Procurement

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COBRA 2006

The construction and building research conference of the Royal Institution of Chartered Surveyors

University College London, 7-8 September 2006

COBRA 2006
PROCEEDINGS OF THE ANNUAL RESEARCH CONFERENCE OF THE ROYAL INSTITUTION OF CHARTERED SURVEYORS Held on Thursday 7th and Friday 8th September 2006 at University College London

Joint Conference Directors
Stephen Brown Stephen Pryke Editor: Elaine Sivyer

COBRA 2006 Proceedings published by: The RICS, 12 Great George Street Parliament Square London SW1P 3AD In association with: The Bartlett School University College London, WC1E 7HB © RICS, The Bartlett School, UCL and the contributors First published 2006 ISBN: 978-1-84219-307-4

A Multiple Decisive Factor Model for Construction Procurement System Selection S. Ratnasabapathy and R. Rameezdeen
Department of Building Economics, University of Moratuwa, Moratuwa, Sri Lanka; shiyalk@yahoo.co.uk The procurement system is a key means through which the client creates the pre-conditions for the successful achievement of project specific objectives. Different procurement systems are used for different projects and the appropriate selection may help to avoid problems and be the key to the attainment of project specific goals. In Sri Lanka, the practice of procurement selection is rather unstructured and ad hoc. Therefore a realistic and systematic approach for the selection of the most appropriate system is essential to aid clients in selecting procurement systems. This paper presents a construction procurement selection model based on decisive factors. It particularly examines and analyses factors in terms of clients’ requirements, project characteristics and the external environment in which the construction industry operates. Four rounds of Delphi surveys were carried out to investigate the most important factors and their level of influence on various construction procurement systems. It was found that client requirements are the most significant influencing factors in the procurement system selection in Sri Lanka. Based on the factors studied, a multiple decisive factor selection model was developed. The model fulfills the requirements of the client, project and external environment for the selection of a suitable procurement system. The outcome of the model was tested for its effectiveness with an expert opinion survey. Keywords: construction industry, procurement, procurement selection, selection model, Sri Lanka.

INTRODUCTION
Recent significant changes in the technical and economic conditions prevailing in the construction industry have prompted the development of several procurement systems over the past decade. However, the selection of a suitable procurement system for a particular project is influenced by several factors which can stem from its internal and external environments. Factors from the internal environment include client requirements and project characteristics. Client requirements are mainly categorized under three parameters: cost, time and quality. In addition there are some other general client requirement factors which affect the selection process. The Sri Lankan construction industry has not developed in quite the same way as those of other developing countries during the twentieth and twenty-first centuries. The current review of the project procurement system used in Sri Lanka reveals that ‘Measure and Pay’ is the dominant system and that the usage of alternative procurement systems is underprivileged compared to other developing countries. The popularity of Measure and Pay is mainly due to government influence on the construction industry of Sri Lanka; the government, as the regulator and a major client, has neglected the development of alternative procurement methods (Shiyamini et al.,

2005). In addition, the practice of procurement selection is rather unstructured and ad hoc. There is no systematic and realistic method used to select an appropriate system for a...
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