Master's project viva zam

Masters’ Project Presentation;

Panel Contractor Satisfaction and Whether
Collaboration and Partnering are Happening
in a Bespoke Contract
By;

Mohd. Norizam Md. Salleh
(MPM September 2010 Intake)
Matric No: CGS00534317

Date: Nov. 2012

Content
1.0 Introduction
2.0 Review of Literature
3.0 Research Methodology
4.0 Data Collection & Analysis
5.0 Discussion, Conclusion and
Suggestion

1.0 Introduction

1. Background Study
2. Problem Statement
3. Objectives of the Study
4. Key Question
5. Scope of Study
6. Significant of the Study
7. Assumption and Limitation

Chapter 1: Introduction
1. Background Study

There are various type of contract uses in construction
business in Malaysia.
• Standard local contract uses are PWD 203a/b, PAM,
CIDB, IEM and etc.
• International standard contract uses namely JCT, APM,
ICE, FIDIC, NEC and etc.
• Modified version or bespoke contract were uses in
some industries e.g. oil and gas and telecommunication
industries.

Standard form of contract

(Pros.)
• They have endured years of test.
• Designed by experts in the field.
• Provide a representative viewpoint of the industry they
served and normally be a fair contract.
• Represent both parties on an equal and a fair share basis and
not one-sided.
• Normally express the obligation of all the parties involved and
clarify the project scope well.

(Cons.)
• Always labelled as a traditional contract strategy.
• Blamed for the edgy relationship between the project
provider and the contractors.
• Fail to perform as a team.

Bespoke contracts
• In Malaysia it’s commonly used in the Oil and Gas and
Telecommunication sectors.
• Involved specialist jobs and were carried out by registered
panel contractors .

(Cons.)
• Often labelled as one-sided contract as they were designed
by the clients.

(Pros.)
• Modern contract strategies such as win-win approach,
partnering, joint decisions, collaboration, rewards,
cooperation, trusts and etc. that may help in meeting the
project common objectives time, cost and quality S & S can be
found.

1.2 Problem Statement
• Traditional contract strategies were always identified as a
hindrance to a good working relationship between the
client and the contractors.

• On the other hand, the modern contract strategies
encourage the client and contractors to work as a team,
work collaboratively, smart partnering, “win-win”
approach, trust, cooperative, shared risk, reward and etc.
• It’s encouraging the client and the contractors to work
together towards achieving the common goals - to complete
the project/task - on or ahead of schedule, within budget
and at acceptable stipulated quality, safety and
sustainability.

Problems to be addressed in this study are as follows;

• Are the panel contractors to a bespoke contract
satisfied with the form of contract used and how it is
managed by the client?

• Whether the modern contract strategy is being
practised in a bespoke contract.

1.3. Objectives of the Study

• To identify whether the panel contractors fully understand the
form of contract use, specifically the bespoke form of
contract.

• To identify whether the panel contractors are satisfied with
the bespoke contract that were commonly used in the Oil &
Gas and Telecommunication Sectors.

• To identify whether the modern contract strategies such as
collaboration and partnering are being practiced in their
contract.

1.4. Key Questions
80% of the key questions are adapted from Chan A. P.
C. et al. (2004) and they are as follows;
1) Panel contractor satisfaction on the bespoke form of
contract uses;
2) Establishment and communication of conflict
resolution strategy;
3) Commitment to win-win attitude;
4) Regular monitoring of partnering and collaboration
process;
5) Clear definition of responsibilities;
6) Mutual trust;

1.4. Key Questions (cont.)

8) Willingness to eliminate non-value added
activities;
9) Early implementation of partnering process;
10) Willingness to share resources among project
participants.
11) Ability to generate innovative ideas;
12) Subcontractors’ involvement;

1.5 Scope of Study
• Whether the panel contractors fully understand the
form of contract they use especially the bespoke
form of contract.

• Whether the panel contractors are satisfied with the
bespoke contract that is commonly used in the Oil &
Gas and Telecommunication sectors.

• Whether the modern contract strategies such as
collaboration and partnering are being practiced in
their contract.

1.6 Significant of Study
• Only a few study conducted related to bespoke
contract.

• Whether the modern contract strategy such as
collaboration and partnering are practised.

• Whether the panel contractor fully understood the
bespoke contract.

• Might benefit other sectors.

1.7 Assumption & Limitation
Due to limited time this study is limited to a bespoke
form of contract used by a Natural Gas
Operator/Supplier.
The targeted group is the panel contractor’s personel
that exposed to form of contract uses.
Will not discuss in detail the construction scope and
form of contract used.
Will not discuss detail comparison between bespoke
form of contract and standard contract.

Chapter 2: Literature Review

1. Introduction
2. Panel Contractors Satisfaction
3. Bespoke Contract
4. Collaborative Approach
5. Partnering
6. Research Instrument
7. Summary

2.1 Introduction
In carrying out this research, the relevant topics
in construction contract administration and
interpretation such as panel contractor
satisfaction, bespoke contract, collaboration and
partnering were identified and discussed.

The identification of keywords and important
terminologies related to these research objectives
were also defined.

2.2 Panel Contractors Satisfaction
• Geyskens, I & Steenkamp (2000) urged that, the satisfaction level is
one of the key factors which affect partnership development.
However, satisfaction is a vague/unclear term. The contemporary
measurement for partnership is concentrated in economic
satisfaction and social satisfaction (Cited by Wong, 2009).

• Wong (2009) - There are five sub-directions to support fine tuning
of Economic and Social Satisfactions. They are profitable; discount;
quality enhancement; effectiveness; selling and marketing for
Economic Satisfactions and feeling hostility; tactful criticism;
mutual interaction; apocalypse; and polices for Social
Satisfactions.

• Therefore it’s concluded, the panel contractor’s satisfaction to the
form of contract uses in the contract can be seen at the level of
pleasure the contractors feel such as how the contract were carried
out and whether it satisfies them economically and socially.

2.3 Bespoke Contract
Bespoke is a British English word meaning an item made to a
buyer's specification (personalised or tailored).

The characteristic points of bespoke/tailoring contracts are the
client/project provider's are in total control over the form of
contract terms and the way the project should be managed.

Basically, "bespoke contract" describes a high degree of
"customisation" on how the form of contracts are structured and
the relation between the client/project provider's and
contractors. That is the reason why it is usually used in the
specialised industries such as oil and gas, telecommunication,
power plant and etc.

2.4 Collaborative Approach
The meaning of collaboration, is working together to achieve
common goal.
In traditional ‘adversarial’ system, conflict, hostility and litigation
between the client and contractors are normal phenomena. Such a
climate actively militates against collective learning and knowledge
sharing between parties. In opposition, under “collaborative
working”, contractors share risks, pool knowledge and work together
to solve problems at all stages and levels in the productive system, a
process conceptualised as “knotworking” by some theorists (Bishop
et al., 2009).
Collaborative innovation occurs when organisations tap into a user’s
expertise, and through collaborative support, is able to reduce their
costs and increase satisfaction. Collaboration is a shift from a
command-and-control state of mind to connect and collaborate
which is towards modern strategy (Sawhney, 2002).

2.5 Partnering
“Partner/partnering” can be defined as a friend who shares a
common interest or participates in achieving a common goal. In the
construction industry partnering approach can be applied in meeting
the three project objectives which are time, cost and quality.
Ashworth (2006) - It is a procedure for improving working
relationships, based on assumption that strong players make each
other stronger; weak ones destroy each other and not only about
systems and methods but it is essentially about people, enabling them
to operate more efficiently, effectively and economically.
American Arbitration Association (1993) - Partnering is a synergy, a co-
operative, collaborative management effort among contracting and
related parties to complete a project in the most efficient, cost-
effective method possible, by setting common goals, keeping line
communication open, and solving problems together as they arise .

2.6 Research Instrument
Only item/factor i), was designed by the author and the rest
items/factors ii) to xi) (80% of the questionnaires) were adapted
from Chan A. P. C. et al., (2004);

i. Panel contractor satisfaction on the bespoke form of
contract uses;
ii. Establishment and communication of conflict resolution
strategy;
iii. Commitment to win-win attitude;
iv. Regular monitoring of partnering and collaboration
process;
v. Clear definition of responsibilities;
vi. Mutual trust;
vii. Willingness to eliminate non-value added activities;
viii. Early implementation of partnering process;
ix. Willingness to share resources among project participants.
x. Ability to generate innovative ideas;
xi. Subcontractors’ involvement;

2.7 Summary
To achieve satisfaction, whatever form of contract used, the players
need to understand and carry out their obligations well as per
stipulated in the contract.

This study can also determine whether modern contract strategies
such as collaboration, partnering, win-win approach, jointly resolve
problems, reward, cooperation, trust and etc. were practised.

Outcome of this study should be able to determine whether the
panel contractors have fully understood the form of contract
(bespoke contract) use; whether they are satisfied with the
bespoke contract that is commonly used in the oil and gas and
telecommunication sectors; and whether the modern contract
strategies such as collaboration and partnering are being practised
in their contract.

Chapter 3: Methodology
3.1 Introduction
3.2 Research Design
3.3 Survey Method
3.4 Sampling
3.5 Likert Scale
3.6 Data Analysis
3.7 Research Frame Work

3.1 Introduction
Research methodology or research can be defined as a systematic
approach in search of specific answers that can be tabled for those
problems that have been identified.

A research should be carried out to go through a certain
systematic process to initiate new findings (Ranjit Kumar, 1996).

The moment a method to carry out a research is identified, it is
important to make the intentions and objectives are
understandable and clear. Master’s projects should not be over
ambitious and its process must tally with the resources available.

It should portray the total research methodology carried out in
relation to research design, population, the research instrument,
questionnaire design, data collections, data verifications, analysis
process and summary.

3.2 Research Design
This research is a descriptive study and will use quantitative
method to address all the questions arising in the problem
statements and the key questions. The survey will be carried out
using structured questionnaires and semi-structured interviews
that are distributed and conducted within a specific group.

Mohd. Majid (2000) stated that a descriptive research is a study
to assemble information and to explain what is happening. This
statement has been supported by Wiersma (1995) and he had
added that the descriptive study is able to portray or give the
information about certain thing, at certain time and decision
making for future plan.

3.3 Survey Method
i) Semi structures interview
ii) Questionnaires.

Part A – Respondent’s Background
Part B - contain the necessary questions that are
designed in order to identify and determine
whether the research’s problem statements and
the study objectives can be met. 80% of the
elements in these questionnaires were adapted
from Chan A. P. C. et al. (2004).

3.4 Sampling
Respondents
The research will focus on a selected group that will consist of
the people who work with the panel contractors of a Natural Gas
Provider. Among the respondents that will be targeted in this
study are the contractors’ owner and the contractor’s
management level e.g. the project managers, contract managers,
construction manager and engineers.

Distribution of the Questionnaires
Via postage, email and by hand.

3.5 Likert Scale
Likert scale with a measurement point 1 to 5 to examine how
strongly subjects agree or disagree with a statement is adopted
in this study.

3.6 Data Analysis
All the data collected will be stored and analyse
using Statistical Package for Social Science 18.0 for
Windows (SPSS).
It also uses to identify the reliability of the data
collected.
SPSS assist the author to elaborate on various
statistical tests and the interpretation of the result
analysed

3.7 Research
Frame Work
These research steps
provided a clear
methodology framework.

- Provides proper steps
on how the study should
establish the conceptual
model and
- to improve the level of
understanding to the
research methodology.

Chapter 4: Discussion, Conclusion and
Recommendation
4.1 Introduction
4.2 Findings
4.3 Result from Data Collection
4.4 Testing Goodness of Data
4.5 Summary

4.1 Introduction
The questionnaires were focused on the respondent’s knowledge,
understanding and experiences to a form of contract uses by a
natural gas provider. All the data gathered were stored and
analysed using SPSS 18.0.

The data were analysed to determine and identify whether the
results collected from the survey are addressing the research
objectives;

• To identify whether the panel contractors have fully understood the
form of contract they use especially the bespoke form of contract.
• To identify whether the panel contractors are satisfied with the
bespoke contract that were commonly used in the oil and gas and
telecommunication sectors.
• To identify whether the modern contract strategies such as
collaboration and partnering are being practised in their contract.

4.2 Findings
From 13 panel contractors, 48 respondents filled
up and returned the questionnaires.
100% of the survey was carried out among the
respondents related to the panel contractors
registered with a Natural Gas Provider.

4.3.1 Demographic of the Respondents
The finding was considered good for this research as
the respondent involved were;
consisted of matured and experiences workers
came from high education background
exposed to the form of contract uses &
involves in construction management.

Therefore they should be able to understand the
questionnaires and answer them correctly.

Figure 4. 1: Number of Years the Present Company in the Industry

More than 70% of the companies have been in this industry 11 years
or more.

Figure 4. 2: Respondents’ Age.

62% belong to 30 - 39 and 40 – 49 age groups.

Figure 4. 3: Respondents’ Gender.

81.25% of the respondents are male and 18.75% are female.

Figure 4. 4: Respondents’ Marital Status.

83.33% were married and 16.67% are single. 62% of
them are 30 years of age or older

Figure 4. 5: Respondents’ Education Background.

87.5% pose at least a diploma or higher.

Figure 4. 6: Respondents’ Current Position

31.25% are engineers, 22.92% are project managers, 8.33% are
construction managers, 29.17% are directors/owners, and
8.33% are others.

Figure 4. 7: Respondents’ Number of Years Working in
Current Company

About 79% of the respondents have been working in the
company for more than 4 years.

Figure 4. 8: Respondents’ Number of Years Working in Oil
& Gas Industry.

87.5% of the respondents have been working in the industry
for at least 4 years or more.

Figure 4. 9: Respondents’ Total Number of Years of
Working Experiences

93.75% of respondents have at least 4 years of working
experiences.

Figure 4. 10: Whether Respondents’ Know What Bespoke
Contract is?

83.33% of the respondents claimed they knew what a
bespoke contract is and only 16.7% said they do not.

4.3.2 Findings From the Key Questions

i)Panel Contractor Satisfaction on the Bespoke Form of Contract
Uses

ii) Establishment and Communication of Conflict Resolution
Strategy

iii) Commitment to Win-win Attitude

iv) Regular Monitoring of Partnering and Collaboration Process

iv) Clear Definition of Responsibilities

v) Mutual Trust

vi) Eliminate Non-value Added Activities

vii) Early Implementation of Partnering Process

ix) Willingness to Share Resources among Project Participants

x) Ability to Generate Innovative Ideas

xi) Subcontractors’ Involvement

4.4 Testing Goodness of Data
4.4.1 Reliability Statistics
It is important to check the reliability of the data.
Therefore the data were analysed between their initial
attributes, the whole data were tested for the average
inter-correlations among the items measuring the
concept using SPSS 18 to verify the data’s reliability.

Carried out on all 50 questions and the questionnaires
fill up by the 48 respondents.

Cronbach's alpha is a reliability coefficient that indicates how
well the items in a set are positively correlated to one another.
The result shows that the Cronbach's alpha value is 0.950 and
this mean the results are reliable, as the closer it to 1, the
higher the internal consistency reliability is (Sekaran, 2003).

Cronbach alpha based on standardized items is something
similiar but is computed alpha when all scale items are
standardized to have equal means and variances.

Chapter 5: Discussion, Conclusion and
Recommendation
5.1 Introduction
5.2 Summary of main Findings
• Research Objective 1
5.3 Limitation
5.4 Conclusion
5.5 Recommendation for Future Studies

5.1 Introduction

All the research objectives listed in Chapter 1, will
be addressed, imprecisely discussed and concluded
via the findings obtained from the research
questionnaires.

5.2 Summary of main Findings;


Research Objective no. 1: To identify whether the panel
contractors have fully understood the form of contract they use
especially the bespoke form of contract?

• Majorities of the respondents have fully understood with the
form of contract uses. This can be seen from the answer to
question 11 of Part A, where 83.33% of the respondents
claimed they knew what is bespoke contract is and only 16.7%
do not.

• In addition when they were asked in question 1 of the Part B,
whether they have fully understood about the form of
contract uses, majorities answered they do understood with a
median value of 3.833.

Research Objective no. 2: To identify whether the panel
contractors are satisfied with the bespoke contract that is
commonly used in the oil and gas and telecommunication
sectors.

• Satisfaction is low. The feedback gathered from the questions
base on the factor of, “Panel Contractor Satisfaction on the
Bespoke Form of Contract” is that, out of twelve (12)
questions, two (2) agreed, eight (8) undecided and two (2)
disagreeing. Majority of the respondents claimed that they
fully understood the bespoke contract that is shown by the
mean value of 3.833. But most of them are undecided
whether the form of contract use is fairly treated between the
clients and the panel contractors.

Research Objective no. 2 (continued):

• Majority of the respondents are agreed that the payment was
paid on time. The survey outcome also determined that no
safeguard on the unforeseen risks were given by the client but
again the respondents were undecided whether the good
relation between the client and the contractors exist via new
contract strategy was being practised in this contract and
whether the client treated their V.O. and E.O.T. fairly. On the
other hand when they were asked about taking legal action shall
their V.O. and E.O.T. claims were rejected, majority of the
respondents answered they disagreed to proceed with it. This
disagreement also contributed to contractors’ satisfaction in the
form of contract as less or no arbitration claims are one of the
outcomes towards the practising of modern contract strategy.

• The form of contract and the client does not protect the panel
contractors from the new submerged risk.

Research Objective no. 3: To identify whether the modern
contract strategies such as collaboration and partnering are
being practised in their contract.

• Majority of respondents agreed that most questions under
the key questions of collaboration and partnering,
Establishment and communication of conflict resolution
strategy; Commitment to win-win attitude; Regular
monitoring of partnering and collaboration process; Clear
definition of responsibilities; Mutual trust; Willingness to
eliminate non-value added activities; Early implementation of
partnering process; and Willingness to share resources among
project participants are happening in the contract that they
served.

Research Objective no. 3 (continued):

• Collaboration and partnering are practised but not up to
maximum. It was not confirmed until what degree they have
been carried out.

• A new contract strategy which includes collaboration and
partnering were practised but they were not properly
monitored.

5.3 Limitation
• Insufficient sample size for the wide range of questionnaires.
Larger group results will be more accurate
• Honesty of respondents. Some of the respondents might not
be truthful either they do not want to disappoint the client or
they actually do not understand the questions asked.
• Respondents do not really understand or lack the knowledge
about modern contract strategies that involve collaboration
and partnering.
• No tools in confirming whether these respondents really knew
what a bespoke contract is all about and fully understood the
form of contract which is currently used.

5.4 Conclusion
Generally, the first second and third objectives are
totally depending on the answers given by the
respondents. The findings to these objectives were
acquired from the data gathered and analyses from
the survey questionnaires that were filled by the
respondents that belong to the panel contractors of
a Natural Gas Provider.

5.5 Recommendation for Future Studies
• The study on panel contractor satisfaction can also be further
deepened such as to determine their level of satisfaction or
dissatisfaction.
• On the partnering and collaboration, further study can be
conducted in order to determine to what extent they were
practising and the success factors required in order to
improve them.
• To widen the studies to include the clients’ representatives
but surely some modification to the questionnaires are
required in order to make them suitable for parties, the panel
contractors and the clients’ representative to answer.
• To widen the studies and to carry out studies/surveys among
the other Oil and Gas companies for comparison purposes.

5.5 Recommendation for Future Studies (cont.)
• A study to include the Telecommunication sector too. This is
important as in the later stage comparisons not only can be
made among the companies in the same sector but also
between these two industries.
• A study can be carried out to identify what are the factors that
dissatisfied the panel contractors and the measures required
to be taken in order to improve these situations.
• A study can also be carried out among the panel contractors
who are dissatisfied with the form of contract and the way
they were practises. This is to determine the reasons what
make these panel contractors are still in this industry
especially when this initial study had shown 70% of the
companies were in this business for 11 years or more but yet
majorities are undecided whether they are satisfied with the
way the contract is managed.

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