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Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
University of Salford
School of the Built Environment
BSc (Hons) Architectural Design and Technology
Design and Build: A Procurement Strategy.
Olufemi Isaac Akinjiyan.
May 2015.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Abstract.
Building Procurement in the Construction Industry is seen as a vital aspect of building projects, if the appropriate Procurement Strategy (PS) is chosen overall success is certain resulting in effective control of the factors that affects procurement choices like project
timing, project cost, complexity, quality, communication and dispute amongst participants. This research work focuses on Design and Build (D&B) and aimed at finding out if D&B is preferred by construction professionals. To achieve this, three objectives were outlined; to investigate other PS, to determine the effects and relationship of time, cost and quality and
to showcase the advantages of D&B over other PS.
Qualitative research strategy was employed to derive a conclusion and the approach used for data collection was a case study of an ongoing public building project and a survey carried out on Procurement in the construction industry by Chartered Institute of Building
(CIOB). Respondents involved were construction professionals in both private and public sectors past and present. The focus was to determine how D&B is viewed in terms of timing, cost, complexity, quality, client’s requirements, communication and dispute amongst participants.
The findings from data collected pointed out that, if the appropriate PS is chosen, the overall success of the project is certain. The findings highlighted that, D&B is preferred for project costing up to £50 Million, barely allows projects to overrun, less occurrence of problem, project timing and cost are usually met, and meets most client’s requirements
particularly when it comes to who bears the project risk and known for proper communication amongst participants.
In conclusion, D&B is viewed as a PS mostly preferred by construction professional on both
small and large scale projects and on private and public projects. Bearing in mind that both Traditional and Partnering Strategies are also mostly preferred based on certain factors.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Acknowledgements.
First and foremost I give glory to Almighty God for his goodness, mercies, favour and
preservation of life. God who gave me the will power, wisdom and understanding by seeing
me through the programme with his continuous guidance and provisions. I say thank you
God for everything from the depth of my heart.
I express my sincere gratitude to my supervisor, Mr. Simon McLean for excellently guiding
me through and ensuring the success of this research work. I would like to say a big thank
to the lecturers, staffs and colleagues of Architectural Design and Technology and those of
the School of Built Environment for their support and advise throughout my course of
study.
I appreciate my mother Mrs Grace A. Akinjiyan for her motherly prayers and
encouragement. To my siblings, in-laws and the entire family members.
And dearest to heart, my better half, my brilliant and excellent wife Abimbola B. Akinjiyan
for her never ending prayers, support and encouragement. Thank you for words cannot
express how much I appreciate and love you.
To my beautiful princesses Oluwafifehanmi and Oluwafikayomi Akinjiyan, I appreciate your
prayers and you mean the world to me.
Not forgetting the United Kingdom Government for making this a reality through their
contributions towards the course financially, this gesture is greatly appreciated.
Thank you all and God bless.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Declaration.
I Olufemi Isaac Akinjiyan confirm that this work is mine, I have not plagiarized and there is
no hidden collusion. I have read and agree with the Declaration on Conduct of Assessed
Work Form on the student intranet.
Signed:………………………………………………………………
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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List of Figures.
Figure 1. Showing research strategy.
Figure 2. Conceptual Procurement Concept.
Figure 2.1. Categorisation of Building Procurement Systems.
Figure 2.2. Traditional Strategy Model.
Figure 2.3. Sequence in Traditional Strategy.
Figure 2.4. Joint Tribunal Contract.
Figure 2.5 Design and Build Model.
Figure 2.6. Sequence in Design and Build.
Figure 2.7. Construction Management Model.
Figure 2.8. Sequence in Construction Management.
Figure 2.9. Management Contracting Model.
Figure 2.9.1. Sequence in Management Contracting.
Figure 2.9.2. Project Partnering Process.
Figure 2.9.3. Procurement Strategies in relation to Financial Risk.
Figure 2.9.4. Relationship between Time, Cost and Quality.
Figure 2.9.4 a – d. Procurement Routes in relation to RIBA POW 2013.
Figure 3. Pictures of Gateway Project.
Figure 3.1a. Location of Respondents.
Figure 3.1b. Age of Respondents.
Figure 3.1c. Gender of Respondents.
Figure 3.1d. CIOB Membership Level.
Figure 3.1e. Job of Respondents.
Figure 3.1f. Sector of Respondents.
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Figure 3.1g. Number of Employee in Organisation.
Figure 3.2a. Response to Question 1
Figure 3.2b. Response to Question 2
Figure 3.2c. Response to Question 3
Figure 3.2d. Response to Question 4
Figure 3.2e. Response to Question 5
Figure 3.2f. Response to Question 6
Figure 3.2g. Response to Question 7
Figure 3.2h. Response to Question 8
Figure 3.2i. Response to Question 9
Figure 3.2j. Response to Question 10
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Table of Figures.
Table 1. Difference between Quantitative and Qualitative Research
Table 2a. Pro and Cons of D&B over other Procurement Strategy
Table 2b. Pro and Cons of D&B over other Procurement Strategy
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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List of Abbreviations.
PS - Procurement Strategy.
UK - United Kingdom.
D&B - Design and Build.
TS - Traditional Strategy.
MC - Management Contracting.
CM - Contracting Management.
PFI - Private Finance Initiative.
PPP - Public Private Partnering.
RS - Research Strategy.
BOQ - Bill of Quantities.
CDM - Construction Development Management.
RIBA - Royal Institute of British Architects.
POW - Plan of Works.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
Table of Contents
Abstract i.
Acknowledgement ii.
Declaration iii.
List of Figures iv.
List of Tables vi.
List of Abbreviations vii.
Chapter 1
Introduction
1.0. Background to Procurement. 1
1.1. Aim. 1
1.2. Objectives. 2
1.3. Methodology. 2
1.3.1. Research Approach choice. 3
Chapter 2
Literature Review.
2.0. Introduction. 5
2.1. Meaning of Procurement Strategy. 6
2.1.1. History of Procurement. 7
2.1.2. Construction Industry Analysis. 8
2.1.3. Factors Considered For Contract. 9
2.2. Procurement Route. 10
2.2.1. Factors Considered. 10
2.2.2. Selection Process. 11
2.3. Types of Procurement Strategy. 11
2.4. Separated Procurement Systems: TS. 12
2.4.1. The parties involved 13
2.4.2. Client’s Responsibilities. 13
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
2.4.3. Consultant’s/Contractor’s Responsibilities 13
2.4.4. Pros. 14
2.4.3. Cons. 14
2.4.4. Contract Type. 14
2.5. Integrated Procurement Systems: Design and Build. 15
2.5.1. Client’s Responsibilities. 17
2.5.2. Contractor’s/Consultant’s Responsibilities. 17
2.5.3. Pros. 17
2.5.4. Cons. 17
2.5.6. Contract. 18
2.6. Management-Orientated PS: Management Strategy . 18
2.6.1. Construction Management. 18
2.6.2. Client’s Responsibilities. 20
2.6.3. CM’s Responsibilities. 20
2.6.4. Pros. 20
2.6.5. Cons. 20
2.6.6. Contract. 21
2.6.7. Management Contracting. 21
2.6.8. Client’s Responsibilities. 22
2.6.9. MC’s Responsibilities. 23
2.6.9.0. Pros. 23
2.6.9.1. Cons. 23
2.6.9.2. Contract. 23
2.7. Discretionary systems: Partnering Strategy. 24
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
2.7.1. Pros. 24
2.7.2. Cons. 25
2.8. Procurement Strategies in relation to Financial Risk 25
2.9. Relationship between Time, Cost and Quality. 25
2.9.1. Pros and Cons of Design and Build over other Procurement Strategies. 26
2.9.2. Other Considerations. 28
2.9.3. Conclusion. 31
Chapter 3
Case Study and Survey Findings
3.1. Introduction. 32
3.2. Stride Treglown Limited. 32
3.3. Case Study Questions. 32
3.4. Answers to Questions. 33
3.5. Background Review: The Chartered Institute of Building (CIOB) 35
3.5.1. Research methodology 35
3.5.2. Questions. 37
Chapter 4
Case Study and literature review analysis
4.1. Introduction. 43
4.2. Analysis of Case study. 43
4.2.1. Analysis of CIOB Survey. 44
4.3. Conclusion. 47
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
Chapter 5
5.1. Conclusion. 48
5.2. The objective
5.2.1. Objective 1. 48
5.2.2. Objective 2. 48
5.3.3. Objective 3. 49
5.4. Summary. 49
5.4. Limitation. 49
5.5. Recommendation for future study. 50
5.6. Further research. 50
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Introduction.
1.0 . Background to Procurement.
In the Construction Industry there are various Procurement Strategies (PS) which include
Traditional Lump Sum, Design and Build (D&B), Management Strategy that comprises of
Contracting Management (CM) and Management Contracting (MC) and Partnering.
Procurement of buildings is described by Love et al, (2010), as a process absorbed in the
industry to determine participant’s structure of responsibilities, client satisfaction and the
overall success of projects. Selection of suitable PS is important to all participants (the
Design Team, Consultants, Main Contractors, and Sub-Contractors) in any given project.
This research is focused on D&B, however, other PS will be compared against D&B. They
will be critically discussed by explaining their selection processes and identifying their
strengths and weaknesses. How time, cost and quality effects PS with their relationship will
be examined also the strength of D&B over other strategies will be highlighted.
According to Frank (1993), D&B’s remarkable growth in the construction industry was
between 1980s and early 1990s. He stated that, different terms are used to describe D&B
such as Design and Construct, Turnkey and Package Deal. D&B is when a contractor
provides the design and construction under a single contract ensuring the building is to
standard. D&B has being employed as far back as 1950s where firms like IDC (now AMEC)
offered exclusively D&B services for buildings other than housing. The interest in D&B
services increased significantly in 1960s. It was the first PS employed in the Construction
Industry developing a different approach to the normal Traditional Strategy (TS) and it
waxed stronger into the 1970s and 1980s. Sequel to this clients became more interested in
other strategies and began to employ Management Contracting (MC) nevertheless, more
clients continued to use D&B.
1.1. Aim
The aim of this research is to find out if D&B is the preferred Procurement Strategy used by
construction professionals in the construction industry.
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1.2. Objectives
In achieving the research aim, the following objectives will be addressed:
To critically investigate other PS, their Selection Process, identifying participants
involved, contract type and highlighting their strengths and weaknesses.
To determine the effects and relationship of time, cost and quality in Procurement
Strategy.
To showcase the strength of D&B over other procurement strategies.
1.3. Methodology
The main approach is to use both primary and secondary data collection for the purpose of
achieving the aims and objectives of this research. The primary data collection will be from
the literature identified in the literature review and other academic sources. The surveys
carried out by previous authors in the subject area will be analysed and evaluated.
Naoum (2007), makes it clear that Primary literature is the most accurate source of
information as it publishes original research work. For the purpose of this research
academic research journals, government and non-governmental organisation publications
and professional institute publications will form the basis of primary data collection and
references because they contain enormous depth of information. While secondary data
collection are those drawn from primary data collection coupled with relevant textbooks
and research methodology textbooks.
In addition to both primary and secondary data collection, it is relatively important to have
a Research Strategy (RS) which Naoum (2007), defined as the process where research
objectives are questioned. Identified two types of RS as Quantitative and Qualitative
Research. However, the choice of RS used usually depends on the availability of information
required and purpose of study area.
Creswell (1994), explains that Quantitative Research is seen as object in ‘nature’ and
described as an investigation into issues based on theory and hypothesis, usually analysed
statistically and measured numerically to determine if theories and hypothesis are correct.
Whereas Naoum (2007), explains that Qualitative Research is ‘subjective’ in nature because
it explains experiences, meanings and description. Information gathered are classified into
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two main categories; Exploratory and Attitudinal. Figure 1 explains the RS further and table
1 highlights the differences between Quantitative and Qualitative.
1.3.1. Research Approach choice.
Naoum (2007), pointed out that the Case study approach is divided into three parts;
Descriptive: similar to descriptive survey but used on detailed cases
Analytical: similar to analytical survey but used on detailed cases
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Explanatory: theoretical approach to problem explaining causality and
showing linkages amongst objects of study.
And the survey approach is divided into two;
Descriptive: this answers question as: What is the process? How many?
Where? By counting numbers of respondents towards the subject area.
Analytical: this establishes relationships between objects in a questionnaire.
From the explanations made above this research work will use the Qualitative RS, where
exploratory research will be employed and the approach for data collection will be the
Case Study (Descriptive) and Survey (Descriptive) formats.
Once all the literature reviews, case study and survey are digested, the researcher will
evaluate the information in line with the subject area as suggested by Kumar (2005), that
the information acquired will be appraised in other to collate themes and issues associated
with the study area.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
CHAPTER 2
Literature Review.
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Literature Review.
2.0. Introduction.
In the last thirty years there has been an enormous amount of literature available in
relation to D&B which has resulted in choosing D&B over other PS.
Molenaar et al, (1999), explains that D&B project delivery is experiencing expansive growth
in both the private and public sectors, where owners are deviating away from the
traditional lump sum approach. They analysed completed public-sector building projects
based on the owner’s experience, level of design completion, design selection, contract
type and method of award with design process variations. The results obtained provided
insights for participants involved in procurement and those of the changing public-sector
procurement system.
On the other hand Ndekugri & Turner (1994), argued that as a method of procuring
buildings, D&B approach accounts for an increasing proportion of building construction
output in the United Kingdom (UK). The approach employed was the survey of contractors,
designers, and building clients regarding D&B issues. The focus areas of the survey were
circumstances in which the approach would be suitable, the project organizations
commonly employed on D&B projects, the difficulties commonly encountered by
practitioners and the attitudes of the construction professionals to the procurement route.
Their survey revealed that D&B is on the increase as many clients see it as means of
reducing disputes amongst participants in comparison to other PS aside from providing
better value for money. The approach can be used satisfactorily with all forms of projects
and is now accepted by more construction professionals.
In addition, Akintoye (1994), illustrated that D&B has become a popular mode of procuring
construction work in the UK, he conducted a survey of 52 construction firms responsible
for 25% of UK construction output in 1991 and examined their current views on D&B. The
feedback showed that, although, D&B is widely used, it is not favoured by contractors, who
would prefer the Develop and Construct approach (a TS approach) where consultants
provides them with the concept design and specification.
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Furthermore, Songer & Molenaar (1996), noted that owners of modern constructed
facilities are increasingly searching for different options of PSs. These methods include
D&B, CM and Turnkey. The primary selection factors of D&B identified by a survey they
carried out includes constructability, establishing project cost and timing, reducing cost and
claims on project size or complexity.
In another case study embarked upon by Molenaar & Songer (1998), it was established that
owners of Public sector were quickly noting new construction PS. The documented project
successes and changings in procurement laws were encouraging owners to sample D&B
approach. Hence, leading to a departure from the TS method. 122 case studies where used
and the Performance criteria analysed includes budget variance, administrative burden,
schedule variance, conformance to expectations, and overall user satisfaction. The
resulting outcome includes project complexity, owner design input, method of selection,
D&B market etc.
In response to all views mentioned above, Anumba & Evbuomwan (1997) stated that D&B
has witnessed significant growth in the UK construction industry over the last ten years and
now used on complex, private and public projects. They highlighted the benefits derived
using D&B, and these includes; the involvement of the contractors in the design process,
shorter lead times, greater price certainty, reduced construction time and improved
communication. On the contrary, the disadvantages ascribed to D&B includes high
tendering costs, reduced design quality and self-consciousness of changes by clients.
This Research Project will be based on the findings of previous survey and life case study of
ongoing project where emphasis will be laid on the aim of this research project to establish
whether D&B is the preferred PS used by majority of participants in the construction
industry. Also by investigating how other PS are selected, who the participants are, how
their Pros and Cons differ compared to D&B and how the effects and relationship between
time, cost and quality in D&B is implemented.
2.1. Meaning of Procurement Strategy.
Procurement of buildings is defined by Love et al, (2010), as a process adapted in the
construction industry; where participant’s responsibilities are structured, client satisfaction
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and project success are determined. The selection of appropriate PS is crucial to
participants involved. Generally, procurement is the process where construction
professionals comes in agreement with clients; to plan, design, construct, engage supply
chain partners in delivering construction projects that ultimately leads to client satisfaction
and value for money. Whereas Rowlinson & Mc Dermott (1999), argues that PS is to satisfy
client’s development or operational needs with respect to the provision of constructed
facilities for a discrete life-cycle. They further explained that it requires emphasise that the
PS must cover all the processes in which the client has an interest and the entire lifespan
of the building. Conceptually procurement is illustrated in figure 2 which clearly explains
the relationship between participants to a construction project.
2.1.1. History of Procurement.
The development of PS according to Morledge & Smith (2013), has been somewhat an ad-
hoc process, where the evolution of TS occurred naturally throughout the seventeenth and
eighteenth centuries. Construction projects were procured as separate trade-based
packages mostly carried out by individual tradesmen. This approach led to constant dispute
notwithstanding, it lasted for over 150 years. Masterman (2002), identified four phases in
contemporary PS. The first being the period (1945 -1972) when conventional methods of
procurement prevailed during the sustained economic growth. Followed by period 1973-
1979, a phase characterised by the recession where the use of non-conventional PS
increased relatively. Then, during the 1980s and 1989s, which was post-recession where
the experienced clients introduced other PS such as D&B and management-oriented
systems. And, finally, the phase started from the last decade till date which has been
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involved in recession and recovery, combined with the introduction of Partnering such as
Private Finance Initiative (PFI) and Public Private Partnering (PPP), a government initiative
to increase the construction industry performance. He also made it clear that by early
1960s, problems arose from separation of design and construction function in TS,
confirmed by the difficulty of apportioning responsibility for defects on completed projects.
Consequently, the integrated PS (D&B, Design and Construct etc.) was introduced.
Ashworth (2012), agreed with Mastermind that the integrated PS was developed as a result
of separation of the designer’s role from those of the contractor where they perform their
responsibilities individually with separate legal responsibility to the client. Furthermore
that D&B can be traced to ancient Mesopotamia where the master builder was responsible
for both designing and constructing the building projects, such as the Parthenon and the
Theatre of Dionysus in Classical Greece.
The master builder disappeared during the Renaissance because architecture and
construction evolved as a profession and complex projects were developed needing
effective construction methods, resulting in the need for design and construction specialist.
Frank (1993), stated that in the 1950s, few firms offered D&B services for buildings other
than residential, but in the 1960s, D&B increased due to participants seeking an alternative
approach to the TS and it became more popular in the 1970s and 80s, clients also diverted
to MC as an alternative to D&B.
2.1.2. Construction Industry Analysis.
According to Ashworth (2012), the changes in methods of procurements has been a huge
driving force within the industry where immense assessment is made between other
industries and countries around the world. Bearing in mind that each PS have their
advantages and disadvantages. For these reasons the choice of PS depends upon different
characterises such as;
Type of client
Type and size of project
Familiarity among client
Risk allocation
Time factor
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Quality factor
Consultants and contractors relationships
Forms of contract
Clients objectives
Choice of designer and consultant
2.1.3. Factors Considered For Contract.
In developing a contract for PS, the client needs to consider the following factors as stated
by RICS 2007, who carried out series of survey to determine the trends in PS and standard
forms of contract used. The approach was to compare between the following issues;
i. Consultant versus Contractor: the survey illustrates that D&B project is
underestimated compared to the contractor approach, where a contractor is preferred to
be engaged rather than a consultant. The advantages of using contractor are price
certainty, time management, great teamwork and comprehensive design fees.
ii. Competition versus Negotiation:
The contractor seeks to acquire construction contract by either selection, invitation or
recommendation. The client must establish the method of engaging the contractor
either by competition or negotiation. By competition the time, price and quality factors
are considered while a negotiated approach is considered if the following
circumstances occurs; early start, financial arrangements and site location.
iii. Traditional versus Alternative:
In recent times majority of strategic building project use the alternative method of
procurement rather than the TS. The study shows that whichever approach is taken
risk, Quality assurance, Size of project, aesthetics, cost and accountability are important
to consider.
iv. Measurement versus Reimbursement:
The two main ways of calculating cost in construction work is either by measurement or
reimbursement. The measurement contract approach allows the contractor to be paid for
work done by multiplying quantity by rate which allows for risks payment to the contractor
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while the cost reimbursement approach does not. When choosing between both contract
approaches Cost control, administration, contract sum and price risk should be considered.
2.2. Procurement Route.
Moreledge and Smith (2013), made it clear that any form of procurement route adopted
should achieve certainty of cost, time and quality. The route establishes contractual
relationships between all parties involved, choosing an appropriate route leads to the
success of the project because any mistake at this stage usually leads to undesirable
consequences. For complex project the client is advised to appoint a Project Director who
helps to ensure the client gets the project required, manage the client within the project
context, to resolve dispute amongst participants and to aid the construction team.
All procurement routes differ in relation to the following reasons;
The client’s financial risk
The availability of reasonable design information at the time of tender
Client’s control over design and construction stage
Availability of adequate information at the commencement of construction work
Contractor’s involvement and contribution in design and planning stage
Organization arrangement in risk, accountability and responsibility distribution.
2.2.1. Factors Considered.
Once a conclusion is reached, the selection factors to consider includes;
Client financial strength
Characteristics of project
Risk management
Project cost
Quality
Time
Factors outside project team control
Ability to make changes at various stages as project progresses.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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2.2.2. Selection Process.
Moreledge and Smith (2013), explains that clients with experience are capable of selecting
a PS they are familiar with, taking into account its main objectives, risk and success rate.
However, inexperienced clients have to seek advice from professionals with experience.
They also pointed out that the procurement route has two components, the first is Analysis,
where priorities are assessed and set in line with project objectives and the second is
Choice, which requires considering possible options, evaluating and selecting the most
appropriate. Conversely Turner (1997), revealed that the selection process requires
employer’s priority checklist, which is a guide line for discussion with the Design team. The
project priority list is considerably studied to decide which PS to use.
It is best practice to select the procurement route from assessing client’s needs and project
characteristics. By providing client with informed advice helps client’s to make correct
decision based on distribution of risk, time, cost, complexity, certainty and division of
responsibilities amongst participants.
2.3. Types of Procurement Strategy.
In establishing the types of PS available in the construction industry, Masterman (2002),
categorised adopted building PS as;
Separated PS: the client is mainly responsible for the funding and operation of the
project where design consultants and quantity surveyor are appointed as the design
team before a contractor is contracted to build the project. This is basically the
convectional system known as TS.
Integrated PS: This enables only one organisation to take full responsibility for the
design and construction of the project, allowing the client to deal only with one
organisation. The strategies included in this category are the D&B, Novated
D&B/Construct, Develop and Construct, Turnkey and Package Deal.
Management-Orientated PS: Here an organisation manages the project working
alongside design team and other consultants to develop design and manage the
operations. The two main systems well established in this category are
Management Contracting, Construction Management and Design and Manage.
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Discretionary systems: In this system the client structures the administration of the
project and uses the most appropriate PS available. Partnering Strategy is widely
used in this category.
Figure 2.1 illustrates the above stated categories of PS. After identifying the broad
categories of Building PS, this project will look mainly at Traditional, D&B, Management
Contracting, Contracting Management and Partnering.
2.4. Separated Procurement Systems: TS.
Turner (1997), explains that in TS the employer appoints consultants for design and cost
control at any stage and a main contractor is appointed to carry out construction work, it
can be accelerated where design overlaps construction i.e. by contracting and tendering
separate work in advance and by using a two-stage process to let the work, this reduces
pre-construction time. In both cases, certainty of cost is lost in having a quicker start while
the risks remains the same. Nevertheless, Roy, Adrian & Dean (2006), argued that TS has
the least risk due to level of certainty about design, cost and time if properly implemented
though usually slow prior to commencement of construction. Design is completed before
competitive tenders are invited, the successful tenderer enters into direct contract with
the employer and completes the project under the supervision of the design consultant. TS
is suitable for technically advanced buildings, used by employers with limited budget and
complex projects. Figure 2.2 explains TS model with the level of involvement of each
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participants. While figure 2.3 explains the sequence of TS in relation to the stages of
overlapping between designing, tendering and construction stages of building projects.
2.4.1. The parties involved
The parties involved in the PS generally includes the employer, designers, contractors and
sub-contractors who are responsible for different roles.
2.4.2. Client’s Responsibilities.
Developing an idea and funding the project.
Employs the consultants.
Bears the project risk.
Cost recovery if negligence is caused by consultants.
Clients have influence over design development due to having direct contractual
relationship with design team.
2.4.3. Consultant’s/Contractor’s Responsibilities.
Contractors submit priced cost and identifies financial risk for the project.
Contractors gets approval from client for additional time and cost if delay is certain.
Figure 2.3. Showing Sequence in Traditional strategy. Sources: Moreledge and Smith (2013)
Design
Tendering
Construction
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Consultants advise client, calculate cost and responsible for developing the design.
2.4.4. Pros.
Roy, Adrian & Dean (2006), pointed out the following Pros and Cons of TS;
Highly competitive and showcases fairness where contractors bid on the
specifications.
Employer’s involvement at design stage resulting to a functional design.
Price certainty is assured and changes made are easily rearranged and valued.
Very transparency).
Participants are confident with the approach due to familiarity.
2.4.3. Cons:
Does not allow for over lapping between stages and fails when contractors are
appointed before completion of design.
Attempting to speed up the process will result to cost and time reduction and
expensive dispute.
Longer duration of project due to commencement of construction after design is
completed
Contractor is not involved at design and planning stage.
Client bears project risk.
TS is unsatisfactory to clients for complex or large projects when certainty
necessary.
Conflicts occurs due to poor communication amongst between participants.
2.4.4. Contract Type:
Standard Building Contract with Quantities is recommended by JTC Ltd (2015), which is the
most popular form of building contracts used. This is justified because Bill of Quantities
(BOQ) is provided in TS. This form of contract can be subdivided into the following;
Standard Building Contract with Quantities: This is adequate for large projects
designed by employer and BOQ are provided. The Quantity Surveyor and contract
administrator are employed to administer the process. Suitable for both private and
public projects and projects done in sections.
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Standard Building Contracts with Approximate Quantities: Used when the full
extent of works cannot be quantified at tender stage due to limited time to prepare
BOQ. It is suitable for projects done in sections, equally used for both private and
public projects.
Standard Building Contract without Quantities: Allows the employer to provide
both the drawings and specification or work schedule to the contractor and allows
the contractor to determine the quality of work required. Used in complex,
private/public projects.
Subcontracts: Used in conjunction with the three forms stated above and available
are different forms used to determine if subcontractors are required to design any
special part of the work.
2.5. Integrated Procurement Systems: D&B.
Roy, et al (2006), explained that a contractor assumes the risks and responsibility for
designing and building the project in return for a fixed price. In fast tracking the project,
construction usually starts before detailed design is completed and client’s requirements
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not included in brief will cause a change to the contract giving rise to high cost on tender
documents and project. Turner (1997), concurred by explaining that one organisation is
responsible to the client for designing and constructing a project, where inviting tenderers’
to bid, selecting tenderers, developing client’s requirements and establishing the need to
build are components of D&B. Before entering into contract it is vital that the brief and
performance specification are defined. D&B is suitable for standard or simple projects,
inexperienced clients and repeat works.
Figure 2.5 explains D&B model with the contractual relationship and level of involvement
of each participants. While figure 2.6 explains the sequence of D&B in relation to the stages
of overlapping between designing, tendering and construction stages of building projects.
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2.5.1. Client’s Responsibilities; Turner (1997).
Client’s desire to build
Contractors are provided performance specification by client at tender stage.
Design team are employed by client to prepare project brief and carry out
preliminary.
Client’s specification interpretation takes preferences over the contractor’s
specification.
2.5.2. Contractor’s/Consultant’s Responsibilities:
To develop the design from project brief and build the project.
Detailed proposal are submitted to client in respect to design brief.
Both parties are responsible to provide client with a building fit for purpose.
Contractor usually appoints the consultants and subcontractor.
Carries project risk.
Involved in planning and designing of the project.
2.5.3. Pros. Roy, et al. (2006),
Client transfer risks to the contractors.
Contractors are involved in planning and design of the project.
Before construction starts, certainty of price are obtained provided alterations do
not occur and client’s requirements specified correctly.
Overlapping of stages reduces project timing.
Only one firm or construction company is dealt with by client.
Little or no disputes and better novation.
Team working is faster and client gets a fair price.
Communication amongst participants are improved.
Client’s requirements are prepared carefully based on desires.
2.5.4. Cons. Chappell (2005),
If alterations occurs additional fees are paid by client.
Delay during approval of design development period causes disputes.
Lower quality of products are associated with D&B.
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Roy, et al (2006) points out that clients experienced difficulties in prepare a
comprehensive brief.
Comparing bids are difficult due to each stage being different and project prices
differs due to project programming between bidders.
Alterations to project by client are costly.
Expensive tendering cost due to no BOQ and project quality of design and materials
may suffer.
2.5.6. Contract.
Ashworth (2012), established that D&B contract is used where detailed contract provisions
are necessary and client’s requirements have been prepared and provided to contractors.
Thus, contractor is responsible for carrying out the design and construction work. Usually
this form of contract is not advisable where the contractor is not responsible for both
design and construction. JCT Ltd. (2014), indicated that works are carried out by the
contractor for D&B and best form of contract is D&B Contract and reasonable because
contractor are allowed to complete the design and execute the works by providing detailed
documents. These document outlines requirements, price and payment are in lump sum
with periodic or interim payments. Framework agreement, Pre-Construction Services
Agreement (PCSA) and Pre-Construction Services Agreement (Specialist) (PCSA/SP) can be
used with this contract.
2.6. Management-Orientated Procurement Systems: Management Strategy;
Walker & Hampson (2003), explains Management Strategy is seen as non-traditional PS
that allows contractors get involved early in design development process and delivering
quality value. Management strategy is divided into; Construction Management (CM) and
Management Contracting (MC).
2.6.1. Construction Management.
In this strategy, the contractor is the consultant that advices on designing and constructing
methods. Roy, et al (2006), points out that client spread the risk by not allocating
responsibilities to an individual main contractor. The design team employed by client and
a construction manager is contracted to manage, coordinate design, construct and
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facilitate the building work. Figure 2.7 explains CM model with the contractual
arrangements and level of involvement of each participants. Figure 2.8 explains the
sequence of CM in relation to the stages of overlapping between designing, tendering and
construction stages of building projects.
Also highlighted two forms of CM as Agency CM (in which the CM undertakes the role of a
consultant providing advice and coordinating construction works for a fee) and Direct CM
(where the CM undertakes works for a guaranteed maximum fee or negotiated price
usually when design is in advanced stage). Other variations of CM includes on call
contracting, full cost reimbursement and guaranty maximum price.
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2.6.2. Client’s Responsibilities.
Client appoints trade contractors directly.
Client involved in design and construction stages.
Appoints project design team that assess the recommendations of cm.
Client employs a project management that is technically astute.
2.6.3. CM’s Responsibilities.
Coordinates design team supervises the construction process.
Bears no risk due to no contractual link with design team and trade contractors.
Liable for negligence by underperforming.
Draws up preconstruction programme.
Paid a fee for managing the construction.
2.6.4. Pros.
Moreledge and Smith (2013),
Reduces confrontation and dispute between participants.
CM is involved early.
Design and construction stage overlaps.
Increased competition for construction work on large projects.
Proper accountability.
Contract variations are few.
Nominated trade contractors are not needed.
2.6.5. Cons.
Little certainty where speed is required.
Client bears all risk on final cost.
Client must have confidence in design team and contractors.
High exploitation.
High level of supervision and compliance.
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2.6.6. Contract:
CM Contract is suggested by JCT Ltd (2015), for this strategy, it is acceptable because the
client appoints different contractors to carry out construction works and CM to project
manage it for a fee. Ashworth (2012), explains that the contract is between the client trade
contractors in conjunction with Construction Management Agreement. It is appropriate for
employer having a direct contract with trade contractors while the construction manager
administers the conditions on behalf of employer. He also highlighted that different forms
are used for this contract which includes the following;
Construction Management Trade Contract
Construction Management Trade Agreement
Construction Management Tender
Construction Management Trade Contractor Collateral Warranty for a Funder
Construction Management Trade Contract Collateral Warranty for a Purchaser or
Tenant
Construction Management Guide
2.6.7. Management Contracting.
According to Cox & Clamp (2003), the client appoints consultant to prepare design with
specification and Managing Contractor is selected through tender. MC are Paid on the basis
of scheduled service, prime cost and management fee. Roy, Adrian & Dean (2006), explain
MC as the process where MC is appointed to manage the building process and paid a fee.
Usually achieving cost certainty is not certain until all works are appointed and depends on
high degree of trust between participants. MC is appropriate for large scale projects and
only large construction firms with experience use the strategy.
Figure 2.9 explains MC model with the level of involvement and contractual arrangements
of each participants. Figure 2.9.1 explains the sequence of MC in relation to the stages of
overlapping between designing, tendering and construction stages of building projects.
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2.6.8. Client’s Responsibilities.
Moreledge and Smith (2013),
Client operates the strategy.
Client must provide useful brief to consultants.
Client selects qualified and committed team.
Cost time and information control is required.
Client is involved in all levels of the project.
Client is flexible on design matters.
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2.6.9. MC’s Responsibilities.
MC acts on behalf of the client.
Selects specialist subcontractors and orders materials.
Pays all works contractors.
MC has contractual links with all participants.
Manages and executes the project.
Appointed by client for advice and not directly involved in carrying out any
construction work.
2.6.9.0. Pros.
Any design alterations do not affect project cost.
Design and construction overlap.
Time saving potential due to over lapping of design and construction stage.
Enables contractor’s contribution to design and project planning.
Risk and role of participants are clear.
Client has direct contract with trade contractors and pays them directly.
Changes can be accommodated provided packages affected have not been let.
2.6.9.1. Cons.
Design is completed only when client is committed to the project.
Poor certainty is unknown at early stage.
Committed participants depended on.
Design work coordination is difficult.
Trade packages are let before price certainty is achieved.
2.6.9.2. Contract.
Management Building Contract is used as indicated by JCT Ltd (2014), because it allows
client to provide uncompleted design. The MC employs other works contractors to execute
construction, administers the conditions and manage the project for a fee. Price is based
on prime cost of the project plus a fee for the management contractor. Framework
Agreement and Pre-Construction Services Agreement (Specialist) can be used with this
contract. The contract is associated with large scale projects that requires early start, where
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full design information are not prepared ahead of work commencing and where design
may be sophisticated or innovative in nature as emphasised by Ashworth (2013).
2.7. Discretionary systems: Partnering Strategy;
Construction Industry Institute (1991), describes partnering strategy as a long term
obligation among two or more organisation for attaining common objectives by maximising
the potential resources of each participant. In achieving a common goal, this relationship
is usually based on trust and an understanding of each individual’s expectation and values.
Figure 2.9.2. Showcase the project partnering process.
According to McDermott (2014), partnering strategy is divided into three parts; First
generation (which is project based), Second generation (a series of projects for one client)
and Third generation (building a virtual organisation).
PS is implemented by using a range of procurement arrangements, where risk and rewards
should be shared appropriately and the employer should pay the partners an agreed sum
for overhead, profit plus and all genuinely incurred costs.. The employer selects contractors
based on experience, past performance and cost management. Contractors are guaranteed
series of project by employer where project cost estimates are developed collaboratively.
The strategy arrangement usually last for 3-7 years.
2.7.1. Pros.
Continuous flow between construction materials and supply chain.
Reduces waste, cost effective and develops better designs.
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Incorporates new technologies and encourages effective working.
Transparent payment method (like project banking).
Objectives of participants are maximised effectively.
2.7.2. Cons.
Open book accounting is required.
Rigorous aiding required.
Participants must be trustworthy and committed.
Time consuming.
2.8. Procurement Strategies in relation to Financial Risk:
There is a level of financial risk in each PS which the employer and contractors are able to
contain, the figure 2.9.3 below shows the relationship of risk.
2.9. Relationship between Time, Cost and Quality:
Turner (1999), explains that in the designing and construction of buildings in the
construction industry relating to PS, a balance of circumstances existing between time, cost
and quality must be established. Where each either of them must probably or not always
pull against one or both of the other two. In real life projects where quality and cost must
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be achieved it takes longer time to achieve the task. Figure 2.9.4 shows the relationship
between time, cost and quality and further illustrate ways of achieving a balance between
these constraints. These factors will looked at further in the following where they will be
analysed for better understanding and how they affect or influence PS choices.
2.9.1. Pros and Cons of Design and Build over other Procurement Strategies.
In showcasing the Pros and Cons of D&B over other PS, the Pros and Cons pointed out
above is tabularised, as seen in table 2 below.
It was highlighted from table 2/&b that D&B has the following advantages over other PS in
the area of Price certainty, Project time, Speed and Project Scale: especially for projects up
to £50 Million, while, Partnering is mostly used for projects above the £50 Million. D&B
carries the entire project risk making is favourable amongst clients, used in both private
and public sector and is known for ensuring effective communication amongst participants
leading to collaborative working. D&B reduced disputes amongst participants compared to
TS, CM and MC where disputes occurs due to lack of negligence and other reasons. It
encourages Overlapping of design and construction stage and allows contractors to
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contribute in the planning and designing stages as against TS and Partnering. Overall the
client is comfortable with D&B because it allows the client to have contractual agreement
with just one participant.
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2.9.2. Other Considerations.
Procurement strategies cannot be discussed without understanding how it relates with the
Royal Institute of British Architects (RIBA) Plan of Works (POW) and how it fits with the new
Construction Development Management (CDM) coupled with their impacts on the various
PS.
According to RIBA the POW was developed in 1936 and has been used in the UK since then
as a model for building design and construction process. The structure served architects
and stakeholders involved, although amendments had occurred over time, the POW 2013
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is the latest amendment which offers the opportunity to undertake a fundamental review
of the RIBA POW, to ensure alignment with best practice from all construction professionals
involved and to provide a renewed framework which will be fit for purpose for the next
generation.
RIBA developed a genetic procurement task bar that allows participants involved in
procurement to generate their bespoke POW by selecting their proposed procurement
route. Once selected a specific POW will be generated showing the task bar that includes
the specific procurement and tendering activities at each stage. This is indicated in figure
2.9.4 a - d and explained below;
a) Traditional: The concept design starts at stage 2 through to the technical design
stage where project is issued for tender, tenders assessed and building contract
awarded.
b) Design and Build: The concept design starts from inception stage zero through to
stage 4 (technical design) by overlapping stage 3 where project is issued for tender,
tenders assessed and building contract awarded on basis of contractor's proposals
before construction works starts.
c) Contracting Management: At stage 2 the Bidding contractors submit concept
designs for appraisal and preferred bidder develops design. Building Contract is
awarded based on contractor's proposals at stage 3 through to 4 after which
construction work.
d) Management contracting: tender to select contractor and building contract is
awarded in stage 2 before the design is developed overlapping straight through to
stage 4 where design information is issued in agreed work packages for tender
before construction commences.
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Trada (2007), explains the aim of CDM is to combine Health and Safety (H&S) and welfare
into the management of project by ensuring everyone involved in construction work
together as a team. Improve planning, management of projects and identifying hazards to
eliminate them at planning and design stage. Ensures competent contractor and
subcontractors are appointed by targeting issues that can improving H&S.
HSE (2015), made it clear that CDM 2007 has been reviewed to CDM 2015 with the
following changes; the replacement of CDM Coordinator by a Principal Designer for the
planning, managing, monitoring and coordination of pre-construction phase/H&S. Principal
Designer and Principal Contractor will be required on all projects where there will be more
than one contractor working on the project.
As a result of these changes, the procurement will fit with the new CDM 2015 from
inception, where all participants will be involved from the planning, designing and
construction stages through to the handover of the project to allow for effective soft
landing which will aid the overall facility management process.
Cabinet office (2015), explains that the Government Construction Strategy of May 2011
acknowledge the importance of improving the value offered by public sector construction
and within this “soft landings” was identified as a way to improve performance of buildings
and to meet the requirements of end users. This reflects a smooth transition from the
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design and construction phase to the operational phase. This was brought together within
the Government Soft Landings policy that will be operational in 2016.
Soft landing should fit into procurement early by ensuring owner and prospective end-user
engagement in the design and construction process because statistics shows that the on-
going maintenance and operational cost of a building during its lifecycle outweighs the
initial cost of construction.
2.9.3. Conclusion:
In a nutshell procurement procedures are dynamic to suit the ever changing needs of the
society especially the construction industry. There is no set solution because each project
requires different level of risk, quality and time scale. Bearing in mind that various factors
are considered carefully before making a decision and ultimately the employer’s interest is
most important by identifying their objectives and balancing them with PS available. CIOB
(2010), makes it clear that by comparing which PS is best, seems impossible because
construction projects differs substantially from project to project and are bespoke in
nature. Based on all the findings in the literature review, the PS employed by employers
and construction professionals in the construction industry are based on series of issues.
These issues must be considered in-depth before any decision is made because a wrong
choice will incur additional cost to the client or other parties bearing the financial risk
depending on the type of strategy used. In addition, the client’s interest must be
paramount at all times in decision making and carrying out the works mainly because the
client wants a building fit for its purpose with quality, time and cost considered at the same
time.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
CHAPTER 3
Case Study Review.
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Case Study Review.
3.1. Introduction.
This chapter will look at a real life case study to understand the choice of PS employed by
parties involved. A project carried out by Stride Treglown Limited (an architectural firm)
will be used as case study and the second is a survey on “Procurement in the construction
Industry “carried out by the Chartered Institute of Builders (CIOB) in 2010.
3.2. Stride Treglown Limited.
Background Review: This is a top ten United Kingdom Architectural Practice with over
£14million turnover, delivering excellent projects to their clients and involved with both
building and landscape. Stride Treglown have commercial awareness because they strike
a balance between the sometimes conflicting aspects of time, cost and quality a major
aspect of PS process. They deliver building construction projects using different forms of
PS, for instance, they used D&B was the Gateway Project of the University of Salford and
Student Living Space at the University of Bath. Nevertheless, other procurement strategies
have been used in projects such as the Eco Home (Orchard Close scheme) in Almondsbury,
Bristol and the new Sainsbury’s store in Portishead, to mention a few.
3.3. Case Study Questions.
The following questions were asked in other to deduce whether D&B is the preferred
procurement strategy in the construction industry;
Q1. Name of project?
Q2. Why was the procurement strategy employed preferred?
Q3. Is Design and Build a preferred choice to other strategies?
Q4. How does Time, Cost and Quality determine the choice of Strategy?
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3.4. Answers to Questions.
In responses to the questions above the Divisional Director (North West England) of Stride
Treglown responded that;
Answer 1. The name of the project is the Gateway Project of the University of Salford,
Manchester. The ‘Gateway Project’ is a £55 million project that was designed primarily for
students of the School of Arts and Media with spaces for students from other disciplines to
use. The facilities within the building includes a theatre, recording and photography
studios, café areas, performance and rehearsal spaces, computer suites and lecture
theatres. Picture 1-3 shows the Gateway Project.
Answer 2. The questions are very tricky to answer because every employer has a different
view, but the overriding factor is almost always financial and procurement choice is about
identifying and apportioning risk.
Answer 3. The process of Gateway Project Salford was an odd two stage process, carried
out after a full set of production information and a BOQ had been produced – which is a
more ‘traditional’ tender pack. However, it was always understood that it would be D&B.
Leaving the tender later on in the design process means that the client can have more of a
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say on quality. In Salford’s case, there was a high degree of specialist space that they
wanted control over.
i. Stage 1 involved interested contractors submitting responses to qualifying criteria
in order for the university to shortlist five or six companies for full tender.
ii. Stage 2 was the tender process and involved pricing against a full set of drawings/
specifications and a BOQ. The lowest price (BAM Construction) was chosen then a
long period of vetting was undertaken. The final contract sum was agreed and a
D&B contract entered into. The majority of the design risk had been worked
through.
iii. The reality is that almost all contracts are now some form of D&B. It is the ‘default’
setting. Traditional forms are still in use for refurbishment and listed building work
where design risk remains high. They place the risk on the client’s side. For the
client, value is obtained because tender figures, reflecting the reduced risk to the
contractor, are proportionately lower.
iv. Extensive ground investigation had reduced that risk too. The resultant fixed price
contract placed all the remaining risk in the hands of the contractor.
v. Lately there has been a shift in emphasis to a more collaborative approach.
Partnering contracts – like NEC 3 – have become popular, especially with public
sector clients.
Answer 4. The old triangle of cost/quality/time still figure in procurement discussions but
are not necessarily the things that drive contract choice.
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Case Study (Survey Review)
3.5. Background Review: The Chartered Institute of Building (CIOB): CIOB was
founded in 1834, an organisation made up of construction professionals in the United
Kingdom, the body is recognised internationally today and represents the public in ensuring
the built environment is well structured. The main mission of the organisation as stated by
CIOB (2010), is to contribute to the creation of a modern, progressive and responsible
construction industry that will meet economical, technological change, environmental and
social challenges faced in the 21st century.
CIOB carried out a survey on “Procurement in the construction Industry” in 2010. It was
the first ever survey by CIOB on procurement in the construction industry and is used in
this research project as a case study. The survey quoted by CIOB (2010) “examines the
stance of construction industry professionals on the current state of procurement within the
sector, with a particular focus on the UK industry. It centres on the role of the client, current
methods of procurement, the effects of the spending cuts both now and in the future, the
prevalence of practices such as suicide bidding, and what can be done to improve
construction procurement practice”.
3.5.1. Research methodology:
1) The survey was conducted using an internet-based questionnaire; open for four
weeks between 18 October and 12 November 2010, which respondents could
access through the CIOB website (www.ciob.org).
2) Respondents were asked general demographic questions regarding their age,
gender, CIOB membership level, location, job level and sector, and the number of
employees within their organisation. Figure 3.1a - g illustrates the categories of
demographic questions asked and responses received.
Series of questions were asked in the survey relating to procurement choice, selection
process, approach, etc. Questions relevant for the purpose of this research work were
adopted and the responses are illustrated alongside the questions in figure 3.1a – g.
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3.5.2. Questions.
Q1. Do you believe that good procurement is always synonymous with a successful project?
Q2. Of the following procurement methods, which one do you perceive to be the most
efficient and suitable for the following scale of projects of up to £5 Million, between £5 to
£50 Million and over £50 Million?
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Q3. Of the following procurement methods, which one do you perceive to be the most in
need of restructuring?
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Q4. What do you view as the most significant problems arising during the procurement
process? (Select up to 3).
Q5. What percentage of projects during your career have you been involved in that have
overrun in terms of cost?
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Q6. Which procurement method was primarily used on those projects that overran in terms
of cost?
Q7. Which procurement method was primarily used on those projects that overran in terms
of time?
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Q8. In these instances, do you believe the chosen procurement method directly contributed
to the project overrunning in terms of time?
Q9. What do you believe to be the primary factors in influencing client procurement method
selection? (Select up to 3).
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42
Q. 10. Do you believe clients have a sufficient understanding of procurement in the
construction industry?
The chapter that follows will analysis the responses from the case study and survey above
to arrive at a conclusion to the aim of this research work.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
CHAPTER 4
Case Study and
literature review
analysis.
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Case Study and literature review analysis
4.1. Introduction.
The results from the case study and survey will be analysed in this chapter to ascertain if
D&B is the preferred PS used in the building construction projects.
4.2. Analysis of Case study.
In analysing the responses to the Gateway Project the following points were highlighted;
It is understood that the major factors considered are Project Cost and allocation of
Risk to participants.
The choice of PS was initially D&B unfortunately it turned out to be traditional
somehow because two stage process was used after production information and
BOQ were developed. The project to the researcher lies very much on TS because
at stage one interested contractors were allowed to submit responses to qualifying
criteria after which five/six contractors were shortlisted for full tender and at stage
two being the tender process, where pricing takes place against full sets of design
drawings, specifications and BOQ. It is made known that the contractor with the
lowest price was chosen and parties involved were engaged in an examination
process to ascertain issues regarding project cost before the final contract sum was
agreed and a D&B contract was used. The approach used makes the researcher
deduce that the PS used is a merger between TS and D&B. Also noted is the use of
Package Deal due to the fact that specialist sub-contractors were contracted to
work on the specialist spaces within the project.
The client was giving the opportunity to have a say on quality by allowing the tender
come in play at the design stage. It was also noted that the project is a complex one
where specialist sub-contractors were contracted to work on the high degree of
specialist spaces within the building project.
It was pointed out that D&B, TS and Partnering are extensively in use today, which
is evident in the CIOB (2010) survey where TS, D&B and Partnering where seen as
the top PS used on construction projects.
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The respondent argue that the effect of cost, quality and time do not necessarily
drive procurement choices, a statement the researcher disagree with because from
the survey carried out by CIOB and literature review, it was made clear that time
and cost definitely have effects on projects because if they are not managed
effectively the project will over run in terms of time and cost.
4.2.1. Analysis of CIOB Survey:
In analysing the result of the CIOB survey the following points were highlighted;
Procurement Choice: 86.6 percentage of respondent made it clear that a good
procurement is synonymous to a successful project as in figure 3.2a. This clearly
means that the procurement chosen for a project generally reflects and determines
the overall success of the project. If the wrong PS is chosen, it leads to other issues
that may increase project cost, time and quality.
Project Cost: On project pricing it is deduced that different categories of project
pricing occurs which are subdivided into;
1) On projects up to £5m: for this category TS (65%) is mostly preferred, seems
very efficient and suitable, while D&B (35%) is second. It is viewed that these
two methods are preferred by clients because they are easy to understand and
pricing can be controlled. Both MC (4%) and CM (5%) are preferred behind
framework arrangement (21%) and partnering methods (18%) showing they
are not preferred for projects within this range.
2) On projects between £5m-50m: Respondent prefer D&B (45%) most suitable,
Partnering (24%) is second and TS (21%) is thirdly preferred. Also in this category
the MC (14%) and CM (12%) are not favoured making them unsuitable.
3) On projects over £50m: It is made clear in the survey that on large scale
projects, Partnering (29%) is highly efficient and suitable. The reason is that
Partnering gives room for collaborative working practices where relationships
amongst participants are valuable on projects of this nature. Also highly
preferred in this category is D&B (24%), PPP/PFI (24%) and CM, (21%) bearing
in mind that CM and PPP/PFI are recently being used for complex projects.
Restructuring: According to respondents (fig. 3.2c), the PPP/PFI (29%) are seen as
the method that needs restructuring however TS (18%) is viewed second, this is
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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because the design and construction stages are separated. Another fact is the issue
of dispute that arises amongst participants which makes it difficult for proper
integration amongst parties involved. D&B (8%), MC (4%) and CM (5%) are viewed
as needing little or no restructuring because the framework of these methods has
been set to allow for proper integration, effective communication and collaborative
working.
Problems: In response to this question respondents pointed out in figure 3.2d that
communication (50%) is a major factor during procurement process (this occurs
when the client did not communicate ideas effectively with the design team or
when all participants generally lack communication between themselves during the
design and construction stage of the project). Other factors are Alterations to client
requirements (46%) (Where the client inputs new idea or information after the
design has been developed and construction work has started) and issues over
responsibility (34%) (Where participants do not agree on individual responsibilities
or responsibilities are not carried out effectively). Other issues includes design team
problems (32%), and design faults (27%). CIOB (2010), indicated communication
amongst all parties involved is vital in achieving best practice with regards to
procurement, which helps to reduce alteration to client’s requirements, clearly
showcasing what each individual party is responsible for during the life cycle of the
project and ultimately eliminates all other forms of problems faced.
Cost: Cost being an important factor in construction projects, projects should not
over run under normal circumstances if the appropriate PS is chosen from
inception. It is deduced that 93% of respondents have previously been involved in
projects that have overrun in terms of cost (fig. 3.2f). The reasons why projects
over run are basically due to alterations by client, design problems, contractor’s
issues, lack of supply chain and unforeseen circumstances.
Project over Running: In terms of preventing projects from over running, the choice
of PS is important, if the right choice is selected from inception it aids the project
cost from over running. It is indicated in figure 3.2e that TS (59%) was used on
projects that over run, D&B followed suite at 15%, Partnering was 6%, MN and CM
were 5% respectively. In conclusion 57% of respondents explained that the choice
of PS used contributed to project cost overrunning.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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Time: Time is another important factor considered, any time set for project
completion is essential in the sense that if time is not met there will be an
implication on the overall cost of the project. A major factor that affect the timing
of construction project are adverse weather or other unforeseen circumstances
beyond the control of contractors. From figure3.2g/h, TS (60%) again is highest for
projects that overrun in terms of time, D&B (20%), Partnering (5%), MC and CM
were (4%). This again makes it certain that the choice of procurement used
determines the time frame for project completion because 48.5% of respondents
believed that chosen procurement choice affects project timing directly resulting in
project overrunning if wrong choice is made.
Client’s requirement: Most at times PS selection are influenced by client’s
requirements, these requirements varies depending on different choices. By
evaluating the results from the survey in relation to factors in figure 3.2i, it is noted
that Value for Money (33%) is the most preferred influence, followed by Client
Requirement to Complete Project Within Budget at 32%, Client Experience On
Other Projects falls on 30% (where clients experience on previous projects comes
into action by making use Partnering Strategy) and closely preferred factors are
Competitiveness Of The Market and Client Trust Of External Parties at 24% and 23%
respectively. Two other factors above the 20% mark are Client Requirement To
Complete Project On Time (meaning that project timing is not an essential necessity
as long as the project has value for money and of good quality) and Client Level Of
Involvement In Project (this is not necessarily considered depending on the type of
PS used where clients involvement is minimal).
The remaining factors least influential in client selection are Type of Project and Size
of Project at (18%), Cost of Procurement Method (17%) and Quality of The Work
(8%).
Procurement Process Understood: Despite the fact that clients are initiators of
most building construction projects, they still have insufficient understanding of the
procurement process because some client are not continuously involved in building
construction projects. From figure 3.2j, 76.6% of respondents declares that clients
do not have a sufficient understanding of procurement. In an open-text comment
section set up by CIOB (2010), it was noted that clients should be educated on how
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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construction procurement works, employing experienced construction
professionals, provision of greater transparency on procurement options offered by
consultants to the client and overall effective communication between participants.
4.3. Conclusion.
CIOB (2010) explained the key findings from the survey indicates that construction
professionals view procurement as absolutely crucial to the delivery of a project on time,
on budget and to a high quality, with 87% of respondents believing that good procurement
is synonymous with a successful project.
This chapter has examined the case study and survey by analysing and comparing points
raised against each other to determine the aim of this research project. The chapter that
follows will collate the data analysis, arrive at a conclusion and present a recommendation
based on the main objectives of the research project.
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5.1. Conclusion
Introduction.
The aim of this research was to find out if D&B is the preferred Procurement Strategy used
by construction professionals in the construction industry. The process employed to
achieve this aim was firstly to ascertain a basic understanding of PS and investigating
various PS used in the Construction Industry. Understanding the overall selection processes
for each PS couple with identifying and highlighting the relationships amongst participants.
Building contract types and their Pros and Cons where also highlighted. Secondly was to
determine the effect and relationship of time, cost and quality in PS. Lastly the Pros and
Cons of D&B over another PS was investigated and highlighted.
This chapter will be used to establish a conclusion by making reference to the main
objectives of this research work.
5.2. The objective:
5.2.1. Objective 1.
Three main objectives where considered for the research work, the first was to investigate
PS, their Selection Process, identifying participants and highlighting their Pros and Cons. A
general knowledge and understanding of procurement in the construction industry was
established by using highly resourceful literature reviews emphasising the history of
procurement. In other to find conflicting views and opinions to the history, selection
process and Pros and Cons of procurement other research journal and text were
researched.
5.2.2. Objective 2.
The second object was to determine the effects and relationship of time, cost and quality
in PS. This was achieved by critically analysing the case study and survey carried out in
relation to how cost, time and quality affects building procurement projects in terms of
building projects over running its stipulated timeframe and project cost. It was also used to
determine how quality influences building projects in ensuring projects attain great value
for money. The literature review was used to analyse the relationship between time, cost
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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and quality which explained how various balance can be struck in building projects to
achieve an operative procurement where all three factors can work effectively without one
being less active.
5.3.3. Objective 3.
The final objective was to showcase the Pros and Cons of D&B over other procurement
strategies, this was carried out by tabulating those derived from the literature review and
analysing those of D&B against others. Also after analysing the results of the case study and
survey, it illustrated that D&B is mostly preferred or considered after TS because it is being
used on both small and large scale building projects and on private and public building
projects based on the Pros it has over other PS.
5.4. Summary.
The overall achievement of this research work is based on the opinions and expertise of
respondents in the case study and survey used. The conclusion drawn will be viewed in
relation to these results and creates the avenue for further research work.
The researcher analysed and understood different forms of research approaches and
decided to use qualitative approach to find the facts needed for the subject area. This is
because the research aim is to find out if D&B is the preferred PS used by construction
professionals in the construction industry.
D&B is viewed as a PS mostly preferred by construction professional on both small and
large scale projects and on private and public projects in the literature review. The survey
and case study made it clearer by proofing that the literature review is right because it was
seen that D&B is most preferred bearing in mind that the TS and Partnering are also mostly
preferred based on certain factors.
5.4. Limitation.
The main limitation during the course of this research work was the inability to get
construction professionals to answer questions set out to identify factors that determines
procurement choices. Ongoing projects of two construction companies were identified as
case study but only one responded. Other means were tried and the researcher was
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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hopeful a second response will be achieved and delayed the work till the last week. Due to
no success the researcher used a survey done by CIOB in 2010 as an alternative.
5.5. Recommendation for future study.
Further research would be recommended by the researcher to establish best practice for
D&B and suggest ways of making everyone within and outside the construction industry
have a better understanding of D&B and how to develop it to the next level.
The literature review and responses from the case study and survey proved that D&B is
used on projects up to £50 Million, it is suggested by researcher that D&B should be
develop to absorb projects above the £50 Million mark, by achieving this D&B will become
the most preferred option alongside Partnering which is mainly used for projects above the
£50 Million.
Project Quality is seen as a weakness in D&B, as a result it should be made an important
factor by ensuring clients emphasise Project Quality to the contractor from project
inception.
There should be an allowance for client’s alterations in D&B without client’s having to have
additional financial implications because the literature review proved that client’s
alterations are costly.
Project Cost and Time running over is highlighted as a weakness in D&B by the survey, the
researcher recommend D&B need to develop a method that will curtail this from happening
in projects in other for projects to be within budget and meeting time scale.
5.6. Further Research.
From the research work carried out, the researcher observed that majority of the literature
review pointed out that project quality is a weakness in D&B. Anumba & Evbuomwan
(1997), agreed that the disadvantages ascribed to D&B includes high tendering costs,
reduced design quality and self-consciousness of changes by clients. Due to this, the
researcher sees project quality in D&B as an aspect that needs further research for future
study.
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Appendix A
The Chartered Institute of Building (CIOB): Survey on; Procurement in the Construction
Industry available at http://www.ciob.org/sites/default/files/CIOB%20research%20-
%20Procurement%20in%20the%20Construction%20Industry%202010_1.pdf.
Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.
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