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300053 Professional Practice

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300053 Professional Practice

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Course Code: 300053
University: Western Sydney University is not sponsored or endorsed by this college or university

Country: Australia

Procurement Report 
Report should describe and analyse the positive and negative aspects of three different procurement methods for construction projects More modem types of procurement are recommended. Benefits and problems for the client/developer, the consultants, the builders, the subcontractors and the end-users should all be considered. 
Please answer the “who, what, why where, when and how” of the positive and negative aspects of your selected systems. The report must be divided into subsections and must be provided with an executive summary of one paragraph, a contents page at the beginning as well as page numbers. Referencing should conform to the Harvard system. You are advised to consult the electronic journals available in the library for reference sources.
The report should describe the characteristics of the three contrasting procurement systems which you have selected. A chart to compare and contrast the three choices would be helpful. You should express an opinion about the kinds of projects which are suited to the different procurement methods and make recommendations about this as if you were advising a potential owner/developer.
Remember that you have ethical obligations when recommending a course of action to a potential client Support your opinions with high quality references. You should also include a disclaimer stating that you have no conflict of interest in terms of the views you have expressed. 

Procurement consists of different routes to property development. Choice of the procurement method and systems to be deployed is vital for the success of the project. Hence making an informed decision is the only option. The three main types of procurement systems are: Traditional procurement system, Design and Build Turnkey Procurement Systems and Management Contracting and Professional Construction Management system (Ashworth & Perera 2018, p. 15).
Traditional Procurement System
This type of procurement system allows the developers of a project to undertake three sequential tasks that involve, designing, bidding and building (Adenuga 2013, p. 15). Developer appoints an architect to complete the design of the project as per his specifications. A consultant team is hired by the developer to advise on the materials needed and the cost to be incurred on the project. Upon successful completion, the developer further hires a contractor through bidding to undertake the project (The Aqua Group 2001, p. 28). Tender documents are prepared based on design specification and cost and then open for successful bidding, in which the lowest tenderer is usually awarded the contract.
Positive Aspects
The project developer gets to exercise full governorship of the project from the word go to meet design and specification as he wishes. Furthermore, the method allows the developer of a project exercise high-quality standard materials in consideration to the architectural design that further ensures the project turns out to be a masterpiece. Additionally, the traditional method is commonly used hence, experienced gained through using this type of project provides fewer chances for uncertainties and mitigates on the financial risk incurred (Johansson 2018, p. 1).
Negative Aspects
The system proves to be time-consuming following a series of events that entails designing the project, selection of the consulting engineer and finally the contract engineering after successful bidding and tendering (Oladinrin et al. 2013, p. 50). Additionally, financial risks tend to occur if the developer of the project fails to have a competent, informed consulting team as it would lead to purchase of the wrong materials and mistake in the design of the project. Furthermore, developers using this project tend to delay the progress of the project which further exceeds the stipulated budget due to unprecedented events emerging (Hughes et al. 2015, p. 61).
Design and Build and Turnkey Procurement Systems
The client appoints a contractor to design and to build the project. The approach is viewed as a single responsibility awarded to a particular contractor to single-handedly design and build the contract (Pabor & Pennington 2012, P. 1). Furthermore, the developer can either appoint, a contractor to design or if he wishes to exercise more control on the project prepare an outline of the project or issue the contractor to design as per the specifications.
Positive Aspects
The system proves to be efficient in time convenience as it has one selection process whereby the designer and the contractor are the same people taking a considerably less time compared to the traditional approach (Lam et al. 2003, p. 38). The designer of the project using this system are usually given an incentive for an economic design, hence making it more convenient for contractors. Furthermore, designing the project and building, contractors are able to introduce new technologies based on experience and innovative designs that further make the final project a masterpiece. The system provides good news to the developers as the burden of the financial risk is usually passed to the contractors (Shrestha et al. 2011, p. 21). Contractors are able to experience fewer changes on demands by the developers of the project at the construction phase hence speeding up the process. The quotation of the bid is the final sum of the contract, hence no additional expenses to the developers in the course of the project. The developer is able to choose the best design from different tenders put to his disposal.
Negative Aspects
Developers of a project are faced with the challenge of losing a project control to the contractors. Hence the final design and building specification of the project may deter from the client or developers wish (Shrestha et al. 2011, p. 22). The contractors furthermore are faced with the burden of financial risk in the case for unprecedented events not budgeted for in the project. Hence occurrence of any risk, the contractors are entitled to continue with the project until completion without the developers adding additional funds to meet this risk, failure to which is considered a breach of contract (The Procurement Academy n.d., p. 1) Effects of such accounts results to loses or reduced profit margins to contractors. However, the developers are also faced with a challenge of overpriced bids on tenders by contractors to cater for uncertainties that may occur in the course of the project. Contractors take this advantage to fluctuate prices on bids for profit maximisation. Lastly, it is more difficult to achieve architectural design and appearance of the project
Management Contracting and Professional Construction Management Systems
Management contracting and professional construction management systems are two terms that have been used interchangeably on referring to another but possess some small differences.  Management contracting system involves a contract between package contractors and management contractors while the construction management system involves a contract between the package contractors and the clients (Lam et al. 2003, p. 39). The two operate with the same concept hence the need to group them under one category.
Positive Aspects
High degree of seriousness is exercised in this type of system as the professional construction manager tends to be more serious in analysing the level of a quality job done by the package contractors. Being veterans in contracting, their experience allows them to exercise proficiency in examining high quality works. Vast knowledge in the industry also equipped them with the ability to select the best materials and components for a particular project (Muriro & Wood 2010, p. 18). Considering the above factors, the system assures projects completed are beyond standard quality. The cost of the project is considerably low compared to using other procurement means. Reasons being the total cost of the project is the sum of the actual prices quoted by the package contractors (Hughes et al. 2015, p. 45). Management contractors act as the consultant of the project hence no additional cost is being added up to cater for main contractor interest in increased profit margin. Furthermore, the only additional cost is the fee paid by the project developer to the management consultant for consultation. Construction time is made shorter as the contractor’s expertise allows for effective coordination of materials, plants, work and manpower in comparison to other systems (Adenuga 2013, p. 18). Management contractors get to play a huge part in speeding up the process through improved buildability and constructiveness. Developers ought to consider this option on accounts that require fast project completion. The system furthermore allows the kick off the project to be early due to the preparation of the bidding document and detail designing of the construction phase. Detail designing in other words shop drawing is carried out by package or consultant in the period stipulated for construction.
Negative Aspects
The system is both time and management intense. The developer is faced with the added expense of hiring a construction manager. With both the package contractor and the management contractor actively participating in making the project a success, large amounts of contracts are brought to the table providing room to make errors (Thwala & Mathonsi 2012, p. 15). The system is made complex hence governance of the project may seem to be hard and tedious due to the involvement of a lot of parties.
Comparison Chart
The chart presents a vivid presentation of the pros and cons of the different procurement management systems.  The traditional procurement system has a low scale on the advantages compared to other systems since the advantage is majorly on the ability of the developer to exercise full ownership of the project. Its cons rely heavily on lacking the expertise on being delivered a quality project. The design and build have a slight advantage over its disadvantage as both pros and cons can either amass to maximum gain in profits and huge losses in case of uncertainties occurring. The construction management system has more benefits over its advantages as shown above in the report.
Developers of a project should consider the traditional method on accounts they require ample time taken on their project meets the design and specification as they wished. Furthermore, developers who wish to exercise full control of the project ought to use the traditional method, so that their specification can be fully addressed even though time will not be on their side. However, there possess to be a financial risk on failure to have a consulting team that would further address on uncertainties unplanned for that the developer may not fully be aware or lack the expertise in predicting. I recommend contractors to opt for the design and build system as it was given them full power to conduct the project process on the basis of their skill set. It further provides them with a platform to fluctuate price way beyond the normal price to maximize on the profit attained and cater for their materialistic benefits .Financial risk strikes to contractors who fail cover the uncertainties of the project in the quoted price. The highest the sum of the tender attained, the better for contractors. To project beneficiaries and developers, management contracting and professional management is the system to deploy as it both assures quality projects beyond the standard measure within the fastest time possible. In the above views that I have expressed I possess no conflict of interest.
Adenuga, O.A., 2013. Comparison of the performance of traditional and direct labour methods of project procurement: A case study of some selected projects of the Nigerian army. Ethiopian Journal of Environmental Studies and Management, 6(1), pp.12-30.
Ashworth, A. and Perera, S., 2018. Contractual procedures in the construction industry. Routledge.Hughes, W., Champion, R. and Murdoch, J., 2015. Construction contracts: law and management. Routledge.
Johansson, M., 2018. The Three Procurement methods: Advantages and Disadvantages. [Online] Available at: [Accessed October 2, 2018].
Lam, E.W.M., Albert, P.C. and Chan, D.W.M., 2003. Is Design and Build the Preferred Option to Procure all Projects. Proceedings of the CIB Student Chapters International Symposium on Innovation in Construction and Real Estate, The Hong Kong Polytechnic University, Hong Kong, pp. 33-43. 
Muriro, A. and Wood, G.D., 2010. A comparative analysis of procurement methods used on competitively tendered office projects in the UK, RICS Cobra. [Online]. Available at: . [Accessed October 2, 2018].
Oladirin, O.T., Olatunji, S.O. and Hamza, B.T., 2013. Effect of selected procurement systems on building project performance in Nigeria. International journal of sustainable construction engineering and technology, 4(1), pp.48-62.
Pabor, E.J., & Pennington, R., 2012. The growth of design build construction. [Online] Available at: [Accessed October 2, 2018]. 
Procurement Academy,n.d. Legal Issues in Procurement. [online]. Available at: [Accessed October 2, 2018].  
Shrestha, P.P., O’Connor, J.T. and Gibson Jr, G.E., 2011. Performance comparison of large design-build and design-bid-build highway projects. Journal of Construction Engineering and Management, 138(1), pp.1-13.
The Aqua Group, 2001. Tenders and Contract for Building- 3rd. Edition. Blackwell Science, London, pp. 27-30. 
Thwala, W.D. and Mathonsi, M.D., 2012. Selection of procurement systems in the South African construction industry: An exploratory study. Acta Commercii, 12(1), pp.13-26.

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