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A CASE STUDY ON THE MANAGEMENT OF UTM NEW HOSTEL BASED ON DESIGN AND BUILD ARRANGEMENT

NURUL HIDAYATI BINTI MOHAMED

A project report submitted in partial fulfillment of the requirements for the award of the degree of Master of Science (Construction Management)

Faculty of Civil Engineering Universiti Teknologi Malaysia

OCTOBER 2005

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I declare that this thesis entitled A case study on the management of UTM new hostel based on design and build arrangement is the result of my own research except as cited in the references. The thesis has not been accepted for any degree and is not concurrently submitted in candidature of any other degree.

Signature Name Date

: ................................................... : Nurul Hidayati binti Mohamed : 23 October 2005

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To those who always love and care for me; MY FAMILY Mohamed bin Ismail Zaiton binti Salleh Nurul Shakirah binti Mohamed Amir Hakimi bin Mohamed Amir Faiz bin Mohamed Amir Hilmi bin Mohamed

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ACKNOWLEDGEMENT

In preparing this thesis, I was in contact with many people, researchers, academicians, and practitioners. They have contributed towards my understanding and thoughts. In particular, I wish to express my sincere appreciation to my main thesis supervisor, Assoc. Prof. Aziruddin Ressang for encouragement, guidance, critics, advices, motivation and friendship. Without his continued support and interest, this thesis would not have been the same as presented here.

I also would like to thanks to all the respondents especially to the project participants involved with the College 9 and 10 projects for being so supportive and helpful to make this study success.

My fellow postgraduate students should also be recognised for their support especially my dear friends, Irma Azreen binti Mazri and Noor Akmal Adillah Binti Ismail for always be with me in cries and laughter during postgraduate life.

My sincere appreciation also extends to all my colleagues and others who have provided assistance at various occasions. Their views and tips are useful indeed.

Unfortunately, it is not possible to list all of them in this limited space. I am grateful to all my family members for being so understanding and supportive.

ABSTRACT

This study attempts to get the insight into the management design and build of UTM hostel. The objectives of the research are to identify the dominant procurement system in Malaysia, to study the management of design and build in UTM and to identify problems in UTMs project related to design and build. This can be achieved by semi-structured interviews, unstructured discussion and questionnaires to garner a better understanding. This paper covers the traditional system is the most dominant procurement system in Malaysia followed by design and build and management contracting. While the management of the UTM hostel project was conducted fully by the project management consultant from the initial until the completion of the project and the main contractor was acted as the construction manager. The client just observed the activities and get involved when there is changes in cost and contract. The analysis of the problems encountered provides lessons to be learned for application to future projects.

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ABSTRAK

Kajian ini dijalankan untuk mendalami pengurusan sistem reka dan bentuk bagi pembinaan asrama Kolej 9 dan 10, Universiti Teknologi Malaysia. Objektif bagi kajian ini adalah untuk mengenalpasti sistem perolehan yang dominant di Malaysia, untuk mendalami pengurusan sistem reka dan bentuk di UTM dan untuk mengenalpasti masalah projek pembinaan di UTM berkaitan dengan sistem reka dan bentuk. Objektif ini dapat dicapai dengan temuramah semi-struktur, perbincangan dan soal-selidik untuk memperoleh pemahaman yang lebih mendalam. Tesis ini mendapati sistem tradisional merupakan sistem perolehan yang paling dominan di Malaysia diikuti dengan sistem reka dan bentuk dan pengurusan kontrak. Pengurusan pembinaan asrama Kolej 9 dan 10 diuruskan sepenuhnya oleh perunding pengurusan projek dari awal projek sehingga projek siap manakala kontraktor bertindak selaku pengurus pembinaan. Pihak klien hanya memantau aktiviti-aktiviti yang dijalankan dan hanya terlibat sekiranya berlaku perubahan projek yang melibatkan kos dan kontrak. Cadangan untuk memperbaiki pengurusan projek pembinaan di UTM turut dikemukakan untuk diaplikasikan untuk projek pembinaan akan datang.

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TABLE OF CONTENTS

CHAPTER Title Page Declaration Page Dedication Acknowledgement Abstract Abstrak Contents List of Figures List of Tables List of Abbreviation

TITLE

PAGE

ii iii iv v vi vii xii xiii xiv

INTRODUCTION 1.1 1.2 1.3 1.4 1.5 Background Problem Statement The Aim and Objectives Scope of Study Methodology of Study 1 2 2 3 3

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CHAPTER

TITLE

PAGE

PROCUREMENT SYSTEM 2.1 2.2 2.3 Introduction Definition of Procurement System Categorization of Procurement System 2.3.1 Separated and Co-Operative Procurement System 2.3.2 Integrated Procurement System 2.3.3 Management-Oriented Procurement System 2.4 2.5 2.6 Procurement Strategy Procurement Management Conclusion 10 14 14 5 5 8

DESIGN AND BUILD 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Introduction Design & Build Procurement Method Design and Build Procurement in Malaysia Definitions and Concept of Design and Build The Structure of Design & Build Design and Build Approach Types of Design and Build 3.7.1 Pure/Traditional Design and Build 3.7.2 Novation Design and Build 3.7.3 Develop and Construct 3.7.4 Package Deal (Including Turnkey Contract) 3.7.5 Design and Manage 15 16 17 18 19 20 21

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CHAPTER

TITLE

PAGE

3.8

The Characteristics of Design and Build Responsibility 27 3.8.1 Responsibility 3.8.2 Price and Time Certainty 3.8.3 Speed (Completion on Time) 3.8.4 Cost 3.8.5 Quality 3.8.6 Communication 3.8.7 Complexity

3.8.8 Risks 3.9 Conclusion 36

MANAGEMENT OF DESIGN AND BUILD 4.1 4.2 Introduction Key Elements for Effective Management 4.2.1 Proper Identification of the Developer's Requirements and Project Objectives 4.2.2 Effective and Detailed Planning from Inception to Completion of the Project 4.2.3 Effective Communication with all Components of the Project 4.2.4 Decisive Action in the Event of Deviation from Plans 4.3 4.4 4.5 4.6 4.7 Responsibilities of the Developer Responsibilities of the Contractor Responsibilities of the Designer Responsibility of the Engineer Conclusion 41 42 44 46 47 37 38

CHAPTER

TITLE

PAGE

RESEARCH METHODOLOGY 5.1 5.2 5.3 5.4 5.5 Introduction Objectives of Field Study Research Approach Approach of Data Collection Models of Data Collection 5.5.1 Literature Review 5.5.2 5.5.3 5.5.4 5.5.5 5.5 5.6 Questionnaire Design Likerts Sale Relative Indexes Interview 54 55 48 48 49 49 50

Data Analysis Conclusion

THE PROCUREMENT METHODS IN MALAYSIA 6.1 6.2 6.3 6.4 Introduction Response Rate and Respondents Profile Respondents Experience Procurement Method In Malaysia 6.4.1 6.5 Trends Procurement System in Malaysia 62 56 56 57 57

Conclusion

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CHAPTER

TITLE

PAGE

CASE STUDY: MANAGEMENT DESIGN AND BUILD IN UTM HOSTEL 7.1 7.2 7.3 7.4 7.5 7.6 Introduction Project Brief Management of the Project Roles and Responsibilities Satisfaction on the Management of the Project Problem Encountered in the Management of the Project 7.6.1 7.6.2 Irresponsible Project Management Consultant Misalignment with the Clients Expectation 63 65 66 67 69 70

7.6.3 Dissatisfaction of Quality Control on Site 7.7 Suggestion and Recommendation for Improvement 7.7.1 Revise the memorandum of agreement for consultancy service 7.7.2 7.7.3 7.7.4 7.8 Improve communication and co-ordination Appoint independent consultant Clients involvement 74 71

Conclusion

CONCLUSION 8.1 8.2 8.3 Introduction Findings of the Objectives Conclusion 75 75 77

REFERENCES

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LIST OF FIGURES

FIGURE NO.

TITLE

PAGE

1.0 3.1 3.2

Methodology of Flow Chart Management structure for Design and Build contract Pure/Traditional Design and Build: Contractual relationships

5 20

22 23 24 25 26

3.3 3.4 3.5 3.6 3.7

Traditional Design and Build process Pre novation contractual arrangement Post novation contractual arrangements Develop and construct: contractual relationship (a) Single point responsibility - D & B Contract

and (b) Fragmented responsibility - traditional contract 29 3.9 5.1 7.1 7.2 Allocation of risk for each type of procurement Five ordinal measures of agreement of Likerts scale The 9 and 10 College with the facilities Project Organisational Chart 35 53 65 66

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LIST OF TABLES

TABLE NO.

TITLE

PAGE

6.1

Ranking of procurement method in Malaysia using Frequency Analysis. 58

6.2

Reason lack of using other procurement method using Frequency Analysis (FA) and Relative Index (RI). 60

7.1

Respondents satisfaction in the management of the project using Frequency Analysis (FA) and Relative Index (RI). 69

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LIST OF ABBREVIATION

ABBREVIATION

MEANING

CIDB D&B JKR MC PMC PWD UTM

Construction Industry Development Board Design and Build Jabatan Kerja Raya Main Contractor Project Management Consultant Public Work Department University Technology Malaysia

CHAPTER 1

INTRODUCTION

1.1

Background

Over the years, the construction industry has been familiar with the contractual arrangement for allocating responsibility and risk of all the parties under the traditional procurement method. However, many client, are becoming increasingly dissatisfied with the traditional form of project delivery and seek other methods of procurement, such as Design-build (D/B) to meet their more exacting needs. The choice of the most appropriate contractual arrangement involves consideration of management and construction law. A chosen procurement route has to be supported by a management framework, which is governed by legal rules embodied in the contractual arrangement. With the mixed roles of tradesman and design consultant under the Design-build system, its contractual arrangement is drastically different to the concept in traditional procurement method. Indeed it tends to reverse the risk and the role of team members in a development project and introduces new legal implications. It is vital that clients make the correct choice of building procurement method in an increasingly complex situation, with a wide range of objective criteria and procurement system. Morledge (1987) has aptly described how construction clients

range from experienced clients who may have their own professional team and an effective procurement policy to the inexperienced client with little or no knowledge of procurement methods and who requires extensive professional advice. Furthermore, the needs of clients vary considerably with regard to certainty of price, cost limits, time requirements, complexity of design and many other factors. The design and build concept, as originally conceived, was based on the concept that a single firm had the in-house staff and expertise to perform all planning, design, and construction tasks. Later, increased interest in the concept had engineers, architects, and conventional contractors seeking to compete with the original design and build firms to meet the growing interest by owners in the project delivery process. Under the current approach, instead of limiting design and build to firms with in-house capability in both areas, the field has now been opened up to permit contracts with engineers who subcontract the construction portion to a contracting firm, with construction contractors that subcontract design services to an engineer or architect, and with engineers and architect in joint-venture with contractor firms. (Fisk, 2003) A design and build contract is often used to shorten the time required to complete a project or to provide flexibility for the owner to make changes in the project during construction. It is a two-party arrangement between the owner and the design and build firm. Since the contract with the design and build firm is awarded before starting any design or construction, a cost-reimbursable arrangement is normally used instead of a lump sum, fixed-cost arrangement. This method requires extensive involvement of the owner for decisions that are made during selection of design alternatives and the monitoring of costs and schedules during construction. (Oberlender, 2000)

7 1.2 Problem Statement

With a design and build arrangement, instead of using an architect or engineer fro a separate design service, the client choose to employ a contractor directly for an all in design and construction service. While there are clear advantages for appointing a single firm to accept all of the responsibilities, there are also disadvantages that the client will need to consider. A project commences with a design and it is important that this is correctly formulated. It could be argued that a contractors design might be more suited to the contractors own organization and construction capability rather than the interests of the client. Conversely, however, the project might be result in lower production costs on site, a shorter overall design and construction period, consequently overall savings in price and perhaps even an implied warranty of suitability, since the single organization has provide an all-in service.

1.3

The Aim and Objectives

The aim of this study is to get the insight of construction management applied by UTM. In achieving this aim, four objectives are being stated. Those are: a) To identify the dominant procurement systems in Malaysia. b) To study the management of design and build applied by UTM. c) To identify problems in UTMs project related to design and build. d) To propose improvements to enhancing best practice in UTM.

8 1.4 Scope of Study

This study is focusing on UTM hostel building. Resources of this study are from the Office of the Asset and Construction, UTM and contractors. The scope of the study is narrowed down to simplify the process of information gathering, so that it can be analyzed within an appropriate time suit. The aspects being considered are: a) The types of procurement applied in UTM. b) The respondents are contractors and UTM representatives. c) The area of study is around UTM new hostel (9th and 10th college)

1.5

Methodology of Study

The methodology is set to get the data for achieving the outlined objectives. The first step is to rationalize the issue to help set up the topic of study. Then the aims and objectives are set. For the knowledge acquisition phase, the literature in connection with the study to be carried out is reviewed through journals, books, newspapers, standard contract forms, conference papers and websites. A pilot study is carried out in order to get a few feedbacks to list the respondents. As an empirical study, questionnaires and semi-structured interviews are to be conducted to the respondents. The data collected will be analyzed and the final phase will be the conclusion creation with reference to the objectives, subsequent to the analysis from the interview and questionnaire. Please refer methodology flow chart in Figure 1.

9 Figure 1.0: Methodology of Flow Chart

PROBLEM STATEMENT

PHASE 1: Justification

Objective

Scope

ISSUES

RESEARCH METHODOLOGY: Literature Review Interview PHASE 2: Data Collection

RESPONDENT: Contractors UTM representative

IDENTIFY CONTENTS OF PROJECT REPORT

ANALYSE DATA

PHASE 3: Data Analysis

EXPECTED FINDING: Information gathered to achieve objectives

VERIFICATION

PHASE 4: Conclusion

RESEARCH OBJECTIVES ARE ACHIEVED

SUMMARY AND SUGGESTION

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CHAPTER 2

PROCUREMENT SYSTEM

2.1

Introduction

All the problem or issues, objectives, scope of study and research approach and methodology of this study have been verified in the Chapter l. Before further discussion had been made, a review of procurement system will be undertaken in order to give an insight of the matter. The objectives of this chapter are to review procurement system in relation to concept, category and criteria.

2.2

Definition of Procurement System

The term procurement, in its modern context, has been defined in various styles by different researchers and writers. This is hardly surprising as the term procurement is widely used in different contexts including commerce industry, defence and construction. In order to arrive at a reasonably clear and common

understanding of the meaning of the term procurement, therefore, it is important to identify the context in which the term is used. Most definitions have concentrated on the contractual arrangements for individual Projects whereas Davidson and Mohsini (1987) suggested that strategically, the set of contracts prepared for any one project must enable the building owner to meet his building need as effectively, and the procurement strategies of all the active building owners has an impact on the overall performance of the building industry. Having identified procurement as a strategic management decision Davidson and Mohsini give a formal definition as the acquisition of new buildings, or space within buildings, either by directly buying, renting, or leasing from the open market, or by designing and building the facility to meet specific need.

The procurement is the fragmented nature of the building industry particularly the separation of design and construction, the uniqueness of the construction projects and the resulting the ephemeral nature of the project organisation places great dependence on the project team in setting up the building process and bringing the project to a successful conclusion (Sidwell, 1982). The term building procurement system has therefore been adopted and it is suggested could, with benefit, be generally accepted within the industry to describe (Masterman, 1992): The organisational structure adopted by the client for the management of the design and construction of a building project.

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2.3

Categorization of Procurement System

Bennet maintains that, from a construction-project management view-point, there are three distinct idealised patterns of the project organisations each with consistent links with different types of projects: Programmed project organisations which relate to standard construction; Professional project organisations which relate to traditional construction; Problem-solving project organisations which relate to innovative construction. This approach is considered to be too academic for the purpose of categorisation, added to which it does not relate to any of the accepted fundamental characteristics of procurement system (Masterman, 1992). Perrys approach categorises all procurement methods as: Divided management of design and construction; Co-operative management of the design and construction; Special emphasis on management; Integrated management of design and construction.

and is considered to be, for the purpose of assisting in simplification of the selection of procurement system, the most appropriate categorisation relating as it does to the critical interaction between the design and construction processes. Masterman (1985) has categorized the project delivery systems to the following categories adapted from Perrys:

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2.3.1 Separated and Co-Operative Procurement System

Where the responsibility for the design and construction aspects of the project is the responsibility of separate organization, e.g. design consultants and contractors. Moreover, this system has been referred to as traditional or conventional system. This system are used which enable the contractor to be appointed at an early stage so that he may co-operate with the client in pricing, providing advice on construction methods and build ability and accelerating the commencement and completion of the project. The category contains one main procurement system which is conventional method or traditional method and a number of variants of these methods as below: Conventional System (Traditional System) Variants of the conventional system Two-stage Selective Tendering Negotiation Continuity Contracts Serial Contracts Cost Reimbursable Contracts

2.3.2 Integrated Procurement System

Where design and construction become the responsibility of one organization, usually a contractor and the client has only one organization to deal with. Moreover, these systems have been referred to as design and build system usually. It has one main member of this category with variants of that method making up the remainder of the group as below:

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Design and Build Variants of Design and Build Package Deals Turnkey Develop and Construct

2.3.3 Management-Oriented Procurement System Where the emphasis is placed upon overall management of the design and construction of the project with the latter element usually being carried out by construction contractors and the management contractor having the status and responsibilities of a consultant. This category comprises: Management Contracting Construction Management Design and Manage

2.4

Procurement Strategy

Before this we have been discuss the categorisation of system to identify and understand the category that be implemented the parties that involve it. In this section, we will discuss more about the criteria for the client used type of procurement system. The selection of appropriate procurement system for any but the simplest type of project is difficult owing to the diverse range of option and professional advice which is available. Much of this advice is in conflict and lacking in a sound of research basis for analysis and evaluation. Some of the advice is tainted with fashion.

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Often a failure in procurement practice has more to do with individual concerned than the refinements of the particular methods selected. Identical projects using identical procurement methods can often achieve very different outcomes. Procurement practices are a learning process (Ashworth, 2004). Many clients, especially those new to building, blithely suppose that it is possible to construct a top quality building at breakneck speed for a knockdown price. Although cost, time and quality are the three most important considerations for a client, the business of project delivery invariably calls for some compromise or conscious balancing of these priorities. However, profile of the type of contract to be undertaken should be established at an early stage of the construction project. From this profile, the building team can establish what level of quality is necessary, how much time is available before construction and for operations on site, and to what extent and in what respects cost considerations are paramount. The profile that emerges, will probably suggest where design

responsibilities are to rest and their extent, and the most suitable procurement system and construction procedures. This in turn will affect tendering arrangements and the amount and form of information, which tenderers will need. Ireland (1985) studied intensively about the factors affecting

procurement selection. He concluded that no mutually exclusive sets of criteria uniquely and completely determine the appropriate project delivery arrangement for a specific project. Murdoch and Hughes (1992) highlighted certain criteria for choosing the procurement methods and the most important of which are: (a) (b) (c) (d) Client's involvement with the process of construction Complexity of the project Separation of design from management Reserving the client's right to alter the specification

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(e) (f)

Speed from inspection to completion Clarity of client's contractual remedies for defective work The critical part of the decision process will be deciding which of the

above criteria are important for a particular project. Clients are seldom aware that there are options for project delivery because most of the construction projects personnel tend to revert to their own ideas of "standard practice" although this might not be in the best interest of the client. The best professional advisers take their clients through some kind of decision process at the outset of the building project. Ashworth (2004) explained that individual experiences, prejudices, vested interests, familiarity, the need and desire for improvements are all factors that helped to reshape procurement in the construction industry. The proliferation of differing procurement arrangements have resulted in an increasing demand for systematic methods of selecting the most appropriate arrangement for a particular project. Intelligent knowledge based system (expert system) have been used with some effect in this respect. Ashworth (2004) has identifies factors which should be considered when choosing the procurement path as follows: Size Small projects are not suited to complex arrangements. Design Aesthetic, function, maintenance, buildability, contractor integration , need for a bespoke design, design before build and then the use of prototypes. Cost Price competition or negotiation, fixed price arrangements, price certainty, price forecasting, contract sum, bulk-purchase agreement, payments and cash flows, life cycle costs, cost penalties, variations and final cost.

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Time Inception to handover, start and completion dates, early start on site, contract period, optimum time, phased completion, fast tracks, delays and extension of time.

Quality Quality control, defined standards, independent inspection, design and detailing, single and multiple contractors, coordination, buildability, contractor reputation, long term reliability, and maintenance.

Accountability Contractor selection, ad-hoc arrangements, contractual procedures, auditing, simplicity, value for money.

Organisation Complexity of arrangements, standard procedures, responsibility, subcontracting and lines of management.

Risk Evaluation, sharing, transfer and control.

Market Workloads, effects of procurement advice.

Finance Collateral, payment systems, remedies for default and funding charges.

The reality of this situation is that a defined project with clear objectives should always result in the selection of the same and appropriate procurement options.

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2.5

Procurement Management

Clients of the construction industry rely extensively upon the advice given in respect of the most suitable method of procuring their project from inception through the completion. The advice provided must therefore be both relevant and reliable and based upon appropriate levels of skills and expertise which are available. The need to match the clients requirements, which are sometimes big and generally imprecise, with the capability of industry is of vital importance if customer satisfaction is to be achieved and the image of the industry improved. Procurement management role has been listed by Ashworth (2004) as below: Determine the clients requirements and objectives Discover what is really important and what is of secondary need Assess the viability of the project and provide advice in respect of funding, taxation, and residues Advise on the organisational structure for the project as a whole Advise on the appointment of consultants and contractors Manage the information and coordinate the whole process from inception through to completion

2.6

Conclusion

Procurement procedures remain a dynamic activity. They will continue to evolve to meet the changing and the challenging needs of society and the circumstances under which the industry will find itself working. There are no standard procurement solutions, but each individual project needs to be considered independently and analysed accordingly. There is, however, a need to evaluate more carefully the procedures being recommended in order to develop good practice in procurement and to improve the image of the industry.

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CHAPTER 3

DESIGN AND BUILD

3.1

Introduction

Design and build is a procurement method where one entity or consortium is contractually responsible for both the design and construction of a project. Design and build is not a new concept. In centuries past, it was the only procurement method available. Its roots originate in the ancient master builder concept where responsibility for both design and construction resided with one person (Songer,1996). Design and build has been traced to ancient Mesopotamia, where the Code of Hammurabi (1800 B.C) fixed absolutely accountability upon master builders for both design and construction. In classical Greece, great temples, public buildings, and civil works were both designed and built by master builders. Enduring structures such as the Parthenon and the Theater of Dionysis are testimony to this master builder process (An introduction of Design and Build, 1994) During the Renaissance, architecture and construction evolved as distinct professions and the presence of master builder diminished. Project

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complexity increased during this era and the functional need for specialization in both design and construction was required (Twomey,1989). As statutory and case law developed during the 1800s, the separation evolved from the functional to legal. Courts determined that architects were only liable in cases of negligence as opposed to the strict liability that contractors faced. As these liabilities became defined, the traditional designbid-build method emerged as the primary procurement method (Nathan, 1994).

3.2

Design & Build Procurement Method

It has long been argued that the separation of design and construction is one of the reasons of difficulties in the construction industry. Whilst this statement is apparently correct, there is a little evidence, other than hearsay, to say that it is so. The construction industry has frequently been likened to manufacturing, where design and production are generally undertaken in the same firm. Although the construction industry has many similarities to manufacturing, there are also many differences. For example, these include construction of the works on the clients own premises, the effects of the weather and the frequently individual nature of a construction project. With a design and build arrangement, instead of using an architect or engineer for a separate design service, the client chooses to employ a contractor directly for an all-in design and construction service. It may also necessary and desirably to employ independent professional advisers to monitor the progress and quality of the contractors work and to agree the value interim certificates for payment purposes. Design and build firms have made positive responses in recent years to the criticisms of unimaginative designs. Many design and build projects, in

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respect of their aesthetic attributes, are now almost indistinguishable from projects that use independent designers. This is often because a contractor may employ independent designers as a part of the contractors all in service to client.

3.3

Design and Build Procurement in Malaysia

The evolution of Design and Build in the 1960s and 1970s in United States of America and Britain was not restricted to Malaysia. In Malaysia, similar trends were evident. The lengthy and adversarial nature of the traditional system and the increase in the project complexity prompted the use of the design and build system. Clients looked alternatives to the traditional procurement path and arrangement, which combined responsibility for both design and construction by contractors. In other words means that, contractors will bear all responsibility throughout the whole process. As the market for Design and Build increased, many contractor, who had previously offered services at the traditional contract, formed Design and Build procurement system with foreign companies. The development of Design and Build procurement system in Malaysia was adopted in construction of Tabung Haji building in early 1980s. In January 2001, the Malaysian construction sector has recently recovered from the financial crisis, thus, nowadays Design and Build is one of the most popular procurement routes that had been used for public and private sector such as office, commercial, residential, educational etc.

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3.4

Definitions and Concept of Design and Build

Broadly, design and build system is a single source contract with a fixed price for the design, construction and commissioning as a facility in line with the owners intention. Design and Build is a form of building procurement whereby the contractor will construct the project and design the work. A Design and Build contract is one in which a single entity, usually a contractor assumes responsibility for the design in whole or in part and for the construction and completion of a construction project. Turner (1990) and Jansen (1991) supported that, Design and Build contractor is supplying the procurement option of "buying" a finished building. To Seeley (1997), design and build is a construction project for a sum inclusive of both design and construction costs which the contractual arrangements vary considerably, ranging from projects where the contractor uses his own professional design staff and undertakes both complete design and construction, to projects where the contractor, specializing in certain form of construction, offers to provide a full service based on preliminary sketch plans provided by the employers architect. While according to Masterman (1992) the term Design and Build has almost been unanimously interpreted and defined as being an arrangement where one contracting organization takes sole responsibility, normally on a lump sum fixed price basis, for the bespoke design and construction of a client's project. This contains three main elements: The responsibility for design and construction, contractor's reimbursement is generally by means of a fixed price lump sum and the project is designed and built specifically to meet the needs. Furthermore, according to David Chappell (1997), Design and Build

contracts place responsibility for both design and erection in the hands of the

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contractor-one point of responsibility for everything. In this system contractor will carried out two functions: Design and Construct. Design and Build is an arrangement where one organization design and construct to the firm order of the client for a single financial transaction. The Chartered Institute of building (CTOB-1983) defines design and build as the process where the client deals directly with the contractor for the complete building and it is the contractor who is not only responsible for but also coordinates the separate design and construction process, including engagement of the design team who are, therefore contractually linked with the contractor and not the client. Therefore, from the definition it can be seen that Design and Build provides single point responsibility for the whole design and construction. Contractors, who are responsible for the implementation of the project, have a power to control all over the projects.

3.5

The Structure of Design & Build

In practice, Design and Build procurement is generally structured in one of two ways: The client employing a dedicated design and build organization with its own in house design team. The client engaging a general building contractor who employs external design consultant as members of the contractor's team for the duration of the project. The organization and management structure for a design-build contract is illustrated in Figure 3.1.

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FUNCTIONS

Management of total design and construction

Figure 3.1: Management structure for Design and Build contract (Roshana Takim, 1999)

3.6

Design and Build Approach

Design and build are not suitable for all project as for example where architectural quality is of paramount importance the employer will probably wish to choose architect independently or by means of an architectural competition, and would not want to be tied to a single contractor (Seeley, 1997). Refurbishment work rarely lends itself to this type of arrangement, while employers requiring purpose made buildings will generally prefer an independent design team. With large or complex project, there are a variety of ways of introducing contractors at an early stage to work with the design team and these tend to militate against the use of design and build. Contractually methodology for Design and Build projects generally follows the JCT Form of Contract with Contractors design (CD 8 I ) written specifically for Design and Build projects. Design and Build procurement

38 commences when the client identifies the need for a building. The client states the project requirements, referred to under the contract as the Employer's requirements. In preparing the employers requirements, the client will usually appoint professional advisors such as an architect and Quantity Surveyor. The employer's requirement is issued to prospective contractors who prepared a planned and coasted design proposal known as the contractor proposal. The client evaluates each proposal submitted and a contractor is selected. The successful contractor prepares a fully detailed design and coordinates and manages all aspects of the site works through to completion of the project. Structure of the Design and Build procurement method is illustrated in Figure 3.1.

3.7

Types of Design and Build

There are several types of Design and Build procurement technique found from the literature, which are as follow:

3.7.1 Pure/Traditional Design and Build

The contractor will be appointed without competition and accepts the total responsibility for both design and construction to meet the requirement of the client. However, Janssens (1991) differentiates pure Design and Build into two categories; Single stage tender and two stages tender. Pure/traditional Design and Build also known as contractor-led Design and Build are shown in

39 figure 3.2. Figure 3.3 illustrates the typical sequences of events in Design and Build.

Client

Supervisory and/or cost

Design & build

Quantity

Archite

Engineer

Subcontracto

Figure 3.2: Pure/Traditional Design and Build: Contractual relationships (Mosley 1990)

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Key Factors
Client Client

Activity
Project Conception

Output

Initial Appointment

Designers

Designers

Design Preparation Tender Invitation Tender Preparation (Design Development)

Outline Design

Client Designer D&B Contractor

Tender

Client Designer

Tender appraisal and appointments

D&B Contractor

D&B Contractor

Clarification & Further Design Development

Detail Design

D&B Contractor

Construction Work

All Parties

Project Completion

Required Facilities

Figure 3.3: Traditional Design and Build process (Anumba and Evbuomwan, 1997)

41 3.7.2 Novation Design and Build

Novation may be defined as a form design and construct agreement, in which the client initially employs the consultant team to carry out design and documentation to the extent that the client's need and intent are clearly identified and documented. Based on these documents, tenders are called and a building contractor is selected. The client then novates the consultant agreements to contractor who takes responsibility for the project to completion (Siddiqui, 1996)

Client

Project M Design

Quantity

Figure 3.4: Pre novation contractual arrangement (Siddiqui, 1996)

Siddiqui notes that the client initiates the project by commissioning design consultant to develop the project brief and to commence design work The terms the engagement of the consultant are specified by an agreement between client and consultant. The contractual arrangement before novation is shown in figure 3.4. Figure 3.5 shown the post novation contractual arrangements where the contract between the client and the design consultants is novated to the contractor after the award of the building contract.

42 After novation, the contractor pays the consultant and their first point of loyalty is the contractor. The contractor who then becomes the designers, is now completely responsible for all the design work as well as constructions. The contractor is required to keep the client informed on design matters, while still maintaining prime responsibility for meeting the performance criteria se down in the design brief (Siddiqui, 1996)

Client Project D&B Quantity

Design Consultant

Subcontractor

Figure 3.5: Post novation contractual arrangements (siddiqui, 1996)

3.7.3 Develop and Construct

Develop and construct is shorthand for develop the detail from the employer's design and construct the works. Consultants design the building required to a partial stage, often called a `scope design', then the contractor will develop, complete the design and construct the building.

43 Turner (1997) has described how in this type , consultants design the building to a partial stage, often called scope design, and competitive tenders are obtained from contractors who develop and complete the design and then construct the building. Janssens (1991) states that develop and construct is very effectively used in various circumstances such as follows: a. b. c. When a client decides to adopt a design-build approach even though he has the design already substantially complete. When the client requires a series of new building to be built on a repetitive basis to a standard design, such as hotel and housing. When the client him self is a designer.

Figure 3.6 shows the relationship between the client, design-build contractor and other professionals involved in develop and construct contracts.

Client

Principal

Scope Develop & Construct

Design

Sub

Figure 3.6: Develop and construct: contractual relationship (turner, 1990)

44 3.7.4 Package Deal (Including Turnkey Contract)

The contractor provides standard buildings or system buildings that are adapted to suit client's space and functional requirements. The contract is almost the same as Design and build contract. William (1986) has suggested that the expression "turnkey" should only used be if the design responsibility is that of the contractor.

3.7.5 Design and Manage

Turner (1997) has described that the design and manage or design management system is a combination of the characteristics of design and build with those of management. A single firm is appointed, following a selection process that may include some degree of competition on price, although this is not usually the main selection criteria. The client will need adequate in-house skills or obtain appropriate professional services in order to formulate his requirements and carry out his responsibilities under this arrangement.

3.8

The Characteristics of Design and Build Responsibility

3.8.1 Responsibility

The prominent feature of Design and Build is that it provides a single point responsibility, which means it should be carried out without any mediating consultants and the central contractual position must be between the

45 client and the contractor (see figure 3.7). This is achieved by allocating all design responsibility and liability to the contractor alone.

It has been supported by the Aqua Group (1990a) that the responsibility for implementing the design lies with the contractors management and design personnel. The employers professional team will monitor the work and ensure that the specification and performance requirements are met. Valuations for payments on account will be made by the employers quantity surveyor and he will value any variations requested by the employer and negotiate with the contractor. This has been explained in JCT 1981, a standard form of contract for Design & Builds, which lays down the contractor's obligation to carry out and complete the works referred to in the employer's requirements and the contractor's proposal. The balance of how much a scope design is detailed in the employer's requirement could reduce reliance on the contractor for and performance. (Clamp & Cox 1989) also stressed that, in the event of a building failure, the contractor is solely responsible. In Design and Build, every negligence or problem will put on contractor's hand. This means nobody is to blame except the contractor, even though it may be supplier or subcontractor causing a problem, but main contractor has to bear the risk. A client retains a responsibility during the contract through his employer's representative.

46

Client

Client

Design & Build

Design

Contractor

Figure 3.7 :(a) Single point responsibility - D & B Contract (b) Fragmented responsibility - traditional contract (Bennett and Grice, 1992)

3.8.2 Price and Time Certainty

In Design and Build is a guaranteed cost and completion date. This means the client knows his total financial commitment in the early stage of the project, provided he does not introduce any changes throughout the project. Because there is no provision for a bill of quantities, adequate arrangements for evaluating any changes on the price or on a cost basis can be carried out earlier by including in the contract. In terms of certainty in time, Design and Build can provide complete contractual certainty on completion for clients from the very earliest stages of their projects if there are not many changes by then client (Bennett and Grice, 1992) for most clients' time is crucial in forming their perspective of the building process. The NEDO report (1995), faster building for industry, highlights that in most cases, non-traditional procurement method including Design and Build tend to be quicker both in term of site construction and total project time.

47

Time savings with Design and Build are maximizes at the pre contract stage with the procurement process up to commencement on site. Studies by Fitchie (1996) indicate that procurement time under the traditional process can be up to twice as long as that of Design and Build. These benefits are accrued quire simply because of the ability of Design and Build to integrate the project team members, produce open communication and encourage effective co-operation.

3.8.3 Speed (Completion on Time)

On the matter of speed, it may be reasonable to expect that the overall project duration is shorter on Design and Build projects or that can it be completed on time due to the overlapping of design and construction phases. Extensive independent research has shown that Design and Build usually achieved early completion of a development, with both the tender and the final cost being significantly lower than conventional schemes. In other words, construction time is reduced because design and building proceed in parallel. Therefore, the integration of design and construction should produce more effective programming. However, the client's consultant should be given time to prepare an adequate set of client/employer's requirements as well a comparing and evaluating the offers and schemes from competing tenders. It should identify that those aspects of the development where the tenderers can adopt their own preferred methods of construction. This is

48 normally impossible under a traditional method, and it encourages

commitment and keen pricing on the part of tenders. According to Masterman (1992), many studies have proved that design projects were associated with shorter overall project times than conventional system. It is also reckoned that the reduction of the overall project period is attributed to the system's ability to overlap the design and construction phases, improved communications between the various members of the project team, the integration of the two basic functions of design and construction and the improvement in build ability and the use of contractor's resources.

3.8.4 Cost

Whilst project time is relatively easy to interpret and potential savings clearly identified, project cost is more ambiguous and therefore difficult to evaluate. A prominent consideration for the client, in any procurement form, is that final cost does not exceed the project budget. In this respect, Design and Build certainly presents a better chance of the client obtaining his completed building within budget. Jerry Adanison (2001), explained that several financial considerations make Design and build desirable. Private sector have implement Design and Build for financial reasons. Design and Build in the sense that "Time is money". Completing a project quickly can save owners used to finance projects. On the question of cost, real cost savings can also be made in Design and Build. According to Masterman (1992), when using this system, the initial and final costs are lower than when using other methods of procurement because of diminished design costs, the integration of the design and construction elements and in built build ability of the detailed design.

49 Cost savings may also result in timesaving. The overall effect is reduction in the employer's financing charges, lesser effect of inflation and faster building operation, which, in a commercial context, produces an earlier return on the capital, invested (Frank 1998).

3.8.5 Quality However, quality of the project is not simply compromised by using the Design and Build form of procurement. Its reputation has suffered from criticism by some construction professional of projects, which involve system building and standardization. Quality control and quality assurance are the essential elements of project review that what is being paid for is up to the standard specified. In Design and Build have allows better control of quality particularly in designer lead design and Build team. However, in considering quality, the client has no direct control over the contractor's performance. Therefore, the standard of quality must be properly selected at the tender stage to ensure that the contractor's proposal do meet his requirements. This also means that the client has a little say in the choice of specialist subcontractors (Clamp & Cox, 1989). This is because some proprietary Design and Build products lack aesthetic appeal. Design and Build has a considerable ability to improve quality in construction. When procured in isolation, design has always pre supposed that client himself has identified his genuine needs, defined his requirements and specified them clearly, the client often ha little clear definition of what he wants Even though this type of procurement may have led to very poor unfortunate has become synonymous with building system.

50 3.8.6 Communication

One major reason for choosing design and build arrangement is to benefit from the good communication that can occur between the design team and the construction team (Gould, 2003). Many of the large design and build companies specialize in particular areas and have developed a smooth flow between the design and construction phases of the project. This collaboration allows the project to be easily fast-tracked, cutting down on overall schedule for the project. Direct contact between the client and the contractor as provided a Design and Build system lines of communication and enables the contractor to adapt more promptly to the client's needs. Integration and encouraged inherently within the system (Griffith, 1989). The client and contractor will communicate closely during the process of the project. Communication between them will start at the beginning stage of the project. Therefore, in design and build it provides the client and contractor an opportunity to interact more often and more directly than traditional contract. In general, this arrangement allows easier incorporation of changes due to scope or foreseen conditions since their coordination occurs within the same contractual entity. The client is less heavily involved and sits outside the direct day to day communication between designer and constructor. This keeps owner staffing to a minimum and puts the full responsibility for good communication and problem solving.

3.8.7

Complexity This system is used for large and complex project. For projects of

exceptional size, the firm must have the managerial expertise to hold a balance between design and construction interest.

51 Design and Build a simpler and more efficient subcontract arrangement integrating design and construction expertise within one accountable organization. This is because there are no nominated subcontractors or nominated supplier. Therefore, the contractor can take full advantage of his own judgment and expertise in procuring only those sub contractor and suppliers with whom he expects to have a successful working relationship and the clients is not involved in this relationship at all (Griffith, 1989)

3.8.8 Risks

The Design and Build contract transfer more risks to the contractor than any other construction contract. Among a variety of risks, a contractor usually takes on many speculative risks. Risks that can vary in incidence between the parties as they wish. Speculative risks can be within or out with the control of a contractor (Turner 1990). However, the suitability of a project to the Design and build approach must be carefully undertaken by ensuring that the contractor is able, willing and has relevant experiences to control the risk satisfactorily, otherwise they may pass these back to the client (Hogg & Morledge, 1995)

52

Contract Type Design Build Traditional Contract Management Contract and

Risk Employer Contractor

Figure 3.9: Allocation of risk for each type of procurement (Hoggs and Morledge 1995)

In term of price, although it is possible to give the owner a fixed, firm price before the project begins, this generally does not happen in a design and build. It is because the firm is hired before the design has started, any real pricing is not possible. The client enters this arrangement without the guarantee of a firm price. Firming up the price too soon will force the design and build team in the position of making scope fit the price and this will lead to the risk of sacrificing quality to protect the profit (Gould, 2003). Another risk that has to pinpoint is the lack of checks and balances (Joyce, 2003). Designer or consultant often hired by the client to evaluate the product of the contractors work. As in design and build, the designer works for the contractor. The design and contractor professionals are put in the position of critiquing their co-workers and perhaps affecting their bottom line by that critique. The client must rely more heavily on the quality and ethics of the firm since most of the checks and balances will likely take place behind the companys door.

53 3.9 Conclusion

Design and build is increasingly becoming a popular alternative method. It provides opportunities for innovation and excellence while also rewarding both clients and contractors who choose that route. The aim should be optimize the project design, schedule, and quality while fostering pleasant and therefore constructive working relationship among client and contractor teams.

54

CHAPTER 4

MANAGEMENT OF DESIGN AND BUILD

4.1

Introduction The successful management of projects undertaken by the D&B method

of procurement is founded on the same principles as are appropriate for all construction projects. The key difference is that by the selection of the D&B arrangement, where one team is responsible from the concept to completion, greater potential and opportunity exist to practice effective project management. The key issue here is the opportunity to exercise control over all facets and phases of the project. As a result, no component of the project team is isolated from management action in the event of difficulty. In particular, the project can be planned to properly address the key requirements of each component of the team including specialist suppliers.

55

4.2

Key Elements for Effective Management

CIBD (1996) broadly categorize the four key elements of effective management as: Proper Identification of the developer's requirement objectives; Effective an detailed planning from inception to completion of the project; Effective communication with all components of the project team; and Decisive action in the event of the deviation from plans.

4.2.1 Proper Identification of the Developer's Requirements and Project Objectives

Many problems on a project arise as a result of the project team designing something that is different from that which the developer needs. This is often the result of an inadequate understanding by the developer of his actual needs in building terms, and a misunderstanding by the D&B team of the developer's objectives. If felt unchecked, the confusion and discrepancy between developer's needs and the design proposal can result in unnecessary and abortive works by the D&B team. The ineffective use of the design phase of the project programme can result in a less than ideal solution to the developer's requirement. Murcutt (1988) stated that the preparation of the developer's design brief needs careful consideration if a successful building is

to result. The developer's requirements should be set out in such a way so as to leave the designers with maximum scope to use their initiative and experience to offer optimum economical solutions. In addition, Chappell and Powel-Smith (1999) commented that the Employer's Requirements must be prepared carefully so as to accurately reflect his wishes while giving proper scope to the contractor. The contractor is unforgiving to the extent that badly assembled requirements will result in Contractor's Proposals, which do not satisfy the employer. The investment of time by the developer and the D&B team in a series of value management meetings during the early stages of the project can help to establish and prioritize the actual needs of the developer. The process of rigorous dialogues between both the developer and D&B team can help to ensure the preparation of an appropriate brief. The process can also provide the D&B team with a firm understanding of the developer's objectives for the project and their relevant priority. The understanding and clarity of the developer's requirements can help the D&B team to propose a design that meets the needs of the project, and prevents the abortive use of design time and resources in developing appropriate design solutions.

4.2.2 Effective and Detailed Planning from Inception to Completion of the Project

It is important that each phase of the project cycle is planned and accorded the appropriate duration and level of resources to enable the task for that phase to be completed correctly and comprehensively. Key decision deadlines must be identified and communicated. The developer must accept the importance of timing of the key decisions. The D&B team can then move on to the next phase without having to re-discuss on what have been previously agreed. It is important that progress be monitored so that effective

57 action can be taken to avoid any delay beyond what should have been decided. Detailed lists of deliverables for each phase should be prepared and monitored closely, both quantitatively and qualitatively. Detailed planning of the project as a whole is a progressive process that develops through each phase of the project to the appropriate level of detail. Progress in each phase must be monitored, reported and acted on. CIRIA (1981) pointed out that for the smooth running of the project, the developer must make certain that all information is provided by his organization at the agreed time. Regular site meetings must also be held between the developer and contractor to monitor the progress of the project, and to solve any site problems.

4.2.3 Effective Communication with all Components of the Project

One of the D&B project manager's key tasks is the implementation and practice of an effective communications policy for the project. The effective communication process incorporates the construction programme into the design process. This can help to ensure that design information is always available to meet the needs of the construction stage. The communication process can contribute to an effective information management system. It is a coordinated flow of design changes, technical and authorities requirements. The coordinated flow of information is important for smooth design work to be carried out. The clear definition and coordination of communication between the different disciplines in the design team can help to reduce design problems. Rowlinson (1986) stated that the common objectives of the D&B members working for the same organization improve communication. The improved communication will reduce the time spent to controlling information flows and inputs, and so release more time to put into the design and construction process. Moreover, Murdoch and Hughes (1996) pointed out that the communication

58 patterns observed in D&B projects are among the most effective found in any form of procurement.

4.2.4 Decisive Action in the Event of Deviation from Plans

Effective and decisive actions in the event of deviation from plans to recover the situation are vital to prevent the project from being disrupted. Should there be a situation where there are scope changes by the developer, the impact of the change on the project in terms of time, cost and quality must be communicated and understood by the developer. According to Franks (1990), the integrated nature of the D& B arrangement improves communication between designer and contractor encourages prompt decisions.

4.3

Responsibilities of the Developer

It is essential that the developer to prepare his brief with care before the award of the contract. Any changes made after the contractor commences his work would invariably, under the standard contract forms; result in additional costs charged by the contractor for variations. The contents of the brief to the contractor would usually contain at least some of the following information (CIDB, 1996): Statement on basic requirements including type of and number of buildings, requirements on finishes, and building height; Details of site including the boundary lines; Specifications of materials, specification criteria for use of special areas in the building; and Provision of a schedule of rates for changes to the works.

59 The developer will normally appoint consultants to prepare the brief for the contractor. The consultants will verify the contractor's payment claims. The consultants will be appointed under the contract as the developer's representative or agent. Regardless of the kind of building contract adopted, the developer is under a general obligation implied by the law not to prevent the contractor from carrying out o r completing his works under the contract. This obligation requires the developer not to take any action that may hinder or delay the completion of the contractor's works. This ma y include failure to give the necessary decisions to the contractor on time, inability to give possession of the site on time, and undue interference in the contractor's works. According to Turner (1994), the developer's failure to permit the contractor possession of the site to fulfill his obligations is a breach of contract. Murdoch and Hughes (1996) commented that giving the contractor possession of the site at the right time is fundamental to the contract. Failure to do so will cause the developer to forfeit any c l a i m for liquidated damages on late completion.

4.4

Responsibilities of the Contractor

The D&B contractor is obviously liable in the event of any defect or failure in the design of the project, as he has assumed responsibility for design. The contractors liability of the design stands on a different standard from that of the in-house designers. The liability of the D&B contractor for the design of the project is strict and is independent of any fault or negligence on his part. In the case of the in-house designer, he is required to exercise all reasonable skill and care in his design. The standard expected is that of the skill and care displayed by an average designer. However, for the D&B contractor, the law requires that his works shall be reasonably fit for its intended use. Accordingly, even if the contractor can show that he has exercised the degree of skill and care which an average competent designer would have displayed and

60 accordingly not negligent, he would nevertheless be liable if the works failed to achieve its intended purpose. The law implies that the D&B contractor provides a warranty that the works and design are fit for their intended purposes. Turner (1994) summarized that the developer had brought his action for negligence in design on the contractor and the nominated subcontractor following the collapse of a television mast. The contractor in turn brought his own action against the subcontractor. It was held that the contractor had implied in his tender that the design (actually performed by the subcontractor) gave a mast fit for its purpose, and that the contractor and subcontractor were in breach. There was negligence in design, even though certain necessary design criteria were not then well-known in the profession, their influence had not been taken in tort to the developer because of a negligence assurance given postcontractually to the developer that the design was adequate. This assurance was not allowed to be contractual, as it might well have been of given before nomination. Robinson, et. al (I996) pointed out that id the contract is of the design and build type, it is self-evident that the contractor undertakes the full, indeed primary, design responsibility, not only to the reasonable care and skill standard which an architect or engineer would owe, but with a duty of fitness for purpose consistent with the overall construction obligation. The contractor's obligations to provide drawings to the developer without further charge two copies of the drawings, specifications, details, levels and setting out dimensions which he prepares or uses for the Works. The drawings are for information only. It is clear from the express reference to setting out dimensions and levels that, despite the fact that the developer must define the site boundaries, the contractor is responsible for setting out on site. That duty would in any event be implied as a vital part of the contractor's obligations under the design and build contract. The contractor must include for all royalty payments, etc. which are payable in relation to any supply or use of anything in connection with the

61 Works. This will generally include everything expressed or inferred in the requirements or the proposals. In addition, the contractor indemnifies the developer against all claims, which may be brought against him as a result of any infringement by the contractor or any patent rights or the like. The effect of this provision is that the contractor agrees to reimburse the developer for all costs in connection with such infringement without limitations. If the contractor infringes any rights as a result of complying with the developer's instructions, any money, which the contractor is liable to pay, will be added to the contract sum as reimbursement to the contractor. The contractor is obliged to give access to the Works, and other places where work is being prepared, for the developer's representative and any person authorized by the developer. The contractor must also include terms in his subcontracts to achieve similar right of access to subcontractors' workshops. The contractor must do everything reasonably necessary to make such right effective. There is an important provision that contractor and any subcontractor may impose reasonable restrictions to safe guard property rights.

4.5

Responsibilities of the Designer

There are two situations whereby the in-house designer c a n

be

l i a b l e f o r f a i l u r e in his design of the works. The first arises out of his duty in contract and tort to the party who had engaged him to prepare the design for the works (whether the D&B contractor or the developer). The other situation is in respect of his liability to all persons who may suffer loss or damage resulting from failure in the design. Generally, the term `design' includes not only the plans and drawings in which the design is sketched on, but the specifications and choice of materials as well. As far as the standard of care and skill is concerned, we have seen that the in-house designer is required to

62 exercise reasonable skill and care expected of the average competent design consultant. The designer has a responsibility to ensure that the site, its contours, geology and dimensions, are appropriate to the client's purpose and the building to be placed upon it (the issue of delegation of certain specialist elements of these task, e.g. to a structural engineer, is considered below). This is likely to involve the carrying out of an appraisal or survey of the site, including measuring and testing, and omission to a p p r a i s e t h e s i t e adequately has been the basis of litigation. Robinson, et. al (1996) pointed out that even the contractor is responsible for an element of design; this may not relieve the architect or engineer of overall responsibility. The possibility of the client having additional recourse against the contractor does not remove the designer's responsibility for checking plans and specifications prior to signing them, although unlike the contractor's. The consultant's required level of responsibility will only be one of the reasonable care and skill, so far as his duty to the client is concerned. Under the Code of Professional Conduct and Ethics made under the Architects Act 1991 and Professional Engineer Act 1991, the professional must not sign drawings, plans or specifications not prepared by him or his firm, unless securitized and checked personally. The liability of the designer to the third party on the consequences of his defective design is based upon the tort of negligence. The issue of liability in tort is quite often entwined with the issue of pure economics loss.

63 4.6 Responsibility of the Engineer

The engineer's role in a D&B contract will depend upon his engagement to the parties to the contract. If the engineer is employed by the developer, his role will be more on a macro scale where he will assist the developer to develop the project conceptual plan, prepare design specifications and owner's requirement, produce the D&B tender documents, assist the developer review/evaluate the D&B contractor's proposal, carry out tender clarification and so on until award of the project. During construction stage, the engineer engaged by the developer will carry out detailed design review and act as independent checking engineer. The engineer will also carry out overall management and supervision of the D&B contractor's work to ensure they are in compliance with the quality and specification guarantee by the contractor. Leong (2000) commented that the engineer in the employment of the client stands to benefit much from his involvement in the project. Projects of this nature often provide many opportunities for transfer of technology and the engineer gains much through his commitment and full involvement in all aspects of the works. Although the engineer is not required to approve drawings, and his supervision is minimal, he should follow the project closely, keep good records and sit in on all the meetings so as to benefit from all the technical discussions. He should also familiarize himself with the technical and managerial matters and monitor the progress. Very often there is a clause in the contract to ensure there is a transfer of skill and technology and the engineer should become competent in operating all equipment handed over on completion of the project. For the engineer who is working under the D&B contractor's payroll, his role will be to carry out the detailed design, prepare construction drawings and also liaise with the engineer employed by the developer to obtain approval for the detailed design and drawings. The engineer working for the D&B contractor will also be involve will also be involve in the day to day running of the project site, construction planning and scheduling delivery of equipment and materials

64 etc. for smooth running of the projects. The D&B contractors engineer will need to organize daily/weekly meetings with the relevant subcontractors and monitoring their works to avoid unnecessary disputes, which could hamper works progress or entail costly rectification works. Chuah (2000) highlighted that the engineer in the employment of the turnkey contractor is in a very unique position as he benefits from the design stage as well as the construction stage. He gains valuable experience in the field of large project management involving many disciplines and subcontractors. He gets to be involved from the design stage to the completion (testing and commissioning) stage, which makes him an all-rounder engineer. As the work is of a highly technical nature involving the latest state-of-art technology, the engineer, if he is committed, diligent and resourceful, will become well versed and competent. Involvement in such projects can help the engineer gain depth and breadth in the engineering field as there is certainly much more exposure.

4.7

Conclusion

To achieve an effective management design and build there are four requirement that can be adopted which are proper identification of the developer's requirement objectives, effective an detailed planning from inception to completion of the project, effective communication with all components of the project team and decisive action in the event of the deviation from plans.

65

CHAPTER 5

RESEARCH METHODOLOGY

5.1

Introduction

The research methodology is essential in guiding the researcher to achieve the aim and objectives of the study. This chapter will discuss on the research procedure, which consists of the literature review and justification, data collection through the questionnaire survey, interviews, analysis of data and finally the conclusion and recommendation.

5.2

Objectives of Field Study

The objectives are mainly to identify the dominant procurement system in Malaysia, to study the management design and build applied in UTM, to identify the problems encountered in the management of the project and

66 finally is to propose improvement to enhance the application design and build in the future.

5.3

Research Approach

There is a wide range of research design and methods available. These methods are broadly classified into qualitative and quantitative methods. Qualitative methods are more committed to research in everyday setting, to allow access to, and minimize reactivity among the subjects. Qualitative methods also enable explanation by understanding. Quantitative methods, on the other hand, involve the generation and use of data in the form of numbers and figures, and usually includes physical or statistical controls to allow the testing of hypothesis. For this study, quantitative methods will be used so that comparisons can be made on the views of the respondents through structured questionnaire. For this study, four steps of research methodology have been identified, and these steps are listed below in chronological order:

Literature Review Data Collection Data Analysis Conclusion and Recommendation

5.4

Approach of Data Collection

The research sets out to gather data on management D&B and its effectiveness particularly in the University of Technology Malaysias hostels.

67 The data on frequency of the used of procurement method in Malaysia is also gathered as part of the data collection.

5.5

Models of Data Collection

There are several known modes of data collection: telephone, personal or focus group interviews, or observation. The modes have to be done systematically and effective to gain the expected findings. Every steps need to be plan carefully. Research methodology that have been used in order to achieve the objectives are literature review, which involved secondary data and empirical study that provide more valuable information in conjunction with the conventional method such as questionnaire and interviews to get primary data from the respondents.

5.5.1 Literature Review

Literature review in Chapter 2, 3 and 4 explains the procurement method in brief and design and build system in detail. For the knowledge acquisition phase, the literature in connection with the study to be carried out is reviewed through journals, books, newspapers, standard contract forms, conference papers and websites. All relevant information about Design and Build were gathered. Based on the literature, the problems of the study will be determined. The main objective for this study is to review the management of the design and build and its application in University Technology Malaysia. The literature review hence, provides guidance to interviews and questionnaire preparation, which is discussed in the following section.

68 5.5.2 Questionnaire Design

The questionnaire asked in the questionnaire be in the form of multiple choice or open-ended questions. Multiple-choice questions require the anticipation of the whole range of likely answers, which would be given, and formulating the options as such. The options available should be established had been on the desk research and preliminary casual interview with some industry players to test the validity o f o p t i o n s . Such questions help to focus data collection. These types of questions are particularly suitable for the mail questionnaire node of data collection where the author does not know targeted respondents. The intention is to make the questionnaire as easy and least time-consuming to fill up in order to achieve a higher response rate. Open-ended questions should be minimized, as respondents tend to find it cumbersome a n d time-consuming to respond to.

Having considered the pros and cons of the various methods available in relation to the context, a semi-structured approach with mostly multiple-choice q u e s t i o n s a n d a few open-ended questions were selected. The open-ended questions are i n t e n d e d t o a l l o w respondents room to provide views that may have been significant but not provided for in the options for the multiple-choice questions.

Two separate sets of questionnaire survey have been developed in order to achieve objectives. Set A is prepared to achieve the first objective, to identify the dominant procurement system in Malaysia. It has been distributed to the construction players in Johor Bharu. Set B of questionnaire survey has been developed to achieve second and third objective of this research. It has been distribute to the project participants who has involved in the construction of 9 and 10 Colleges project.

69 Through literature review, it has been identified that traditional system and design and build is the most frequent used procurement method in Malaysia. Questionnaire set A has been divided into two sections as follow: a) Section 1 consists of the research title and request for the general information from the respondent. b) Section 2 consists of multiple-choice questions are based on Likert's scale of five ordinal measures of agreement towards each statement (from 1 to 5) on the reason why other type of procurement system less implemented in Malaysia. To response to this questionnaire survey, the respondents are requested to give opinion on the proposed questions. They are requested to state their view to enhance procurement system in Malaysia. Questionnaire set B has been divided into two sections too as follow: a) Section 1 consists of the research title and request for the general information from the respondent. b) Section 2 consists of multiple-choice questions are based on Likert's scale of five ordinal measures of satisfaction towards each statement (from 1 to 5) which is 1 represent the not satisfied and 5 represent very satisfied. To response to this questionnaire, the respondents, preferably the contractors and clients (UTM representatives) are requested to give their opinion on the proposed questions. They also are requested to state their view to improve the management of design and build in UTM. The results obtained will be ranked according to the respondents opinion.

70 5.5.3 Likerts Scale The multiple-choice questions are based on Likert's scale of five ordinal measures of agreement towards each statement (from 1 to 5) as shown in Figure 5.1.

Ordinal scale 1 to 5 in ascending order 1 2 3 4 5

Increasing

degree

of

Each scale represents the following rating:

1 = Least contributing 2 = Low contributing 3 = Neutral 4 = High Contributing 5 = Highly contributing

Figure 5.1: Five ordinal measures of agreement of Likerts scale

5.5.4 Relative Indexes (RI)

The data collected from the questionnaire survey was analysed using frequency analysis, modified frequency and Relative Indexes (RI) techniques. RI was calculated using the following formula:

RI =

(1n 1 + 2n2 + 3n 3 + 4n 4 + 5n x ) 5(n1 + n 2 + n 3 + n 4 + n x )

Where nx = the number of respondent agreeing with the x choice.

71 The computation of the RI using this formula yield the value of RI ranging from 0.2 to 1. The value 0.2 represents the lowest strength and the value 1 represents the maximum strength.

5.5.5

Interview

Personal interviews are conducted with contractor, project management consultant and UTM representatives involved in the project as separate respondents. The client and the project manager interviewed were selected on the basis that they played an important roles in the project. The contractor was the construction manager who was responsible for the management of the project. The interviewees were selected in such way as to ensure a good mix of profiles, so that rich and even conflicting views on the project could be obtained.

5.5

Data Analysis

The next logical step, after collecting the information is to analyze the information and the available data. The findings are identified. The procedure has been used in analyzing the result of questionnaire survey is aimed to identify the most dominant procurement method in Malaysia and establishing the management design and build in UTM and the problems encountered within the project by ranking them according to the data given by the respondents.

Finally, from the results of analysis, the findings may help to identify the factors of causation towards the problems occurs within the management of the

72 project as well as to suggest for the corrective actions in order to overcome or minimize the common problems that arise.

5.6

Conclusion

Research methodology is essential in providing the valuable results of the study. Methodology used in this study was literature review, data collection, data analysis and conclusion and recommendation of the study. The literature review is used to identification of the issues; questionnaire is used to collect the data while interviews are conducted to collect data related to the case study. Statistical and analysis and qualitative interviewing method were used to analyze data. Finally, the conclusion and recommendation with reference to the objectives are created, subsequent to the analysis from the interviews and questionnaires.

73

CHAPTER 6

THE PROCUREMENT METHODS IN MALAYSIA

6.1

Introduction This chapter discusses the findings of this study. It is refer to the first

objective of the study that is to identify the most dominant procurement method in Malaysia. This chapter will explain the current trends in procurement method in Malaysia especially in Johor.

6.2

Response Rate and Respondents Profile

Although only 17 respondents have responded to questionnaires but this is sufficient to carry out statistical analysis upon. From the 17 respondents, 8 are contractors, 4 from developers, 3 from government agencies and the remainders are from consulting firms. The distribution

74 gives more reliable result because the respondents come from various field, expertise and functions. They also come from both government and private sectors.

6.3

Respondents Experience

The result shows that 62% of the respondents have more than 5 years of working experience in construction industry. This indicates that they possess both depth of practical experience and knowledge in the field. Therefore they are capable and qualified enough to give reliable feedback on the related topic. The combination of various experts and specialist like engineers, surveyors and contractors will give wider scope and more convincing answer.

6.4

Procurement Method In Malaysia

The allocation of risk in a construction contract is a function of the system of procurement. The latter determines the relationship of parties involved in the procurement process. In some procurement systems, there may be a direct contractual relationship between the contractor, sub-contractors and the consultants on the one hand and the client on the other hand, while in others there may not. In additional, in some procurement systems there may no direct contractual relationship between contractor, sub-contractors and the consultants on the one hand and the clients on the other hand but there may be a direct contractual relationship between themselves. The contractual relationship indicates the types of risk for which each party will be

75 responsible and the reward for doing so in the processes of construction management.

6.4.1

Trends Procurement System in Malaysia

In Malaysia, comprehensive data on the use of the different types of procurement method is not available. However, Abdul Rashid, K. (2002) has listed the three types of procurement method that has been identified as the dominant procurement method in Malaysia which are traditional lump sum system, design and build system and management contracting. Through questionnaires that have been gathered, the result of the most frequent used or dominant procurement method in Malaysia is shown in the table below.

Table 6.1: Ranking of procurement method in Malaysia using Frequency Analysis. Ranking (1 7) Rank 1 2 3 4 5 6 7 Procurement Method Traditional System Design and Build Management Contracting Project Management Construction Management Design and Manage Built, Operate and Transfer 1 15 7 0 0 0 0 0 2 2 9 2 0 0 0 0 3 0 1 9 4 2 1 0 4 0 0 5 7 2 1 0 5 0 0 1 6 8 4 0 6 0 0 0 0 5 11 0 7 0 0 0 0 0 0 17 Frequency (no. of respondent)

76 The result shows that the traditional system is still the dominant or most frequent used procurement method in Malaysia with 15 respondents (88%) mark it in the first rank. 9 respondents (53%) agreed that design and build is also one of the procurement systems frequently used in Malaysia followed by management contracting, project management, construction management, design and manage and finally built, operate and transfer. Traditional system has always be the choice of procurement in Malaysia construction industry. The traditional system has not only be the dominant procurement system in Malaysia but also other countries such as United Kingdom, Indonesia and Singapore. There is no doubt that traditional system is still be the most preferred system in construction industry. The advantages of this system gives a credit for this system to become a popular choice among construction players especially client. This system is already establish, more familiar and comfortable to apply as it has been practice for a very long time. It meets the key requirement of transparency and accountability. The clients especially still would like to involve in the project especially when it involves lots of money in the project. The lengthy and adversarial nature of the traditional system and the increase in the project complexity prompt the use of the design and build. Since the system is relatively new in Malaysia and majority of the design and build contractors do not have their own in-house designers, they employ design consultants to prepare detailed design and specifications. Only contractors with a high level of financial, technical and management capabilities would be able to provide full design and build contracting services.

77

6.4.2

Reason on Lack of Using Other Types of Procurement System

Table 6.2: Reason lack of using other procurement method using Frequency Analysis (FA) and Relative Index (RI). Frequency Analysis Rank 1 2 3 4 5 Description No standard form of contract of other types of procurement Not profitable Suitable for large and complex project Lack of clients involvement Limited experience of contractor 0 0 4 3 6 7 2 4 5 3 17 17 0.69 0.68 0 0 2 2 3 4 5 2 7 9 17 17 0.80 0.76 1 0 2 0 3 2 4 4 5 11 Total Relative Index 17 0.90 No. of Respondents

The table above shows the reason why other types procurement system less implemented in our industry. The majority of the respondents very agreed with the statement that there is no standard form of contract of other types of procurement method with the relative index 0.90. Without any specific contract form, it hard for any construction player to perform other types of contract. Contract defines a legally binding agreement between two ore more persons which creates mutual rights and duties and which is enforceable at law to future performance. So, without a proper and establish contract, there is always doubt to perform other types of contract. In other word, if they would like to perform the other contract, they have to go through a lot of legal procedure and amendments to make it valid and to satisfied all parties involved. However, according to Harban Singh (2002) through his book entitled Engineering and Construction Contract Management, JKR has no standard form of

78 other types of contract and it is doubtful if JKR will in future generate or publish such standard form of contract. Not profitable is the second highest reason why other types of procurement system are less implemented in Malaysia with the relative index 0.80. According to few respondents that I have interviewed, I have two clash opinions between clients and contractors especially. For the contractors, the other types of procurement push the risk on the contractors shoulder. So, they have to bid with the high price to overcome any uncertainties within the project. Usually, they failed to get the project and it quite frustrating. While on the client behalf, after comparing the bidding price from the contractor and the estimate price that has been made, there a lots of differences. Usually the have to conduct interview to clarify the matters to understand the contractors estimate. Even though, the client will not involved directly with the project when it has started, but there is always doubt especially on quality of the material and work done. With relative index 0.76, the respondents believe that other types of procurement are more suitable for large and complex project. I think most of them refer to Built, Operate and Transfer System (B.O.T) which usually use for government facilities project such as highways. Followed by lack of clients involvement with relative index 0.69. Finally with the relative index 0.68, limited experience of contractors was the last reason why other types of procurement method less applied in Malaysia. My respondents also have given a few comments on this matter. One of them which are a consultant said that most general contractors do not possess the necessary qualification. The lack of qualified and experienced contractors arises because management training fro contractors has traditionally been neglected in the Malaysian construction industry. Most contractors have been established and developed skills through experience with little formal training. A large number of construction firms are family owned business where skills are passed from the senior family members to the juniors. So most of other types procurement method is quite new in Malaysia and they do not possess that knowledge and skills to apply the other systems.

79 6.5 Conclusion

Traditional system is the most dominant procurement system in Malaysia. It is more familiar and establish to the construction player to use it in the construction industry. Followed by the Design and Build, Management Contracting, Project Management, Construction Management, Design and Manage and finally Built, Operate and Transfer (B.O.T). The main reason the other types of procurement system less applied in the industry is there is no standard form of contract of other type of procurement system. Other than that is because it is not profitable, it suitable for a large and complex project only, lack of clients involvement and lack of contractors expertise.

80

CHAPTER 7

CASE STUDY : MANAGEMENT DESIGN AND BUILD IN UTM HOSTEL

7.1

Introduction

University Technology Malaysia is one of the prestigious universities in Malaysia. It has two campuses, namely the 1,222-hectare main campus in Skudai, Johore and an 18-hectare branch campus, situated at Jalan Semarak, in the capital city of Malaysia, Kuala Lumpur. Life on campus is lived to the fullest, and seems to include a lot of fun. University Technology Malaysia always provides better services to all students in accordance with the studying situation. Accommodation Transportation Advocacy Sports & Recreation

81 Health and Counseling Co-Curriculum Students with Disability Living in colleges provides a wealth of opportunities for social contact on student's academic discipline, participating in a community and a sense of belonging. First year students are compulsory to live in colleges. The University has 13 residential college based on Skudai Main Campus and 2 residential college in Kuala Lumpur City Campus. The lists of college are as follows:a) Rahman Putra College, b) Tun Fatimah College, c) Tun Razak College, d) Tun Hussein Onn College, e) Tun Dr. Ismail College, f) Chancellor College, g) Perdana College, h) The 9, 10, 11, 12 & 13, 14 & 15, 16 & 17 Colleges. The colleges are within easy walking distance and shuttle buses are available to all teaching and research facilities. accommodation is 18,700 occupants. A Principal, an Assistant Manager of accommodation, several Fellows and Assistant Fellows manage each college. All college provides basic amenities such as a cafeteria, multi purpose hall, mini mart, laundry shop and a prayer room. Recreational facilities such as indoor courts, common room and reception room are also provided. The total capacity for on campus

82 In response to a growing number of international students, the University has provide about 200 single rooms for International student and 200 family housing for both local and international students.

7.2

Project Brief

Figure 7.1: The 9 and 10 College with the facilities

The construction project of 9 College consisting of two blocks for 1000 students for Block A1 and A2 in single and double bedrooms while 10 College consist of two blocks for 2000 students fro Block B1 and B2 in double bedrooms. The project also constructed 3 units of single storey terraced house for Principals residence, 9 units single storey house for Fellow residence, one unit of single storey dining hall, one unit of sewerage treatment plant and other ancillary building and internal and external infrastructure work. The location of the project is behind Sport Complex and beside Kolej Perdana. The sum of the contract is RM65, 000,000 within 24 months or 2 years

83 contract period. The project has been started on 28th May 2001 and completed on 27th May 2003.

7.3

Management of the Project

Figure 7.2: Project Organisational Chart

University of Technology Malaysia (Office of the Asset and Construction) Client

A-Plus Project Management Sdn. Bhd Project Management Consultant

Cygal Berhad Main Contractor

Consultants (Architect, C&S, M&E)

Sub-contractor

Contractual Relationship Organisation Relationship

Chart : Management Relationship Source : Office of the Asset and Construction, UTM

84 University of Technology Malaysia (hereinafter referred to as client or UTM) proposed to the Ministry of Education (now Ministry of Higher Education) to build up a hostel to provide safe and comfortable accommodation for 3000 student in the campus. A-Plus Project Management Consultant (hereinafter referred to as PMC) has been engaged by the Ministry of Education (now Ministry of Higher Education) to manage the project on behalf of the client beginning from the initial until the completion of the project. The role of PMC include performing feasibility studies, preparing the clients requirements, basic brief design, formulating contract and financial strategies, obtaining and evaluating proposals, advising the client on the appointment of the contractor and monitoring and controlling the project. The PMC has to report all of the activities on site to the client. There was no interference from the client unless there is a change in term of cost and contract. The observation has been done from time to time to ensure the activities on site. As regards procurement strategies, design and build was considered a suitable procurement option, as it allows price certainty and early completion. Design and build also has other advantages such as single point of responsibility, minimum changes, better relationship among project participants and higher constructability. Design and build is also able to achieve the clients objective of risk avoidance because it allocates design and construction responsibilities and associated risks to contractors. Cygal Berhad (hereinafter referred to as MC) was selected as main contractor by the Ministry of Education (now Ministry of Higher Education) based on selective tender. As it was important for the client that the budget was not exceeded, the contract was based on lump sum fixed price, in order to provide price certainty. However, contract sum could be revised to accommodate the clients change orders. The MC was required to design as well as construct, manufacture and supply the facilities and products. MC was also required to engage his own consultants and subcontractor. Any problem on site and approval needed, the MC has to refer to PMC.

85 7.4 Roles and Responsibilities

Phases
Conception and Feasibility studies

Activities
1. Define the need for the development 2. Evaluate site 3. Environment impact assessment 4. Obtain permits and regulatory approvals 5. Priorities project objectives 6. Analyse project risk 7. Prepare conceptual scopes and estimates 8. Define project implementation approach

Task Team
Project Management Team comprising: (a) Project Manager (b) Client

Project Planning

1. Plan and develop project requirements 2. Prepare bid documents and RFP 3. Establish pre-qualification evaluation criteria (a) Project Manager

Project Management Team comprising: (a) Project Manager (b) Client Contract Committee comprising: (a) Project Manager (b) Clients Contract Unit (c) MOE appoint the contractor Project Management Team comprising: (a) Client (b) Project Manager (c) Contractor (d) Consultants

Bidding and Contracting

1. Conduct pre-qualification exercise 2. Shortlist pre-qualified tender contractors for tender 3. Contractors submit bids and proposals 4. Evaluate bids 5. Negotiate contracts 6. Appoint contractor

Project Implementation 1. Administer contract 2. Contractors develop detailed design 3. Review design and give approvals 4. Approve sub-vendors and sub-contractor 5. Contractor proceed with construction and commissioning 6. Control quality on site 7. Commissioning

86

7.5

Satisfaction on the Management of the Project

Table 7.1: Respondents satisfaction in the management of the project using Frequency Analysis (FA) and Relative Index (RI). Frequency Analysis Rank 1 2 3 4 5 6 6 8 Types of management Meeting Reports and letters Delegation of power Contract management Controlling and monitoring Communication Leadership Decision making 1 0 0 0 0 0 0 0 0 2 0 0 0 0 1 1 1 1 3 1 2 3 4 2 3 3 4 4 4 4 3 2 3 2 2 1 5 1 0 0 0 0 0 0 0 Total 6 6 6 6 6 6 6 6 Relative Index 0.80 0.73 0.70 0.66 0.66 0.63 0.63 0.60 No. of Respondents

(1=Not satisfied, 2=Less satisfied, 3=Moderate, 4=Satisfied, 5=Very satisfied)

The table above shows the respondents satisfaction in the management of the project. It is to measure the performance of the management after the project completed. Overall, most of the project members are satisfied with the management of the project. Through questionnaires that have been distribute to the project participants involved with the project, most of them are very satisfied with the management of the meeting with the relative index 0.80. While the decision-making has been vote as the least satisfied management in the project with the relative index 0.60.

87

7.6

Problem Encountered in the Management of the Project

There a lots of obstacles throughout the process completing the project. Through my interviews with the respondents, there are typical problems in the construction occurs in this project. I have found out that most of the respondents has come out with this three major problems that has a little bit affected the progress of the project. The problems are as follows: Irresponsible project management consultant Misalignment with the clients expectation Dissatisfaction of quality control on site

7.6.1

Irresponsible Project Management Consultant

The major problem that encountered was referred to project management consultants representative who was failed to be on site when he was needed especially when it comes to decision making. This problem arose in the middle of the construction phase where there were lots of specialist job involved. Due to his absence, lots of work could not progress smoothly such as test approval and issuing the certificate of payment. The contractor will not get his pay if the PMCs representative was not there to check the payment slip. The project manager was failed to be the centre of the communication to channel the information needed among project participants. The MC has to skip the flow of information and went directly to the client. His absent forced the client to put his representative on site to solve the problem. It is understand that the representative was only be on site a day or two within one week because there is no clause in the Memorandum of Agreement for Consultancy Services (Project Management) stated that the PMCs representative need to stay on site all the time. The PMC also at that time holding too much project and they were lack of staff for replacement.

88 7.6.2 Misalignment with the Clients Expectation

The second problem encountered was the misalignment of clients expectation. The client was not satisfied with the power supply to the hostel. The PMC overlook of this matter during approving the schematic drawing and the client has to request the contractor to add another generator. As the additional generator was not in the drawing and contract, the client has to request additional fund from the government, which it takes two to three weeks for approval.

7.6.3

Dissatisfaction of Quality Control On Site

The consultants under the design and build are employed under the contractor and therefore the contractor pays the fees. The consultants are very often squeezed to accept the quality and workmanship at site as well as to approve progress of work of the contractor so that themselves will subsequently receive their portion of fees.

7.7

Suggestion and Recommendation for Improvement

After analysing the data available, some suggestion and recommendation are made to enhance better practice in the procurement system in Malaysia and also to perform a better management of design and build in UTM to be applied in future project. The recommendation and the suggestion are supported with discussion and ideas from the project participants and experts in the related field. The suggestion and recommendation for improvement are as follows: Revise the memorandum of agreement for consultancy service. Improve communication and co-ordination

89 Appoint independent consultant Clients involvement

7.7.1

Revise the memorandum of agreement

The memorandum of agreement is a binding understanding between the client and the consultant on the responsibility and services that has to be perform by the consultant to the client. In this project, the client put all the management responsibility to the project management consultant. There will be no interruption from the client unless there is changes in cost and contract. It means that the role of the consultant especially the project manager is crucial. The project manager play the most important role in the project. The project manager also has the authority to make decision for the project on behalf of the client. The project manager also is the main sources of the project and also the centre of the communication line among project organization. Due to this reasons, the client should revise the memorandum of agreement for consultancy as the project is managed fully by the project management consultant. The client should add a clause to provide fulltime project manager on site or by his representative that has been appointed by the client, so that the work on site will be well managed and work smoothly. With this solution, it is believe that the main problem of the management design and build in UTM will be solve or at least will be minimised. With the availability of full time project manager or his assistant on site, the project will be well organized.

7.7.2

Improve communication and co-ordination

It is realized that all the people do not interpret the same thing in the same way and that a communication is of no value unless it is both received and understood. In this project, the main reason of ineffective communication is the absent of the project manager. Without project manager, the communication and the co-ordination of the project become chaos and uncontrollable. The project manager

90 has few projects in hand to take care of that affected the project managers concentration to the project. As we know, concentration is one of the key to success in construction project management. The client has to overtake the project managers job to settle all the problem on site when he is gone. This situation has disturb the flow of communication which is the client will only deal with the project manager and the project manager is the one who is responsible to deal with other parties on site. When the communication is become ineffective, it also has disturb the coordination of the project. With the revision of the memorandum of agreement as suggested, the communication and the co-ordination will flow smoothly as the project manager is stand by all the time on site to deal with any matter in the project. With that, the project manager will concentrate to the objectives of the project and believed by all project participant as a person that they can rely on.

7.7.3

Appoint independent consultant

In term of controlling the quality of the product, it is suggested to the client to employ independent professional advisers to monitor the progress and quality of the contractors work. The client can choose to appoint consultant for advice during the course of the project. The independent consultant must be free from any interest or connection with any parties in the project. By appointing the independent consultant, it is believe that the quality on site will be improve.

7.7.4

Clients involvement

In this project, there is lack of clients involvement. In construction, the project participant must emphasis on the clients objectives. The clients role is crucial to the success of construction project. The involvement of the client in the achievement of his objectives within the contract must be closer than any other relationship and activity. The client itself must make sure that the project is done to meet his requirement. Here it is suggested that the client should allocate one of his

91 representative on site to involve and to make sure that the management and the construction is done according to the planning. The participation of the client throughout the process of the project will enhance and force the other project participant to work hard to achieve the target.

7.8

Conclusion

Now, the management of design and build applied in the project 9 and 10 College, UTM has been revealed. The project management consultant has given the power to manage the project without any interference form the client except if there are any changes in cost and contract. Contractor was in charged as construction manager with the supervision of the project manager. However, three major problems encountered during the project implementation, which are irresponsible project management consultant, misalignment with the clients expectation, and dissatisfaction of quality control on site. Suggestion for improvement has been made for a better application for the future project.

92

CHAPTER 8

CONCLUSION

8.1

Introduction

This chapter will conclude the study of this thesis. In previous chapters, this paper has explained the application of procurement method in construction industry. It has been gone through specifically in Design and Build system and also the case study on the management of design and build applied by the UTM.

8.2

Findings of the Objectives

This study has been carried out with the target to achieve the goals and objectives that have been set up at the early stage of the process. The scope of this study is limited in Johor Bharu specifically in 9 and 10 College, University Technology Malaysia. The respondents involved are the project participants of the 9 and 10 College project and also the construction players in Johor Bharu. This study used a

93 qualitative and quantitative approach to collect and analyse the data. The entire objective has been achieved as described below:

Objective 1 : To identify the dominant procurement systems in Malaysia. Traditional system is the most dominant procurement system in Malaysia. It is more familiar and establish to the construction player to use it in the construction industry. Followed by the Design and Build, Management Contracting, Project Management, Construction Management, Design and Manage and finally Built, Operate and Transfer (B.O.T). The main reason the other types of procurement system less applied in the industry is there is no standard form of contract of other type of procurement system. Other than that is because it is not profitable, it suitable for a large and complex project only, lack of clients involvement and lack of contractors expertise.

Objective 2 : To study the management of design and build applied by UTM. The management of design and build applied in the project 9 and 10 College, UTM has been revealed. The project management consultant has given the power to manage the project without any interference form the client except if there are any changes in cost and contract. Contractor was in charged as construction manager with the supervision of the project manager.

Objective 3 : To identify problems in UTMs project related to design and build. Three major problems encountered during the project implementation which are irresponsible project management consultant, misalignment with the clients expectation, and dissatisfaction of quality control on site.

94 Objective 4 : To propose improvements to enhancing best practice in UTM. Improvement has been suggest with the help from the project participant and the expert fro the related field. The suggestions are to revise the memorandum of agreement for consultancy service, improve communication and co-ordination, to appoint independent consultant and to widen the clients involvement.

8.3

Conclusion

By the end on this study, all objectives have been identified successfully. Through this study, I gained lots of information and knowledge on procurement method generally, and design and build specifically. Although Traditional System still remain the most popular procurement system but there is a particularly a lot of increase demand on the using of alternative method especially design and build and management contracting. The management of design and build applied by UTM also has been revealed and the problems related to it have been identified to find out solutions to solve or minimise the problems.

95

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