This document discusses four procurement methods - traditional, design and build, management contracting, and construction management. It analyzes the advantages and disadvantages of management contracting and traditional methods in terms of time, cost, risk, and design control. Traditional method provides more certainty of cost and schedule as design is complete before tender. However, it has a longer project duration. Management contracting allows for earlier start but has uncertainty of final cost until contracts are signed and client loses some design control. The document concludes the traditional method is most suitable for the project.

1. SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
Bachelor of Quantity Surveying (Honours)
Group members: Felix Vong Zhi Wei 0318462
Lee Ern Hui 0319703
Elliot Pang Tiu Seng 0319438
Welson Lum Wei Jiunn 0319514
Kevin Lee Hee Xian 0315192

2. PROCUREMENT METHOD
• Traditional method
• Design and Build
• Management Contracting
• Construction Management
Each procurement
method will affect the
time, cost and quality of
the project.
Risk should be
considered as for
choosing which
procurement method to
be used.

3. Client name: Dato’ Sri Haji Abd Rahim Bin Haji Abdul
Name of project: Spyhx Condo
Location: 47500, Subang Jaya
Client’s Budget: RM ????
- No demolition works
- Flat and compressed
soil

4. 20-storey condominium
Additional green
Sustainable green
features
Project Example

5. MANAGEMENT
CONTRACTING
• M.C USUALLY NOMINATED BY THE CLIENT BASED ON THEIR
EXPERIENCE IN THE MANAGEMENT SERVICES OR SELECTED BY
COMPETITION BASED ON TENDERS
• HE DOES NONE OF THE WORK HIMSELF BUT SEPARATE IT INTO WORK
PACKAGES TO THE WORK CONTRACTORS
• M.C PROVIDES CONSTRUCTION MANAGEMENT SERVICE ON A FEE BASIS
AS PART OF THE CLIENT’S MANAGEMENT TEAM
• PROVIDES AND MAINTAINS ALL THE NECESSARY SITE FACILITIES AND
DEALING WITH LABOUR PROBLEM

7. ADVANTAGES
• Reduced of time requirement , earlier complete the
project and return investment by client.
• Able to identify with the client’s needs and interests.
• Work can start earlier as the works package designed.
• Contractor’s practical knowledge and management
expertise able to assist the design team.

8. DISADVANTAGES
• The final cost of the project uncertainly until the last works
contract signed.
• Variations and the amount of re-measurement required
greater than traditional contracts.

9. TRADITIONAL PROCUREMENT
METHOD
• widely used by building projects.
• Suitable for all clients, including inexperienced clients „„
• Cost certainty

10. ADVANTAGES
• with the contractor building to a complete design, it should
be easier for the employer to minimise time and cost
overruns
• employer retains control of design
• There is a lot experience with this type of procurement
method

11. DISADVANTAGES
• It takes a long time before the project can start due to
selection of the consultant engineer, the time needed to
carry to design, selection of contractor.
• High risk for client if there are mistakes in the design of the
project
• The delays in the project will cause the exceed of the budget
due to unforeseen circumstances.

12. Examine of The
Contract Form

13. What is Lump Sum Contract?
Approach in terms of
1. DESIGN
2. QUALITY
3. COST
- Contract Sum is determined before construction work
started.
*reduce design & contract administration cost.
- Cost is Anticipated

14. Lump Sum Contract
Client’s Side
-Essentially assigned most of the risk to the Contractor.
-Client controls contingency.
-The tendered price included high risk contingency.
-Required to appoint consultant team at the early stage. (Contractor
does not provide pre-construction consulting services)

15. Lump Sum Contract
Contractor’s Side
-Ask for higher markup in order of unforeseen contingencies.
-Appointed by competitive tender/ Negotiation (Rare)
-Stated estimating on labour costs, material costs, contractor’s
overhead, and profit margin.
-Greater control in overhead cost and profit.

16. Lump Sum Contract
Contractor’s Side (Cons)
-Poor executed and Long-Delayed job will diminish the contractor’s profit
and affect contractor’s overhead cost.

17. Suitability of Lump Sum
Contract
Appropriate when work is defined in detail, limited variations are
expected, level of risk is low and quantifiable, and client does not wish
to participate in the management of the project.
Reduce Client’s Risk
Stable soil condition

18. DESIGN & BUILD PROCUREMENT
• EVALUATE THE VIABILITY OF THE DESIGN AND BUILD S
COMPARING TO BASIC PROCUREMENT METHODS FOR THE
NEW PROJECT.

19. ffEMPLOYER
D&B
CONTRACTO
R
D&B
CONTRACTO
R
D&B
CONTRACTO
R
D&B
CONTRACTO
R
D&B
CONTRACTO
R
Contractu
al
Relations
hip
Coordination

20. DIFFERENT BETWEEN DESIGN & BUILD AND BASIC PROCUREMENT METHODS
DESIGN & BUILD BASIC PROCUREMENTS
Single Point Responsibility Client has consultants
Complex tendering process Easier tendering process
Client’s ability to control design
reduced
Able to control the design
Reduced project duration Longer project duration
Lower quality of work Higher quality of work
Guarantee Maximum Price (GMP) Uncertain Price – (Management
Contracting)

21. Procurement Methods
• Traditional Method
• Management Contracting

22. Factors influencing the selection of
Procurement Method
 Project Characteristics (time, cost & risk)
 Timing
 Cost issues
 Client
 External factors (economic downturn)

23. TRADITIONAL METHOD MANAGEMENT
CONTRACT
Time Not suitable for fast track project
- design have to be completed before
of tender/construction.
Overlapping of design
construction allows
construction to
earlier on site if early
completion is a critical
factor.
Cost Tender will be based on completed design
- provides certainty of construction cost
Construction starts before
full design is completed
- uncertainty of final cost
until final works contract is
signed.
Risk Lower financial risk on client ( construction
after design is completed)
Higher financial risk on
client
- higher chance of
changing design during
construction period.
Design Client can lead and have direct influence on
the design
- quality as well as functionality can be
assured
Client loses direct control
of design quality because
it is under the control of
management contractor
consultant.

24. Conclusion
Traditional Procurement Method – MOST SUITABLE
 Suitable for all clients including inexperienced clients
 Price certainty is achieved early - secure the project within
the client’s budget and also provides a firm contractual date
for completion
 The cost is fixed after contract signed - lower financial risk
on client (impact of economic)
 Client can be involved in design - can improve functionality
& quality of overall design
 A tried and test method of procurement which the market is
very familiar with.