SCHOOL OF ARCHITECTURE • BUILDING • DESIGN

BACHELOR OF QUANTITY SURVEYING (HONOURS)

PROFESSIONAL PRACTICE 1MARCH 2016 SEMESTER

Name Student ID

Yong Seen Yee 0315883

Shane Sim Ee Han 0321288

TABLE OF CONTENTDescription Page1. Procurement 1

1.1. Traditional Procurement 11.1.1.Advantages of Traditional Procurement 11.1.2.Disadvantages of Traditional Procurement 2

1.2. Design And Build Procurement 41.2.1.Advantages of Design And Build Procurement 41.2.2.Disadvantages of Design And Build Procurement 6

1.3. Recommendation 82. Tendering 10

2.1. Open tendering 112.1.1.Advantages of Open Tendering 122.1.2.Disadvantages of Open Tendering 12

2.2. Selective Tendering 142.2.1.Advantages of Selective Tendering 152.2.2.Disadvantages of Selective Tendering 15

2.3. Negotiated Tendering 172.3.1.Advantages of Negotiated Tendering 172.3.2.Disadvantages of Negotiated Tendering 18

2.4. Recommendation 193. Schedule of Project 204. References 21

1. Procurement 1.1.Traditional procurement In the traditional procurement method, the design work is normally separate from

construction. Therefore, the client will appointed the consultants to prepare a

complete set of design and cost control before it is put out to tender whereas the

contractor is appointed for building the works. The contractor is usually appointed

through a competitive tendering. This responsibility extends to all workmanship and

materials, and includes all work by subcontractors and suppliers. Furthermore, the

client will go into contract with the consultant and contractor separately.

1.1.1. Advantages (a) Familiarity among contractors and consultants

The roles and responsibilities of contractors and consultants are well understood

and clear between each other as this traditional procurement method is normally

considered as a standard method that is widely used in Malaysia.

(b) Quality of work

In this procurement method, the client has a direct influence and responsibility for

the design team. Therefore, the client can determine and control at each level of

the design and even the outcome of the final design. Therefore, the better control

over the quality of design can produce a high level of the functionality of the

project.

(c) Usually cheaper

This method of procurement allows careful planning of the overall design and

performance of the project, and also allows the employer’s involvement in the

project is more than other method of procurement. Therefore, the client has to

build himself in taking risk since he is the one who is responsible for decision and

control on design of the project. Besides, the contractor takes single-point

responsibility for construction under a lump sum contract, but the design risk is

still remains with the client. Thus, there will be relatively cheaper in cost.

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(d) Flexibility of change

In this procurement, it can easily accommodate and arrange any changes to the

contract as required by the client.

(e) Independent design and cost advice to employer from consultants

The client has an independent professional in the role of contract administrator

monitoring the overall project. Besides, the client’s interest and requirement is

protected by the consultants who act as an advisors and independent certifiers in

the contract. Furthermore, the direct workmanship between the client and

employer can also allow the consultant to direct advice on the reasonable design

and cost for the employer.

1.1.2. Disadvantages (a) Creates the “Then & Us “attitude

The separation between design and construction process and responsibility

would often lead to disputes. For example, the contractor may blame the design

team for their design defects, whereas the design team may blame the contractor

for defects in materials and workmanship. They may continually blame each

other because there is no single point of responsibility in this procurement.

(b) Long duration

The project need take long time to complete due to selection of consultant

engineer and it can also be a timely process to produce the full contract

documentation. Besides, the design would have been ‘finalised’ before

construction contract is let which mean that the construction cannot be

commenced prior to the completion of the design. Therefore, the overall project

duration may be longer than other procurement methods. Furthermore, if the

client wishes to make any amendment for later design, it will be more difficult and

time consume.

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(c) Contractor is not involved in designing

Client cannot tender for main contractor until the final design has been finalized.

As a contract is not appointed at the early stage of the project commence, the

contractor is unable to input his deign and idea into the project which will

sometime bring benefits and more functionality to the project. Besides, this will

also result in more time consume before the construction work can commence.

(d) Slow line of communication

In traditional procurement, the client has to handle with both parties, which are

design consultant and main contractor. This is because the design consultant is

responsible for design while main contractor is responsible for construction.

Therefore, if there have any problems occur, the contractor has to report to client,

and then the client will pass these messages to consultant and vice versa. Thus,

this will decrease the overall project efficiency.

(e) Decreases in design quality and standard

In traditional procurement, the contactor may wish to win the job. Therefore, they

will normally price the work which is less expensively rather than design quality

and standard which properly reflects the work to be carried out. Thus, this can

produces a claims culture if the submitted price was too low because of market

force.

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1.2.Design and build procurement Design and build procurement method is where a design consultant will be appointed

by the client to prepare a design concept and specification which is known as

employer’s requirement. The employer’s requirement is including the specification for

the building, the scope of services required from the contractor and an allocation of

risk for unknown items. After that, a contractor is appointed by the client to manage

both the design and construction of the project based on the “Employer’s

requirement”. Then, the contractor has to submit a set of Contractor’s Proposals

which is including the contractor's suggested approach for designing and

constructing the building, along with their price. In design and build procurement, it is

likely that the contractor may not have the design expertise in-house to do this.

Therefore, the contractor may have a contractual link with his own consultants to

complete the design or take over the client’s consultant through a process called

novation.

1.2.1. Advantages (a) Single point of responsibility

In design and build procurement, the client has to deal with and enter into

contract with only one contractor who is responsible for both the design and the

construction. Therefore, it will reduce the need to commit resources and time to

enter into separate construction and design agreement.

(b) Time saving

In design and build procurement, the speed of delivery from concept to

completed building will be faster as the level of design control is given to

contractor. Therefore, the contractor can commence the work on site at an early

stage of the project even though the design haven’t fully completed. Thus, this

procurement can be reducing the overall project delivery time.

(c) Price certainty

Price certainty is generally obtained before construction commences as client’s

requirements are specified and does not continually change. The contractor who

has more experience and expertise is able to provide a design that allows him to

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buy elements which allow him to obtain the best price offers. Therefore, this

procurement can be more cost effective and more cost certainty.

(d) Faster line of communication

In design and build procurement, the client is only liaise with one party, which is

main contractor. This is because the main contractor is responsible for both

design and construction. Therefore, it is an easy and faster way for client to

communicate with contractor if the client wishes to amend the brief or get more

information about the progression of the project.

(e) Product fit for purpose

In this procurement, the client can achieve what he wants to get based on the

employer’s requirement as the contractor will accurately specify the client's

requirements. For example, what the finished building is to be like, what the

building is to function and code of design. Besides, it is potential for better design

and construction because the architecture and engineering (A/E) is working for

the contractor. Furthermore, the final project costs are well defined earlier in the

project process and the amount is usually less than when using other types of

procurement systems.

(f) Novation of design

In this procurement, the contractor will wish to enter a contractual link with the

client's own designers which can provide an advisory on the preparation of

“Employer’s requirement”. This process is normally called novation. Furthermore,

this process comes a lot of benefits which including; the designers that the client

keep repeating hired will be more familiar with the client’s requirement and the

client will also be happy with the quality of their project.

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1.2.2. Disadvantages (a) Higher contract price

The client has to pay higher fees to the contractor if they ask the contractor to

build themselves into high risk and sole responsibility for the entire project.

(b) Client’s involvement

In this procurement, the design of the project is solely obligated by the contractor

which means that the client has less involvement, control and influence over the

design matters. Thus, the client can only review his desired project design

through the design brief and design requirement.

(c) Inflexibility to change

In this procurement, once the contractor’s proposal have been agreed and

submitted, it is very hard and difficult for client to make any amendment on his

requirements. Besides, the design of the project may be compromised if the

employer’s requirement is not firm and clear. Thus, the client needs to pay extra

amount of fees to obtain the design that he desired to.

(d) Conflict

If the client’s requirements and the contract’s proposal which have been

submitted is not match with each other, there may be some conflicts happen

between each party. Therefore, both documents have to check clearly before

submitted and the client have to submit a firm set of requirement that he desires

to obtain during the final design stage in order to obviate the conflicts happen.

(e) Quality of project

In design and built procurement, the contactor has the incentive to complete the

projects in short period and they normally influence by the cost of the materials

which is less expensively rather than by design standards. Therefore, this can be

reducing the overall material quality of the project.

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(f) Additional fees

In this procurement, the client is required to pay more additional fees if they need

to get more advices and information on the design of the project after the building

contract has been awarded. Besides, the variation of the post contract will be

charged more expensive as it is very difficult to monitor the addition charged

where normally the works are priced based on the basis of a specification.

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1.3.Recommendation As Innovative Cost Consultant Sdn. Bhd. Director, I would like to recommend that

the proposed project to build a branch campus in Kota Kinabalu, Sabah should use

the design and build method.

Based on the Taylor’s University plan, they required the branch campus to be

operational in mid-2019. Therefore, timely delivery of the facility on time is the main

priority to concern. By using design and build method, it allows a fully integrated

team which are design and construction team to work together at the beginning

stage of the project. This overlapping design and construction process allows

programmes to be more easily met and the speed of construction is also often

quicker. Thus, it is possible to complete the campus on time without delay. While in

the traditional method, it will extend the duration of the project as it is timely process

to finalize the design and documentation before construction contract is awarded

which mean that the construction cannot be commenced prior to the completion of

the design.

Regarding to the cost, they are also required the campus to be complete within the

fixed budget. Based on design and build method, the initial price may be higher as

the client will ask the contractor to build themselves into high risk and sole

responsibility for the whole project and the variation of the post-contract will be

charged more expensively. However, there is a single point of responsibility between

design team and construction team. Therefore, within a reasonable degree of

accuracy, there is less possibility of claims being made by the contractor in respect

of the relationship between the design function and the construction function.

Besides, the experience contractor can also use his expertise in providing a design

that allows him to buy goods and services which allows him to obtain the best buying

margins. Therefore, it will be more cost effective. One of the ways to ensure the

building is delivered for the best value for money and is finished with a satisfactory

level of quality is design and constructs the project based on “employer’s

requirement”. This can ensure that a contract runs smoothly, economically,

expeditiously, minimal the project change and increase performance.

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Nowadays, building defect is one of the major components of building problems that

significantly needed attention. When a building fails to function, it will bring harm to

occupant. Therefore, we must immediately seek for the solution. The most important

point in constructing a campus is to ensure that the building is firm enough and

sustainability. Besides, we must also ensure that the building have the least

construction defects like cracking and settlement. In design and build method, the

design is more likely to constructability which in practical terms is concerned with

reducing project uncertainty and risk through increasing efficiency in the design and

construction processes due to contractor’s input into the design in the early stage of

the project commencement. Besides, the contractor can also take over from the

client previous contract for design work, complete the design and construct the work.

This process is normally called novation. Besides, this process brings a lot of

benefits which the designers will be more familiar with the client’s requirement and

the client will also be happy with the quality of their project.

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2. Tendering According to Finch (2011), tendering is the process where contractors are invited to

bid for a construction project. Tendering involves an employer/client who they intend

to build a building or infrastructure, they offer contractors who are referred as

tenderers to submit their proposal or bid. Tenderers win the bid by lowest but

reasonable price and hence their offer is being accepted by employer.

Tendering can be further broken down into three types which are open, selective and

direct negotiation. Each method of tendering has their own advantages and

disadvantages.

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Tendering document

preparation

Tender invitation

Tender closing

Tender review, evaluation and

recommendation

Awards tender

2.1.Open tender According to Lynch (2016), open tendering is a public competitive bidding to acquire

goods, services and infrastructure works at the interest of the public. Hence, any

interested contractors have opportunity to submit tender for the bidding process.

Open tendering is employed by both government and private sector.

Employers who intend to build building or infrastructure announce tender invitation to

the public through local newspapers, websites or governed development boards to

attract attention.

Contractors who wish to tender will have to approach the consultants to purchase

tender documents. Tender documents are available to purchase starting the date

advertised until a week before the closing of tender. After the closing date of tender,

contractors have to submit their tender documents and a tender deposit is required

to show interest in participation. However, deposit is refundable to contractors who

lost the bid.

Upon closing of tender, consultants will review all tenders and evaluate validity of

tenders to ensure that the price is lowest and reasonable. For some big projects,

contractor profiles are also taken into consideration such as contractor’s experience

and company background.

After evaluation, a report has to be submitted to client to review. Therefore, client will

decide to award the project to contractor at the advisory of the consultants. Hence,

client reserves the rights not to award the project to the lowest bid.

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2.1.1. Advantages of open tender (a) Ideal price

As open tendering is a public tendering process, it attracts many participation of

contractors. Hence, the competition is high as every bidders attempt to lower

their price to earn a job opportunity. As number of bidders increase, the

competition gets greater, the lower the price of project. Therefore, it benefits the

clients in such a way that clients are able to award the project at an ideal price.

(b) Various options

Open tendering also allows various options as there are many tenderers

participate in the bidding; consultant and client have many choices of tenderers to

award the job. Moreover, they are also able to evaluate the benchmark of the

price by comparing all the tenders.

(c) More job opportunities

Open tendering offers more job opportunities because open tendering offers

chances to public, hence any new organisations can start off and enter the

industry. As new organisation enters the industry, they creates job opportunities

due to the needs of manpower.

2.1.2. Disadvantage of open tender (a) Capability of contractor

Capability of contractor can cause a major drawback to the client and also the

project. As open tendering is a fair bidding process where any contractors are

allowed to participate, client might not understand the profile and background of

the contractor who gets the job. Hence, the capability is an unknown in which if

the contractor does not have the capabilities such as insufficient funds or

manpower, it affects the project in many aspects.

(b) Quality of work

As open tendering is a very competitive tendering method, contractor who got the

job by lowest bid might not produce quality works because they might cut corners

in order to increase profit margin. Client might also face risks such as non-

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compliance of specifications or delays due to rectification works on poor quality

works.

(c) Time consuming process

Open tendering is also a time consuming process due to many tender documents

to reviewing works by consultants to evaluate tenders and advise client on the

best tender to be awarded. Moreover, consultants may have to invite contractors

for an interview session to review contractor background and company profile.

Hence, the process takes a long time before a project is awarded.

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2.2.Selective tender Selective tendering is a closed tendering process. It is a process where tender is not

announced to public and only selected contractors are invited to submit their tender.

According to The Constructors (2016), these contractors will be given a list of

information required for qualifying evaluations.

Selective tendering consists of single stage and two stages selective tendering.

Single stage selective tendering is where selected contractors receive tender

invitation from consultants and they are to accept the invitation by submitting their

bids or reject the invitation to tender. Generally, the lowest bid gets the job.

Two stages selective tendering differs from single stage as it undergoes a

prequalification stage where selected contractors are to submit their personal and

company profiles for evaluation by consultants. The criteria considered are such as

contractor experience, project references, financial capabilities, staffs profile and etc.

After evaluation, if the contractors achieve the requirements set by consultants, they

will be included in the final tender list. Generally, these contractors are experienced

contractors, good reputation in terms of producing quality works, financially strong,

good management skills so and so for.

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2.2.1. Advantage of selective tender (a) Quality of work

By selective tendering method, consultants are able to choose contractors who

are good in producing quality works. Good quality of work consists of aspects

such as no cutting corners, compliances to specifications and able to producing

good finishing without delay of time.

(b) Time saving

Selective tendering saves time because consultants require less time in

reviewing tenders due to less amount of tenderers. Moreover, consultants also

save time in interviewing contractors as compared to open tendering. In fact,

there are no interviews required because contractors who submitted tenders are

contractors who had passed the prequalification stage.

(c) Less conflicts

Selective tendering reduces conflicts due to less competition during the tendering

stage. Apart from that, it also reduces conflicts when it comes to recommending

selection of contractors to the client. In an open tender, consultants may have to

give explanations if the lowest bid is not selected. However, selective tendering is

much simpler since bidders are chosen as equally good contractors, price

determines the winner of the bid. Hence, it is less complicated and therefore

reduces conflicts.

2.2.2. Disadvantage of selective tendering (a) Favouritism

In selective tendering, there are chances where favouritism might happen

because both client and consultants might have relationship with the selected

contractors of the list. In some cases, there are possibilities of collusion that

consultants have mutually beneficial relationship with contractors. Hence, it is

unfair to other equally potential selected contractors and might a threat to client.

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(b) High cost

Since selective tendering is a private tendering process where there is less

numbers of contractors comparing to open tendering, therefore the competition is

lesser. Client has less bargaining power because client has limited choices of

contractors. Hence, the project cost might be higher comparing to open tender

where client has more bargaining power due to greater competition.

(c) Less job opportunities

Unlike open tendering, all contractors are allowed to opt for job opportunities,

selective tendering sets boundaries to job opportunities because only

experienced contractors are given chances. Hence, new firms cannot enter the

market. Meanwhile, lesser experience contractors may not be able to gain more

experience and therefore the numbers of good contractors may decrease

exponentially.

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2.3.Negotiated tendering Negotiated tendering is where client approaches a known supplier or contractor to

negotiate a price before awarding the job. The supplier or contractor can be by

recommendation, past projects or specialist.

For big scale of projects, negotiated tendering is not widely used. It is used within a

project for jobs that requires specialist such as lift systems or some other advanced

technology mechanical systems. For instance, train stations also require specialist in

which the construction project applies negotiated tendering.

Besides, negotiated tendering is also applied when the project is urgent and cannot

be delayed. For example, building houses for disaster refugees, reconstruct roads

after an earthquake and etc. are works that requires immediate commencement.

Client will approach suppliers or contractors with bill of quantities and pricing will be

filled in by contractors or suppliers as negotiation goes along.

2.3.1. Advantages of negotiated tendering (a) Quality of work

Since it is negotiated between client and contractor, it is more likely that client

selects contractors with good qualities and high working ethnics. Hence, quality

of work is assured. Moreover, it also assures safety when it comes to

infrastructure works. This is because infrastructures concern of lives, it is very

important that quality of work is not compromised. Therefore, negotiated

tendering is applied especially to works that require specialist or good

contractors.

(b) Trustable

As client looks for the ideal contractor to accept the job, it is also more trustable

in aspects such as experience and skills especially to works that requires

specialist. It also ease supervision works during construction because a good

contractor is a contractor who has good working ethnics in which they will

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complete the project without cutting corners. Hence, client will be more satisfied

with the quality of work.

2.3.2. Disadvantages of negotiated tendering (a) High cost

It is undeniable that the price of tender will be relatively higher as compared to

open and selective tendering because there is no competition of price. This is

because client has no bargaining power while contractor is on the upper hand

due to no competitors. Moreover, contractor might gain more bargaining power

when it comes to specialized works.

(b) High risk

In any unforeseeable circumstances that occurs in which the contractor fails to

deliver the project, it would be a huge lost to the client in terms of resources and

time. Moreover, it is also risky to allocate all jobs under a contractor because if he

fails, the entire project fails. In short, it is not advisable to put all eggs in one

basket.

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2.4.Recommendation As the director of Innovative Cost Consultant Sdn Bhd, I would recommend my client

to implement open tendering method. This is because there are few important

factors that have to be put as first priority.

First element to be considered is cost. The cost to build a campus a high because a

campus has to cater many students and many safety features have to be built such

as fire protection system and features such as vertical transportation and other

infrastructures. Hence, it is more advisable to apply open tendering method to

increase the competition in order to lower the cost of construction. Moreover, it also

allows more options of contractors to be chosen.

Secondly, familiarity is also one of the factors that suits this project. This is because

open tendering is commonly used around Malaysia and hence contractors are more

familiar with the standard methods of tendering. As for the client, familiarity has to be

taken into consideration because client might not know much good contractors in

Sabah, therefore open tendering is better than selective or negotiated tendering

methods.

Besides, as open tendering allows many tenderers to participate, it also leads to

discovery or import of new technologies which might shorten the construction time.

Since campus is a relatively big project, Industrialized Building System (IBS) may be

imported and implemented. Hence, it lowers the cost of construction and time in

which it allows campus to be done and commences operation on time.

In conclusion, I would recommend Taylor’s University to implement open tendering in

order to save cost, familiarity and to allow more contractors to enter the market with

new and advanced technology.

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3. Schedule of Project

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