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Name : Mohd Afiq bin Abdullah // ARK 876 CONSTRUCTION PROJECT MANAGEMENT
Student ID : 2016447808 // REFLECTIVE WRITING ASSIGNMENT

Introduction

Procurement, by definition, is the acquisition of the materials, supplies, services, etc.

that a company or project requires in order to successfully operate. In the construction
management world however, this process involves large amount of parties involving
suppliers, construction professionals and the clients. So, a careful practice of management
and awareness from the start till the end of a project must be carried out so that the client’s
target and goals can be met with adequate time and cost.

In this report, matters concerning payment and management techniques will be

discussed in terms of procurement scenarios, its scenarios and the proper method that could
be done in the first place to avoid and to ensure a smooth and economically feasible project
commencement.

According to Fox (2015), Construction procurement methodology in general consist

of three main strategies namely of Traditional, Design and Build and Management based. The
aforementioned strategies are guides to base on for suitable construction projects background
that are vary for one another. For example, traditional procurement method is most likely to
suit the nature of a project which possesses a full tender documentation available before
contract whereas Design and build procurement strategy required a defined and clear tender
requirements and can be changes should the cost and budget are too expensive. Management
based on the other hand, is suitable for projects that are complex, large scale and requires
additional management expertise and good planning.

Other than that, in terms of price certainty Traditional method has no price certainty
during design phase but price will be certain after construction commitment occurs. Cost will
be monitored at all stages. Design and build method is the most suitable to determine the
price of supplies however this will result in a higher overall cost if changes of design occurs.
High risk will be accountable to the contractor as the contactor takes single-point
responsibility in this method. Management based procurement on the other hand no firm
price will be set at commitment of construction. The contractor will not be responsible for
management cost of works.

In a nutshell, Traditional method can be understood suitable for better cost and
quality. If the nature of the project calls for better time and cost management, Design and
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Name : Mohd Afiq bin Abdullah // ARK 876 CONSTRUCTION PROJECT MANAGEMENT
Student ID : 2016447808 // REFLECTIVE WRITING ASSIGNMENT

build is the most suitable. This type of procurement method also is the most commonly used
in most projects in Malaysia. For better time and quality, Management based method is the
most suitable procedure.

Scenario 1: Construction claim management delay in Malaysia

Construction industry in Malaysia is a growing industry and a highly competitive

field. Construction industry in Malaysia contributes about a moderate growth of 5.9 per cent
year-on-year to record RM37.1 billion (Q4 2017: RM35.1 billion) of the value of
construction work done in the first quarter 2018. (Department of Statistics,
Malaysia).According to Construction Industry Development Board (CIDB), construction
sector saw a growth of 8% to RM170b in 2017 compared to 7.4 per cent, or RM166 billion in
2016.

Even though construction industry recorded a fast growing pace in Malaysia,

claims management in realty still shows failure and delay of payment and claims of the works
done. Mostly failure of claims are concerning additional works. This scenario has been for
quoted by Saied Kartam, 1999 as he quoted completing a project on schedule is a difficult
task to achieve in the uncertain, complex, multiparty, and dynamic environment of
construction projects. Furthermore, the open nature of the construction industry causes it to
be prone to disputes between parties. Other than that, even with the most expert
understanding of construction contract and the most reasonable risk-allocation system, claims
will continue to present problems if they are poorly managed in practice (Zaneldine, 2006).

An earlier prevention of claims disputes can be lessen if a good practice of suitable

construction procurement process appropriate with the nature and size of the project as
discussed in the previous chapter which states management based procurements are more
suitable for projects that are complex and large scale projects. Complex projects had more
claim disputes as most contractors opted for Design and build method which will determine
the price of supplies initially despite high risk will be accountable to the contractor if a lot of
design changes has to be made.

There are 5 factors which delay of claims can occur. Namely, the nature of the
contract followed by contract complexity. Tolerance and problems between involving parties
and risk management. Lastly, the pressure of time constraint also influence delay of claims
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Name : Mohd Afiq bin Abdullah // ARK 876 CONSTRUCTION PROJECT MANAGEMENT
Student ID : 2016447808 // REFLECTIVE WRITING ASSIGNMENT

(Zaneldine, 2006). Other than the aforementioned 6 factors, most commonly known causes of
claims delay is lack of awareness by site staff. Changes in design will result in orders to be
delivered to the site in which if a mix up between site staff and design professionals occurs
without firstly referring to the contract due to time constraints can cause the work be done but
if the cost not stated in contract will not be reimbursed. So, it is vital for contract
understanding by not only the site staff but also construction professionals who did
amendments of design works. Failure to access to relevant contracts related to the contract
can also cause delay in construction time if not for the delay of claims. This is why a certain
degree of agreement and understanding of construction procurement must be fully
implemented to avoid problems that led to the delay of claim payments.

If the process of choosing suitable procurement of a type of project is not observed

from the beginning of the project, there are ways to control a project’s work flow and
management to ensure no claims delay. Firstly, appropriate project information must be kept
throughout the course of the project because changes in design and work can be ensured if
any clauses of restrictions are to be aware all times. Furthermore, contractors must record
additional costs to prevent conflicts between clients and other construction professionals.
This can ease and assist of the claim process by financing bodies in later stages.

In summary, an understanding of contract and construction procurements must be

made cleared and defined in earlier stages of construction. This ensures any disputes or
conflict can be rectified through standard and transparent procedures.

Scenario 2: Construction projects completion delay in Malaysia

Ministry of Housing and Local Government (KPKT) define the project delay is the
project who are experiencing delays in construction period where different gaps between the
actual in progress sites work compared to the work scheduled which is between 10% to 30%.
Critical project is the project encountering delays in development period where gap between
actual work progresses compared to the work scheduled is more than 30% or the projects
neglected to finish in the construction time frame. (KPKT 2010). In common cases, delay of
construction will result projects using more budget cost, more time and depleted material and
workmanship quality.

Recent case is at main campus of University Malaysia Kelantan and second case of
delay is a construction of research complex in National University of Malaysia, Bangi. Both
cases are experienced delay. Delays give increase to disturbance of work and loss of
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Name : Mohd Afiq bin Abdullah // ARK 876 CONSTRUCTION PROJECT MANAGEMENT
Student ID : 2016447808 // REFLECTIVE WRITING ASSIGNMENT

productivity, late completion of project increased time related costs, and third party claims
and abandonment or termination of contract. It is important that general management keep
track of project progress to reduce the possibility of delay occurrence or identify it at early
stages. (Saleh Al Hadi Tumi 2009)

Delayed projects will incur additional cost as the result of extending the contract time
Standard construction practices permit some level of percentage of the project cost as a
contingency allowance in the contract price and this allowance is usually based on judgment.
Although the contract parties agreed upon the extra time and cost associated with delay, in
many cases there were problems between the owner and contractor as to whether the
contractor was entitled to claim the extra cost. (Murali Sambasivan 2007). This is where
proper procurement understanding comes into play as to prevent is better than to treat.

Different procurement strategies are suitable for different types of project for example
big and complex projects will opt for management based procurement strategy. Management
based procurement method can give contractors more flexibility during works in result if
each and every management will be specialised in this method. Thus, reducing the possibility
of construction delay, reducing unnecessary additional cost and good workmanship.

Delay of projects has not only been always on the construction management team
fault. However there are some cases of delay had been caused by the client’s behalf. For
example, Majlis Amanah Rakyat (MARA) management procurement construction also had
been in argument in the past years. Studies have shown due to the nature of difficulty of cash
flow from bursary department of MARA had resulted in of its several projects facing delay.
Contractors and respecting construction bodies had find their claims been taken too long to
go through and more of their construction works time are being consumed due to waiting
reimbursement of funds. Abdullah et. el. (Mohd Razaki Abdullah 2010) made a study about
MARA issue of procurement back in 2010. The studies has conclude some MARA project
problems such as cash flow and financial difficulties faced by contractors, contractor’s poor
site management and ineffective planning and scheduling by contractors are the main cause
of the delay.

In conclusion of this type of scenario, the management of procurement by client’s or

construction team should be duly observed and dealt with thoroughly and carefully. Certain
types of projects especially public building shall not be compromised of its completion time
because in building a nation is as important as building its infrastructure.
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Name : Mohd Afiq bin Abdullah // ARK 876 CONSTRUCTION PROJECT MANAGEMENT
Student ID : 2016447808 // REFLECTIVE WRITING ASSIGNMENT

Conclusion

As a conclusion, the aforementioned procurement strategies in the introduction topic

compared with the two scenarios mentioned in this report shows if the unsuitable type of
procurement strategies are undertaken will cause project delay of its completion time and
problematic claim procedures. Before any project starts, it is safe to study carefully the brief
and contract document’s clauses and restrictions first so that in the later stage of the project
will not cause any disputes and arguments. A ‘Domino effect, will not be occur if proper
planning of a project especially procurement is understood. Finally, I hope that this report
will inspire on how time management , good handling of budget and tolerance in decision
making is important in any project in line with the role of an architect who is responsible to
lead a project.

References

T. (2018, May 10). Quarterly Construction Statistics, First Quarter 2018. Retrieved June 30,
2018, from https://www.dosm.gov.my

Online, T. S. (2017, April 11). CIDB sees construction sector growing 8% to RM170b in
2017 - Business News | The Star Online. Retrieved June 30, 2018, from
https://www.thestar.com.my/business/business-news/2017/04/11/cidb-sees-construction-
sector-growing-8pct-to-rm170b-in-2017/

P. (2018). Procurement Strategy Development. Retrieved July 1, 2018, from

http://www.procurement-academy.com/procurement-competences/procurement-strategy-
development/

Fox, S. (2014, February 24). Guide to Construction Procurement Strategies. Retrieved June
30, 2018, from https://www.slideshare.net/sarahjvfox/guide-to-construction-procurement-
strategies

Bakhary, N. A., Adnan, H., & Ibrahim, A. (2015). A study of construction claim management
problems in Malaysia. Procedia Economics and Finance, 23, 63-70.

Hamzah, N., Khoiry, M. A., Arshad, I., Tawil, N. M., & Ani, A. C. (2011). Cause of
construction delay-Theoretical framework. Procedia Engineering, 20, 490-495.

Sin, T. A. S. (2006). Payment issues–The present dilemmas of Malaysian construction

industry. Unpublished Masters Dissertations, Universiti Teknologi Malaysia, Skudai. “