor related and other external factors. Delays from consultants can cause problems in planning,
procurement, and scheduling. Contactors can delay project execution work. Clients are often involved
in requirements gathering and approval and thus, could cause delays in these processes. Other external
factors would be labour disputes, weather fluctuations, legislative complications, and so on (Hammadi
& Nawab, 2016).
Schedule overrun can be seen as one major issue that causes major influence on most project
management factors as per Alhowaish (2015). They can lead to cost overrun as labour has to be hired
for a longer term and thus, have to be paid more than planned. This can put pressure on the clients
who have cost constraints and they tend to hold back the payments hampering the delivery capacity of

the team. If costs are too high, the profits are affected which can lead to further complications like
contractual disputes (Hendrickson, 2008).
Silverman (2016) talks about arbitration which is needed whenever there is a major contractual
dispute. This arbitrator is a third party between the project owner and the contractor who helps in
settling the dispute through negotiation. The arbitration also comes at a cost and affect the project
profitability. At times, even arbitration does not help in which case, the matter can get into litigation
which can be a major cost to the company (Fisher, 2017).
Procurement in Civil Contracting
There can be a range of possibilities in civil procurement methods. Regardless of the choice of
method, a procurement strategy must assist a construction organization in achieving its construction
goals. The choice of the procurement method can be made on the basis of the needs of the client and
other factors like need for speed, project complexity, risk. Competition, quality, flexibility, and
certainty (Markle, et al., 2015).
The objectives behind any procurement process are to ensure work completion in timely manner,
justify and fulfil all project requirements and meet all legislative compliances. Procurement systems
can be categorized into traditional, management, design and construct contracts. Traditional methods
include lump sum, measurement and cost reimbursement contracts (OECD, 2016). In lump sum civil
contract, project stakeholders decide the contract amount which is fixed based on the quantities of
materials procured. In measurement contracts, a contract amount is pre-decide but later the contracts
and re-quantified based on actual work completed. In cost reimbursement contracts, contract cost is
determined based on the actual labour cost with addition of mark up for attaining profits. Traditional
procurement methods are used when designers and construction contractors are independently hired
by the project owner and when the work needs to have a superior quality as needed by a client
(Pearson, 2013).
Design and build or construct method is another popular procurement method that is used for
technical complex projects that also have possibilities of scope changes during the progress of the
project. In this method of procurement, different tasks are assigned to different contractors and best
price is determined for each contractor hired for supplies or deliveries. In management contracts,
contractors are involved in the whole project development process and thus, these types of contracts
provide flexibility for accommodating changes (Turina, et al., 2019).
Construction Management contracts, a contractor pays to control schedules, outlines, and
development processes. In such contracts, it is essential to have contract management expertise in the
contractor as the contractor would need to take care of the whole construction project (Lam & Albert
P.C. Chan, 2005).
The internal and external environment of a project can affect the selection of the procurement method.
External variables that determine procurement methods can be competition, regulatory environment,
politics, globalization, finance, and information technology. Internal environment can include time
factors, quality factors, and cost factors. Specific considerations that project managers may make
while selecting a procurement method in a civil contracting work can be socio-economic factors,
client requirements, capital or cash flow, and project characteristics (Mathonsi & Thwala, 2012).
Socio-economic factors can include politics, nature of venture, market condition, and innovation.
Client requirements can include considerations of political obstruction and globalization as well as
have specific prerequisites defined. Capital or cost factors can be related to customer fees and other
cost elements. Project characteristics can cause variations in project life cycle and cause technical
complexities which is why they are important to consider when selecting a contracting method
(Walcroft & Caletka, 2012).

Different procurement methods may be analysed on the basis of a seven S model which is used for
evaluating them for selection. The model defines factors of consideration that are important in a
construction project. These include strategy, structure, systems, staff, skills, and shared esteems (Lam
& Albert P.C. Chan, 2005).
A strategy defines how an organization must use the assets obtained to accomplish project objectives
within scheduled time. Structure gives the framework at the project level defining the project delivery
system and administrative procedures that are used in the project. Systems include a set of methods
and procedures that would be used for project deliveries. Staff factor involves evaluation of the
capacities of the workers involved on the project. Their skills for development including
specializations are also important considerations in the decision making. Shared esteem refers to the
ideas that individuals in authority share with each other and the common values they carry along
(Rocca & Strube, 2017).
Specific selection criteria can be defined for procurement methods evaluation. This criteria can
include factors like time, certainty of time, certainty of cost, price competition, quality, flexibility,
responsibility, risks, and complexity. A traditional procurement can weigh higher on flexibility and
complexity while design and build contracts can fit well in terms of certainties of time and
responsibility parameters. Management procedures can serve good in maintaining time, cost, quality,
complexity, and responsibility but weigh low on risk factors. Traditional methods could be more time
consuming but at the same time can give sufficient time for project activities completion. In design
and build contractors, a higher risk is borne by the client because of design involvement (Patil &
Nadaf, 2017).
Issues in procurement
TFV theory of production gives three distinct views of product that are guided by different sets of
assumptions. These include transformation view, flow view and value views. Production view sees
production as a way of transforming inputs to outputs such that the whole process consists of the parts
of the processes combined. In the flow view, time is also added as an input to the process of
production and it emphases reduction of wastage from production. Value view suggests determination
of output considering value created for customers. Thus stresses on the importance of meeting the
needs of constructions in a construction project (Koskela, 2011). In procurement, production view is
often dominant which is why companies are mostly concerned about saving on costs. They understand
the requirements of the client and work to achieve the desired output with least expenses. However,
this view loses track of the concept of value for customers which is also very important for the
successful acceptance of a project output. However, consideration of the value view does present
major challenges as it can lead to an increase in the cost and demand adjustments in the schedule
which would affect the profitability of the project. With increasing complexity of the project, the
issues of such an adaptation become even more pronounced (Pekuri, et al., 2014).
To avoid such procurement issues, a procurer mostly consider the material or product to procure at
the lowest cost. This approach suffers from the fundamental requirements of taking care of the value
for the customer and thus, create a difference between the achieved value and the desired value.
Further, stakeholders may have their needs not completely fulfilled in this approach which can cause
problems of acceptance in the later stages of the project. Moreover, with increasing number of
stakeholders and their differentiating views associated with the project, taking care of value becomes
even more difficult (Salvatierra-Garrido & Pasquire, 2011).
While production view causes value to suffer, a focus on value would cause uncertainty on the project
in terms of time and cost management. The two problems of uncertainty and value loss need to be
minimized for which selection of an appropriate procurement strategy is a must. In civil contracts,