Which procurement system? Towards a universal procurement selection technique

Two approaches are described, which aid the selection of the most appropriate procurement arrangements for a building project. The first is a multi-attribute technique based on the National Economic Development Office procurement path decision chart. A small study is described in which the utility factors involved were weighted by averaging the scores of five 'experts' for three hypothetical building projects. A concordance analysis is used to provide some evidence of any abnormal data sources. When applied to the study data, one of the experts was seen to be atypical. The second approach is by means of discriminant analysis. This was found to provide reasonably consistent predictions through three discriminant functions. The analysis also showed the quality criteria to have no significant impact on the decision process. Both approaches provided identical and intuitively correct answers in the study described. Some concluding remarks are made on the potential of discriminant analysis for future research and development in procurement selection techniques.

Knowledge management practices in construction : Evidence from Hong Kong

The acquisition and management of knowledge is the dominant source of organisational com-petitive advantage. As innovation processes in the management and procurement of construc-tion activities are becoming increasingly interactive, knowledge management (KM) has been widely recognised by construction organisations as an essential tool to be employed when dealing with growing complexity and cost of projects as well as increasing client demands. KM requires deliberate efforts by an organisation to maximise its performance through the acquisition, dissemination and leveraging of the organisation’s intellectual assets. The Hong Kong (HK) construction market has been described as one of the most open and globally competitive. This paper reports on KM practices within the HK construction industry, and through the analysis of a self-administered questionnaire survey, reveals managers’ opinions of the formal and informal KM practices that could be used to manage the flow of knowledge, and identifies the level of implementation within their organisations. The differences between managers’ perception and the actual state of implementation – as reported by the same man-agers – are statistically examined. The analysis leads to better understanding of how HK con-struction professionals currently manage organisational knowledge, and what areas for poten-tial improvement exist.

Climate change adaptation for public buildings management : stakeholder roles and responsibilities

Climate change is expected to increase earth’s temperatures and consequently result in more frequent extreme weather events such as cyclones, storms, droughts and floods and rising global sea levels. This phenomenon will affect all assets. This paper discusses the impact of climate change and its consequences on public buildings. Public building management encompasses the building life cycle from planning, procurement, operation, repair and maintenance and building disposal. This paper recommends climate change adaptation strategies to be integrated into public building management. The roles and responsibilities of asset managers and users are discussed within the framework of planning and implementation of public building management and the integration of climate change adaptation strategies. A key point is that climate change can induce premature obsolescence of public buildings and services, which will increase the maintenance and refurbishment costs. This in turn will affect the life cycle cost of the building. Furthermore, a business continuity plan is essential for public building management in the context of disasters. The paper also highlights the significant role that the occupants of public buildings can play in the development and implementation of climate change adaptation strategies.

Project governance : ethical decision making in project procurement in the Malaysian public sectors

Managing public sector projects in Malaysia is a unique challenge. This is because of the ethical issues involved during the project procurement process. These ethical issues need attention because they will have an impact on the quality, cost and time of the project itself. The ethical issues here include conflict of interest, bid shopping, collusive tendering, bid cutting, corruption and the payment game. In 2006, 17.3% of 417 Malaysian government contract projects were considered sick due to contractors' performances that failed to conduct the project according to the project plan. Some of the sick projects from these statistics are due to the ethical issues involved. These construction projects have low quality due to the selection of the contractors, done unethically due to personal relationships instead of professional qualifications. That is why it is important to govern the project procurement processes to ensure the accountability and transparency of the decision making process to ensure that these ethical issues can be avoided. Extensive research has been conducted on the ethical issues in the tendering process or the award phase of project management. There is a lack of studies looking at the role of clients, including the government client, in relation to unethical practice in project procurement in the public sector. It is important to understand that ethical issues not only involve the contractors and suppliers but also the clients. Even though there are codes of ethics in the public sectors, ethical issues still arise. Therefore, this research develops a project governance framework (PGEDM) for ethical decision making in the Malaysian public sectors. This framework combines the ethical decision making process together with the project governance principals in guiding the public sectors with ethical decision making in project procurement. A triangulation of questionnaire survey and Delphi study was employed in this research to collect required qualitative and quantitative data. A questionnaire survey was conducted among the public officials (the practitioners) who are currently working in the procurement area in the Malaysian public sectors, in identifying the ethical behaviours and factors influencing further ethical behaviour to occur. A Delphi study was also conducted with the assistance of a panel of experts consisting of practitioners that have expertise in the area of project governance and project procurement as well as academician, which further considered the relationship and the influence of the criteria and indicators of ethical decision making (EDM) and project governance (project criteria, organisational culture, contract award criteria, individual criteria, client's requirements, government procedures and professional ethics). Through the identification and integration of the factors and EDM criteria as well as the project governance criteria and EDM steps for ethical issues, a PGEDM framework was developed to promote, and drive consistent decision outcome in project procurement in the public sector. The framework contributes significantly to ethical decision making in the project procurement process. These findings not only give benefit to the people involved in project procurement but also to the public officials in guiding them to be more accountable in handling ethical issues in the future and to have a more transparent decision making process.

Purchasing social good(s): A definition and typology of social procurement

Social procurement has gained attention in modern public management; however, considerable differences exist in understanding what social procurement actually is. Divergent definitions of social procurement inhibit effective policy implementation, and can result in imprecision in empirical research. This paper develops a typology of social procurement implementation, and advances a coherent single definition of social procurement. Clarifying the intent and approaches to social procurement will assist policy implementation and empirical evaluation.

Government procurement contracts and minimum labour standards enforcement: Rhetoric, duplication and distraction?

Government contracts for services typically include terms requiring contractors to comply with minimum labour standards laws. Procurement contract clauses specify reporting procedures and sanctions for non-compliance, implying that government contracting agencies will monitor and enforce minimum labour standards within contract performance management. In this article, the case of school cleaners employed under New South Wales government contracts between 2010 and 2011 is the vehicle for exploring the effectiveness of these protective clauses. We find that the inclusion of these protective clauses in procurement contracts is unnecessary in the Australian context, and any expectations that government contracting agencies will monitor and enforce labour standards are misleading. At best, the clauses are rhetoric, and at worst, they are a distraction for parties with enforcement powers.

A theoretical framework for reducing tendering costs in the procurement of infrastructure projects

Purpose of this paper One way in which the tendering process can be further improved is by reviewing and clarifying the high costs that participants face during the course of the tendering phase. The study aims to provide project teams working in construction tender preparation a clear picture of what to expect when tendering for infrastructure projects. Design/methodology/approach Firstly, a review of current literature on tendering in infrastructure projects is conducted to identify the associated costs affecting traditional and PPP procurements as well as the potential measures contributing to tendering cost-reduction. A theoretical framework and its corresponding research hypotheses, which are based on the literature reviewed, are then proposed. An industry-wide questionnaire survey is currently under design to solicit industry practitioners’ views on tendering costs and the associated tendering cost-reduction measures. The data collected in the survey will subject to statistical analysis to test the proposed research hypotheses, which will be reported in a forthcoming paper. Findings and value The direct and indirect costs in public-private procurement have been identified and have been categorised into internal and external costs arising from working on tender submissions. A theoretical framework, mainly composed of five mechanisms of cost reduction, has been proposed and will be tested in a forthcoming industry-wide questionnaire survey. Originality/value of paper The findings are expected to lead to a transparent tendering process in infrastructure procurement, in which there is increased engagement from the private sector as well as an increase in competitive tendering.

Comparing the effect of inadequate documentation to the cost management and tendering processes in managing contractor and fixed lump sum contracts in Australia

Purpose of this paper This research aims to examine the effects of inadequate documentation to the cost management & tendering processes in Managing Contractor Contracts using Fixed Lump Sum as a benchmark. Design/methodology/approach A questionnaire survey was conducted with industry practitioners to solicit their views on documentation quality issues associated with the construction industry. This is followed by a series of semi-structured interviews with a purpose of validating survey findings. Findings and value The results showed that documentation quality remains a significant issue, contributing to the industries inefficiency and poor reputation. The level of satisfaction for individual attributes of documentation quality varies. Attributes that do appear to be affected by the choice of procurement method include coordination, build ability, efficiency, completeness and delivery time. Similarly the use and effectiveness of risk mitigation techniques appears to vary between the methods, based on a number of factors such as documentation completeness, early involvement, fast tracking etc. Originality/value of paper This research fills the gap of existing body of knowledge in terms of limited studies on the choice of a project procurement system has an influence on the documentation quality and the level of impact. Conclusions Ultimately research concludes that the entire project team including the client and designers should carefully consider the individual projects requirements and compare those to the trade-offs associated with documentation quality and the procurement method. While documentation quality is definitely an issue to be improved upon, by identifying the projects performance requirements a procurement method can be chosen to maximise the likelihood that those requirements will be met. This allows the aspects of documentation quality considered most important to the individual project to be managed appropriately.

The future of roads: Reducing environmental pressures and the management of carbon

Although road construction and use provides significant economic and social benefits, its environmental impact is of growing concern. Roads are one of the greatest greenhouse gas contributors, both directly through fossil energy consumed in mining, transporting, earthworks and paving work, plus the emissions from road use by vehicles. Further, according to the Australian Government, when combined with forecast population growth, internal migration and changes in temperature and rainfall, these are expected to increase road maintenance costs. This discussion paper outlines opportunities within the Australian context for reducing environmental and carbon pressure from road building, and provides a framework for considering the potential future pressures that will affect the resilience of roads to the impacts of climate change and oil vulnerability. Seven strategic areas are outlined for further investigation, including a guide to carbon management for road agencies covering planning, funding, procurement, delivery and maintenance of roads.

Contributing to computing services to benchmarking asset management knowledge management

Asset management has broadened from a focus on maintenance management to whole of life cycle asset management requiring a suite of new competencies from asset procurement to management and disposal. Well developed skills and competencies as well as practical experience are a prerequisite to maintain capability, to manage demand as well to plan and set priorities and ensure on-going asset sustainability. This paper has as its focus to establish critical understandings of data, information and knowledge for asset management along with the way in which benchmarking these attributes through computer-aided design may aid a strategic approach to asset management. The paper provides suggestions to improve sharing, integration and creation of asset-related knowledge through the application of codification and personalization approaches.

A decision support framework for prioritization of engineering asset management activities under uncertainty

Engineers and asset managers must often make decisions on how to best allocate limited resources amongst different interrelated activities, including repair, renewal, inspection, and procurement of new assets. The presence of project interdependencies and the lack of sufficient information on the true value of an activity often produce complex problems and leave the decision maker guessing about the quality and robustness of their decision. In this paper, a decision support framework for uncertain interrelated activities is presented. The framework employs a methodology for multi-criteria ranking in the presence of uncertainty, detailing the effect that uncertain valuations may have on the priority of a particular activity. The framework employs employing semi-quantitative risk measures that can be tailored to an organisation and enable a transparent and simple-to-use uncertainty specification by the decision maker. The framework is then demonstrated on a real world project set from a major Australian utility provider.

Developing green procurement framework for construction projects in Malaysia

With the current emerging development pattern in Malaysia, Malaysian government has enthusiastically promoted green procurement approach that will help the construction project being green. Previous studies highlighted that the concept of green procurement is still very new to the Malaysian construction industry, and this increases the needs for further research in this area. This paper addresses the needs of guidelines for stakeholders to procure environmentally-friendly construction. Currently, there is a limited practical guideline for stakeholders to procure green projects. This paper discusses the progress to date of a research project aimed at developing a green procurement framework for construction projects in the Malaysian construction industry. This framework will guide the stakeholders to plan the green procurement implementation to procure a construction projects. Through literature and expert opinion, this paper explores the list of green practices within procurement practices which becomes the basis to develop a survey instrument that will be used in the later part of this study. The paper will shed useful information for construction researchers and practitioners in exploring the green procurement concept for construction industry in Malaysia.

Green procurement framework for the Malaysian construction industry

Construction projects have a negative impact on the environment. As Malaysia is planning more construction projects to cater for its current and future development needs, practitioners are urged to undertake greener approaches to construction. One of the efforts is the introduction of green procurement, which is promoted under the Malaysian Government’s MyHijau initiative. Construction procurement is recognised as a tool to shift the construction business into a greener industry. However, the implementation of green procurement in Malaysia is still in its infancy and faces a number of challenges, such as the lack of knowledge. A significant gap has been found between policy formulation and actual project delivery as there are no practical guidelines for stakeholders to procure environmental-friendly construction projects. To address this problem, the present research (as part of an ongoing PhD project) aims to develop a green procurement framework that guides stakeholders in procuring green projects in Malaysia. This article highlights the concept of green procurement in Malaysia, the work carried out to date to achieve the research objectives and the preliminary framework that has been established. It is hoped that this research will help academics and practitioners to further explore the potential of green procurement to improve sustainability in the current construction industry practices.

Deriving optimal competition in infrastructure procurement

Typically only a limited number of consortiums are able to competitively bid for Public Private Partnership (PPP) projects. Consequently, this may lead to oligopoly pricing constraints and ineffective competition, thus engendering ex ante market failure. In addressing this issue, this paper aims to determine the optimal number of bidders required to ensure a healthy level of competition is available to procure major infrastructure projects. The theories of Structure-Conduct-Performance (SCP) paradigm; Game Theory and Auction Theory and Transaction Cost Economics are reviewed and discussed and used to produce an optimal level of competition for major infrastructure procurement, that prevents market failure ex ante (lack of competition) and market failure ex post (due to asymmetric lock-in).

Social Procurement and New Public Governance

Taking a critically informed approach, this innovative text examines emerging approaches to social procurement within the context of New Public Government (NPG), and examines the practices of social procurement across Europe, North America and Australia. Considering both the possibilities and limitations of social procurement, and the types of value it can generate, this book also provides empirically driven insights into the practicalities of 'triple bottom line' procurement, the related challenges of measuring social value and the management of both the strategic and operational dimensions of procurement processes. As such it will be invaluable reading for all those interest in social services, public governance and social enterprise.