Sem 4

1. PROFESSIONAL PRACTICE 1
TUTORIAL 3
PROCUREMENT METHODS
WONG JIA JING
YEAP PHAY SHIAN
YEE JYH LIN

2. DESIGN & BUILD
ADVANTAGES
● Selection can be made based on best or
prefered design of the client
● Reduce total project duration
Due to implementation of Guaranteed maximum
Price (GMP) concept:
● Employer’s financial commitment is capped
● Change made by employer can be easily
accommodated
● Claim for extension of time, loses and
expenses can be minimise
**Client’s overall risk is LOW!

3. DESIGN & BUILD
DISADVANTAGES
● Client driven change can be expensive
● Bids are difficult to compare
● Difficult to formulate Employer’s
Requirement in the absence of an approved
drawing
● Commencement date depends on approval

4. MANAGEMENT
CONTRACTING
ADVANTAGES
● Management contractor (MC) participate at
early stage of design & planning
● Shorter overall development time
● Best possible price can be obtained
● Employer only have to deal with ONE party

5. MANAGEMENT
CONTRACTING
DISADVANTAGES
● Uncertainty of final cost until last work
package is let to tender
● Greater remeasurement & variation
● Requires a good quality brief

6. CONSTRUCTION
MANAGEMENT
ADVANTAGES
● Construction manager participate at early
stage of design stage & planning
● Lines of communication between the client
and the specialist contractors are shorter
● Late changes easily accommodated
● Detailed design can continue in parallel with
construction –shorter time.

7. CONSTRUCTION
MANAGEMENT
DISADVANTAGES
● The client has more direct trades contractors
to deal with
● The client’s financial commitment is
uncertain until the last of the works contracts
has been signed.
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8. TENDERING
METHODS TYPES
● OPEN TENDERING
● SELECTIVE TENDERING
● NEGOTIATED TENDERING

9. OPEN TENDERING
ADVANTAGES
● High competition in pricing
● All tenders received will be genuine
● New opportunities presented by selecting
new contractor
● Most familiar procurement method to all
sectors

10. OPEN TENDERING
DISADVANTAGES
● High tendering cost
● Risk of selecting new / unknown /
inexperienced contractors.
● Selection of lowest tender may result from
under-priced contractor which leads to poor
quality of work or delay of work if the
contractor encounters financial difficulties
due to undercutting the prices.
● High evaluation time

11. SELECTIVE
TENDERING
ADVANTAGES
● High quality workmanship
● Only competent and well known tenderers
tendering.
● Cost of tendering reduced
● Chances of failure to fulfill an obligation is
minimized

12. SELECTIVE
TENDERING
DISADVANTAGES
● Tender Price may be invariably higher than it
would have been in open tendering.
● Longer tendering process

13. NEGOTIATED
TENDERING
ADVANTAGES
● High quality workmanship
● Easy to meet client’s expectations
● Contractor with proven experience engaged
● Time & cost saving in removing tender
process

14. NEGOTIATED
TENDERING
DISADVANTAGES
● The costs may be driven up by the lack of
competitive bidding.
● Longer time period to negotiate before
award of tender

15. RECOMMENDATIONS
FOR TENDERING METHOD
SELECTIVE TENDERING

16. THANK YOU!