con 4

• Non-traditional management-oriented systems include:

  • Management contracting system
  • Construction management system
  • Project management system
• Management contracting system:

  • Engages a management contractor (MC) through competitive tendering to provide construction management services
  • MC is part of the client’s management team and responsible for organizing, coordinating, supervising, and managing construction works
  • Project divided into work packages sub-let to subcontractors
  • Contractor provides necessary site facilities and deals with labor relation issues
• Merits of management contracting system:

  • Work can begin on site as soon as the first one or two work packages are designed
  • Overlapping of design and construction reduces time requirement
  • Contractor's practical knowledge and management expertise assist the design team
  • Works contracts are based on firm price tenders
• Demerits of management contracting system:

  • Uncertainty in the final cost until the last works contract is signed
  • Greater variations and re-measurement due to changes in design during construction
• When to use management contracting system:

  • Independent architect and design team desired
  • Need for early completion
  • Fairly large project with complex requirements
  • Changing employer’s requirements anticipated during the building period
  • Employer requiring early completion and maximum competition in price
• Construction Management system:

  • Involves hiring a construction manager to oversee project construction
  • Client selects traditional consultants for construction documents and construction manager through competitive tendering
  • Trade contractors or subcontractors execute specific work portions under construction manager’s supervision
• Duties of a Construction Management Professional:

  • Co-operation with client’s professional team
  • Preparation of detailed construction program
  • Determining site facilities and services required
  • Breaking down project into work packages and recommending suitable contractors
  • Coordinating works contractors to ensure work is carried out according to the master program
• Project Management:

  • Project manager supervises and controls project planning from site acquisition to project completion and final accounts preparation
• Duties of the Project Manager:

  • Coordinating services for site acquisition, planning, design, and construction activities
• Joint Venture:

  • Partnership between companies for building or civil engineering contracts
  • Joint venture is a separate business entity, project-specific, and described as a special-purpose partnership
• Merits of Joint Venture:

  • Pooling resources and spreading construction risks
  • Creates a stronger entity than individual parts acting alone
  • Suitable for contractors contemplating work in a new geographical area
• Partnering:

  • Mutual objectives of improved performance and reduced cost with continuous improvement
  • Applied to single jobs or multiple projects for cumulative benefits
• When to use partnering:

  • Technically complex projects with difficult specifications
  • Projects of a similar nature allowing continuous improvements
  • Uncertain construction conditions requiring joint problem-solving
• Merits of partnering:

  • Achieving optimum performance and productivity early in the process
  • Reduced or eliminated costs in abortive tendering
  • Structured procedures promote confidence and reliability
  • Improved risk identification and early problem resolution
• Demerits of partnering:

  • Absence of competition may lead to collusion
  • Targets for cost, quality, and time may be missed
  • Temptation to not declare true cost savings
  • Turnover of staff may lead to misunderstandings and lack of commitment
• Selecting Suitable Procurement System:

  • Procurement method chosen based on project type and client involvement
  • Factors to consider include client involvement, separation of design from management, client's right to alter specifications, complexity of the project, required speed, and certainty of price
• Management-oriented procurement systems follow a chronological process:
• Needs identification

  • Project Brief
  • Feasibility study
  • Design
  • Tendering and Contracting
  • Construction
  • Sectional Handover
  • Design
  • Tendering and Contracting
  • Construction
  • Sectional Handover
  • Design
  • Tendering and Contracting
  • Construction
  • Complete Handover
  • Phase 1
  • Phase 2
  • Phase 3
• Non-traditional management-oriented systems include:

  • Management contracting system
  • Construction management system
  • Project management system
• In the Management contracting system:

  • A management contractor (MC) is engaged by the client through competitive tendering
  • MC organizes, coordinates, supervises, and manages construction works
  • Project divided into work packages sub-let to subcontractors
  • Contractor provides necessary site facilities and deals with labor relation issues
• Merits of Management contracting system:

  • Work can begin on site as soon as the first one or two work packages are designed
  • Overlapping of design and construction reduces time requirement
  • Contractor's practical knowledge and management expertise assist the design team
  • Firm price tenders based on works contracts entered close to their commencement on site
• Demerits of Management contracting system:

  • Uncertainty in the final cost until the last works contract is signed
  • Greater variations and re-measurement due to changes in design during construction
• When to use Management contracting system:

  • Independent architect and design team desired
  • Need for early completion
  • Fairly large project
  • Complex project requirements
  • Changing employer's requirements anticipated during the building period
  • Employer requiring early completion and maximum competition in price
• Construction Management system involves:

  • Hiring a construction manager to oversee the project
  • Selection of traditional consultants for construction documents
  • Selection of construction manager through competitive tendering
  • Selection of trade contractors or subcontractors under construction manager's supervision
• Duties of a Construction Management Professional include:

  • Co-operation with client's professional team
  • Preparation and updating of detailed construction program
  • Preparation of materials and components flows
  • Determining necessary site facilities and services
  • Breaking down the project into work packages
  • Obtaining tenders from contractors and suppliers
  • Evaluating tenders and making recommendations
  • Coordinating work of contractors
  • Dealing with variations and providing cost estimates
  • Submitting applications for payments and settling final accounts
• Project Management involves:

  • Engagement of project manager through competitive tendering
  • Supervising and controlling project planning from site acquisition to completion and final accounts preparation
• Duties of the Project Manager include:

  • Coordinating services for site acquisition
  • Coordinating planning, design, and construction activities
• Contemporary procurement systems include:

  • Joint Venture
  • Partnering
• Joint Venture:

  • Partnership between companies for building or civil engineering contracts
  • Participants jointly and severally liable for contractual obligations
  • Can be in the form of sole proprietorships, partnerships, or corporations
  • Creates a stronger entity for pooling resources and spreading risks
• Merits of Joint Venture:

  • Pooling resources and spreading risks
  • Creating a stronger entity
  • Desirable for work in new geographical areas
• Partnering involves:

  • Mutual objectives of improved performance and reduced cost
  • Active search for continuous improvement
  • Agreed common approach to problem-solving
• When to use Partnering:

  • Technically complex projects
  • Projects of similar nature for continuous improvements
  • Uncertain construction conditions requiring joint problem-solving
• Merits of Partnering:

  • Achieving optimum performance and productivity early
  • Reducing or eliminating costs in abortive tendering
  • Developing long-term relationships for confidence and reliability
• Demerits of Partnering:

  • Absence of competition leading to collusion
  • Missing targets for cost, quality, and time due to constant improvement
  • Risk of not openly declaring true cost savings
  • Possibility of slackness and resorting to shortcuts
• Factors to consider when selecting a suitable procurement system:

  • Client involvement in construction process
  • Separation of design from management
  • Client's right to alter the specification
  • Clarity of client's contractual remedies
  • Complexity of the project
  • Required speed from inception to completion
  • Requirement for certainty of price
• It is important to understand where each form of procurement should be used and base the choice on the advice of consultants.
• Procurement refers to the process of acquiring goods or services from external sources through competitive bidding or negotiation.
• Construction projects are complex and involve multiple stakeholders such as clients, designers, contractors, subcontractors, suppliers, regulators, and communities.
• The construction industry is the largest employer in the world, with over 10% of global employment
• The selection of an appropriate procurement method depends on various factors such as the type of work involved, the level of risk associated with it, the desired outcome, and the availability of resources.