Essay: Attitudes Journal Management In Engineering: Procurement Methods And Strategies.

Procurement Processes and Strategies in Engineering Management

Discuss About The Attitudes Journal Management In Engineering.

A proper analysis of various procurement processes or strategies appears to be much hard and much complex as they are seen as either financial or unbeneficial projects that appear to be same in the systems procurement steps. For one to make a decision on what procurement  strategy is, one should consider the clients objectives, means of payments, design methods and constructional obligations.to have a good working knowledge of key differences, one should appropriately analyse and evaluate the working strategies by carrying out research through studies to come up with an appropriate process documentation (Murdoch & Hughes, 2000).

Construction project resources are put into two categories namely: managerial and technical skills ,plant construction and equipment methods which can be evaluated or obtained through the following methods (Murdoch & Hughes, 2000)

• standard approach.
• Selection approach.
• Construction and design approach.
• Divided contract approach.
• Indirect and direct labour.
• Consultants appointing.
• Client and consultants contracts.
• Consultant’s payment methods.
• Contractor’s appointments.
• Contract negotiations.

Alliance contracting or the private public partnership is kind of infrastructure procurement in which the national government in conjunction with the private sectors comes together to purchase, buy, acquire capital assets or tasks from outer sources and accept to divide the favourable circumstances and operate via risk in collaboration with a project progresses.

In alliance contracting the involved parties create a cohesive body that collectively divide the risks and benefits as laid in the joint agreement formula whereas in the public-private partnering the parties set aims and goals as well as the conflict resolution and escalation strategies enacted with the partners retaining their independence and thus benefits or suffer loses independently in the relationship creating a win-win or lose-lose environment.

Alliancing have demonstrated a positive correlation with productivity, job satisfaction as well as loyalty what is significance in providing a positive results other than protecting a contractual status

Through the use of alliance, it becomes easier to innovate new resolution ideas and management the stakeholders’ interest and conduct new benchmarks for the project safety.

The rate by which Australia alliances give a competitive edge to those who seeks to get marketing overseas keeps improved.

Selection of appropriate procurement process system is aimed at reducing the project’s cost. Due to this, it has been made difficult to come up with the best systems as clients, consultants and contractor come up with different options and taste. Poor decision making in selecting procurement systems may result to overruns of costs, delay times and problem in the quality of the design project as correct choice of procurement system is vital for the efficiency of the construction project. A study has been conducted through which all systems in building firms to generate the best systems to be applied in project design and construction. Through project evaluation, one is able to choose appropriate procurement methods. The various procurement systems are as follows:

1. separated procurement system (traditional systems and variant of traditional systems)
2. Co-operated procurement systems(traditional systems and variant of traditional systems)
3. Integrated procurement systems (include traditional procurement systems)
4. Management-oriented procurement systems (management contracting, construction management)
5. Management procurement system.

Alliance Contracting

This is a procurement process in which the construction and designing responsibilities are separated or divided and various independent organizations such as constrictors and designers are used to carry up the tasks. Other names used to refer to the system are; multiple responsibilities contracting approach sequential or linear contracting systems.in this method system, the development activities of the construction project begin from a simple study or analysis, design preliminary, construction documentation and hand over are undertaken step by step or one followed by the other. Locally, fully working designs or drawings are to be made by the designers or constructors before the design work or construction project is undertaken. This procurement system is separated into two sub-divisions namely; variant of the traditional systems and traditional system. Furthermore, the variant of the traditional systems is subdivided into; sequential method and accelerated method.

In the sequential method or single stage tendering approach, the client of the building is capable of selecting a consultant’s team or group who on the client’s behalf generate construction drawings and designs specifications and project documents and are also capable of undertaking the tendering work process where they come up with the appropriate contractor for the design. Once the contractor has been obtained, he /she will undertake the construction project depending on the drawing designs provided by the client’s consultants.

Considering the accelerated method which is said to be an innovative approach used to haste or speed up constructor’s appointments and the start of the construction project. Accelerated procurement systems are classified into two various groups comprising of two-stage method and negotiation methods. It is through the methods that the project owners and the contractors come in agreements about the payments, cost of the projects, contract time and submission of fixed tender.

Time. The traditional procurement system has been evaluated as the slowest project presentation approach due to its sequential or linear approach. The advantage of this method is that it is preferred as it gives clear accountability and good design and construction control by the client. More time is availed for the client and the project team to review the project before design as the pre-contract stage of the system is longer.

Cost. More price certainty is provided by the system to the clients at the beginning of the project and also gives clients competitive and firmer price since the complete working and design drawings have completely been developed and well detailed in the tender. Anny construction and design ambiguity or uncertainties that make the contractor to unnecessary inflate the price. In places where a lower project cost is required the bill of requirement materials is needed, the bidding is fair as the project cost is lower. As a result of variation, the system is employed to regulate the cost.

Integrated Procurement Systems

Quality. Through traditional procurement systems, a high degree of functional standards and uncertainty quality is gained. Through the system, the client is presented a chance gt generate and gather the best construction designs also enabling skills and knowledge sharing among consultants and constructors. qualityThe method provides enough time for consultants and clients to evaluate and perfectly develop the design and specifications for proper document presentation. Only limitation of the system is that it does not avail opportunities for the contractor to make the contribution on his or her management and technology as they come to the scene after the development and approval of the projects. Integrated procurement systems (Masterman, 1996).

In this procurement method, design and construction responsibilities are combined or integrated into the working out of the design or tender. The roles are assigned to each specific firm or body. This system is also referred to as single or parallel procurement system which entails the client dealing with only one or single body for designing and constructing the presented work or project. This system, therefore, allows or involves the project constructor design teamwork. It is through this system that people team up or come together in agreement to form a design and construction company where they are capable of sharing ideas to come up with the best solutions. The project owner is capable of engaging with the consultants to generate a design programme by collecting all important information on the project. Well documented results, project description and clients requirements are obtained. Invited contractors will submit their own drawings and designs, construction and come up with their own projects proposal costs. It is through these procurement techniques that enables the project owners come up with conclusions that prefers the best economic. Project cost and duration. The procurement systems innovation and variation is made up of package deal, turnkey, development and contract systems which help in economical time management. The techniques give the contractor a role of designing and working on the project. This also allows the contractor to start the project during the early times. Package deal is a procurement system in which the client gives the contractor all the roles of all which is needed and important for the construction, design and project delivery.it is also known as “all in” the contractor is given a role to make projects brief preparations, final workings and sketch drawings, construction project financing, finding all authorities approvals, commissioning and furnishing all accessories and equipment and presenting the construction project to the client (Masterman, 1996).

Choosing the Appropriate Procurement Method

Turnkey contract is a package contract in which a contractor responsible to undertake tasks that are for project commissioning and construction. Turnkey is used to referring to completion where the constructor is presented with the role of creating designs, brief project presentations, he or she is given capital to fund the project workings and presenting project documents.in this system the constructor is given the roles of designing and constructing the design project.in addition, the customers consultant individual is allowed to generate design concepts or drawings presentations. He or she is capable of constructing and evaluating  the design sicking to the given work (Rowlinson, 1987).

Time. Through the pre-tender process, the personnel’s are allowed to start working on the project just at the beginning of the project as such leads to time reduction in designing and working on the project. The system also allows the detailed design process and construction to concurrently run or parallels run to each other hence reduction of project overall development period.as a single entity, the system is responsible for design and construction, as it enables the contractor to not only control the construction time but also the reserved time for the project design hence reducing overall construction time. Contractors are well chosen based on their skills, knowledge, working experience and competency in design construction which helps in minimizing construction time. This is done through design rationalizing, process construction and site activities (Rowlinson, 1987)

Cost. The design and Build and Turnkey Procurement Systems cost is higher than that of the traditional contracting system regardless of the fixed costs at the beginning of the project. However, the significant saving cost in this procurement process is done through the reduction of development time. Loan reduction interest and early financial benefits or returns.in this process saving cost can also be made when the constructor simplifies or makes the project simple by application of his or her own skills and knowledge (Rowlinson, 1987)

It is a procurement system that aims at managing the construction and design projects.it is in this method that the consultant take the place of the client as a manager of of the of the construction design project. Commissioning of the construction is meat to any sub-contractor or specialist who gets into the contract with either the client or the management contractor. The system is put in place to enable the consultant or specialist to gain more skills for him to be in control of all processes involved in design project. The work of the client’s constructor is to manage or supervise the construction and design by the design consultants and the chosen specialists constructors. The clients consultant is not allowed to undertake any task as his role is to manage or supervise the work in absence of the client. This procurement system is divided into three different categories namely: Design and manages, management construction system and construction management systems.

Benefits and Risks of Different Procurement Methods

 This is a system where one body or organization is approved of being responsible for designing the construction project and managing its construction. The organization or firm takes the tender which it performs itself. The firm is made up of a number of package constructors or specialist sub-constructors who make an agreement with the client.

Construction management contracting system and management contracting are procurement systems in which one is given some projects to fund by managing, supervising, design and project construction. This is a system in which constrictors are hired as consultancy personnel. Construction management constructing and constructor management is where in one instance, the management contractors are in agreement while in construction management contracting, sub-contractors are in agreement with the project owner (Akintoye & Fitzgerald, 1995)

Co-operate management system isn’t similar to various arrangements that exists among in cooperate commonwealth commodities. It is different as compared to small arrangements between two non-corporate commonwealth commodities, to large organizations containing more non-corporate Commonwealth entities.it can further contain single deed or contract of standing offer handled by a single entity, with the rest joining through understanding agreement or separate contracts for every separate commodity.

• The method leads to reduced market approaches due to presence of administrative efficiencies for industrial commodities.
• There is cost savings through discount making.
• It is through this procurement process that one is able to share knowledge and better practices between entities.

Cooperate procurement benefits are only important to smaller entities that are not able to make price savings through an individual market approach or contain the necessary skills r knowledge to peruse procurement. This system is only limited to services and products in common use by most entities and also performs well for specialist areas that are only needed by a small number of entities. Panel arrangements are specifically suited to cooperate procurement since they are able to accommodate more flexibility to meet a range of requirement entities (Ashworth, 2001)

This system covers goods and services procurement as it involves activities and consultancy services. The main objective of this method is to ensure availability of required materials or goods and services comprising of roads, buildings, and other infrastructure at appropriate time and price to ensure a smooth running of planned activities The Aqua Group, 2001).  

Conclusion

Quality, cost and time are most important parts of a constructional project performance. The three have been noted to be most in highly competitive and uncertain business fields as clients are in need of better values from their project investments. Most people or project owners of quick completion of projects and as per the agreed periods and cost. It has been noted that it is through evaluation and analysis of procurement systems that the client’s needs or requirements can be met. The major reason behind this is that procurement systems have varying effects on quality, time and project cost. It is most necessary at every outset of any project to appropriately consider important factors when choosing the most appropriate procurement system for a project construction (Kwakye, 1997)

References

Ashworth A (2001) Contractual Procedures in the Construction Industry, UNITEC, New Zealand.

Akintoye, A and Fitzgerald E (1995) – Design and Build: A Survey of Architects’ Views, Engineering, Construction and Architectural management.

Kwakye A A (1997) Construction Project Administration In Practice – Longman, London.

Chitkara K K (2005): Project Management - Planning, Scheduling and Controlling – Tata McGraw Hill, New Delhi.

Masterman J W E (1996) – Building Procurement Systems: An Introduction, E & FN Spon, London.

Lam, E W M, Albert P C and Chan D W M (2003) Is Design and Build the Preferred Option to Procure all Projects? Research Fellow, Department of Building and Real estate, The Hong Kong Polytechnic University.

Rowlinson, S (1987) Design and Build – Its development and Present Status, Ascot – CIOB.

Murdoch J and Hughes W ( 2000) Construction Contract: Law and Management: 3rd Edition E&FN Spon, London.

The Aqua Group (2001) Tenders and Contract for Building- 3rd. Edition Blackwell Science, London.

Songer A D and Molenaar K R (1996): Selecting Design and Build – Public and Private Sector Owner Attitudes, Journal of Management in Civil Engineering, ASCE