There are several layouts for procurement in construction development. The selection of the procurement method is important to the project; hence, deciding a choice is a core to creating a profit from the project.
The procurement method adopted in the project is the packaging deal. This kind of procurement method can also be called a turnkey and design-and-build system. In this method, the client recognizes his requirement for the building and declares his requirements to the contractor. Commonly, the client’s professional spokesperson may ascertain the wants and provide primary tender documents. Contractors with the required pre-qualification can bid for the project and submit a full design, costing, and schedule. After the evaluation stage, the client will choose the contractor they want. Design is fully formed when both participants lead a decisive agreement concerning designation and cost.
Table 1: Procurement methods in the Construction Industry
According to the question, the construction project is a construction project from Jabatan Kerja Raya, Sabah, and a private contractor firm executed it. The client carrying out this project is Kementerian Pendidikan Malaysia, while the enforcement officer in charge will be Pengarah Kerja Raya Sabah. The client would like to utilize the contractor’s innovation in some specific works; part of the design work is carried out by the contractor.
Based on the table above, we can see that the design and build work is under the contractor. At the same time, the finance and operation are under client.
The contractor indeed covers the responsibility of the design and build. The consultant’s field only restricted to the administration of the contract. The client is accountable for finance and operation.
In this method, the contractor requires to undertake both the design and construction of the work in return for a lump sum price. Contractors are required to reveal a design to a certain level, provide a tender figure, and offer the whole package, which is termed a proposal to be evaluated to meet the client’s satisfaction. The consultants will be required to evaluate each contractor’s proposal. In this case, the evaluation of tenders is usually challenging because the contractors are not working with one design. Tenderers should be informed of the measures to be used, and whether the price is likely to be a prime factor.
The design and build method has given the client a single point of contact. However, the client binds to the price of construction and the price of design, much earlier than with the traditional approach. In contrast, the risk is substituted by the contractor. The client’s modifications during design can be expensive because they influence the whole of the contract, rather than just the design team cost. Furthermore, although the contract duration is reduced, valuing the tenders and choosing a contractor can be challenging because all the tenderers are operating with different designs.
The benefits of the packaging deal are the product suitable for the purpose; meanwhile, the contractor owes a qualification for purpose obligation for both design and construction. Besides, it can use the contractor’s innovation and design work economically. Contractor engagement can provide to his practice for better buildability and develop production and cost-effectiveness.
In conclusion, the design and build method suit the project based on the question, whereas management contracting can be possible if the project identified on a package basis.
Once again, it is suggested that the selection of a suitable procurement method is the very fundamental step for the success of the construction project. Thus consideration should be given to this process.