Procurement is a formal process by which to obtain or to create a product upon the client’s need for a new facility through two main steps. Firstly, the logical starting point would be the client’s approval, which is based on the feasibility study to determine whether to proceed or not. Furthermore, the client’s decision will determine whether to procure, how to procure, what to procure and when to procure. Thus, all construction projects must begin by identifying the client’s needs and constraints. For example, public organisations might be required by law to follow certain procurement practices and make bidding selection from the prospective sellers in a certain way, on the other hand, private companies do not need to comply with competitive bidding because it is not required by law. Secondly, procurement routes should be established by identifying the project’s needs. This includes marketplace conditions, local standards and determining the overall complexity of the project and the level of risk is critical to selecting the best procurement approach
Evidently, the client’s prime role as a project creator is to define the project objectives and to establish a structure for the management of the project, as well as selecting the most appropriate method of procurement, which requires the client’s understanding of basic principles of risk management. A survey from the Chartered Institute of Building (CIOB) into procurement in the construction industry indicates over 77% of respondents have serious doubts whether construction clients are educated enough about the importance of selecting the right procurement route. Among possible problems that may be encountered at later stages of a project, poor standards, projects becoming over-budgeted or unable to be finished within the estimated timeframe were mentioned. Thus when construction clients think that procuring construction is “the same as buying grocery” and do not understand the damage they cause to their own projects when they accept suicide bids (CIOB, 2010). A good example to illustrate this can be found in the case of Wembley stadium, when the client action and consideration were based on price alone and very low cost. Having awarded the project to an Australian contractor, who has no sufficient Knowledge of UK construction supply chain, Design and Build contract was rush assembled by the client without fully establishing its requirement (NAO, 2003). It is clear from the above that complete project information, client’s awareness and positive involvement will lead to more accurate selection of the procurement system and if the client selects an inappropriate procurement, method this may lead to undesirable project outcomes.
Bearing in mind the client’s significant impact on choosing of the procurement system, there are other factors that will also influence procurement choice, which are project-nature related, such as the complexity of the project, size, innovative design, innovative materials and local condition. This has been seen in the case of Portcullis House. The start of construction was delayed by almost a year because of certain problems London Underground met, while building the new Underground railway station, which lies beneath Portcullis House, and involved a complex structural engineering solution. Moreover, the roof and external walls, cost a total of £29 million more than forecasted, because of the innovative nature of the design. Therefore, project complexity definitely should have led to changes in the approach towards selecting the appropriate procurement route. Designs and technology change rapidly, and so do innovations, which tend to lead to changes in materials (NAO N. A., 2002). Those projects involving minimal risks will call for simple, straightforward plans. Large projects, or those involving significant risks, will need further detail and more sophisticated procurement route.
Regardless of project type or whether the project is notifiable or not, the client should always ensure they have access to competent procurement advice. The construction client’s attitude towards contractor selection and contractor’s freedom of presenting what is good practice are paramount. The evidence above suggests that success in construction projects is driven by the knowledge and skills of the client. Because even if the contractor or the client’s adviser introduce the top quality procurement route, client can simply ignore it, as nobody can force the client to do anything. This is certainly true in the case of The New Scottish Parliament Building. The reports by the Auditor General of Scotland provided sound project management advice but the project team did not act upon them, nor did they deal with the identified shortcomings. A lack of a proper analysis and selection of the procurement system was a fundamental cause of the problems with the project (Isobel White, 2005). Consequently, it can be concluded that the success of a selecting the right procurement system lies largely in the hands of the construction clients. Therefore, the client has more impact factor that determines the choice of procurement system than the project nature.
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