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Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology. University of Salford School of the Built Environment BSc (Hons) Architectural Design and Technology Design and Build: A Procurement Strategy. Olufemi Isaac Akinjiyan. May 2015.

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Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

University of Salford

School of the Built Environment

BSc (Hons) Architectural Design and Technology

Design and Build: A Procurement Strategy.

Olufemi Isaac Akinjiyan.

May 2015.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Abstract.

Building Procurement in the Construction Industry is seen as a vital aspect of building projects, if the appropriate Procurement Strategy (PS) is chosen overall success is certain resulting in effective control of the factors that affects procurement choices like project

timing, project cost, complexity, quality, communication and dispute amongst participants. This research work focuses on Design and Build (D&B) and aimed at finding out if D&B is preferred by construction professionals. To achieve this, three objectives were outlined; to investigate other PS, to determine the effects and relationship of time, cost and quality and

to showcase the advantages of D&B over other PS.

Qualitative research strategy was employed to derive a conclusion and the approach used for data collection was a case study of an ongoing public building project and a survey carried out on Procurement in the construction industry by Chartered Institute of Building

(CIOB). Respondents involved were construction professionals in both private and public sectors past and present. The focus was to determine how D&B is viewed in terms of timing, cost, complexity, quality, client’s requirements, communication and dispute amongst participants.

The findings from data collected pointed out that, if the appropriate PS is chosen, the overall success of the project is certain. The findings highlighted that, D&B is preferred for project costing up to £50 Million, barely allows projects to overrun, less occurrence of problem, project timing and cost are usually met, and meets most client’s requirements

particularly when it comes to who bears the project risk and known for proper communication amongst participants.

In conclusion, D&B is viewed as a PS mostly preferred by construction professional on both

small and large scale projects and on private and public projects. Bearing in mind that both Traditional and Partnering Strategies are also mostly preferred based on certain factors.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Acknowledgements.

First and foremost I give glory to Almighty God for his goodness, mercies, favour and

preservation of life. God who gave me the will power, wisdom and understanding by seeing

me through the programme with his continuous guidance and provisions. I say thank you

God for everything from the depth of my heart.

I express my sincere gratitude to my supervisor, Mr. Simon McLean for excellently guiding

me through and ensuring the success of this research work. I would like to say a big thank

to the lecturers, staffs and colleagues of Architectural Design and Technology and those of

the School of Built Environment for their support and advise throughout my course of

study.

I appreciate my mother Mrs Grace A. Akinjiyan for her motherly prayers and

encouragement. To my siblings, in-laws and the entire family members.

And dearest to heart, my better half, my brilliant and excellent wife Abimbola B. Akinjiyan

for her never ending prayers, support and encouragement. Thank you for words cannot

express how much I appreciate and love you.

To my beautiful princesses Oluwafifehanmi and Oluwafikayomi Akinjiyan, I appreciate your

prayers and you mean the world to me.

Not forgetting the United Kingdom Government for making this a reality through their

contributions towards the course financially, this gesture is greatly appreciated.

Thank you all and God bless.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Declaration.

I Olufemi Isaac Akinjiyan confirm that this work is mine, I have not plagiarized and there is

no hidden collusion. I have read and agree with the Declaration on Conduct of Assessed

Work Form on the student intranet.

Signed:………………………………………………………………

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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List of Figures.

Figure 1. Showing research strategy.

Figure 2. Conceptual Procurement Concept.

Figure 2.1. Categorisation of Building Procurement Systems.

Figure 2.2. Traditional Strategy Model.

Figure 2.3. Sequence in Traditional Strategy.

Figure 2.4. Joint Tribunal Contract.

Figure 2.5 Design and Build Model.

Figure 2.6. Sequence in Design and Build.

Figure 2.7. Construction Management Model.

Figure 2.8. Sequence in Construction Management.

Figure 2.9. Management Contracting Model.

Figure 2.9.1. Sequence in Management Contracting.

Figure 2.9.2. Project Partnering Process.

Figure 2.9.3. Procurement Strategies in relation to Financial Risk.

Figure 2.9.4. Relationship between Time, Cost and Quality.

Figure 2.9.4 a – d. Procurement Routes in relation to RIBA POW 2013.

Figure 3. Pictures of Gateway Project.

Figure 3.1a. Location of Respondents.

Figure 3.1b. Age of Respondents.

Figure 3.1c. Gender of Respondents.

Figure 3.1d. CIOB Membership Level.

Figure 3.1e. Job of Respondents.

Figure 3.1f. Sector of Respondents.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Figure 3.1g. Number of Employee in Organisation.

Figure 3.2a. Response to Question 1

Figure 3.2b. Response to Question 2

Figure 3.2c. Response to Question 3

Figure 3.2d. Response to Question 4

Figure 3.2e. Response to Question 5

Figure 3.2f. Response to Question 6

Figure 3.2g. Response to Question 7

Figure 3.2h. Response to Question 8

Figure 3.2i. Response to Question 9

Figure 3.2j. Response to Question 10

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Table of Figures.

Table 1. Difference between Quantitative and Qualitative Research

Table 2a. Pro and Cons of D&B over other Procurement Strategy

Table 2b. Pro and Cons of D&B over other Procurement Strategy

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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List of Abbreviations.

PS - Procurement Strategy.

UK - United Kingdom.

D&B - Design and Build.

TS - Traditional Strategy.

MC - Management Contracting.

CM - Contracting Management.

PFI - Private Finance Initiative.

PPP - Public Private Partnering.

RS - Research Strategy.

BOQ - Bill of Quantities.

CDM - Construction Development Management.

RIBA - Royal Institute of British Architects.

POW - Plan of Works.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

Table of Contents

Abstract i.

Acknowledgement ii.

Declaration iii.

List of Figures iv.

List of Tables vi.

List of Abbreviations vii.

Chapter 1

Introduction

1.0. Background to Procurement. 1

1.1. Aim. 1

1.2. Objectives. 2

1.3. Methodology. 2

1.3.1. Research Approach choice. 3

Chapter 2

Literature Review.

2.0. Introduction. 5

2.1. Meaning of Procurement Strategy. 6

2.1.1. History of Procurement. 7

2.1.2. Construction Industry Analysis. 8

2.1.3. Factors Considered For Contract. 9

2.2. Procurement Route. 10

2.2.1. Factors Considered. 10

2.2.2. Selection Process. 11

2.3. Types of Procurement Strategy. 11

2.4. Separated Procurement Systems: TS. 12

2.4.1. The parties involved 13

2.4.2. Client’s Responsibilities. 13

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

2.4.3. Consultant’s/Contractor’s Responsibilities 13

2.4.4. Pros. 14

2.4.3. Cons. 14

2.4.4. Contract Type. 14

2.5. Integrated Procurement Systems: Design and Build. 15

2.5.1. Client’s Responsibilities. 17

2.5.2. Contractor’s/Consultant’s Responsibilities. 17

2.5.3. Pros. 17

2.5.4. Cons. 17

2.5.6. Contract. 18

2.6. Management-Orientated PS: Management Strategy . 18

2.6.1. Construction Management. 18

2.6.2. Client’s Responsibilities. 20

2.6.3. CM’s Responsibilities. 20

2.6.4. Pros. 20

2.6.5. Cons. 20

2.6.6. Contract. 21

2.6.7. Management Contracting. 21

2.6.8. Client’s Responsibilities. 22

2.6.9. MC’s Responsibilities. 23

2.6.9.0. Pros. 23

2.6.9.1. Cons. 23

2.6.9.2. Contract. 23

2.7. Discretionary systems: Partnering Strategy. 24

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

2.7.1. Pros. 24

2.7.2. Cons. 25

2.8. Procurement Strategies in relation to Financial Risk 25

2.9. Relationship between Time, Cost and Quality. 25

2.9.1. Pros and Cons of Design and Build over other Procurement Strategies. 26

2.9.2. Other Considerations. 28

2.9.3. Conclusion. 31

Chapter 3

Case Study and Survey Findings

3.1. Introduction. 32

3.2. Stride Treglown Limited. 32

3.3. Case Study Questions. 32

3.4. Answers to Questions. 33

3.5. Background Review: The Chartered Institute of Building (CIOB) 35

3.5.1. Research methodology 35

3.5.2. Questions. 37

Chapter 4

Case Study and literature review analysis

4.1. Introduction. 43

4.2. Analysis of Case study. 43

4.2.1. Analysis of CIOB Survey. 44

4.3. Conclusion. 47

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

Chapter 5

5.1. Conclusion. 48

5.2. The objective

5.2.1. Objective 1. 48

5.2.2. Objective 2. 48

5.3.3. Objective 3. 49

5.4. Summary. 49

5.4. Limitation. 49

5.5. Recommendation for future study. 50

5.6. Further research. 50

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

CHAPTER 1

Introduction.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Introduction.

1.0 . Background to Procurement.

In the Construction Industry there are various Procurement Strategies (PS) which include

Traditional Lump Sum, Design and Build (D&B), Management Strategy that comprises of

Contracting Management (CM) and Management Contracting (MC) and Partnering.

Procurement of buildings is described by Love et al, (2010), as a process absorbed in the

industry to determine participant’s structure of responsibilities, client satisfaction and the

overall success of projects. Selection of suitable PS is important to all participants (the

Design Team, Consultants, Main Contractors, and Sub-Contractors) in any given project.

This research is focused on D&B, however, other PS will be compared against D&B. They

will be critically discussed by explaining their selection processes and identifying their

strengths and weaknesses. How time, cost and quality effects PS with their relationship will

be examined also the strength of D&B over other strategies will be highlighted.

According to Frank (1993), D&B’s remarkable growth in the construction industry was

between 1980s and early 1990s. He stated that, different terms are used to describe D&B

such as Design and Construct, Turnkey and Package Deal. D&B is when a contractor

provides the design and construction under a single contract ensuring the building is to

standard. D&B has being employed as far back as 1950s where firms like IDC (now AMEC)

offered exclusively D&B services for buildings other than housing. The interest in D&B

services increased significantly in 1960s. It was the first PS employed in the Construction

Industry developing a different approach to the normal Traditional Strategy (TS) and it

waxed stronger into the 1970s and 1980s. Sequel to this clients became more interested in

other strategies and began to employ Management Contracting (MC) nevertheless, more

clients continued to use D&B.

1.1. Aim

The aim of this research is to find out if D&B is the preferred Procurement Strategy used by

construction professionals in the construction industry.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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1.2. Objectives

In achieving the research aim, the following objectives will be addressed:

To critically investigate other PS, their Selection Process, identifying participants

involved, contract type and highlighting their strengths and weaknesses.

To determine the effects and relationship of time, cost and quality in Procurement

Strategy.

To showcase the strength of D&B over other procurement strategies.

1.3. Methodology

The main approach is to use both primary and secondary data collection for the purpose of

achieving the aims and objectives of this research. The primary data collection will be from

the literature identified in the literature review and other academic sources. The surveys

carried out by previous authors in the subject area will be analysed and evaluated.

Naoum (2007), makes it clear that Primary literature is the most accurate source of

information as it publishes original research work. For the purpose of this research

academic research journals, government and non-governmental organisation publications

and professional institute publications will form the basis of primary data collection and

references because they contain enormous depth of information. While secondary data

collection are those drawn from primary data collection coupled with relevant textbooks

and research methodology textbooks.

In addition to both primary and secondary data collection, it is relatively important to have

a Research Strategy (RS) which Naoum (2007), defined as the process where research

objectives are questioned. Identified two types of RS as Quantitative and Qualitative

Research. However, the choice of RS used usually depends on the availability of information

required and purpose of study area.

Creswell (1994), explains that Quantitative Research is seen as object in ‘nature’ and

described as an investigation into issues based on theory and hypothesis, usually analysed

statistically and measured numerically to determine if theories and hypothesis are correct.

Whereas Naoum (2007), explains that Qualitative Research is ‘subjective’ in nature because

it explains experiences, meanings and description. Information gathered are classified into

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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two main categories; Exploratory and Attitudinal. Figure 1 explains the RS further and table

1 highlights the differences between Quantitative and Qualitative.

1.3.1. Research Approach choice.

Naoum (2007), pointed out that the Case study approach is divided into three parts;

Descriptive: similar to descriptive survey but used on detailed cases

Analytical: similar to analytical survey but used on detailed cases

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Explanatory: theoretical approach to problem explaining causality and

showing linkages amongst objects of study.

And the survey approach is divided into two;

Descriptive: this answers question as: What is the process? How many?

Where? By counting numbers of respondents towards the subject area.

Analytical: this establishes relationships between objects in a questionnaire.

From the explanations made above this research work will use the Qualitative RS, where

exploratory research will be employed and the approach for data collection will be the

Case Study (Descriptive) and Survey (Descriptive) formats.

Once all the literature reviews, case study and survey are digested, the researcher will

evaluate the information in line with the subject area as suggested by Kumar (2005), that

the information acquired will be appraised in other to collate themes and issues associated

with the study area.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

CHAPTER 2

Literature Review.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Literature Review.

2.0. Introduction.

In the last thirty years there has been an enormous amount of literature available in

relation to D&B which has resulted in choosing D&B over other PS.

Molenaar et al, (1999), explains that D&B project delivery is experiencing expansive growth

in both the private and public sectors, where owners are deviating away from the

traditional lump sum approach. They analysed completed public-sector building projects

based on the owner’s experience, level of design completion, design selection, contract

type and method of award with design process variations. The results obtained provided

insights for participants involved in procurement and those of the changing public-sector

procurement system.

On the other hand Ndekugri & Turner (1994), argued that as a method of procuring

buildings, D&B approach accounts for an increasing proportion of building construction

output in the United Kingdom (UK). The approach employed was the survey of contractors,

designers, and building clients regarding D&B issues. The focus areas of the survey were

circumstances in which the approach would be suitable, the project organizations

commonly employed on D&B projects, the difficulties commonly encountered by

practitioners and the attitudes of the construction professionals to the procurement route.

Their survey revealed that D&B is on the increase as many clients see it as means of

reducing disputes amongst participants in comparison to other PS aside from providing

better value for money. The approach can be used satisfactorily with all forms of projects

and is now accepted by more construction professionals.

In addition, Akintoye (1994), illustrated that D&B has become a popular mode of procuring

construction work in the UK, he conducted a survey of 52 construction firms responsible

for 25% of UK construction output in 1991 and examined their current views on D&B. The

feedback showed that, although, D&B is widely used, it is not favoured by contractors, who

would prefer the Develop and Construct approach (a TS approach) where consultants

provides them with the concept design and specification.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Furthermore, Songer & Molenaar (1996), noted that owners of modern constructed

facilities are increasingly searching for different options of PSs. These methods include

D&B, CM and Turnkey. The primary selection factors of D&B identified by a survey they

carried out includes constructability, establishing project cost and timing, reducing cost and

claims on project size or complexity.

In another case study embarked upon by Molenaar & Songer (1998), it was established that

owners of Public sector were quickly noting new construction PS. The documented project

successes and changings in procurement laws were encouraging owners to sample D&B

approach. Hence, leading to a departure from the TS method. 122 case studies where used

and the Performance criteria analysed includes budget variance, administrative burden,

schedule variance, conformance to expectations, and overall user satisfaction. The

resulting outcome includes project complexity, owner design input, method of selection,

D&B market etc.

In response to all views mentioned above, Anumba & Evbuomwan (1997) stated that D&B

has witnessed significant growth in the UK construction industry over the last ten years and

now used on complex, private and public projects. They highlighted the benefits derived

using D&B, and these includes; the involvement of the contractors in the design process,

shorter lead times, greater price certainty, reduced construction time and improved

communication. On the contrary, the disadvantages ascribed to D&B includes high

tendering costs, reduced design quality and self-consciousness of changes by clients.

This Research Project will be based on the findings of previous survey and life case study of

ongoing project where emphasis will be laid on the aim of this research project to establish

whether D&B is the preferred PS used by majority of participants in the construction

industry. Also by investigating how other PS are selected, who the participants are, how

their Pros and Cons differ compared to D&B and how the effects and relationship between

time, cost and quality in D&B is implemented.

2.1. Meaning of Procurement Strategy.

Procurement of buildings is defined by Love et al, (2010), as a process adapted in the

construction industry; where participant’s responsibilities are structured, client satisfaction

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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and project success are determined. The selection of appropriate PS is crucial to

participants involved. Generally, procurement is the process where construction

professionals comes in agreement with clients; to plan, design, construct, engage supply

chain partners in delivering construction projects that ultimately leads to client satisfaction

and value for money. Whereas Rowlinson & Mc Dermott (1999), argues that PS is to satisfy

client’s development or operational needs with respect to the provision of constructed

facilities for a discrete life-cycle. They further explained that it requires emphasise that the

PS must cover all the processes in which the client has an interest and the entire lifespan

of the building. Conceptually procurement is illustrated in figure 2 which clearly explains

the relationship between participants to a construction project.

2.1.1. History of Procurement.

The development of PS according to Morledge & Smith (2013), has been somewhat an ad-

hoc process, where the evolution of TS occurred naturally throughout the seventeenth and

eighteenth centuries. Construction projects were procured as separate trade-based

packages mostly carried out by individual tradesmen. This approach led to constant dispute

notwithstanding, it lasted for over 150 years. Masterman (2002), identified four phases in

contemporary PS. The first being the period (1945 -1972) when conventional methods of

procurement prevailed during the sustained economic growth. Followed by period 1973-

1979, a phase characterised by the recession where the use of non-conventional PS

increased relatively. Then, during the 1980s and 1989s, which was post-recession where

the experienced clients introduced other PS such as D&B and management-oriented

systems. And, finally, the phase started from the last decade till date which has been

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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involved in recession and recovery, combined with the introduction of Partnering such as

Private Finance Initiative (PFI) and Public Private Partnering (PPP), a government initiative

to increase the construction industry performance. He also made it clear that by early

1960s, problems arose from separation of design and construction function in TS,

confirmed by the difficulty of apportioning responsibility for defects on completed projects.

Consequently, the integrated PS (D&B, Design and Construct etc.) was introduced.

Ashworth (2012), agreed with Mastermind that the integrated PS was developed as a result

of separation of the designer’s role from those of the contractor where they perform their

responsibilities individually with separate legal responsibility to the client. Furthermore

that D&B can be traced to ancient Mesopotamia where the master builder was responsible

for both designing and constructing the building projects, such as the Parthenon and the

Theatre of Dionysus in Classical Greece.

The master builder disappeared during the Renaissance because architecture and

construction evolved as a profession and complex projects were developed needing

effective construction methods, resulting in the need for design and construction specialist.

Frank (1993), stated that in the 1950s, few firms offered D&B services for buildings other

than residential, but in the 1960s, D&B increased due to participants seeking an alternative

approach to the TS and it became more popular in the 1970s and 80s, clients also diverted

to MC as an alternative to D&B.

2.1.2. Construction Industry Analysis.

According to Ashworth (2012), the changes in methods of procurements has been a huge

driving force within the industry where immense assessment is made between other

industries and countries around the world. Bearing in mind that each PS have their

advantages and disadvantages. For these reasons the choice of PS depends upon different

characterises such as;

Type of client

Type and size of project

Familiarity among client

Risk allocation

Time factor

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Quality factor

Consultants and contractors relationships

Forms of contract

Clients objectives

Choice of designer and consultant

2.1.3. Factors Considered For Contract.

In developing a contract for PS, the client needs to consider the following factors as stated

by RICS 2007, who carried out series of survey to determine the trends in PS and standard

forms of contract used. The approach was to compare between the following issues;

i. Consultant versus Contractor: the survey illustrates that D&B project is

underestimated compared to the contractor approach, where a contractor is preferred to

be engaged rather than a consultant. The advantages of using contractor are price

certainty, time management, great teamwork and comprehensive design fees.

ii. Competition versus Negotiation:

The contractor seeks to acquire construction contract by either selection, invitation or

recommendation. The client must establish the method of engaging the contractor

either by competition or negotiation. By competition the time, price and quality factors

are considered while a negotiated approach is considered if the following

circumstances occurs; early start, financial arrangements and site location.

iii. Traditional versus Alternative:

In recent times majority of strategic building project use the alternative method of

procurement rather than the TS. The study shows that whichever approach is taken

risk, Quality assurance, Size of project, aesthetics, cost and accountability are important

to consider.

iv. Measurement versus Reimbursement:

The two main ways of calculating cost in construction work is either by measurement or

reimbursement. The measurement contract approach allows the contractor to be paid for

work done by multiplying quantity by rate which allows for risks payment to the contractor

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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while the cost reimbursement approach does not. When choosing between both contract

approaches Cost control, administration, contract sum and price risk should be considered.

2.2. Procurement Route.

Moreledge and Smith (2013), made it clear that any form of procurement route adopted

should achieve certainty of cost, time and quality. The route establishes contractual

relationships between all parties involved, choosing an appropriate route leads to the

success of the project because any mistake at this stage usually leads to undesirable

consequences. For complex project the client is advised to appoint a Project Director who

helps to ensure the client gets the project required, manage the client within the project

context, to resolve dispute amongst participants and to aid the construction team.

All procurement routes differ in relation to the following reasons;

The client’s financial risk

The availability of reasonable design information at the time of tender

Client’s control over design and construction stage

Availability of adequate information at the commencement of construction work

Contractor’s involvement and contribution in design and planning stage

Organization arrangement in risk, accountability and responsibility distribution.

2.2.1. Factors Considered.

Once a conclusion is reached, the selection factors to consider includes;

Client financial strength

Characteristics of project

Risk management

Project cost

Quality

Time

Factors outside project team control

Ability to make changes at various stages as project progresses.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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2.2.2. Selection Process.

Moreledge and Smith (2013), explains that clients with experience are capable of selecting

a PS they are familiar with, taking into account its main objectives, risk and success rate.

However, inexperienced clients have to seek advice from professionals with experience.

They also pointed out that the procurement route has two components, the first is Analysis,

where priorities are assessed and set in line with project objectives and the second is

Choice, which requires considering possible options, evaluating and selecting the most

appropriate. Conversely Turner (1997), revealed that the selection process requires

employer’s priority checklist, which is a guide line for discussion with the Design team. The

project priority list is considerably studied to decide which PS to use.

It is best practice to select the procurement route from assessing client’s needs and project

characteristics. By providing client with informed advice helps client’s to make correct

decision based on distribution of risk, time, cost, complexity, certainty and division of

responsibilities amongst participants.

2.3. Types of Procurement Strategy.

In establishing the types of PS available in the construction industry, Masterman (2002),

categorised adopted building PS as;

Separated PS: the client is mainly responsible for the funding and operation of the

project where design consultants and quantity surveyor are appointed as the design

team before a contractor is contracted to build the project. This is basically the

convectional system known as TS.

Integrated PS: This enables only one organisation to take full responsibility for the

design and construction of the project, allowing the client to deal only with one

organisation. The strategies included in this category are the D&B, Novated

D&B/Construct, Develop and Construct, Turnkey and Package Deal.

Management-Orientated PS: Here an organisation manages the project working

alongside design team and other consultants to develop design and manage the

operations. The two main systems well established in this category are

Management Contracting, Construction Management and Design and Manage.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Discretionary systems: In this system the client structures the administration of the

project and uses the most appropriate PS available. Partnering Strategy is widely

used in this category.

Figure 2.1 illustrates the above stated categories of PS. After identifying the broad

categories of Building PS, this project will look mainly at Traditional, D&B, Management

Contracting, Contracting Management and Partnering.

2.4. Separated Procurement Systems: TS.

Turner (1997), explains that in TS the employer appoints consultants for design and cost

control at any stage and a main contractor is appointed to carry out construction work, it

can be accelerated where design overlaps construction i.e. by contracting and tendering

separate work in advance and by using a two-stage process to let the work, this reduces

pre-construction time. In both cases, certainty of cost is lost in having a quicker start while

the risks remains the same. Nevertheless, Roy, Adrian & Dean (2006), argued that TS has

the least risk due to level of certainty about design, cost and time if properly implemented

though usually slow prior to commencement of construction. Design is completed before

competitive tenders are invited, the successful tenderer enters into direct contract with

the employer and completes the project under the supervision of the design consultant. TS

is suitable for technically advanced buildings, used by employers with limited budget and

complex projects. Figure 2.2 explains TS model with the level of involvement of each

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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participants. While figure 2.3 explains the sequence of TS in relation to the stages of

overlapping between designing, tendering and construction stages of building projects.

2.4.1. The parties involved

The parties involved in the PS generally includes the employer, designers, contractors and

sub-contractors who are responsible for different roles.

2.4.2. Client’s Responsibilities.

Developing an idea and funding the project.

Employs the consultants.

Bears the project risk.

Cost recovery if negligence is caused by consultants.

Clients have influence over design development due to having direct contractual

relationship with design team.

2.4.3. Consultant’s/Contractor’s Responsibilities.

Contractors submit priced cost and identifies financial risk for the project.

Contractors gets approval from client for additional time and cost if delay is certain.

Figure 2.3. Showing Sequence in Traditional strategy. Sources: Moreledge and Smith (2013)

Design

Tendering

Construction

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

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Consultants advise client, calculate cost and responsible for developing the design.

2.4.4. Pros.

Roy, Adrian & Dean (2006), pointed out the following Pros and Cons of TS;

Highly competitive and showcases fairness where contractors bid on the

specifications.

Employer’s involvement at design stage resulting to a functional design.

Price certainty is assured and changes made are easily rearranged and valued.

Very transparency).

Participants are confident with the approach due to familiarity.

2.4.3. Cons:

Does not allow for over lapping between stages and fails when contractors are

appointed before completion of design.

Attempting to speed up the process will result to cost and time reduction and

expensive dispute.

Longer duration of project due to commencement of construction after design is

completed

Contractor is not involved at design and planning stage.

Client bears project risk.

TS is unsatisfactory to clients for complex or large projects when certainty

necessary.

Conflicts occurs due to poor communication amongst between participants.

2.4.4. Contract Type:

Standard Building Contract with Quantities is recommended by JTC Ltd (2015), which is the

most popular form of building contracts used. This is justified because Bill of Quantities

(BOQ) is provided in TS. This form of contract can be subdivided into the following;

Standard Building Contract with Quantities: This is adequate for large projects

designed by employer and BOQ are provided. The Quantity Surveyor and contract

administrator are employed to administer the process. Suitable for both private and

public projects and projects done in sections.

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Standard Building Contracts with Approximate Quantities: Used when the full

extent of works cannot be quantified at tender stage due to limited time to prepare

BOQ. It is suitable for projects done in sections, equally used for both private and

public projects.

Standard Building Contract without Quantities: Allows the employer to provide

both the drawings and specification or work schedule to the contractor and allows

the contractor to determine the quality of work required. Used in complex,

private/public projects.

Subcontracts: Used in conjunction with the three forms stated above and available

are different forms used to determine if subcontractors are required to design any

special part of the work.

2.5. Integrated Procurement Systems: D&B.

Roy, et al (2006), explained that a contractor assumes the risks and responsibility for

designing and building the project in return for a fixed price. In fast tracking the project,

construction usually starts before detailed design is completed and client’s requirements

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not included in brief will cause a change to the contract giving rise to high cost on tender

documents and project. Turner (1997), concurred by explaining that one organisation is

responsible to the client for designing and constructing a project, where inviting tenderers’

to bid, selecting tenderers, developing client’s requirements and establishing the need to

build are components of D&B. Before entering into contract it is vital that the brief and

performance specification are defined. D&B is suitable for standard or simple projects,

inexperienced clients and repeat works.

Figure 2.5 explains D&B model with the contractual relationship and level of involvement

of each participants. While figure 2.6 explains the sequence of D&B in relation to the stages

of overlapping between designing, tendering and construction stages of building projects.

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2.5.1. Client’s Responsibilities; Turner (1997).

Client’s desire to build

Contractors are provided performance specification by client at tender stage.

Design team are employed by client to prepare project brief and carry out

preliminary.

Client’s specification interpretation takes preferences over the contractor’s

specification.

2.5.2. Contractor’s/Consultant’s Responsibilities:

To develop the design from project brief and build the project.

Detailed proposal are submitted to client in respect to design brief.

Both parties are responsible to provide client with a building fit for purpose.

Contractor usually appoints the consultants and subcontractor.

Carries project risk.

Involved in planning and designing of the project.

2.5.3. Pros. Roy, et al. (2006),

Client transfer risks to the contractors.

Contractors are involved in planning and design of the project.

Before construction starts, certainty of price are obtained provided alterations do

not occur and client’s requirements specified correctly.

Overlapping of stages reduces project timing.

Only one firm or construction company is dealt with by client.

Little or no disputes and better novation.

Team working is faster and client gets a fair price.

Communication amongst participants are improved.

Client’s requirements are prepared carefully based on desires.

2.5.4. Cons. Chappell (2005),

If alterations occurs additional fees are paid by client.

Delay during approval of design development period causes disputes.

Lower quality of products are associated with D&B.

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Roy, et al (2006) points out that clients experienced difficulties in prepare a

comprehensive brief.

Comparing bids are difficult due to each stage being different and project prices

differs due to project programming between bidders.

Alterations to project by client are costly.

Expensive tendering cost due to no BOQ and project quality of design and materials

may suffer.

2.5.6. Contract.

Ashworth (2012), established that D&B contract is used where detailed contract provisions

are necessary and client’s requirements have been prepared and provided to contractors.

Thus, contractor is responsible for carrying out the design and construction work. Usually

this form of contract is not advisable where the contractor is not responsible for both

design and construction. JCT Ltd. (2014), indicated that works are carried out by the

contractor for D&B and best form of contract is D&B Contract and reasonable because

contractor are allowed to complete the design and execute the works by providing detailed

documents. These document outlines requirements, price and payment are in lump sum

with periodic or interim payments. Framework agreement, Pre-Construction Services

Agreement (PCSA) and Pre-Construction Services Agreement (Specialist) (PCSA/SP) can be

used with this contract.

2.6. Management-Orientated Procurement Systems: Management Strategy;

Walker & Hampson (2003), explains Management Strategy is seen as non-traditional PS

that allows contractors get involved early in design development process and delivering

quality value. Management strategy is divided into; Construction Management (CM) and

Management Contracting (MC).

2.6.1. Construction Management.

In this strategy, the contractor is the consultant that advices on designing and constructing

methods. Roy, et al (2006), points out that client spread the risk by not allocating

responsibilities to an individual main contractor. The design team employed by client and

a construction manager is contracted to manage, coordinate design, construct and

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facilitate the building work. Figure 2.7 explains CM model with the contractual

arrangements and level of involvement of each participants. Figure 2.8 explains the

sequence of CM in relation to the stages of overlapping between designing, tendering and

construction stages of building projects.

Also highlighted two forms of CM as Agency CM (in which the CM undertakes the role of a

consultant providing advice and coordinating construction works for a fee) and Direct CM

(where the CM undertakes works for a guaranteed maximum fee or negotiated price

usually when design is in advanced stage). Other variations of CM includes on call

contracting, full cost reimbursement and guaranty maximum price.

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2.6.2. Client’s Responsibilities.

Client appoints trade contractors directly.

Client involved in design and construction stages.

Appoints project design team that assess the recommendations of cm.

Client employs a project management that is technically astute.

2.6.3. CM’s Responsibilities.

Coordinates design team supervises the construction process.

Bears no risk due to no contractual link with design team and trade contractors.

Liable for negligence by underperforming.

Draws up preconstruction programme.

Paid a fee for managing the construction.

2.6.4. Pros.

Moreledge and Smith (2013),

Reduces confrontation and dispute between participants.

CM is involved early.

Design and construction stage overlaps.

Increased competition for construction work on large projects.

Proper accountability.

Contract variations are few.

Nominated trade contractors are not needed.

2.6.5. Cons.

Little certainty where speed is required.

Client bears all risk on final cost.

Client must have confidence in design team and contractors.

High exploitation.

High level of supervision and compliance.

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2.6.6. Contract:

CM Contract is suggested by JCT Ltd (2015), for this strategy, it is acceptable because the

client appoints different contractors to carry out construction works and CM to project

manage it for a fee. Ashworth (2012), explains that the contract is between the client trade

contractors in conjunction with Construction Management Agreement. It is appropriate for

employer having a direct contract with trade contractors while the construction manager

administers the conditions on behalf of employer. He also highlighted that different forms

are used for this contract which includes the following;

Construction Management Trade Contract

Construction Management Trade Agreement

Construction Management Tender

Construction Management Trade Contractor Collateral Warranty for a Funder

Construction Management Trade Contract Collateral Warranty for a Purchaser or

Tenant

Construction Management Guide

2.6.7. Management Contracting.

According to Cox & Clamp (2003), the client appoints consultant to prepare design with

specification and Managing Contractor is selected through tender. MC are Paid on the basis

of scheduled service, prime cost and management fee. Roy, Adrian & Dean (2006), explain

MC as the process where MC is appointed to manage the building process and paid a fee.

Usually achieving cost certainty is not certain until all works are appointed and depends on

high degree of trust between participants. MC is appropriate for large scale projects and

only large construction firms with experience use the strategy.

Figure 2.9 explains MC model with the level of involvement and contractual arrangements

of each participants. Figure 2.9.1 explains the sequence of MC in relation to the stages of

overlapping between designing, tendering and construction stages of building projects.

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2.6.8. Client’s Responsibilities.

Moreledge and Smith (2013),

Client operates the strategy.

Client must provide useful brief to consultants.

Client selects qualified and committed team.

Cost time and information control is required.

Client is involved in all levels of the project.

Client is flexible on design matters.

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2.6.9. MC’s Responsibilities.

MC acts on behalf of the client.

Selects specialist subcontractors and orders materials.

Pays all works contractors.

MC has contractual links with all participants.

Manages and executes the project.

Appointed by client for advice and not directly involved in carrying out any

construction work.

2.6.9.0. Pros.

Any design alterations do not affect project cost.

Design and construction overlap.

Time saving potential due to over lapping of design and construction stage.

Enables contractor’s contribution to design and project planning.

Risk and role of participants are clear.

Client has direct contract with trade contractors and pays them directly.

Changes can be accommodated provided packages affected have not been let.

2.6.9.1. Cons.

Design is completed only when client is committed to the project.

Poor certainty is unknown at early stage.

Committed participants depended on.

Design work coordination is difficult.

Trade packages are let before price certainty is achieved.

2.6.9.2. Contract.

Management Building Contract is used as indicated by JCT Ltd (2014), because it allows

client to provide uncompleted design. The MC employs other works contractors to execute

construction, administers the conditions and manage the project for a fee. Price is based

on prime cost of the project plus a fee for the management contractor. Framework

Agreement and Pre-Construction Services Agreement (Specialist) can be used with this

contract. The contract is associated with large scale projects that requires early start, where

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full design information are not prepared ahead of work commencing and where design

may be sophisticated or innovative in nature as emphasised by Ashworth (2013).

2.7. Discretionary systems: Partnering Strategy;

Construction Industry Institute (1991), describes partnering strategy as a long term

obligation among two or more organisation for attaining common objectives by maximising

the potential resources of each participant. In achieving a common goal, this relationship

is usually based on trust and an understanding of each individual’s expectation and values.

Figure 2.9.2. Showcase the project partnering process.

According to McDermott (2014), partnering strategy is divided into three parts; First

generation (which is project based), Second generation (a series of projects for one client)

and Third generation (building a virtual organisation).

PS is implemented by using a range of procurement arrangements, where risk and rewards

should be shared appropriately and the employer should pay the partners an agreed sum

for overhead, profit plus and all genuinely incurred costs.. The employer selects contractors

based on experience, past performance and cost management. Contractors are guaranteed

series of project by employer where project cost estimates are developed collaboratively.

The strategy arrangement usually last for 3-7 years.

2.7.1. Pros.

Continuous flow between construction materials and supply chain.

Reduces waste, cost effective and develops better designs.

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Incorporates new technologies and encourages effective working.

Transparent payment method (like project banking).

Objectives of participants are maximised effectively.

2.7.2. Cons.

Open book accounting is required.

Rigorous aiding required.

Participants must be trustworthy and committed.

Time consuming.

2.8. Procurement Strategies in relation to Financial Risk:

There is a level of financial risk in each PS which the employer and contractors are able to

contain, the figure 2.9.3 below shows the relationship of risk.

2.9. Relationship between Time, Cost and Quality:

Turner (1999), explains that in the designing and construction of buildings in the

construction industry relating to PS, a balance of circumstances existing between time, cost

and quality must be established. Where each either of them must probably or not always

pull against one or both of the other two. In real life projects where quality and cost must

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26

be achieved it takes longer time to achieve the task. Figure 2.9.4 shows the relationship

between time, cost and quality and further illustrate ways of achieving a balance between

these constraints. These factors will looked at further in the following where they will be

analysed for better understanding and how they affect or influence PS choices.

2.9.1. Pros and Cons of Design and Build over other Procurement Strategies.

In showcasing the Pros and Cons of D&B over other PS, the Pros and Cons pointed out

above is tabularised, as seen in table 2 below.

It was highlighted from table 2/&b that D&B has the following advantages over other PS in

the area of Price certainty, Project time, Speed and Project Scale: especially for projects up

to £50 Million, while, Partnering is mostly used for projects above the £50 Million. D&B

carries the entire project risk making is favourable amongst clients, used in both private

and public sector and is known for ensuring effective communication amongst participants

leading to collaborative working. D&B reduced disputes amongst participants compared to

TS, CM and MC where disputes occurs due to lack of negligence and other reasons. It

encourages Overlapping of design and construction stage and allows contractors to

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contribute in the planning and designing stages as against TS and Partnering. Overall the

client is comfortable with D&B because it allows the client to have contractual agreement

with just one participant.

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2.9.2. Other Considerations.

Procurement strategies cannot be discussed without understanding how it relates with the

Royal Institute of British Architects (RIBA) Plan of Works (POW) and how it fits with the new

Construction Development Management (CDM) coupled with their impacts on the various

PS.

According to RIBA the POW was developed in 1936 and has been used in the UK since then

as a model for building design and construction process. The structure served architects

and stakeholders involved, although amendments had occurred over time, the POW 2013

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29

is the latest amendment which offers the opportunity to undertake a fundamental review

of the RIBA POW, to ensure alignment with best practice from all construction professionals

involved and to provide a renewed framework which will be fit for purpose for the next

generation.

RIBA developed a genetic procurement task bar that allows participants involved in

procurement to generate their bespoke POW by selecting their proposed procurement

route. Once selected a specific POW will be generated showing the task bar that includes

the specific procurement and tendering activities at each stage. This is indicated in figure

2.9.4 a - d and explained below;

a) Traditional: The concept design starts at stage 2 through to the technical design

stage where project is issued for tender, tenders assessed and building contract

awarded.

b) Design and Build: The concept design starts from inception stage zero through to

stage 4 (technical design) by overlapping stage 3 where project is issued for tender,

tenders assessed and building contract awarded on basis of contractor's proposals

before construction works starts.

c) Contracting Management: At stage 2 the Bidding contractors submit concept

designs for appraisal and preferred bidder develops design. Building Contract is

awarded based on contractor's proposals at stage 3 through to 4 after which

construction work.

d) Management contracting: tender to select contractor and building contract is

awarded in stage 2 before the design is developed overlapping straight through to

stage 4 where design information is issued in agreed work packages for tender

before construction commences.

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Trada (2007), explains the aim of CDM is to combine Health and Safety (H&S) and welfare

into the management of project by ensuring everyone involved in construction work

together as a team. Improve planning, management of projects and identifying hazards to

eliminate them at planning and design stage. Ensures competent contractor and

subcontractors are appointed by targeting issues that can improving H&S.

HSE (2015), made it clear that CDM 2007 has been reviewed to CDM 2015 with the

following changes; the replacement of CDM Coordinator by a Principal Designer for the

planning, managing, monitoring and coordination of pre-construction phase/H&S. Principal

Designer and Principal Contractor will be required on all projects where there will be more

than one contractor working on the project.

As a result of these changes, the procurement will fit with the new CDM 2015 from

inception, where all participants will be involved from the planning, designing and

construction stages through to the handover of the project to allow for effective soft

landing which will aid the overall facility management process.

Cabinet office (2015), explains that the Government Construction Strategy of May 2011

acknowledge the importance of improving the value offered by public sector construction

and within this “soft landings” was identified as a way to improve performance of buildings

and to meet the requirements of end users. This reflects a smooth transition from the

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design and construction phase to the operational phase. This was brought together within

the Government Soft Landings policy that will be operational in 2016.

Soft landing should fit into procurement early by ensuring owner and prospective end-user

engagement in the design and construction process because statistics shows that the on-

going maintenance and operational cost of a building during its lifecycle outweighs the

initial cost of construction.

2.9.3. Conclusion:

In a nutshell procurement procedures are dynamic to suit the ever changing needs of the

society especially the construction industry. There is no set solution because each project

requires different level of risk, quality and time scale. Bearing in mind that various factors

are considered carefully before making a decision and ultimately the employer’s interest is

most important by identifying their objectives and balancing them with PS available. CIOB

(2010), makes it clear that by comparing which PS is best, seems impossible because

construction projects differs substantially from project to project and are bespoke in

nature. Based on all the findings in the literature review, the PS employed by employers

and construction professionals in the construction industry are based on series of issues.

These issues must be considered in-depth before any decision is made because a wrong

choice will incur additional cost to the client or other parties bearing the financial risk

depending on the type of strategy used. In addition, the client’s interest must be

paramount at all times in decision making and carrying out the works mainly because the

client wants a building fit for its purpose with quality, time and cost considered at the same

time.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

CHAPTER 3

Case Study Review.

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Case Study Review.

3.1. Introduction.

This chapter will look at a real life case study to understand the choice of PS employed by

parties involved. A project carried out by Stride Treglown Limited (an architectural firm)

will be used as case study and the second is a survey on “Procurement in the construction

Industry “carried out by the Chartered Institute of Builders (CIOB) in 2010.

3.2. Stride Treglown Limited.

Background Review: This is a top ten United Kingdom Architectural Practice with over

£14million turnover, delivering excellent projects to their clients and involved with both

building and landscape. Stride Treglown have commercial awareness because they strike

a balance between the sometimes conflicting aspects of time, cost and quality a major

aspect of PS process. They deliver building construction projects using different forms of

PS, for instance, they used D&B was the Gateway Project of the University of Salford and

Student Living Space at the University of Bath. Nevertheless, other procurement strategies

have been used in projects such as the Eco Home (Orchard Close scheme) in Almondsbury,

Bristol and the new Sainsbury’s store in Portishead, to mention a few.

3.3. Case Study Questions.

The following questions were asked in other to deduce whether D&B is the preferred

procurement strategy in the construction industry;

Q1. Name of project?

Q2. Why was the procurement strategy employed preferred?

Q3. Is Design and Build a preferred choice to other strategies?

Q4. How does Time, Cost and Quality determine the choice of Strategy?

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3.4. Answers to Questions.

In responses to the questions above the Divisional Director (North West England) of Stride

Treglown responded that;

Answer 1. The name of the project is the Gateway Project of the University of Salford,

Manchester. The ‘Gateway Project’ is a £55 million project that was designed primarily for

students of the School of Arts and Media with spaces for students from other disciplines to

use. The facilities within the building includes a theatre, recording and photography

studios, café areas, performance and rehearsal spaces, computer suites and lecture

theatres. Picture 1-3 shows the Gateway Project.

Answer 2. The questions are very tricky to answer because every employer has a different

view, but the overriding factor is almost always financial and procurement choice is about

identifying and apportioning risk.

Answer 3. The process of Gateway Project Salford was an odd two stage process, carried

out after a full set of production information and a BOQ had been produced – which is a

more ‘traditional’ tender pack. However, it was always understood that it would be D&B.

Leaving the tender later on in the design process means that the client can have more of a

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34

say on quality. In Salford’s case, there was a high degree of specialist space that they

wanted control over.

i. Stage 1 involved interested contractors submitting responses to qualifying criteria

in order for the university to shortlist five or six companies for full tender.

ii. Stage 2 was the tender process and involved pricing against a full set of drawings/

specifications and a BOQ. The lowest price (BAM Construction) was chosen then a

long period of vetting was undertaken. The final contract sum was agreed and a

D&B contract entered into. The majority of the design risk had been worked

through.

iii. The reality is that almost all contracts are now some form of D&B. It is the ‘default’

setting. Traditional forms are still in use for refurbishment and listed building work

where design risk remains high. They place the risk on the client’s side. For the

client, value is obtained because tender figures, reflecting the reduced risk to the

contractor, are proportionately lower.

iv. Extensive ground investigation had reduced that risk too. The resultant fixed price

contract placed all the remaining risk in the hands of the contractor.

v. Lately there has been a shift in emphasis to a more collaborative approach.

Partnering contracts – like NEC 3 – have become popular, especially with public

sector clients.

Answer 4. The old triangle of cost/quality/time still figure in procurement discussions but

are not necessarily the things that drive contract choice.

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Case Study (Survey Review)

3.5. Background Review: The Chartered Institute of Building (CIOB): CIOB was

founded in 1834, an organisation made up of construction professionals in the United

Kingdom, the body is recognised internationally today and represents the public in ensuring

the built environment is well structured. The main mission of the organisation as stated by

CIOB (2010), is to contribute to the creation of a modern, progressive and responsible

construction industry that will meet economical, technological change, environmental and

social challenges faced in the 21st century.

CIOB carried out a survey on “Procurement in the construction Industry” in 2010. It was

the first ever survey by CIOB on procurement in the construction industry and is used in

this research project as a case study. The survey quoted by CIOB (2010) “examines the

stance of construction industry professionals on the current state of procurement within the

sector, with a particular focus on the UK industry. It centres on the role of the client, current

methods of procurement, the effects of the spending cuts both now and in the future, the

prevalence of practices such as suicide bidding, and what can be done to improve

construction procurement practice”.

3.5.1. Research methodology:

1) The survey was conducted using an internet-based questionnaire; open for four

weeks between 18 October and 12 November 2010, which respondents could

access through the CIOB website (www.ciob.org).

2) Respondents were asked general demographic questions regarding their age,

gender, CIOB membership level, location, job level and sector, and the number of

employees within their organisation. Figure 3.1a - g illustrates the categories of

demographic questions asked and responses received.

Series of questions were asked in the survey relating to procurement choice, selection

process, approach, etc. Questions relevant for the purpose of this research work were

adopted and the responses are illustrated alongside the questions in figure 3.1a – g.

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3.5.2. Questions.

Q1. Do you believe that good procurement is always synonymous with a successful project?

Q2. Of the following procurement methods, which one do you perceive to be the most

efficient and suitable for the following scale of projects of up to £5 Million, between £5 to

£50 Million and over £50 Million?

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Q3. Of the following procurement methods, which one do you perceive to be the most in

need of restructuring?

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Q4. What do you view as the most significant problems arising during the procurement

process? (Select up to 3).

Q5. What percentage of projects during your career have you been involved in that have

overrun in terms of cost?

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Q6. Which procurement method was primarily used on those projects that overran in terms

of cost?

Q7. Which procurement method was primarily used on those projects that overran in terms

of time?

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Q8. In these instances, do you believe the chosen procurement method directly contributed

to the project overrunning in terms of time?

Q9. What do you believe to be the primary factors in influencing client procurement method

selection? (Select up to 3).

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42

Q. 10. Do you believe clients have a sufficient understanding of procurement in the

construction industry?

The chapter that follows will analysis the responses from the case study and survey above

to arrive at a conclusion to the aim of this research work.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

CHAPTER 4

Case Study and

literature review

analysis.

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43

Case Study and literature review analysis

4.1. Introduction.

The results from the case study and survey will be analysed in this chapter to ascertain if

D&B is the preferred PS used in the building construction projects.

4.2. Analysis of Case study.

In analysing the responses to the Gateway Project the following points were highlighted;

It is understood that the major factors considered are Project Cost and allocation of

Risk to participants.

The choice of PS was initially D&B unfortunately it turned out to be traditional

somehow because two stage process was used after production information and

BOQ were developed. The project to the researcher lies very much on TS because

at stage one interested contractors were allowed to submit responses to qualifying

criteria after which five/six contractors were shortlisted for full tender and at stage

two being the tender process, where pricing takes place against full sets of design

drawings, specifications and BOQ. It is made known that the contractor with the

lowest price was chosen and parties involved were engaged in an examination

process to ascertain issues regarding project cost before the final contract sum was

agreed and a D&B contract was used. The approach used makes the researcher

deduce that the PS used is a merger between TS and D&B. Also noted is the use of

Package Deal due to the fact that specialist sub-contractors were contracted to

work on the specialist spaces within the project.

The client was giving the opportunity to have a say on quality by allowing the tender

come in play at the design stage. It was also noted that the project is a complex one

where specialist sub-contractors were contracted to work on the high degree of

specialist spaces within the building project.

It was pointed out that D&B, TS and Partnering are extensively in use today, which

is evident in the CIOB (2010) survey where TS, D&B and Partnering where seen as

the top PS used on construction projects.

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The respondent argue that the effect of cost, quality and time do not necessarily

drive procurement choices, a statement the researcher disagree with because from

the survey carried out by CIOB and literature review, it was made clear that time

and cost definitely have effects on projects because if they are not managed

effectively the project will over run in terms of time and cost.

4.2.1. Analysis of CIOB Survey:

In analysing the result of the CIOB survey the following points were highlighted;

Procurement Choice: 86.6 percentage of respondent made it clear that a good

procurement is synonymous to a successful project as in figure 3.2a. This clearly

means that the procurement chosen for a project generally reflects and determines

the overall success of the project. If the wrong PS is chosen, it leads to other issues

that may increase project cost, time and quality.

Project Cost: On project pricing it is deduced that different categories of project

pricing occurs which are subdivided into;

1) On projects up to £5m: for this category TS (65%) is mostly preferred, seems

very efficient and suitable, while D&B (35%) is second. It is viewed that these

two methods are preferred by clients because they are easy to understand and

pricing can be controlled. Both MC (4%) and CM (5%) are preferred behind

framework arrangement (21%) and partnering methods (18%) showing they

are not preferred for projects within this range.

2) On projects between £5m-50m: Respondent prefer D&B (45%) most suitable,

Partnering (24%) is second and TS (21%) is thirdly preferred. Also in this category

the MC (14%) and CM (12%) are not favoured making them unsuitable.

3) On projects over £50m: It is made clear in the survey that on large scale

projects, Partnering (29%) is highly efficient and suitable. The reason is that

Partnering gives room for collaborative working practices where relationships

amongst participants are valuable on projects of this nature. Also highly

preferred in this category is D&B (24%), PPP/PFI (24%) and CM, (21%) bearing

in mind that CM and PPP/PFI are recently being used for complex projects.

Restructuring: According to respondents (fig. 3.2c), the PPP/PFI (29%) are seen as

the method that needs restructuring however TS (18%) is viewed second, this is

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because the design and construction stages are separated. Another fact is the issue

of dispute that arises amongst participants which makes it difficult for proper

integration amongst parties involved. D&B (8%), MC (4%) and CM (5%) are viewed

as needing little or no restructuring because the framework of these methods has

been set to allow for proper integration, effective communication and collaborative

working.

Problems: In response to this question respondents pointed out in figure 3.2d that

communication (50%) is a major factor during procurement process (this occurs

when the client did not communicate ideas effectively with the design team or

when all participants generally lack communication between themselves during the

design and construction stage of the project). Other factors are Alterations to client

requirements (46%) (Where the client inputs new idea or information after the

design has been developed and construction work has started) and issues over

responsibility (34%) (Where participants do not agree on individual responsibilities

or responsibilities are not carried out effectively). Other issues includes design team

problems (32%), and design faults (27%). CIOB (2010), indicated communication

amongst all parties involved is vital in achieving best practice with regards to

procurement, which helps to reduce alteration to client’s requirements, clearly

showcasing what each individual party is responsible for during the life cycle of the

project and ultimately eliminates all other forms of problems faced.

Cost: Cost being an important factor in construction projects, projects should not

over run under normal circumstances if the appropriate PS is chosen from

inception. It is deduced that 93% of respondents have previously been involved in

projects that have overrun in terms of cost (fig. 3.2f). The reasons why projects

over run are basically due to alterations by client, design problems, contractor’s

issues, lack of supply chain and unforeseen circumstances.

Project over Running: In terms of preventing projects from over running, the choice

of PS is important, if the right choice is selected from inception it aids the project

cost from over running. It is indicated in figure 3.2e that TS (59%) was used on

projects that over run, D&B followed suite at 15%, Partnering was 6%, MN and CM

were 5% respectively. In conclusion 57% of respondents explained that the choice

of PS used contributed to project cost overrunning.

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Time: Time is another important factor considered, any time set for project

completion is essential in the sense that if time is not met there will be an

implication on the overall cost of the project. A major factor that affect the timing

of construction project are adverse weather or other unforeseen circumstances

beyond the control of contractors. From figure3.2g/h, TS (60%) again is highest for

projects that overrun in terms of time, D&B (20%), Partnering (5%), MC and CM

were (4%). This again makes it certain that the choice of procurement used

determines the time frame for project completion because 48.5% of respondents

believed that chosen procurement choice affects project timing directly resulting in

project overrunning if wrong choice is made.

Client’s requirement: Most at times PS selection are influenced by client’s

requirements, these requirements varies depending on different choices. By

evaluating the results from the survey in relation to factors in figure 3.2i, it is noted

that Value for Money (33%) is the most preferred influence, followed by Client

Requirement to Complete Project Within Budget at 32%, Client Experience On

Other Projects falls on 30% (where clients experience on previous projects comes

into action by making use Partnering Strategy) and closely preferred factors are

Competitiveness Of The Market and Client Trust Of External Parties at 24% and 23%

respectively. Two other factors above the 20% mark are Client Requirement To

Complete Project On Time (meaning that project timing is not an essential necessity

as long as the project has value for money and of good quality) and Client Level Of

Involvement In Project (this is not necessarily considered depending on the type of

PS used where clients involvement is minimal).

The remaining factors least influential in client selection are Type of Project and Size

of Project at (18%), Cost of Procurement Method (17%) and Quality of The Work

(8%).

Procurement Process Understood: Despite the fact that clients are initiators of

most building construction projects, they still have insufficient understanding of the

procurement process because some client are not continuously involved in building

construction projects. From figure 3.2j, 76.6% of respondents declares that clients

do not have a sufficient understanding of procurement. In an open-text comment

section set up by CIOB (2010), it was noted that clients should be educated on how

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construction procurement works, employing experienced construction

professionals, provision of greater transparency on procurement options offered by

consultants to the client and overall effective communication between participants.

4.3. Conclusion.

CIOB (2010) explained the key findings from the survey indicates that construction

professionals view procurement as absolutely crucial to the delivery of a project on time,

on budget and to a high quality, with 87% of respondents believing that good procurement

is synonymous with a successful project.

This chapter has examined the case study and survey by analysing and comparing points

raised against each other to determine the aim of this research project. The chapter that

follows will collate the data analysis, arrive at a conclusion and present a recommendation

based on the main objectives of the research project.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

CHAPTER 5

Conclusion.

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5.1. Conclusion

Introduction.

The aim of this research was to find out if D&B is the preferred Procurement Strategy used

by construction professionals in the construction industry. The process employed to

achieve this aim was firstly to ascertain a basic understanding of PS and investigating

various PS used in the Construction Industry. Understanding the overall selection processes

for each PS couple with identifying and highlighting the relationships amongst participants.

Building contract types and their Pros and Cons where also highlighted. Secondly was to

determine the effect and relationship of time, cost and quality in PS. Lastly the Pros and

Cons of D&B over another PS was investigated and highlighted.

This chapter will be used to establish a conclusion by making reference to the main

objectives of this research work.

5.2. The objective:

5.2.1. Objective 1.

Three main objectives where considered for the research work, the first was to investigate

PS, their Selection Process, identifying participants and highlighting their Pros and Cons. A

general knowledge and understanding of procurement in the construction industry was

established by using highly resourceful literature reviews emphasising the history of

procurement. In other to find conflicting views and opinions to the history, selection

process and Pros and Cons of procurement other research journal and text were

researched.

5.2.2. Objective 2.

The second object was to determine the effects and relationship of time, cost and quality

in PS. This was achieved by critically analysing the case study and survey carried out in

relation to how cost, time and quality affects building procurement projects in terms of

building projects over running its stipulated timeframe and project cost. It was also used to

determine how quality influences building projects in ensuring projects attain great value

for money. The literature review was used to analyse the relationship between time, cost

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and quality which explained how various balance can be struck in building projects to

achieve an operative procurement where all three factors can work effectively without one

being less active.

5.3.3. Objective 3.

The final objective was to showcase the Pros and Cons of D&B over other procurement

strategies, this was carried out by tabulating those derived from the literature review and

analysing those of D&B against others. Also after analysing the results of the case study and

survey, it illustrated that D&B is mostly preferred or considered after TS because it is being

used on both small and large scale building projects and on private and public building

projects based on the Pros it has over other PS.

5.4. Summary.

The overall achievement of this research work is based on the opinions and expertise of

respondents in the case study and survey used. The conclusion drawn will be viewed in

relation to these results and creates the avenue for further research work.

The researcher analysed and understood different forms of research approaches and

decided to use qualitative approach to find the facts needed for the subject area. This is

because the research aim is to find out if D&B is the preferred PS used by construction

professionals in the construction industry.

D&B is viewed as a PS mostly preferred by construction professional on both small and

large scale projects and on private and public projects in the literature review. The survey

and case study made it clearer by proofing that the literature review is right because it was

seen that D&B is most preferred bearing in mind that the TS and Partnering are also mostly

preferred based on certain factors.

5.4. Limitation.

The main limitation during the course of this research work was the inability to get

construction professionals to answer questions set out to identify factors that determines

procurement choices. Ongoing projects of two construction companies were identified as

case study but only one responded. Other means were tried and the researcher was

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hopeful a second response will be achieved and delayed the work till the last week. Due to

no success the researcher used a survey done by CIOB in 2010 as an alternative.

5.5. Recommendation for future study.

Further research would be recommended by the researcher to establish best practice for

D&B and suggest ways of making everyone within and outside the construction industry

have a better understanding of D&B and how to develop it to the next level.

The literature review and responses from the case study and survey proved that D&B is

used on projects up to £50 Million, it is suggested by researcher that D&B should be

develop to absorb projects above the £50 Million mark, by achieving this D&B will become

the most preferred option alongside Partnering which is mainly used for projects above the

£50 Million.

Project Quality is seen as a weakness in D&B, as a result it should be made an important

factor by ensuring clients emphasise Project Quality to the contractor from project

inception.

There should be an allowance for client’s alterations in D&B without client’s having to have

additional financial implications because the literature review proved that client’s

alterations are costly.

Project Cost and Time running over is highlighted as a weakness in D&B by the survey, the

researcher recommend D&B need to develop a method that will curtail this from happening

in projects in other for projects to be within budget and meeting time scale.

5.6. Further Research.

From the research work carried out, the researcher observed that majority of the literature

review pointed out that project quality is a weakness in D&B. Anumba & Evbuomwan

(1997), agreed that the disadvantages ascribed to D&B includes high tendering costs,

reduced design quality and self-consciousness of changes by clients. Due to this, the

researcher sees project quality in D&B as an aspect that needs further research for future

study.

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Appendix A

The Chartered Institute of Building (CIOB): Survey on; Procurement in the Construction

Industry available at http://www.ciob.org/sites/default/files/CIOB%20research%20-

%20Procurement%20in%20the%20Construction%20Industry%202010_1.pdf.

Olufemi Isaac Akinjiyan. BSc. (Hons) Architectural Design and Technology.

52

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