Effect of Procurement Systems on the Performance of Construction Projects

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EFFECT OF PROCUREMENT SYSTEMS ON THE PERFORMANCE OF CONSTRUCTION PROJECTS Rosli Abdul Rashid, Ismail Mat Taib , Wan Basiron Wan Ahmad, Md. Asrul Nasid, Wan Nordiana Wan Ali & Zainab Mohd Zainordin Department of Quantity Surveying Faculty of Built Environment Universiti Teknologi Malaysia

Abstract: Project procurement has been described as an organized methods or process and procedure for clients to obtain or acquire construction products. Apart from the traditional approach, there are now other “fast-tracking” or innovative procurement systems used by the construction industry world wide. The different procurement systems differ from each other in term of allocation of responsibilities, activities sequencing, process and procedure and organizational approach in project delivery. These differences have invariably affected the project performance. Project performance has been defined as “the degree of achievement of certain effort or undertaking” which relates to the prescribed goals or objectives that form the project parameters. There are many other elements that determine project success, but the focus of this paper is on the three critical parameters or project performance i.e. time, cost and quality. The aim of this paper is to look into the effect of the different procurement systems on the project performance. Since there are many different project procurement systems, it is appropriate for the purpose of this presentation to limit to the common ones i.e. traditional system, design and build and management contracting.

Keyword: Project procurement, performance, time, cost and quality INTRODUCTION The procurement of construction project is vast in scope because it involves the gathering and organizing of myriads of separate individuals, firms and companies to design, manage and build construction products such as houses, office buildings, shopping complex, roads, bridges etc. for specific clients or “customers”. Procurement comes the word procure which literally means “to obtain by care or effort”; “to bring about” and “to acquire”. System is about “organized method, approach, technique, process or procedure”. In this context, project procurement is very much concerned with the organized methods or process and procedure of obtaining or acquiring a construction product such as a house, shopping complex or road and jetty. It also involves arranging and coordinating people to achieve prescribed goals or objectives. The Aqua Group (1999) described procurement as the process of obtaining or acquiring goods and services from another for some consideration. Masterman (1996) described project procurement as the organizational structure needed to design and build construction projects for a specific client. It is in a sense very true because the process of “obtaining” a building by a client involves a group of people who are brought together and organized systematically in term of their roles, duties, responsibilities and interrelationship between them.



Today, there are several types or variations of project procurement systems being widely used in the construction industry. They range from the traditional system to the many variations of “fasttracking” systems such as turnkey, design and build, build-operate-transfer, management contracting, cost-plus contracting etc. The introduction of many variations of project procurement system was induced by the quest for more efficient and speedier project delivery system and better project performance. They are innovations to the traditional delivery method aimed at meeting the changing demand of clients or customers. The different procurement systems present have brought changes not only to the process and procedure of project delivery but also the aspects of management and organization. Performance has been described as “the degree of achievement of certain effort or undertaking”. It relates to the prescribed goals or objectives which form the...
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