Design and Build Procurement Method Construction Essay

1/10/2014 Design And Build Procurement Method Construction Essay
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IfthepotentialreadersofthisdissertationwithintheMiddleEastregionaregoingtogetabetter
appreciationoftheDesignandBuildprocurementmethod,initiallytheymustunderstandthe
advantagesand/ordisadvantagesofthistypeofprocurementmethodfromboththeClientsand
Contractorsperspective.
4.2 Arguments for Design & Build
BothNdekugriandTurner(1994)arguethattheDesignandBuildcontractisoftencompletedina
shorterdurationbecauseoftheintegrationofthedesignandconstructionphasesofaproject.
FromaClientsperceptionthisisoneofthemostimportantbenefitsthistypeofarrangementhas
tooffer.Becausethedesign/buildContractorisbothdesigningandconstructingtheproposed
facility,procurementandtheconstructionphasecanbeginsoonerthanthemoretraditional
design/bid/andthenbuildtypeofprocurementarrangement.Thistimesavingstendstoresults
fromtheprojectbeingdesignedinphaseswhichenablestheContractortobegintheconstruction
worksearlier.Withthetraditionaldesign/bid/constructionarrangement,theContractordoesnot
normallystartbuildinguntiltheDesignerhascompletedthedesignandtheprojecthasbeen
awarded.
BothSaxon(2000)andtheRICSIconsult(nodate)supportthisargumentbothagreethatoneof
themainbenefitsofthisDesignandBuildarrangementisthatittendstoreducethedesignand
constructiontimebecausetheyarebeingdoneconcurrentlyandallowstheClienttostartearning
revenuesoonerthanhadheelectedtousethetraditionalprocurementmethod.Thisbenefitis
illustratedinFig.5below:
TimeSaving
Fig5DesignandBuildTimeBenefit
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AccordingtoNdekugriandTurner(1994)anotherimportantbenefitoftheD&Bprocurement
methodisthebroadresponsibilityofthedesign/buildContractor.Intraditionalconstruction
projects,problemsoftenoccurwhentheDesignerblamestheContractorandviceversafor
problemsintheoperationofthefacility.Onoccasionsintraditionalconstructionprojects,
protractedlitigationisnecessarytoresolveanydisputebetweentheDesignerandContractor
whentheycontinuetoblameeachotherfortheproblems.Indesign/buildcontracts,theDesign
andBuildContractorisresponsibleforboththedesignandconstructionoftheprojectandretains
thefullresponsibilityfortheoutcomeoftheproject,exceptformattersforwhichtheClientretains
responsibility.TheDesignerandContractorarethesameentity,soblamingeachotherdoesnot
excusetheDesignandBuildContractor.Thedesign/buildContractoriscompletelyresponsiblefor
bothconstructionanddesigndefects.TheClientcanrecoverdirectlyfromthedesign/build
Contractorfordeficienciesineitherdesignorconstructionoftheproject.Therefore,theClient
neednotdetermineinitiallywhetheradefectwascausedbyanerrorindesignorconstruction.Ina
moretraditionalconstructioncontract,thisissuemustbedeterminedsothattheClientcan
establishwhetherthedesignprofessionalortheContractorisatfault.
Haskell(nodate)believesthatanotherbenefitoftheDesignandBuildarrangementisthatwhere
thedesignandconstructionpersonnelworktogetherandcommunicateandsolveproblemsasa
team,theClientwillbenefitfromthecontinuitybetweenDesignerandContractor.InaDesignand
Buildprojectthesameentityhastheexpertisetodesigntheprojectaswellastheexpertiseto
buildtheproject.Thereforetheyareunlikelytosuffercommunicationproblems,andbecausethey
areworkingasateam,theyarebetterabletooptimizethedesignandbetterabletoevaluate
alternativematerialsandconstructionmethodsefficiently.Inadditiontothis,theRICSIconsult(no
date)believesthatbecausethedesignteamandtheContractorareworkingtogetherasateam,
thedesignismorelikelytobebuildable.
Hughes(1992)arguesthatDesign&Buildoffersahighdegreeofcostcertainty,encourages
economicalsolutions,andenablesvaluetobeconsideredaswellasprice.TheRICSIconsult(no
date)agreeswithHughes,andconfirmthatprovidingthattheClientdoesnotchangetheirdesign
brief,theDesignandBuildprocurementmethodismorecosteffectiveandprovidesmorecost
certaintythanthetraditionalmethodsofprocurement.
ShapiroHankinson&KnutsonLawCorporation(nodate)alsobelievesthatanotherfavourable
featureofthisarrangement,isthatthedesign/buildContractorisliableforanyadditionalcostthat
hemayincurduetoerrors,omissionsorambiguitiesinhisdrawingsand/orspecification.In
traditionalcontractstheClientwarrantsthesufficiencyofthespecificationanddrawings,andthe
ClientbecomesliabletotheContactorforanyincreasedcostsbecauseofdeficienciesinthe
drawingsandspecifications.Inadesign/buildcontract,thedesign/buildContractorisresponsible
fordesignaswellasconstruction.Thesituationminimisesclaimsforextrapaymentandthe
design/buildContractorcannotrequestextracompensationonaccountoftheirownmistakesor
assumptions.
Insomeinstance,thedesign/buildconcepthasbeentakenastepfurther,thusprovidingtheClient
withmoreoptionsand/oradvantages.Forexample,thedesign/buildContractor,mightoffera
turnkeyprocurementsolution,thisgenerallymeansthattheywilloffertheClientafullpackage
whichincludesthetestingandcommissioningofthefacility,aswellasthetrainingoftheClients
staffintheoperationofthefacility.Theconceptisthatwhenthefacilityisfinishedandreadyfor
handingover,alltheClienthastodoisturnthekey.Insomeinstancesthedesign/build
Contractormayalsoincludeintheirproposalafinancingdealfortheproject.Alternativelythe
design/buildContractormayofferaBOLTtypearrangementi.e.theywillbuildtheproject,then
theywilloperatethefacilityforagivenamountoftime,inconsiderationforthis,theClientwillthen
leasesthefacilityforthedefinedtermandcost,thenaftertheexpiryoftheterm,theownershipof
thefacilityisthentransferredbacktotheClient.
SchiffHardinLLP(ii)(nodate)arguesthatonlywithdesign/buildcontracts,istheClientableto
obtainperformancewarrantiesbecausetheDesignerandContractorarenotinapositiontoblame
eachotherbecausetechnicallytheyareasingleentity.Forexampleitiscommonforthe
design/buildContractortowarrantthataproposedfacilitywhencompletedwillyielda
predeterminedoutput(e.g.process2000cansofcokeperhour).Thisrequirementcanthenbe
linkedtotheliquidateddamagesclauseintheeventthattheoutputfallsshortofthe
predeterminedoutputforthefacility.
AccordingtotheRICSIconsult(nodate),becausetheDesignandBuildContractorhastotal
responsibility,therewillbelessclaimsfromtheContractorforthelatedeliveryofinformation,
particularlydesigninformation.
Inmostdesign/buildcontracts,thecontractpriceisfixedprice/lumpsums,thisgivestheClient
somedegreeofpricecertainty.
Insummary,someoftheproclaimedadvantageofthedesign/buildprocurementincludeinteralia:
(i)Clientswithlimitedaccesstotechnicalconsultantsortheirowninhousetechnicaldepartments
mayfindsuchcontractsattractive.Similarlyitisalsoperceivedthatbecausethedesign/build
Contractorisresponsiblefordesign,andconstructioninclusiveofquality,theClientwillbenefit
fromthereducedcostofthirdpartyinspectoratesandcontractadministration,Howeveryoucould
arguethatthisisandisadvantagetotheClient,becauseattheendoftheday,Contractorsand
designconsultantsareprofitdrivenandthissituationcouldleadtoacompromiseinthequalityof
theproject
(ii)Becausethedesignandconstructionareintegratedandthepersonnelareworkingtogetherfor
acommongoal.TheyarebetterabletooptimisetheDesignandBuildabilityofaproject.Theyare
betterabletoevaluatealternativematerialsandmethodsofconstruction.Innovationandteam
workshouldresultincostsavings.ThiscouldbeconstruedtobeadisadvantagetotheClient,
especiallyifalltheinnovationoccursduringthedesigndevelopmentstage,becauseitisgenerally
onlytheD&BContractorthatwillgettoseebenefitsforthecostsavingsatthisstageofaproject
(iii)Thedesign/buildContractorisasinglepointandboththeDesignerandbuilderarejointlyand
severallyliableand/orresponsible
(iv)Intheeventofalatentdefectand/orlitigationbytheClient,thejointfinancialresourcesofa
design/buildContractorwillbegreaterthanthoseoftheindividualDesignerandbuilder
(v)Mostdesign/buildarrangementswilltendtobelumpsuminnature,meaningthattheywill
usuallyoffergreatercertaintyinrespectofcosttotheClient
(vi)Paymentbyfixedinstalmentsatcertainmilestonestages,ratherthanbyevaluationmethod,
maybepreferentialtobothDesign/Builderand/orClient
(vii)Intheeventofapostcompletionfailureoftheproject,theClientwillnotbeconcernedto
discoverwhetherthefailureisduetothedesignontheonehandordefectiveworkormaterialson
theother
viii)Fromthedesign/buildContractorsperspective,duetotheincreaseinriskthatisinherentofa
DesignandBuildcontract,therewardwillbegreateri.e.moreprofit.Howeverwithmorerisk,
comesmorepainwhenthingsgowrongforaDesignandBuildContractor
ix)FromtheperspectiveofaDesignandBuildContractor,duetothespecialisednatureofa
DesignandBuildarrangement,notallContractorshavetherequiredskillsettoundertakeprojects
withthedesignresponsibility.Theconsequenceofthisislesscompetition.However,froma
Clientsperspectivethiscouldbeadisadvantagebecauseofthelikelyhoodofhigherpricesdueto
thereductionincompetition
x)Thereisnoneedtowaituntilthedesignis100%complete,thereforetheClientwillbenefitfrom
thespeedatwhichthedesigngetstranslatedintoconstruction
xi)TheoreticallythereshouldbelessofaninvolvementbytheClientsconsultants,thereforethe
feesfromConsultantsshouldbeless.
4.3 Arguments against Design & Build
ClientsshouldstopthinkingthatDesignandBuildarrangementsneedlessinputfromthirdparties
thanthetraditionalmethod.SomeClientsbelievethatbecausetheyhaveappointedadesign/build
Contractorwhoultimatelyhasasinglepointofresponsibility,thereisnoneedtoappointathird
partyinspectorateand/orcostadvisor.Thisbeliefcancompromisethequalityoftheproject,asthe
DesignandBuildContractorwillattempttocompletetheprojectascheaplyandquicklyas
possible.
SchiffHardinLLP(i)(nodate)arguesthatbecausetheDesignerisnolongeremployeddirectlyby
theClient,theClientmayfinditmoredifficulttoaccessinformationthatwouldhaveordinarilybeen
availabletothemunderatraditionalproject.TheClientmayfeelthathehaslesscontroloverthe
designphaseanddesignintentbecausetherelationshipbetweenDesignerandClientisnotthe
samehaditbeeninamoretraditionalproject.SimilarlytheClientinatraditionalcontractretains
theservicesoftheDesignerduringtheconstructionphasetoactasawatchdogforcompliance
withthedrawingsandspecification.ButinaDesignandBuildcontract,theDesignernolonger
worksfortheClientandtheDesignerallegianceiswiththeD&BContractor
Hanscomb(2004)confirmsthatoneofthedisadvantagesofaDesignandBuildarrangement,is
thatdisputesoftenoccurwhentheEmployerRequirementsarenotspecificenoughandleftopen
totheinterpretationoftheparties.AsaresulttheClientmayperceivethatheisgettingX,butthe
design/buildContractorsinterpretationisY.AsaresulttheClientmaynotgetwhattheyenvisaged.
Thismayalsoleadtolitigationifthepartiescannotmutuallyresolvethedifferenceininterpretation
oftheEmployersRequirements.
AsconfirmedbeforeandbySchiffHardinLLP(i)(nodate),duetothespecialisednatureofthe
DesignandBuildarrangement,theClientmayfinditdifficulttoobtaincompetitivequotations.In
addition,thisformofprocurementmethodquiteoftenexcludessmallercompanieswhodonot
necessaryhavetheinhousetechnicalabilitytoundertakeaDesignandBuild.Itisalsocommon
fordesign/buildcontractstonegotiatedratherthanbecompetitivelybidbecauseClientstendto
finditdifficulttoinduceContractorstoproducepreliminarydesignsunlesstheyarecompensated
fortheircosts.AllofthesefactorscouldbeconstruedasadisadvantagetotheClientbecausethey
maynotgetvalueformoney.
Appelbaumetal(2012)arguesthattheprincipaldisadvantageoftraditionalDesignandBuildis
thattheownerlosescontrolofthedesignprocess,sincethedesignprofessional'sprimarylegal
andpracticalallegianceistothedesignbuilderratherthantheowner.Thiscancreatesevere
conflictsofinterestduringboththedesignphaseandconstructionadministration.
Fromadesign/buildContractorsperspectiveandespeciallyinacompetitivetendersituation,they
areatriskofspendingasubstantialamountofmoneyonapreliminarydesignand/orconcepts
andthereisnocertaintyiftheywillrecoverthiscost.FromaClientperspectivetheycouldbe
perceivedasanadvantageinacompetitivebiddingsituationbecausetheydonotneedto
compensatetheContractorsfortheirpreliminarydesigncosts.
Itisalsocommonlybelievedthatitisalmostimpossibletomakeanygenuineappraisaland/or
comparisonofthecostofacompetitivelybidDesignandBuildtender,especiallywheretheir
designsdiffersignificantly.SchiffHardinLLP(nodate)maintainsthatifaClientputsaDesignand
Buildtenderouttobid,thisinevitablyresultsinacompetitiontounderdesignafacilitatewithout
anyregardtoquality,functionality,andmaintainability.
Itcouldalsobearguedthatwhereboththedesign/buildContractorandClientslackexperiencein
thistypeofdeliveryapproach,thiscouldhaveahugedetrimentalimpactonthedeliveryofthe
projectandtheexpectationsoftheparties.Inotherwords,ifanaiveClientand/orD&BContractor
believesthattheotherpartyisresponsibleforanydeliverableassociatedwiththeproject,andlater
ittranspirestheyarenot,thenanunexpectedcostmightarisethatwasnotanticipated.
Rowlinson(1988)alsoarguesthatfromtheClientsperspective,itisdifficulttomakeacomparison
ofthevariouspreliminarydesignproposalssubmittedbyDesignandBuildContractors.Each
DesignandBuildContractorwilleachdevelopaconceptdesignthatsatisfiestheEmployers
Requirementsalbeitusinglotsofdifferentmethodsand/ortechniques.
AccordingtotheRICS(nodate),fromtheperspectiveofaDesignandBuildContractor,theextent
ofthedesignresponsibilityisgenerallyfitnessforpurposesunlessthecontractstatesotherwise.
Thisismoreonerousthanthenormaldutyof'reasonableskillandcare'imposedonadesign
consultantwhentheyareemployedbytheClientinthetraditionalrole.Conversely,andinmy
opinion,fromtheperspectiveoftheClient,thiscouldbeconstruedtobeanadvantageintheevent
ofadesigndefect.
Duringthecourseofthisstudy,ithasbecomeevidentthathereintheMiddleEast,aContractor
and/orDesignerisgenerallyonlyregisteredwiththeconcernedauthoritiestoeitherundertake
constructionworksordesignworks.Itisrareforoneentitytoberegisteredtoundertakebothwork
classificationi.e.designerandbuilder.Thereforeforanyorganisationthatwantstoparticipatein
theDesignandBuildfield,theywillhavetoformaconsortiumofDesignerandContractorwhich
canbealengthyandcomplicatedprocessfortheparties,especiallywhentheyattempttoagree
whohasresponsibilityforeachriskandwhichentityisbestequippedtohandletherisk.
UnlesstheClientincorporatesamechanisminthecontractthatgivesthemtheopportunitytohave
aninputintothedetaileddesign,theClientsinputintothedetaileddesignwillbelimitedandthis
mayresultinthefinishedarticlenotbeingastheypreviouslyenvisaged,whichthencouldthen
leadtodisputes.Conversely,andagaininmyopinion,iftheClientemploysaDesignertocarryout
thedetaileddesignandthenbynovation,theClienttransfersthedesignliabilitytotheDesignand
BuildContractor,thiscouldresultinhighercostsfortheClient.Thiscouldalsohaveadetrimental
effectontheabilityoftheDesignandBuildContractortooptimisethedesignandconstructionof
theprojectandtoevaluatethemeritsofalternativematerialsandconstructionmethods.
SchiffHardinLLP(i)(nodate)alsobelievesthatfromtheperspectiveoftheClient,thetermsofa
DesignandBuildcontractgenerallyfavourtheDesignandBuildContractor.Thereforeitis
recommendedthatanyClientthinkingofusingthedesignandbuiltprocurementmethodsshould
workcloselywithalawyerexperiencedinconstructionlawandinparticulartheDesignandBuild
contracts.Conversely,andagaininmyopinion,theDesignandBuildcontractwillgenerally
considerthistobeanadvantagebecausethetermsofthecontractareintheirfavour.
ShapiroHankinson&KnutsonLawCorporation(nodate)arguesthatunderalumpsumDesign
andBuildarrangement,itcangetconfrontationalonhowtodeterminewhatmoneyisduetothe
DesignandBuildContractor.Themaindifficultyistheabilitytoassessthedesign/builders
progress,particularlywherethereisnoindependentpartythatcanarbitratebetweentheparties
andmakeindependentassessment.Toovercomethisproblemitissuggestedthatmilestones
stonebeincorporatedintoanycontracttogetherwithapredeterminedsumforpaymentwhenthe
respectivemilestoneareachieved.
GenerallytheDesignandBuildContractorwillprepareadocumenttoaccompanyhistender
knownastheContractorsProposals.Thisdocumentsetsouthismethodologyofhowtheyintend
tosatisfytheperformancespecificationssetoutintheEmployerRequirements.TheJointTribunal
CouncilintheUK(2008)warnsClientsthatintheeventofconflictbetweentheEmployers
RequirementsandtheContractorsProposals,thelatterarestatedtoprevail.Theyfurtheradvise
Clientsthatwhenevaluatingtenders,adequatetimemustbegiventocheckingtheseproposals,
particularlyasthecontractconditionsrefertotheEmployerhavingsatisfiedhimselfthatthe
ContractorsProposalsareacceptable.SimilarlytheClientshouldallowadequatetimeforchecking
theproposalstoensurethattheyaregettingwhattheyenvisaged.Conversely,thiscouldbe
lookeduponasanadvantagetotheClient,fortheD&BContractormayhaveoptizmedthe
EmployersRequirementsbyintroducinginnovationandbeneficialalternativesandmethodsinto
theContractorsProposals.
AnUnknownAuthor(nodate)arguesthatanotherdisadvantageoftheDesignandBuildcontract
isthatitisnotflexibleenoughtoaccommodatechange.ThereforeClientsareadvised,thatthey
shouldavoidchange.Ifisoftenfoundthatwhenforeseenand/orunforeseenchangesoccur,the
Clientsbudgetcannotaccommodatetheadditionalcostsandtheyareleftwithnoalternativebutto
eitherreducethescopeofworksand/orcompriseonthequalityoftheprojectinordertoreduce
cost.ThiswillinevitablyleadtoaproductthatisnotwhattheClientenvisagedatthestartofthe
project.
SchiffHardin(ii)(nodate)wrotethatissuesrelatingtoinsuranceandbondingaffectthe
relationshipbetweentheDesignandBuildparties.ErrorsandomissionsbytheDesignerare
generallyexcludedfromtheContractorsinsurancepolicies,anderrorsandomissionsbythe
ContractorisgenerallyexcludefromtheinsurancepoliciesoftheDesigner.Suretybondscanalso
leadtosimilarproblems,forexample,performancebondsmaynotcoverdesignservices.
Satisfactorybondingorinsuranceobligationsarelikelytobeeithercommerciallyunobtainableor
prohibitivelyexpensive.
Insummary,someoftheproclaimeddisadvantageofthedesign/buildprocurementmethod
includeinteralia:
(i)InthetraditionalDesignandBuildsituation,onlyiftheClientemploysthirdpartyinspectorates
and/orcostadvisorsathisexpensewillhebeabletosafeguardhisinterests.Bydoingthis,andin
myopinion.thisappearstobeatoddswiththeconceptofaDesignandBuildcontracti.e.the
DesignandBuildContractorisasingleentitythatarejointlyandseverallyresponsibleforboth
defectsindesignandworkmanship.
(ii)BecauseofthespecialistnatureoftheDesignandBuildcontract,thereareonlyalimited
numberofDesignandBuildContractorthatarecapableofundertakingworkusingthis
arrangement.Thisconsequentlyresultsinlesscompetitionandultimatelylesscompetitionwill
resultinhigherprices
(iii)FromtheClientsperspective,comparedwiththetraditionaldesign/bidandconstruct
arrangement,theClientinevitablylosescontrolofboththedesignandconstructionphase.Evenif
theyweretoengageindependentadvisors,theyhavelimitedinfluenceoverthewholeprocessall
theycandoismonitorforcompliancewiththeEmployersRequirements.
(iv)Ithasbeensuggestedthatwhereithasbeenpossibletocomparebothformsofdelivery
methodsi.e.DesignandBuildversedesign/bidandtheconstructtherewaslittleevidencethatthe
optimisationofdesignandtheevaluationofalternativematerialsandmethodsofconstruction
haveyieldedacostsavingfortheClient.Inmyopinionallbenefitsthatoccurduetotheinnovative
ideasgenerallyoccurpostcontractandthecostbenefitsremainwiththeDesignandBuild
Contractor
(v)Particularattentionshouldbegiventothedraftingofdesign/buildcontractsandEmployer
Requirementsbecauseofitbespokenature.TheClientshouldseeklegaladviceparticularlyfrom
aconstructionlawyerwhoarewellversedinthefieldofDesignandBuildprojects.Thislegal
adviceinvariablyincreasesthetotalcostoftheprojectfortheClient.
(vi)WhereClientselecttocompetitivelytenderaDesignandBuildproject,fromtheContractors
perspective,thecostofpreparingpreliminarydesignsandthetenderaregenerallysubstantial
becausetheContractorwillhavetoengagetheservicesofadesignprofessional.Thiscostwill
needtoberecoveredinallsubsequenttendersiftheContractorisnotsuccessful.Insome
instances,someDesignandBuildContractorswilldeclinetobidandthiswillunavoidablyresultin
alesscompetitiveenvironment.
vii)WheretheClienthaselectedtoappointaDesignertoundertakearelativelydetaileddesign.
AfterwhichtheClientdecidestonovateboththeDesignerandtheirdesigntotheDesignandBuild
Contractor.FromaContractorsperspective,thiswilllimittheirabilitytooptimisethedesignand
constructionaswellasreviewalternativemethodsandmaterials.ConverselyfromtheClients
perspective,heregainscontroloverthedesignandconstructionphaseoftheproject.
viii)AllClientshaveadutytoconductsomeinvestigationintothecapabilitiesandexperienceofthe
DesignandBuildContractor.Particularattentionshouldbepaidtothetrackrecordofthepreferred
Contractors.DesignandBuildContractorswhoarerelativelynewtothisformofdeliverymethod
canthemselvesbecomeaproblembecauseoftheirlackofexperience.Wardanietal.(2006)
concludedthatresourcingisinfluentialtothesuccessofdesign/buildprojectswhereahigher
knowledgeandunderstandingofthedesignbuildprocessescanreduceproblemswithinthe
combineddesignandconstructionphases
ix)TheClientshouldwherepossibleavoidchangesoncetheconceptdesignandtendershave
beenfullyevaluatedandtheDesignandBuildContractorhasbeenappointed.Ifrequired,any
decisionforchangeshouldbemadeasquicklyaspossible.XiaoandProverbs(2003)arguethat
variationsduringtheconstructionstageareriskfactorsthataredisruptivetotheachievementof
projectgoals.
4.4 Outcome
Asstatedin1.4,theobjectiveofthischapterwastocriticallyanalysethebenefitsofDesignand
Buildprocurementmethod.
Havinglookedatvarioussourcesofliteraturefrombooks,internetwebsitesandjournalsregarding
theDesignandBuildprocurementmethod,thewriterbelievesthatthishasbeenachieved.
Thenextchapterofthereportwillattempttoascertainthefeelingsandattitudesofthe
constructionprofessionalsintheMiddleEastregiontotheDesignandBuildprocurementmethod
andtogaugewhetherthereisafutureforthisprocurementmethod.
Chapter 5 : Design and Build Case Study
http://www.rtpi.org.uk/media/2957/SheffieldHallamLOGO.jpg
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5.1 Introduction
Togaugetheknowledge,feelingsandattitudesoftheconstructionprofessionalsintheMiddle
EasttotheDesignandBuildformofprocurement.Asurveyhasbeenconductedusinga5page
questionnaire(SeeAppendixxxxxxforablankcopyofthesurvey).Acoveringletteraccompanied
thequestionnairesettingouttheobjectiveofthestudy.TheresponseratetothisQuestionnaire
wasafavourable62%.Asstatedin2.6onthisreport,thedatareceivedfromtherespondentswas
collatedandanalysedusingthedescriptivestatisticmethod.Barchartsand/orhistograms
accompaniedwiththecorrespondingnarrativehavebeenusedtopresentsomeofthedata
gatheredfromtherespondents.
Questions 1 to 4 Inclusive
Initiallyaseriesofparticipantbackgroundquestionswereaskedoftherespondents,particularly
wheretheylivedwithintheMiddleEast,andwhatdisciplinebestdescribedtheirroleintheindustry
i.e.constructionmanagement,commercial.Furthermore,therespondentswereaskedhowmany
yearshadtheybeenintheindustry,andwhichsectoroftheindustrytheypreferred.Approximately
60%oftherespondentshadbeenintheindustryformorethan20years.63%oftherespondents
favouredthesectorofroadsandbridges.Therespondentsallcamefromavarietyofdisciplines
i.e.32%fromaconstructionmanagementbackground,23%fromacommercialbackgroundand
14%fromaconsultantsbackground.WithreferencetoFig6below,56%respondentsrespondent
camefromtheSultanateofOman,24%fromtheUnitedArabemirates,4%fromKuwait,8%from
Bahrain,4%fromSaudiArabia,4%fromQatar.Thepurposeofthesequestionswastoensure
thatthedataprovidedbytherespondentswasreliableandcouldbeconstruedtobe
representativeoftheindustryintheMiddleEastregionassetoutintheobjectivescontainedin1.4
ofthisreport.
Fig6RespondentGeographicalLocationintheMiddleEast
Questions 5 to 7
Thenextseriesofquestionwasintendedtogatherdataonthetypeandnatureofthe
organisationsthattherespondentsworkfor.Again,thepurposeofthesequestionswastoensure
andverifythattherespondentsallcamefromdiversebackgroundand/ordisciplinesand/or
organisations.WithreferencetoFig7below,25%oftherespondentscamefromaconsultants
backgroundsand63%camefromavarietyofcontractingbackgrounds,4%camefromdevelopers
and8%camefromothersectorswithintheconstructionindustry.
Fig7SectorsWorkedforbyRespondents
Questions 8 to 13 inclusive
Totestmypreconceptionthatthetraditionalformofconstructionprocurementmethodisthemost
extensivelyusedintheMiddleEast,andtotestpeoplesattitudestothevarioustypesof
procurementmethods.Therespondentswereaskedanumberofquantitativequestionsi.e.Q8
Whichprocurementmethoddidtheircurrentprojectfollow?Q9Whichprocurementmethodhad
theyusedthemostextensively?Q10Whichprocurementmethoddidtheyprefer?Q11Which
procurementmethoddidtheythinkisthemostextensivelyusedintheregion?Q12Whichone
oftheDesignandBuildprocurementmethodsdidtheywanttogainfurtherexperience?Q13
Whichprocurementmethodwasusedthemostextensivelywithintherespondentsorganisation?
ThesurprisingresultofthedatacollectedforQ8,wasthat21%oftherespondentsconfirmedthat
theircurrentprojecthadfollowedtheDesignandBuildprocurementmethod.Thisresultisnottoo
dissimilartoHandscomb(2004)findingsdetailedonpage11ofthisreporti.e.theuseofDesign
andBuildhadgrowntomorethan30%today.Theresulttoquestion8isalsoinlinewiththe
ContractsinUse2007SurveyundertakenbyRICSfortheUnitedKingdomi.e.21.7%of
contractswereprocuredusingtheD&Bprocurementmethodjustfortheeconomicaldownturn.
However,thisresponsewascontrarytothewriterspreconceptionofhowextensivetheDesignand
Buildprocurementmethodiscurrentlybeingusedintheregion.Thewriterwasnotexpectingthe
actualuseoftheDesignandBuildmethodofprocurementtobesohigh.Thewriters
preconceptionwasmoreinlinewiththeresultsgainedfromQ11(seeFigure8below)i.e.92%of
therespondentsbelievedthatthetraditionalmethodofprocurementwasthemostextensively
usedintheregionwithonly4%oftherespondentssayingthattheDesignandBuildmethodwas
themostextensivelyused.Thefactual21%ofprojectscurrentlyfollowingtheDesignandBuild
procurementmethod(Q8)andtheperceived4%useofthedesignandbuilt(Q11)iscompletelyat
variancewitheachother,thusindictingthatpeoplearenotasnarrowmindedaspreviously
thought,andaremoreopenmindedthantotheuseofalternativeprocurementmethodsinthe
MiddleEastregion,particularlyDesignandBuild.
Figure8Q11:Theperceivedmostextensivelyusedprocurementmethods.
WithreferencetoFig.9below,itwasalsosurprisingtoseethat44%oftherespondentsfavoured
DesignandBuildmethodofprocurement,and40%favouredthetraditionalmethodof
procurement(Q10).Againthisresponsewasnotinlinewiththewritershypothesisthat
professionalsintheregionarenotopentochangeandotherformsofprocurementmethodsother
thanthetraditionalconstructionprocurementmethods.
Figure9Q10:RespondentspreferredConstructionProcurementMethods
InresponsetoQ13,83%oftherespondentsconfirmedthatthetraditionalmethodofprocurement
wasthemostextensivelyusedprocurementmethodbytheirorganisationand14%confirmed
DesignandBuild.WhencomparedtotheanswersgiveninQ10,itcouldbearguedthatitisthe
Employersintheregionthatarecomfortablewiththestatusquoandarenotwillingtoconsider
change,theanswersgivenbytherespondentstoQ10wouldsuggestthatthereisanappetitefor
changeamongsttheworkersastheyfavouredtheDesignandBuildprocurementmethod.
Questions 14 to 20
Inordertogaugetheattitudesoftherespondentstothevariousprocurementmethodsavailable,
therespondentswereaskedwhichprocurementmethodwasmostsuitedtoaparticularsectorof
theconstructionindustry(SeeResultsinTable1below).
IndustrySector
Traditional
Design&Build
Partnering
Management
Healthcare
21%
38%
33%
8%
Education
25%
38%
33%
4%
Housing
34%
54%
4%
8%
Commercial
29%
54%
4%
13%
Industrial
17%
58%
12%
13%
CivilEng
36%
52%
4%
8%
Refurbishment
29%
25%
13%
33%
Table1Themostsuitableprocurementmethodsforthevariousindustrysectors
WithreferencetoTable1above,themajorityoftherespondentsfavouredtheDesignandBuild
contractoverthetraditionalformofprocurementinallbutonescenario.Againtheseresultsareat
variancetothewriterspreconceivedideasofpeopleattitudestotheDesignandBuild
procurementmethodintheMiddleEast.Theseresultindicatethatconstructionprofessionalinthe
MiddleEastareinfactopentotheideaofnewprocurementmethodsandinparticulartheDesign
andBuild.Thisiscontrarytothehypothesiscontainedin1.2ofthereport.
Question 21
88%oftherespondentsconfirmedthattheyhadgainedsomeformofexperiencewiththeDesign
andBuildprocurementmethod,andonly12%hadgainednoexperienceatall(SeeFigure10
below).ThisappearstoreinforcetheemergingideathatconstructionprofessionalsintheMiddle
Eastwouldindeedbeopentousingdifferentprocurementmethodsintheregion.
Figure10RespondentsDesign&BuildExperience
Question 22 to 24 inclusive
Therespondentswereaskedtoindicateintermsoftime,qualityandcostswhatwastheoverall
percentagebenefitoftheDesignandBuildprocurementwhencomparedtothetraditional
procurementmethods(SeeResultsinTable2below).
None
05%
510%
1015%
1520%
20%+
Cost
4%
4%
33%
29%
21%
8%
Time
0%
14%
17%
29%
29%
13%
Quality
33%
17%
17%
21%
8%
4%
Table2PercentageBenefitofDesignandBuildovertheTraditionalProcurementMethod
IntermsofTime,100%oftherespondentsconfirmedthattoonedegreeoranother,byusingthe
DesignandBuildformofprocurementmethodwhencomparedtothetraditionalprocurement
methods,atimesavingwouldbeachieved.ThissupportstheargumentsputforwardbyNdekugri
andTurner(1994)andSaxon(2000)in4.2ofthisreportthattheDesignandBuildprocurement
methodreducestheoveralldeliverytimeofaprojecti.e.frominceptiontocompletion(SeeTable2
above)
IntermsofCost,94%oftherespondentsconfirmedthattoonedegreeoranother,byusingthe
DesignandBuildformofprocurementmethod,acostsavingwhencomparedtoatraditional
procurementmethodcouldbeachieved(seeTable2above).
Intermsofquality,only67%oftherespondentsconsiderthattoonedegreeoranother,therewas
aqualitybenefitwhencomparedtoatraditionalprocurementmethod.Asignificantproportionof
therespondents(33%)didnotbelievetherewasanyqualitybenefitoftheDesignandBuild
procurementmethod,whencomparedtothetraditionalformofprocurement.Thiscouldbea
reflectionofpeopleattitudestoContractors,particularlyifContractorsarelefttotheirowndevises
andunsupervised,theymaycutcornerswithregardstoquality,allasstatedin4.3ofthisreportto
achievegreaterprofit.
Again,alloftheseresultsindicatethattheconstructionprofessionalintheMiddleEastappreciate
whatbenefitstheDesignandBuildprocurementmethodhastoofferoverthetraditionalformsof
procurement.Thisagainappearstoreinforcetheemergingideathatconstructionprofessionalsin
themiddleeastwouldindeedbeopentochange.
Question 25
WithreferencetoFig11below,38%oftherespondentsbelievedthatthemaindisadvantageof
theDesignandBuildprocurementmethodwasitinflexibilityforchange.Thiswascloselyfollowed
byincreasedrisk(33%),thenunderstanding(17%),andthencommunication(8%).Allofthese
argumentsagainsttheDesignandBuildprocurementmethodhavebeendiscussedinmoredetail
inchapter4.3ofthisreport.
Fig11.ThemaindisadvantageoftheDesignandBuildprocurementMethod
5.2 Outcome
Asstatedin1.4ofthisreport,theobjectiveofthischapterwastoascertainthefeelingsand
attitudesoftheconstructionprofessionalsintheMiddleEastregiontotheDesignandBuild
procurementmethodandtogaugewhetherthereisafutureforthisprocurementmethod.
Surprisingly,thefutureslooksbrightfortheDesignandBuildprocurementmethodintheMiddle
East,despitethefactthatthewriterhadapreconceptionthattheconstructionprofessionalsinthe
MiddleEastwerehappytocontinueusingthetraditionalmethodsofprocurementandmaintainthe
statusquo.Thiscanbeverifiedbythefactthatthemajorityoftherespondedbelievedthatthe
DesignandBuildprocurementmethodwasmostsuitedto6outofthe7differentindustrysectors
(seeQuestion14to20inclusive).
Thereisalsoevidencethatasignificantproportionoftherespondentshaveabiastowardsthe
DesignandBuildprocurementmethodandnotthetraditionalformsofconstructionaspreviously
thought,andthisisevidentfromtheanswerstoQuestion10.
Inviewoftheabove,thewriterbelievesthattheobjectivesetoutin1.4ofthisreporthasbeen
achieved.
Chapter 6 : Conclusions
6.1 Review of Objective 1
Objective:Tocompareandcontrastthetraditionaldesign/bidandthenbuildtypeofdelivery
methodwiththeDesignandBuildmethod.
Conclusion:Fromtheempiricaldatathathasbeenreviewedinordertoundertaketheliterature
reviewassociatedwithchapter3ofthisreport,itisbelievedthattheinvestigationhasgivenany
potentialreaderintheMiddleEastabriefbutcomprehensiveinsightintothevariousdifferent
formsofprocurementmethodsavailableandhowtheydifferfromeachother.
Objective:TocriticallyanalysethebenefitsofaDesignandBuildconstructionprocurement
method
reviewassociatedwithchapter4ofthisreport,itisbelievedthatabriefbutcomprehensiveinsight
intosomeoftheadvantagesanddisadvantagesoftheDesignandBuildprocurementmethodhas
beenprovided.
Objective:ToidentifythevarioustypesoftheDesignandBuildconstructionprocurementmethods
andidentifywheretheyarebestused.
reviewassociatedwithchapter3andinparticularsection3.3ofthisreport,itisbelievedthata
briefbutcomprehensiveinsightintothevarioustypesoftheDesignandBuildprocurement
methodshavebeenprovidedandabriefindicationofwherethesedifferenttypesoftheDesign
andBuildcontractsarebestused.
Objective:ToascertainthefeelingsandattitudesoftheconstructionprofessionalsintheMiddle
EastregiontotheDesignandBuildprocurementmethodandtogaugewhetherthereisafuture
forthisprocurementmethod.
Conclusion:Fromthequestionnaire,andthedataprovidedbytherespondents(SeeChapter5),it
waspossibletoascertainthatasignificantproportion(44%)oftherespondentspreferredthe
DesignandBuildmethodofprocurement(SeeQ10).Similarlyalmost21%oftherespondents(by
numberofprojects),confirmedtheprojectthattheywerecurrentlyworkingon,wasprocuredusing
theDesignandBuildprocurementmethod.Interestinglyin2008,theRICSpublisheditssurveyfor
theContractsinuseSurveyfortheUnitedKingdomin2007whichconfirmedthat21.7%of
contracts(bynumber)wereprocuredusingtheD&Bprocurementmethod(justbeforethe
economicslowdowninEurope).IftheseresultsaretrulyrepresentativeoftheMiddleEast,then
theuseoftheD&BprocurementmethodintheMiddleEastisalreadyatlevelsexperiencedin
Europepriortotheeconomicslow.SimilarlytheanswersprovidedtoQ14toQ20inclusive(See
Chapter5),clearlyindicatethatasignificantproportionofpeoplebelievedthattheDesignand
Buildwasmorebeneficialthanthetraditionalprocurementmethods,thereforeinmyopinionthe
futurelooksbrightforthistypeofprocurement.
6.5 Review of Hypothesis 1
Hypothesis:DesignandBuildContractsarenotnecessarilysuitedforeveryconstructionproject
eachandeveryprojectwillhaveauniquerequirement.Howeverwitheducationtheindustryasa
wholeintheMiddleEastcouldpotentiallybenefitfromthisprocurementmethod.
Conclusion:TheempiricaldataprovidedinChapter3&4indicatesthishypothesistobetruei.e.
thereisnotonebestsolutionthatfitsalltherequirementsoftheClient.SomeClientswillwantto
maintaincompletecontroloftheDesignandConstructionphasesofaprojectforonereasonsor
another,whereasotherClientswillnot.SomeClientsareriskadverseandthereforewilllookto
transferasmustoftheriskaspossible,whereasotherClientswilllooktoproportiontherisk
accordingtothepartythatisbestequippedtohandletherisk.Attheendoftheday,itisthe
Clientsattitudetothefourdriversassociatedwithconstructionprojectsi.e.time,cost,qualityand
riskthatwilldictatewhichprocurementmethodthatwilladoptforuseontheirproject.
6.5 Review of Hypothesis 2
Hypothesis:PeopleintheconstructionindustrywithintheMiddledonotlikeleavingtheircomfort
zonesandarelesslikelytopromotechangeandinnovativeideaswhichmayincludetheuseof
alternativemethodsofprocurementforconstructionprojectssuchasDesignandBuild.
Conclusion:TheprimarydatacontainedinChapter5indicatesthishypothesistobefalse.There
wasevidencetoconfirmthatahealthyproportionoftheconstructionprofessionalspreferredthe
DesignandBuildprocurementmethod.Regrettably,thishypothesiswasformulatedwiththe
preconceptionthatalltheconstructionprofessionalswithintheMiddleEastlikedtheperceived
statusquoandpreferredthetraditionalmethodsofprocurement.
Chapter 7 : Recommendations
7.1 Recommendation for Further Studies /
Research
7.1.1Iftimehadnotbeensuchafactor,thenthenumberofquestionnairesdistributedthroughout
theMiddleEastwouldhavebeengreater,andyouwouldhopethatthenumberofrespondents
wouldhaveincreasedproportionality.Therebygivingamorecomprehensiveandaccurateviewof
theConstructionprofessionalintheMiddleEast.
7.1.2DuetothelimitationofworkingintheMiddleEast,andnothavingaccesstoasubstantial
amountofsecondarydatethatwouldhavebeenreadilyavailableinafirstclasslibraryinsaythe
UK.Theremayhavebeenfurthersecondarydatathatcouldhavecontributedfurthertothisstudy.
7.1.3Withmoretime,astudyofthehowtheconstructionprofessionalattitudesand/or
persecutionsvaryaccordingtogeographicallocation,disciplineandnationalitycouldhavebeen
undertakenfortheDesignandBuildprocurementmethod.
7.1.4AccordingtoanarticlepublishedintheConstructionWeekMagazinebyLouiseCollins
(2011)shepredictsthatby2015morethan50%oftheprojectsintheUnitedStatesofAmerica
willfollowtheDesignandBuildprocurementmethod,regrettablythereiscurrentlynorecorded
dataavailablefortheMiddleEasttomonitoritsgrowth.Therefore,andsimilartotheRICS,a
periodicinvestigationcouldbeundertakentomonitortheContractsthatarebeingutilised
ContractinUseintheMiddleEasttoestablishsomefactualgrowthinformation.
Bibliography
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AuthorNotKnown(nodate).DissertationGuide,AHandbookforstudentsundertakinga
dissertationaspartoftheirstudies[byhand.HeriotWattUniversity,SchooloftheBuild
Environment.
COBRA(2004).SuitabilityofDifferentDesignandBuildConfigurationforprocurementofbuildings.
[onlineLastaccessed5November2012at:http://www.scribd.com/doc/39656676/RICSCOBRA
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