Procurement Methods
Procurement method is one of the most popular terms used to describe the construction organization system and procedures to organize the project team to manage the entire construction process. Other terms such as delivery methods, project organization system, contractual arrangements, delivery system and procurement system were regularly used by many authors in their discussion on procurement methods. A client has to decide which and when a designer will be hired and what type of procurement method will be used. A client also has to decide which and when to hire the construction professionals and under what type of contract or variations. Which organization will be first hired and who reports to whom.
Indeed, there are a number of proven strategies that are used to manage the process where each has its own distinct advantages and disadvantages. Four procurement approaches are widely discussed; traditional, management, integrated services and in house teams (Ofori, 1990). But, the latest variation, partnering has been introduced in Malaysia construction industry in the early 2000s but have yet to be assessed of its effectiveness.
Monday, March 29, 2010
Tuesday, March 23, 2010
MALAYSIA CONSTRUCTION INDUSTRY - CURRENT CHALLENGES
Over the years, Malaysia construction industry has been an engine growth of Malaysia economy. Although, this industry recorded an average growth rate of 0.7% over the period of 2000 to 2007 (CIMP, 2007)[i] compared to GDP growth of 5.46% but this industry continues to be an essential element of the Malaysian economy. It is extensively linked with many other parts of the economy, in particular with related industries such as metal products, electrical machineries and building materials.
Global economic turmoil in early 2008 has affected almost all countries. Non-exceptional, Malaysia economy was contracted by 6.2% in the first quarter of 2009 (4Q 08: 0.1%). In line with the economic uncertainties, all economic sectors experienced contraction except for construction. The GDP growth of the construction sector has recorded a growth of 0.6% in the first quarter of 2009 (4Q 08: -1.6%) (BNM Quarterly Bulletin, 1/ 2009)[ii] and this indicator shows that the construction sector has shown sign of recovery.
In concern with the unfavourable economic situation, Government is injecting two stimulus packages amounting RM 67 billion to rejuvenate the Malaysia economy (The Supplementary Supply (2009) Bill, 2009)[iii]. The first economic stimulus package announced on 4th November 2008 is aimed at compensating the shortfall in private sector demand and encourages private spending. The fund is being spent on small-scale construction, maintenance of social infrastructure and public amenities and development projects that included the building of low-cost houses as well as measures to boost private consumption. The RM 60 billion second stimulus package announced on 10th March 2009 include the wide –ranging measures to support domestic economic activities and strengthened capacity for future growth.
A quick analysis of budget 2010 announced on 23rd October 2009 extends the Government support to construction industry by promoting the Public Private Partnership (PPP). This strategy is to boost the construction industry and this sector is envisaged to expand by 3.2% in 2010 (MBAM Bulletin, 10/09)[iv].
[i] CIMP (2007), Construction Industry Master Plan 2006-2015, CIDB
[ii] BNM Quarterly Bulletin (2009), issue 1/09
[iii] The Supplementary Supply (2009) Bill 2009, 10th March 2009
[iv] MBAM Bulletin (2009), issue 10/09
Global economic turmoil in early 2008 has affected almost all countries. Non-exceptional, Malaysia economy was contracted by 6.2% in the first quarter of 2009 (4Q 08: 0.1%). In line with the economic uncertainties, all economic sectors experienced contraction except for construction. The GDP growth of the construction sector has recorded a growth of 0.6% in the first quarter of 2009 (4Q 08: -1.6%) (BNM Quarterly Bulletin, 1/ 2009)[ii] and this indicator shows that the construction sector has shown sign of recovery.
In concern with the unfavourable economic situation, Government is injecting two stimulus packages amounting RM 67 billion to rejuvenate the Malaysia economy (The Supplementary Supply (2009) Bill, 2009)[iii]. The first economic stimulus package announced on 4th November 2008 is aimed at compensating the shortfall in private sector demand and encourages private spending. The fund is being spent on small-scale construction, maintenance of social infrastructure and public amenities and development projects that included the building of low-cost houses as well as measures to boost private consumption. The RM 60 billion second stimulus package announced on 10th March 2009 include the wide –ranging measures to support domestic economic activities and strengthened capacity for future growth.
A quick analysis of budget 2010 announced on 23rd October 2009 extends the Government support to construction industry by promoting the Public Private Partnership (PPP). This strategy is to boost the construction industry and this sector is envisaged to expand by 3.2% in 2010 (MBAM Bulletin, 10/09)[iv].
[i] CIMP (2007), Construction Industry Master Plan 2006-2015, CIDB
[ii] BNM Quarterly Bulletin (2009), issue 1/09
[iii] The Supplementary Supply (2009) Bill 2009, 10th March 2009
[iv] MBAM Bulletin (2009), issue 10/09
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