This document discusses different procurement methods for a proposed 200-unit semi-detached residential housing project with sustainable features. It recommends the traditional procurement method, assessing the suitability of traditional, management contracting, and design-build approaches. It suggests using a lump sum contract with quantities and the PAM Contract 2006 standard form. Design-build is also described, outlining its potential benefits like single point responsibility but noting developers in Malaysia commonly prefer traditional procurement.

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SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)
PROFESSIONAL PRACTICE QSB60604107787-M
LECTURER: WONG CHONG WEI
Name Student ID Marks
LIU WEI QIAN 0322969
LIM CHU NING 0320369
WENDY TEO SIEW YEN 0328242
WILLIAM GOH MING HANN 0317949
GAN XIAO YING 0322998
NUMBERS OF WORDS: 2585

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INTRODUCTION
Successful and profitable property development is usually influenced by the economy
of the country amongst other causing factors. In this modern era with the availability of better
technologies and knowledge, construction and development projects are usually designed
with additional green and sustainable features by complementing more to the environment
standards which ultimately is to draw the attentions from purchasers. Green buildings can
preserve the environment and quality of life which enrich the resource efficiency. The
processes require close cooperation between team members at all stages. (Wikipedia, 2006)
The objective of this report is to deliberately explain on the appropriate and suitable
principles of basic procurement methods coupled with the pros and cons of the chosen
procurement to be used in the anticipated project which is a 200 units of semi-detached
residential houses with additional sustainable features. Based on the chosen proposed
project, the suitability of the form of contract will be assessed thoroughly before making any
suggestion.
Design and build is also one of the procurement methods that are practiced in the
industry. However, the feasibility of the design and build as a procurement method will be
assessed according to the project by comparing with the basic procurement methods.

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TRADITIONAL PROCUREMENT METHOD
First of all, term ‘procurement method’ is usually used to portray the complicated set
of connections between client, consultants, and contractors. (Clamp, Cox, & Lupton, 2007)
From the name itself, traditional procurement method is basically the regular method
in the industry. Client is the person who has the intention to start up on projects. The client
will appoint consultants to assist him with the processes throughout the entire project.
Consultant is responsible to design for the work in detail, prepares for tender
documentation and administers the project. (Designing Buildings Ltd., 2016)
Contractor can either be chosen through the tendering or negotiation method.
Tendering method is more competitive as contractors are invited to price and bid for tenders
of project. However, the contractor is appointed earlier through the latter method. Contractor
carries out the work of project. Any sub-contractor or nominated sub-contractor will be under
the care of the main contractor. (Icon.Net Pty Ltd, 2004)

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ADVANTAGES OF TRADITIONAL PROCUREMENT
Client controls the consultant team. The consultant designs the project according to
the client’s requirements which the quality for the work can also be controlled. In addition,
consultant administers the project on behalf of the client by ensuring the project will not
exceed the client’s budget. (UK Essays, 2013)
Besides that, client is able to acquire best price for project through competitive
tendering and be certain of the construction cost it is based on the completed drawings and
bill of quantities. (UK Essays, 2013)
It is also easier to accommodate for variations. Any variations to the contract will be
easier to arrange and manage because the consultants will be able to check all the elements.
(UK Essays, 2013)
DISADVANTAGES OF TRADITIONAL PROCUREMENT
It takes longer time to complete the project. The process is sequential and cannot be
started prior to completion of design. Preparing complete drawings and full documentation for
the project consumes much time. Only when all the documentations are prepared, the
contractors can tender for the work. (UK Essays, 2013)
Furthermore, it lacks of single point of responsibility and control for development.
Consultant team has different interest and responsibility to the project. For example, the
architect has his own idea for project design while the engineer might design better and more
complicated structural design which could help to increase in the safety factor such as by
adding more number of reinforcement bars.
Contractor will not have the opportunity to design for the project. It will be solely done
by the consultant and no design and planning input by the contractor because the contractor
will only start to involve in the project from the tendering stage which means the entire
planning and designing have already been set and done. (Icon.Net Pty Ltd, 2004)

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MANAGEMENT CONTRACTING
A management contract is a written agreement between an Employer and a
Contractor after the contractor become the winner in the tendering process. The contractor
will be the management contractorin this procurement method by providing management and
advisory services. When the contractor enters the contract, employer will have direct
contractual relationship with the contractor. Besides, the consultant team that appointed by
the employer will have direct contractual relationship with the employer but they will
coordinate with the contractors. Even though, the contractor can advise the consultant team
but there is no direct contractual relationship in between. Normally in management contracting
procurement method, the contractor is experienced. The client has a considerable degree of
flexibility on design matters, whenever the client wants to change the design of the drawings
or unsanctified with the design, they can be adjusted as construction proceeds and won’t be
over budget. Management Contracting procurement method is different with traditional
method because in this method management contractor will involve in the early stage of
construction process and will be involved in design stage. Management Contractor can give
advice based on their construction experienced that had been design by the architect.
Management Contractor will have spilt the works into appropriate work packages and
distribute the work packages to work packages contractors. After the work packages, which
will be tendered out and the sub-contractors that successfully win the tender will enter direct
contract with Management contractor. The contractor can choose the sub-contractor and
order the materials with good relationship supplier. Because of this, materials that had been
deliver on time to site will not cause any delays on the construction sites. This kind of
procurement methods can achieve early work completion because the contractor involves in
the early stage of construction. So, that, the contractor can give advice for the drawing in the
design stage and they will know all the details of the drawings. The miscommunication
between the contractor and consultant team will decrease. The fees for the contractor
manager will be the percentage of the total project cost. (Graham 2009)

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ADVANTAGES OF CONTRACTING MANAGEMENT
The budget of the construction project will not exist because the design of the drawing
can be amended during the construction process. When the construction project is going on
but suddenly overbudget the employer can assign the design team to change the design of
the drawing to adjust the cost is within the employer’s budget. The employer only deals with
one contractor because the contractor will help the employer to supervise the work packages
sub-contractor and coordinate with the design team. The contractor will supervise the quality
of the performance of sub-contractors and make sure they fulfilled their work on time through
the plan. (Austroads 2014; Graham, 2009)
DISADVANTAGES OF CONTRACTING MANAGEMENT
Management contracting procurement method is different with the traditional method
because the drawing hasn’t complete but the construction process already started.
Sometimes the client will be difficult to set the exact amount of the cost budget for the cost
plan for the whole construction process with limited design details. The employer will not know
the exact cost for the construction works until the last work packages has been done
(Austroads, 2014; Graham, 2009).
Figure 1.0 Diagram of Management Contracting

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Procurement method
As the expert in this subject, wewould recommendthe traditional procurement method
for this project. This is because residential houses project usually involves simple method,
thus the traditional procurement method is more suitable for the project. Traditional
procurement is popular among the construction industries and it is widely used by the
developer in the market. This procurement method is suitable for both experienced and
inexperienced clients due to the certainty of design, work quality and cost of the project. (Ltd,
2016)
First of all, Client hires a consultant team to manage the design, work and cost
of the whole project. Client will also nominate a team of sub-contractors and suppliers to have
a contractual relationship with the main contractor to carry out the specialised works. Client
will have direct contractual relationship with the consultant which allows him to ensure the
quality of work is complied with the client’s preference. (NBS, 2016) It is up to the client to
hire his own design team. However, the design team will have to depend on the client’s
decision, thus the project design set out will be based on the client’s requirements. Since the
consultant team is to be selected before the tendering stage, all the drawings for the project
will be completed before the commencement of the construction. (Ltd, 2016)
As the drawings will be completed prior to the construction started, client able to obtain
a completed bill of quantities and thus get a certainty of construction cost based on the
drawings. This allows the ease for the client to make a budgetary control. (Richards, 2006)
When the cost is out of budget, it is easy to do some amendments to the design to control the
budget.
Comparing to management contracting, the final cost will remain uncertain until
the end of the contract. This is because the construction will start without the fully completed
drawings which makes it difficult for the total final costto be produced for the client Therefore,
management contracting is not suitable for the client who have budget and financial limitation.
Variation may occurin every construction project due to the nature of the environment,
construction technology, availability of specified material and so on. (Ltd, 2016) In traditional
procurement method, variation is relatively lower due to the completed drawings. Variation to
the contract is easy to control and supervise as the full design is given and the consultant is
able to check all the elements. (Davis, P., Love, P., and Baccarini, D. 2008) However,
variation in management contracting will be greater than traditional procurement method due
to the incompleted design before construction starts and the changes during the construction

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period. This will cause frequent re-measurement for the project which results in the change
of the final cost.

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CONTRACT FORM
As traditional procurement method is chosen for the project, there are several contract
forms that are available such as lump sum, measurement and cost reimbursement contract.
However, we recommend that our client to use lump sum contract.
Lump sum contract is widely use within the construction industry where the contractor
agrees to carry out the construction project for a certain price. (Van Thompson, 2009). The
lump sum contracts are estimated basing on the bill of quantities and drawings. (Icon.Net Pty
Ltd, 2004)
There are two types of lump sum contract which is lump sum contract ‘with quantities’
and lump sum contract‘without quantities’. Lump sum contract ‘with quantities’ are calculated
based on the bill of quantities and drawings. There are cases where the items are not correctly
calculated can be claimed under provisional sum.Therefore, the contractorcannot claim from
the client for extra cost. (Icon.Net Pty Ltd, 2004)
Meanwhile, lump sum contract ‘without quantities’ is estimated based on the drawings
and specifications where the scope of works is defined. As bill of quantities does not describe
the specifications of work, it is replaced by Schedule of Rates in lump sum contract ‘without
quantities’. The contractor is able to make claims when there is any variation to the material
quantity used for the project. Works that are specified in the specifications shall be followed
and completed by the contractors. (Azman Yahaya, 2013)
Lump sum contract provides several benefits to the client and project. Firstly, low cost
risk to the client where they do not have to pay for unpredicted sum in the middle of
construction stage unless the agreement stated otherwise. (Juan Rodriguez, 2016) Therefore,
contractor is responsible for any cost overruns.
Next is project completion. As the fixed price is agreed before the construction works
start, the contractor must complete the project as promised without requesting any additional
cost even when there is implications involves extra cost. (Van Thompson, 2009)
Besides that, simple to choose contractor. It is simple where the client can either
accept the price given by contractor or reject it for other alternative. (Fraser Sherman, 2008)
An experienced contractoris required as they are more able to estimateaccurate costwithout
having further implication such as cost overruns during the construction stage. This will save
time and hassle for both parties.
Other than that, maximum production and performance could be provided by the
contractors. This will shorten the project time required and quality work are produced as the

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contractors wish to maximize their profit. (MattWan, 2011) This will also help the client as they
are able to showcase their completed project to the market earlier.
As for standard form of contract, we would advise that our client to use PAM Contract
2006 With Quantities. PAM Contract is suitable for private sector and traditional contract.
(Anep Botak, 2012) One of the reasons are that as it is stated in the PAM contract under
condition of contract section 1.1, where the contractor are to carry out and complete the job
in according to the relevant documents. (PAM Contract With Quantities, 2006) Besides that,
as stated in section 22.1, the contractorwould be issueda certificate of non-completion if they
did not complete the project by due date and would have to pay for damages to the client.
(PAM Contract With Quantities, 2006)
In conclusion, PAM Contract 2006 is more procedural where all the parties involved
are to strictly follow to notice requirements and time provision. (Ng Mei Shan, 2014)

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Design and Build (D&B) Procurement
“A design and build contract also known as a ‘package deal’ or ‘turnkey contract’, is
one under which the contractor undertakes both designing and constructing the contract
works, which are to be completed in such a way as to meet the requirements of the employer”
(Ir. Harbans Sing K.S, 2005). Based on this statement, the contractor is solely responsible for
all designs and works to carry for construction. If there is any breach or negligence by the
contractor, it will be part of his expenses. The employer need not identify either is it due to
the quality of material or workmanship or due to either party at fault.
D&B procurement method has become more and more recognised due to the benefit
that stands out over other basic method of procurement which is providing single point of
responsibility (Mustapha, 2011). This greatly reduces the risk on the employer’s side.
However, in Malaysia, many developers still favour over traditional procurement method. The
D&B procurement method is suitable for projects that are complex like developing 200 units
of sustainable semi-detached houses that involves lots of sustainable complex features to be
incorporated into the residential houses. D&Bprocurement method could provide time saving
and fixed lump sum cost. Even though the D&B method is single point of responsibility of the
main contractor, the employer is not entirely uninvolved with the project, the main contractor
has to comply with all the specifications and requirements stated by the employer. The
employer first will provide a design outline and bills of quantities through an independent
consultant which is known as the pre-novation contract (Davis, P., Love, P., and Baccarini, D.
2008; Seng & Aminah 2006). The tender document will be prepared to allow contractors to
bid for the project. After the chose contractor is chose, the design team will be novated to the
main contractor (Mustapha, 2011; Seng & Aminah 2006).
Strength of Design and Build Procurement System
Unlike the traditional procurement method, the design ideas are not constraint to one
produced by an appointed unit design team but rather providing various type of design ideas
from other contractors during the tendering stage. That way, the employer will have more
variations of design ideas together with the expected cost to choose from compared to the
basic procurement method that have confirmed and fixed design before calling for tender.
D&B procurement method provides fixed cost that enables the employer to analysed their
financial commitment and budget during the early stage of the project with the requirement of
not incurring additional charges throughout the project (Seng & Aminah 2006).
As mentioned above, one of the benefits of using D&B procurement method would be
the single point responsibilities where all and construction works including the design of the
project will be allocated to the main contractor. With the single point of responsibilities, comes

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with single point of contact and hence the employer only has contractual relationships with
the contractor. The employer does not need to spend extra time and coordinating with other
sub-contractor or consultants or designers and focus on more timely decision making.
Zooming into the entity of D&B, it has total control on the final outcome of the project including
its quality and cost where transferring of responsibilities to another party due to defects on
the design or any other construction errors cannot be done (Seng & Aminah 2006).
The following factor that associates with the strength would be time saving. The project
is able to start off early providing that frequent changes are not made during the early stage
of the project compared to the other basic procurement methods (Davis, P., Love, P., and
Baccarini, D. (2008). This is one of the important factor because indirectly it will affect the
cost. The faster the completion of project, lesser cost needs to be incurred (Seng & Aminah
2006). Using the traditional procurement method may double up the time for the project (Seng
& Aminah 2006).
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