School of Architecture, Building and Design
Bachelor of Quantity Surveying (Honours)
Semester March 2016
Professional Practice 1
Assignment 1 - Report
Student Name : Muhammad Hasif bin Alias
Student ID : 0316413
Lecturer : Ramar A/L Subramaniam
2.1 Traditional Method
2.2 Design & Build (D&B) Method
3.1 Open tender
3.2 Selective tender
3.3 Negotiated tender
4.0 Schedule of Work
Taylor’s University is one of the best world class private university. It have operated over 45 years
in education and is a long- standing heritage with a tradition of excellence over 70,000 graduates, which
are leaders in their chosen field.
Recently, they contacted and appointed my quantity surveyor firm, Innovative Cost Consultant Sdn.
Bhd. as their consultant. They intended to build a branch campus in Kota Kinabalu, Sabah, which will be
operational in mid-2019. My company are tasked to provide advice on the procurement system and the
tendering methods that are available and suitable to be adopted in carrying out the project.
The management of the University has informed my company that the following requirements are
Cost to completion to be within the budget fixed
Timely delivery of the facility in order to commence operation in mid- 2019
My consultant have prepared a report to Taylor’s University recommending the most suitable
procurement system and tendering method to be adopted, along with reasons of their advantages and
2.0 ProcurementProcurement comes from the word “procure” which literally means “to obtain by care or effort”, “to
bring about” and “to acquire”. In this context, project procurement emphasized organized methods or
process and procedure of actualizing a construction project. Procurement process is the entire procurement
cycle starting from the identification of need, through to the completion of the contract.
2.1 Traditional Method
Traditional method is commonly used in Malaysia. The basic concept of how the procurement
system works is that the construction is separated from the design. The construction are only commenced
when the design and costs prepared by consultant are known. This form of procurement are commonly
known as “traditional contracting”. The Employer first appoints design consultants to produce full design
and documentation including drawings, work schedules and bills of quantities. Then, main contractors are
called or invited to submit tenders depending on which tender method chose, usually on a single-stage,
competitive basis. The client will award the tender to the main contractor and a contractual relationship is
formed between them. The construction process will begin. The contractor is not responsible for the design,
other than temporary works. Typically, the client retains the design consultants during the construction
phase to prepare any additional design information that may be required, to review any designs that might
be prepared by the contractor, and to inspect the works. Consultants will be appointed to administer the
2.1.1 Advantages of Traditional Method
1) Easily understood
The most basic method taught and learned by construction workers either through experience or workshop.
help to ease the procument process as all parties involved knows how to play their part.
2) Better facilitation and control
Contractor construct based on drawings designed and specified by the client and consultants without the
need to change or add adjustment by the contractor himself. A direct influence between the client and
design consultant will facilitate a high level of functionality and provide flexibility towards variations.
4) Cost certainty at award
The method enforced the design and cost to be finalized first, thus preventing further big changes which
may result in additional cost for the client.
5) Equity during tendering
The tender bid their prices based on the same drawings and specification, allowing the client to choose the
best value for money. This prevent the tenderer from giving tender consist of false quality and
specification to earn more profit.
2.1.2 Disadvantages of Traditional Method
1) Slow procument process
The method involved a long duration as the design and construct phases are consequential. The design and
documentation needs to be fully complete before contractor can tender and make preparation for
construction (pre-contract preparation).
2) Liabilities separation
Disputes may occur due to any flaws in design, in construction or in the contract itself. The traditional
method does not have a party to act as point of responsibility, because both design and construct are under
3) Weak line of communication
The communication between design and construct are kept at minimal because they dont have a
contractual relationship. Any information or report, must be directed to the client and the client will tell the
specific party and vice versa. This prolonged the construction process and additional cost.
4) No design or buildability input from contractor
Involvement of contractor in design is restricted, whereby their input may improve the constructability of
the project in terms of their cost and resources.
2.2 Design and Build (D&B) Method
A D&B contract is between the client and a single contractor under which the contractor manage
planning, design and construction in accordance to client’s requirements. The contractor hold the single
point of contractual responsibility for all aspects of design and construction. The contractor may higher his
own consultants or take over his client’s consultants (novation) during the process. It is advisable to
inquire information about who the contractor intends to use as designer. Adequate professional indemnity
insurance should always be a requirement. Thus, the appointment of consultants is highly recommended to
provide advice on the preparation of the requirements along with adequate time for this to be done
adequately. The construction may commence after the cost is established even if the design is still not
2.2.1 Advantages of D&B Method
1) Fast and efficient process
A quicker start on site, the close integration or overlap of design and build activities can result in more
effective schedule and reduce project period.
2) Cost Effective
D&B method offer certainty on the contract sum and bring cost benefits. The overlap design and
construction methods and the relative freedom of the contractor to use their purchasing power and market
knowledge effectively can provide a client with a competitive price. Allowing the project to be cost
effective - provided that the client does not create any variation in the document.
3) Single point responsibility
The client has to deal with one firm and reduces the need and liability to commit resources and time to
contracting designers and contractors separately.
4) Improved Constructability
Involvement of contractor’s input in design increased the constructability in following time and quality.
Furthermore, the contractor will perform much better as all liability solely fall into them.
5) Swift line of communication
The main contractor will be the only party that any party need to liaise with including the client, as the
responsibility solely fall onto the main contractor.
2.2.2 Disadvantages of D&B Method
1) Clients involvement
Client have minimal role to play during construction stage in this method which result in having lesser
influence and inflexibility to design. Furthermore the difficulties will be experienced by client during the
preconstruction stage, which require the client to prepare an adequate and sufficient comprehensive brief
or requirements. Any variation afterwards can be expensive.
2) Choosing tender
Difficulty in comparing bids since each design will be different, project schedule will vary between bidders,
and the prices for the project will have huge differences for each design.
3) Initial fee & Additional consultant fee
The main contractor need to be paid with a higher price than normal method as he have to handle all risk
and responsibility. Also, the client need to hire additional consultant in order to provide guide throughout
the preconstruction stage to avoid any error which may lead to additional cost.
Based on the prioritize given by Taylor’s management, my company would advice the proposed
project to use the Design and Build (D&B) method.
The reason is because in term of cost, D&B method is more cost effective. Assuming no variation
are made as a campus building is not a complex building, this method bring certainty to contract sum and
provide cost benefits. As stated by the Taylor’s management, with this method, the Contractor have the
relative freedom to use their purchasing power and market knowledge effectively to provide the client with
a competitive price, so that the price will stay within budget.
Besides that, in term of timing, D&B method provide swift line of communication along with fast
and efficient construction process. This method allow to construction to start as soon as the tender is
awarded even if the approved designs are not completed. Any sort of error and adjustment during
construction will be easily communicated to the Main Contractor in order to update and reason with the
Furthermore, passing full responsibility to the Main Contractor is part of this method advantages.
The Taylor’s management with less expertise in this industry do not want to be caught up in confusion if
disputes occurred among construction payers. Being a single point of responsibility, the Main Contractor is
paid to handle and take full responsibilities of whatever happening with the project.
Finally, D&B method motivates the Main Contractor in construction to increase their
constructability in providing great quality and ensuring the building is completed in time.
On the other hand, if the project uses the Traditional method, the process would most likely be slow
as line of communication and constructability are weak because of separation of liabilities and weak
construction management. In the end, it will result in confusion on site, start disputes and rendered the
project to be incomplete upon 2019.
3.0 TenderingFIDIC (1987) defines “Tender means the Contractor’s priced offer to the Employer for the
execution and completion of the Works and the remedying of any defects therein in accordance with the
provision of the Contract, as accepted by the Letter of Acceptance” . In construction, it means offering
process made by contractor to client, usually in competition which, if accepted by the employer, will form
a binding contract. There are many type of tender. The chosen three for this report purpose are Open,
Selective and Negotiated Tendering.
3.1 Open Tender
In an open tender, the Client invites potential Contractors through public advertisement (newspaper,
magazine, e-tendering websites) stating details of the proposed project such as :-
Type of work
Requirement to tender
Details of submission (time, date & place of submission)
Interested Contractors may respond to the advertisement to buy and collect the tender document
which are usually sold up to a week prior to closing of tender). Usually, a tender bond or deposit are
required to submit along with the tender document. The tenderers have to demonstrate their tender, skills,
resources, experience and strength and financial capacity to execute the project. This results in competitive
prices and very competitive tendering.
Upon tender closing and the tender documents are handed out to the Client, the Client and his
consultants shall evaluate and record the tender price of each tenderer. The complete report will be
submitted to the Client. Finally, the Client will decide which tender to award. He is not bound to accept the
lowest tender and can consider consultant’s recommendation.
3.1.1 Advantages of Open Tender
1) Familiar with the System
Open tender is a simple and traditional method which is a basic knowledge for all construction player.
2) High Competition
Open tendering secures maximum competition, allowing the Client to get value for money price from
contractors. The number of tenderers would prevent any Contractor from bidding outrageous price in order
to get maximum profit.
3) No Favoritism
Contractor would not have to worry of any form of bias or bribery to occurs as there is no restrictive list of
tenderers. This is to promote fairness and transparency because the tender are also viewable by local
4) Allow new firms to enter market
Open tender allow any contractor to tender without taking accounts of company experience, thus allowing
new company to tender. Increased in number of company will result it better (lower price, good quality)
tender bidding as the competition get tougher.
3.1.2 Disadvantages of Open Tender
1) Risk of Selecting Newcomer
New firm might have poor workmanship (quality) or no experience on the type of works being tendered.
The tender document might be done wrongly, thus result in underpriced contractor.
2) High cost
Cost of tendering is high because, as the number of tenderer increased, the need of producing tender
document copies also increased. Paper bigger than A4 do not come cheap.
3) Longer tender period
The need to evaluate each and every one of the tenders will take a long time and cost. Furthermore, report
and recommendation must be thoroughly afterwards to present to the Client.
3.2 Selective Tender
In selective tender, there are two type which are single stage and two stage selective tendering. In
single stage, a list of contractors are proposed by consultants and only certain Contractors are invited to
tender, whereby in two stage, there is an initial selection process stage for tenderers known as
prequalification. Prequalified contractors will then be included in the final tender list. Generally, the lowest
priced tender will be awarded the project.
These Contractors are selected on their integrity, ability and characteristics before they are invited to
tender.The criteria also include:
Standard of workmanship
Size of company and grade class
Reputation to meet completion dateline
Capacity for current workload etc.
Past experience on similar works
It follows that only firms of sufficient standing and experience in that particular type of work will be
invited. The other contractor firm usually do not know such tender is floated. Basically, the tender
procedure is the same as open tenders except it is not advertised in the press.
3.2.1 Advantages of Selective Tender
1) Qualified Contractor
Only acknowledged contractors will be allowed to tender, thus prevent the risk of awarding project to
newcomers. This provide better quality of workmanship and more professional management.
2) Guaranteed Quality
Through prequalification process and the proper contractors chosen, the quality of the construction can be
assured. Furthermore, they are paid more than average contractor.
3) Time and Resources
Tender evaluation is usually based on price only, thus the need to hire consultant or adding extra time to
work on evaluating tender are not needed. Furthermore, the number of tender document copies can be done
at optimum, preventing the need to end up cutting more trees.
3.2.2 Disadvantages of Selective Tender
1) Bid Rigging
Form of fraud in which a tender is promised to one party even though for the sake of appearance several
other parties also present a bid. This form of collusion is illegal in most countries. It is a form of price
fixing and market allocation. Basically, the Client is being toyed by the selected contractors into choosing
tender which he think is the lowest price, but it is actually much higher than estimated cost.
2) Longer Tendering Period
In the two stage, the need to go through prequalification and qualification stage prolonged the tender
process. The need to do thorough financial, resource and company background need more time than the
The consultant may recommend the company that they either have contractual or past relationship with to
the Client. Or, the Client himself may already select who qualified to award the project before the
prequalification process even start. Favoritism may end up having good and bad consequences.
4) Higher cost
The selected contractors are most likely experienced/professional workers which require greater amount of
payment. Thus, the optimum price is not known as the contractors compete with their high price bid.
3.3 Negotiated Tender
In negotiated tendering procedure, the Client will approach one Contractor selected on merit to
submit a tender for the work. The method used to arrive at the pricing is usually left to the Contractor and
can be on the basis of a Bills of Quantities. Often the services of a Quantity Surveyor (consultant) is used
to advise on rates and prices during negotiations. It is based on one-to-one discussion with contractors to
negotiated the terms of contract. Usually, the reason to tender such way is because time does not allow for
normal tendering on open tenders or selective tendering.
3.3.1 Advantages of Negotiated Tender
1) Qualified & Trustworthy Contractor
Hand picked by the Client. Must have great experience and company background and most importantly,
more than capable of handling the Client's project requirements. Promotes partnering and serial contracting
in the future.
2) Higher Success Rate with Quality Assured
Project would not be delayed or left unfinished. The partnership with the client act as motivation for the
Contractor to provide the best quality and construction management.
3) Emergencies, Securities Reasons
Can be done during the time that does not allow for normal tendering on open tenders or selective
tendering. Any technicalities around the design and development of details may require the specialist
knowledge of qualified Contractor. Also, as solution to project where the final cost requires to be
established at an early stage of development and the design will be controlled by the costs.
3.3.2 Disadvantages of Negotiated Tender
1) Higher Cost
The lack of competitor and a one to one negotiation allow the Contractor to have full power towards
pricing the BQ rates. Furthermore, the one negotiated most likely a proper experienced Contractor which
result in higher payment than average contractor.
2) Failure Risk
If the tender failed, this would result in loss of valuable resources, and the need to get additional time to
complete negotiation with another Contractor.
3) Longer process period
One to one negotiations must be done thoroughly before award of tender, thus resulting more time taken.
This sole purpose is to ensure that all requirement are acknowledged and approved by the Contractor.
4) Public View
The contract is void from public knowledge, thus allowing the Contractor to simply price the rate of the
BQ. This result in question of the accountability and integrity for both parties by which could be apprehend
Based on the analysis done, my company would highly suggest the selective tendering process.
Since Taylor’s University is building a branch campus, it is important to ensure that the building is
complete on time with optimum cost needed while sustaining the look of a private college through quality
A university campus project should not be awarded to newcomer as it result in more risk than
goodness. A more qualified and experienced contractors would suffice the requirement of time, as they can
manage the project well to ensure it is completed within time. However, it is high advisable for the
management to keep track of any bid rigging.
The cost might be higher than an open tendering process, however, the extra cost give benefits. This
tender chose proper contractors who can provide great workmanship, so that the branch campus would
look more outstanding and attract more student to enroll.
Furthermore, the tendering process cuts down time and resources needed in order to award the
project. The selective tender only emphasized on the price and may no require any thorough evaluation on
the tender document. Also, the number of tenderers are at definite amount, thus preventing additional cost
of producing tender document copies.
The reason why negotiated is not chosen, is that the branch campus completion need to be assured,
any risk of failures, the alternative contractor must be present. Secondly, building a campus definitely
requires competition during tendering process, in order to get the best value price from it.
4.0 Schedule of Works
5.0 References1. RICS (1996). The Procurement Guide. Royal Institution of Chartered Surveyors, London, UK.
2. Walker, A. (2015). Project management in construction. John Wiley & Sons.
3. Elyamany, A. (n.d.). METHODS OF CONTRACTOR SELECTION. Retrieved May 16, 2016, from
4. Essays, UK. (November 2013). Types Of Tenders And Tendering Process Construction Essay.
5. V. (2008, May). BEST PRACTICE GUIDE FOR TENDERING AND CONTRACT MANAGEMENT.
Retrieved May 16, 2016