Selecting a suitable procurement method for a building project

PeterE.D.Love
CSIRODivisionofBuilding,ConstructionandEngineering
CannonHill,Queensland4170,Australia
MartinSkitmoreandGeorgeEarl
SchoolofConstructionManagement,QueenslandSchoolofTechnology
Brisbane,Queensland4000,Australia

ABSTRACT
Building procurement has become a fashionable term with industry practitioners and researchers. It
determinestheoverallframeworkandstructureofresponsibilitiesandauthoritiesforparticipantswithinthe
buildingprocess.Itisakeyfactorcontributingtooverallclientsatisfactionandprojectsuccess.The
selectionofthemostappropriateprocurementmethodisconsequentlycriticalforbothclientsandproject
participants,andisbecominganimportantandcontemporaryissuewiththebuildingindustry.Theproblem,
nevertheless,liesinthefactthattherehasbeenlimitedempiricalresearchinthisfieldofstudy.Postal
questionnairesurveysof41clients,34contractorsand35consultantswerecarriedout,andwereusedto
obtainexperiencesandattitudestoavarietyofprocurementmethodsandthecriteriausedforselection.The
findingsindicatethatasimplesetofthecriteriaisgenerallyadequateandsufficientforprocurementpath
selectionandthatthereisareasonableconsensusontheirappropriateweightingforeachpath.Moreover,it
isshownthatsimilarclientsgenerallydonothavesimilarprocurementneedsbutneverthelessonlyone
procurementmethod,thatofnovation,bestsatisfiestheneedsofthoseinvolvedinthestudy.
Keywords: procurementselection,novation,criteriaweights,clientneeds,utilityrating.
INTRODUCTION
Aprojectmayberegardedassuccessfulifthebuildingisdeliveredattherighttime,attheappropriateprice
andqualitystandards,andprovidestheclientwithahighlevelofsatisfaction(e.g.NaoumandLangford,
1988).Oneimportantinfluenceonthis,identifiedintheBanwellandEmersonreportsofthe1960s,isthe

typeofprocurementmethodimplemented.Thesehaveproliferatedinrecentyearsandtheircharacteristics
havebecomeamajorfieldofstudyintheirownright(e.g.Turner,1990;Franks,1990;Nahapietand
Nahapiet,1985).Oneresultofthisisaconsensusthatthereisoneprocurementmethodthatisinsome
sense'better'thanallothersforanindividualprojectbutthatnooneprocurementmethodislikelytobe
betterthanothersforanyproject.Severalstudieshaveconsideredhowthis'best'individualprocurement
methodmaybeidentified(e.g.NEDO,1983)byreferencetoasetofprojectcharacteristics,attributesor
criteria.ThemostadvancedofthesearethoseofSkitmoreandMarsden(1988)andSingh(1990)who
proposeaprocedureinvolvingweightingfactorsandpriorityratingforprojectattributessuchasspeed,
certainty, flexibility, quality, complexity, risk avoidance and responsibility, price competition and
disputes/arbitration.Forthisproceduretobeofpracticaluseitisnecessarytofirstfixtheweightingfactors
whichrelatetheseattributestoindividualprocurementmethodsindependentofindividualprojects.
Oneproblemwiththishoweveristhatthefactorweightscannotbeobtainedeasilybyobjectivemeansand
havetobeelicitedfrompractitionersinthefield,whohavefounddifficultyinreachingaconsensusonsuch
matters(Hamilton,1987).Afurtherproblemisthattheclientpriorityratingshavetobeestablishedforeach
project.Thiscanbefurtherexacerbatedforclientswhomaynothavethenecessaryexperienceevento
produceanadequatebrief.NahapietandNahapiet(1985)howeverfoundthemainfactorsaffectingchoice
ofprocurementmethodtobethecharacteristicsoftheclientaswellastheprojectcharacteristicsand
requirements, suggesting that similar clients with similar project requirements may have similar and
consistentpriorityratings.
THESURVEY
A postal questionnaire survey of 34 contractors and 35 consultants was conducted to establish if a
reasonable consensus existed on factor weightings, while a similar postal questionnaire survey was
conductedwithasampleof41clientstoestablishifareasonableconsensusexistedamongstsubgroupsof
clients on priority ratings for similar types of projects. Attitudes and experiences to a variety of
procurementmethodsandcriteriausedforselectionwerederivedfromthequestionnaires.Theresultsof
the research indicate that, for the samples involved, a reasonable consensus did exist for the factor
weightingsbutnotforpriorityratings.Afurtherandverysurprisingresultwasthat,havingappliedthe
establishedfactorweightsandtheindividualprojectpriorityweightingstoindividualprojects,thepredicted
procurementsystemwasinallcasesthatofnovation,aderivativeofthedesignandbuildsystem,followed

bythetraditionalsystemgenerallythereverseoftheactualchoicemade.
ALTERNATIVEAPPROACHESTOPROCUREMENTSELECTION
Numeroustechniquesexistfortheselectionofprocurementmethod.Thechoiceofprocurementsystemis
nowsowideandprojectsarebecomingsocomplex,thattheselectionprocessneedstobecarriedoutina
disciplinedandobjectivemannerwithintheframeworkoftheclients'overallstrategicprojectobjectives.
Nevertheless,themajordifficultiesassociatedwithprocurementselectioninclude:

nosingleperson,orknowledgable'czar',hasbeenfoundwhoisfamiliarwithalltheprimary
procurementmethods(Hamilton,1987);

noconsensushasbeenfoundbetween'experts'whicheasilysystemisesprocurementselection;and

no mutually exclusive sets of criteria uniquely and completely determine the appropriate
procurementmethodforaspecificproject(Ireland,1985).

However,despitethedifficultiesassociatedwithprocurementselection,researchers haveattemptedto
derivesimpleapproachessometimesignoringthesedifficulties.NEDO(1985)relatesthecharacteristicsof
themostpopularprocurementmethodsusedtoalistofnineclientprioritiesorneeds.Thistechnique,whilst
usefulasaguideintermsofeliminatingunsuitableprocurementmethodsfromtheavailablealternatives,is
insufficientlysophisticatedtoenableafinaldecisiontobetakenastothemethodappropriateforabuilding
project(Masterman,1992).Franks(1990)usesaratingsystembasedontheabilityofeachprocurement
systemstomeetsevencommonsatisfyingcriteria.Ascaleof1to5isused,where1istheminimumand5
isthemaximum.Masterman(1992)statesthattheuseofthistechniqueindeterminingclients'needsis
valid,butitisflawedwithsubjectivity.
SkitmoreandMarsden(1988)andSingh(1990)usedthemultiattributeapproach,whichisatechnique
appliedtomeasuretheobjectivitytothesubjectiveareas.Bothstudiesadaptedtheprocurementpath
decisionchartfromNEDO(1985)toaidthedecisionmakingprocess.BennettandGrice(1990)have
undertakensimilarwork.Furthermore,SkitmoreandMarsden(1988)appliedconcordanceanalysisand
discriminant analysis to their theoretical framework. Concordance analysis is used to measure the
consistencyofexperts'rankingforeachprocurementagainstasetpredeterminedcriterion.Discriminant
analysisexamineddatacollectedunderasetofcriteriawhicharecharacteristicsonwhichthevarious

procurementmethodsareexpectedtodiffer.Thus,procurementpathscouldbediscriminatedagainstfor
decisionmakingpurposes.SkitmoreandMarsden(1988)foundfromtheirexploratoryworkthatthemulti
attributeapproachgavesimilarresultstothoseusingdiscriminantanalysis.
AcognitiveperspectivetoprocurementselectionwasproposedbyLiu(1994).Organisationalbehaviouris
modelledasanActtoOutcomeprocess.TheActtoProductandProducttoOutcomepathsaretheproject
realisationstageandpostoccupancystageofthebuildingprocurementprocess,respectively.Liu(1994)
statesthatorganisationalbehaviourisgovernedbyorganisationalgoalsandprojectgoalsaffecttheActto
Outcomeprocess.Anumberofmoderatorssuchasability,taskcomplexityandsituationalconstraintsaffect
thisgoalperformancerelationship,thusaffectingtheActtoProductandProducttoOutcomeprocesses.It
issuggestedbyLiu(1994)thatinselectinganappropriateprocurementmethod,thedecisionmakershould
takeintoaccounttheeffectofthesemoderatorsusingconjointanalysis(atechniqueusedtomodela
decisionmakersjudgmentprofile).
Theprocurementmoduleofthe'ELSIE'expertsystemcomputerpackage(Brandonetal.,1988)provides
therecommendationsonthemostappropriateprocurementmethodviaasoftwareprogram.Aseriesof
questionsrelatingtothetiming,quality,designcostparametersandothercharacteristicsoftheprojectare
posedbytheprogram.Onevaluationoftheinformation,recommendationsaregivenbymeansofalistof
themostappropriatemethods,rankedinorderofsuitability,togetherwithanindicationoftheextentto
whichthevariousmethodswillsatisfytheclientrequirements.
Theapproachesforprocurementselectionrangefromsimple(Franks1990)tohighlycomplex(Skitmore
and Marsden, 1988; Liu, 1994). However, it is important that method selection is done logically,
systematicallyandinadisciplinedmannerbytheclient'sprincipaladviser.Eachtechniquehasbeenbriefly
explained.ThetechniquesandmethodologyproposedbySkitmoreandMarsden(1988)andSingh(1990)
wereadoptedforthepurposeofthisresearchbecauseoftheirunderlyingconceptualframework.
THEPROCUREMENTSYSTEM
Acommonleitmotivoftheconstructionindustryisthemisunderstandingofthedefinitionofaprocurement
system. Too often the terms 'contractual arrangement' and 'procurement system' are considered to be
synonymous.Aprocurementsystemcanbedefinedasan organisationalsystemthatassignsspecific

responsibilitiesandauthoritiestopeopleandorganisations,anddefinestherelationshipsofthevarious
elementsintheconstructionofaproject.Procurementsystemscanbecategorisedasfollows:

traditional(designtenderconstruct)methods;

designandconstructmethods;or

managementmethods.

However,subclassificationsofthesesystemscontinuetoproliferatewithintheAustralianindustry(Fig.1).
Novationanddesignandmanagemethodsaresomeexamples.Itiscommonforprocurementsystems,
contractformsandpricedeterminationmechanismstoberegardedasthesamethingorinexorablyrelated
(Fellows,1993).
Procurementsystemshavebecomeincreasinglyflexible.Fellows(1993)suggeststhattheinterchangethat
existsbetweensuchsystemshasmadeitessentialtodistinguishtheprocurementsystemfromtheformal
subsystem.ItisfurthersuggestedbyFellowsthatthesubsystemmaybeusedinterchangeablytoenablethe
procurementsystemtobetunedtotheclients'circumstancesandrequirements.Aprimaryissuethatisoften
raisedwithintheconstructionindustryrelates towhatclients wantinordertobesatisfiedwiththeir
buildingsandthemeansbywhichthosebuildingshavebeenprocured.Itisimportanttoevaluatetheclients'
criteria,theirimportanceandthenseekperformancetomatchthecriteria.Allclientsrequiretheirbuildings
ontime,withinbudgetandofthehighestquality.However,someclientsstressthatcertaincriteriaaremore
important than others. The author acknowledges that there are numerous derivatives to each method.
However,thosewhichhavebeencategorisedareconsideredtobethemostpopularmethodsatthetimeof
evaluation.
METHODOLOGY
An examination of the literature revealed that insufficient empirical research had been undertaken in
selectingaprocurementsystemforthebuildingprocess.Theresearchattemptedtoconductanempirical
study,usingasimilarmethodologytothatofSkitmoreandMarsden(1988)andSingh(1990).Bothsuggest
amethodofidentifyinganappropriateformofprocurementmethodbyderivingasetofprincipalclient
requirementsandweightingthemaccordingly.Thisprocedurewasadoptedtoinvestigatetheprincipal
criterionofclients.Weightingswereobtainedfromclientsandinsertedintoadecisionchartjuxtaposed

withweightingsof'experts'foreachofthelistedprocurementmethods,thusindicatingtheappropriateform
ofprocurementmethodfortheclient.
SelectionofProcurementMethods
ThemostcommonlyusedprocurementmethodsinAustraliaare(basedonIreland(1982)):

singlelumpsumcontractsandfulldocumentation;

provisionalorpartialquantities;

costreimbursement;

packagedeals/turnkey;

constructionmanagement;

managementcontracting;and

projectmanagement.

Projectmanagementwasexcludedasitwasconsideredthataprojectmanagercouldbeappliedtoany
procurementmethod.Inotherwords,todispelacommonmisconception,projectmanagementisnota
procurementmethod(Bennett,1986,p.5).Thetermmerelymeansthattheclienthasemployedanagentto
assistinundertakingasupervisoryandcoordinationrolewithintheproject.Totheabovelistwereadded
novation,designandmanage,andcontractorsdesignandbuild.
SelectionofCriteria
The following criteria were used to examine client requirements and 'experts' preferences for the
performanceofeachprocurementmethod.NEDO(1985),SkitmoreandMarsden(1988)andSingh(1990)
suggestemployingthefollowingcriteriatoestablishaprofileoftheclients'requirements:

speed(duringbothdesignandconstruction);

certainty(priceandthestipulatedtimeandknowledgeofhowmuchtheclienthastopayateach
periodduringtheconstructionphase);

flexibilityinaccommodatingdesignchanges;

quality(contractors'reputation,aestheticsandconfidenceindesign);

complexity(clientmayspecifyparticularsubcontractor,orbuildabilityanalysis);

riskallocation/avoidance;

responsibility(completionofprogram,price,productquality,designandconstruction);

pricecompetition(coveringsuchissuesasvalueformoney,maintenancecostsandcompetitive
tendering);and

disputesandarbitration.

MultiattributeUtilityAnalysis
Multiattributeutilityanalysisisamethodologywhichcanbeusedasatooltomeasureobjectivityinan
otherwisesubjectiveareaofmanagement(Fellows etal., 1983).Asaprocurementsystemistheoverall
managerialapproachbywhichaclientcommissionsandobtainsabuilding,themultiattributeapproach
wasconsideredtobetheforemosttechniqueappropriateforexaminingthecriteriaofclientsandthe
preferencesofexperts'weightsforeachmethodinthemostobjectiveway.Byindicatingtherelativeutility
ofeachclientrequirementandprocurementmethodagainstanumericalscale,itispossibletoobtainaset
ofutilityfactors.Clientswereinvitedtogivearatingtotheabovecriteriaforthelatestbuildingprojectthey
hadprocured.Quantitysurveyors,architects,projectmanagersandcontractingorganisationsgaveratings
fortheabovecriteriaagainsteachprocurementmethodlistedherein.Eachprocurementmethodandclient
criterionwasscoredonascaleof10to110toavoidanypossibleimbalancesduetooccurrenceofzeros
(FellowsandLangford,1980).
TheProcedureforWeightingCriteria
Theprocedureadoptedforobtainingclientpriorityweightingsforeachcriteriaisasfollows(Singh,1990):
(1) ClientweightstherelativeimportanceofeachvariableindicatedontheProcurementPathChartona
scaleof1to20.
(2) Rationalisedpriorityratingsarecalculated(bydividingeachofthepriorityratingsbythesumofall
theratings)andthenenteredintothedecisionchart.Thesumoftherationalisedpriorityratingsshould
alwaysbeequalto1.
(3) Eachrationalisedpriorityratingistakeninturnandmultipliedbyeachoftheutilityfactors;theresults
willthenbeenteredintotheappropriatecolumns.

(4) Thetotalsofeachoftheresultscolumns,undereachprocurementmethod,arecalculatedandrankedin
descendingorder.Themostappropriateprocurementmethodwillhavethehighesttotalresult.
ConcordanceAnalysis
SkitmoreandMarsden(1988)used concordanceanalysistomeasuretheconsistencyoftheexpertswho
weightedthecriteriafromtherankingsobtained.Thistechniquewasusedtoexaminetheconsistencyofthe
clients'weightingsforeachclienttype.Thecoefficientofconcordance(W)(KendallandBabingtonSmith,
1939)wasusedtoseeiftherankingsoftheexpertsandclients'weightingforeachcriterionagreedwithone
another.Thisstatisticaltechniquemeasurestherankcorrelationforanumberofrankings.Themeasurefor
thecoefficientofconcordanceisdefinedby:
2

W=12Sw/m (n n)
whereSwequalsthesumofthesquaresofthedeviationsofthetotaloftheranksassignedtoeachindividual
fromm(n)/2.Thequantitym(n+1)/2istheaveragevalueofthetotalsoftheranks,andhenceSwisthesum
ofsquaresofdeviationsfromthemean.Wvariesfrom0to1;0representsnocommunityofpreference,and
1representsperfectagreement.ApplyingKendallandBabingtonSmith'sdefinitionofthecoefficientof
concordancetothisstudy,itwasappliedinthefollowingway:wheremisthenumberofobservers,nisthe
numberofprocurementcategories,andSwisthesumoftheranksforeachprocurementmethodisfound,
andthedeviationofeachsumfromtheaverageisthencalculated.
Thesumsoftheratingsforeachprocurementpath,whenaddedtogethershouldbeequalto0.5mn(n+1).
DATACOLLECTION
Clients
Questionnairesweremailedto100selectedclientsthroughoutAustralia(withtheexceptionoftheNorthern
Territory).Clientsweregivenoveronemonthtoreplytothequestionnaire.Initiallyonly20clientsreturned
theirquestionnaires,thereforeafurther50questionnairesweremailedtoclients.Theseclientsweregiven
twoweekstoanswerthequestionnaireresultinginatotalof41beingeventuallyreceived,ofwhich

approximately25%werepropertyanddevelopmentcompanies,25%investors,30%occupiers,and20%
localandcentralgovernmentauthorities(including7%fromlocalauthorities).Theseresultsindicatean
evenspreadofclients.Oncethedeadlinedateforthereturnofthequestionnaireshadpassed,thoseclients
whohadrepliedtothequestionnaireswerecontactedandinterviewedviathetelephone.All41clients
cooperatedinthefollowupinterview.
Contractors
Questionnaires were mailed randomly initially to the building divisions of 50 selected contracting
organisations throughoutAustralia, andfollowedupwitha telephone call.Thirtyeight replied to the
questionnaire,weightingthedesignandconstructoptionswithutilityweightings.Contractorsstatedthat
contractors'designandbuildandpackagedealswerebecomingincreasinglypopularformsofdelivery
systems.Contractorswereaskedwhytheybelievedthistobethecase.Thirtyfourcontractingorganisations
statedthattheybelieveditwastodowithclientswantingtoallocateriskandadvocateallresponsibilityto
thepartywhowasgoingtoconstructthebuilding.Itwasalsosuggestedthatclientsdesiredaguaranteed
maximumpricebeforeconstructioncommencesonsite.
Consultants
Questionnairesweremailedto100selectedconsultantsthroughoutAustralia.Consultantsweregivenover
onemonthtoreplytothequestionnaire.Only10questionnaireswerereturnedwithinthetimeallocated.
Eachconsultantwasthentelephonedtoestablishwhytheyhadnotreturnedthequestionnaire.Asaresultof
thetelephonecalls,afurther10questionnaireswerereturned.Questionnaireswerealsomailedtoanother
50 consultants throughout Australia who were given one month to return the questionnaire. Fifteen
questionnaireswerereturned,bringingthetotalsamplesizeto35.
FINDINGS
Datafromthequestionnaireswasextractedtoderiveweightingsofutilityfactors.Theutilityweightingsof
thecontractorrespondentswere,however,foundtohaveabiastowarddesignandconstructmethodsof
procurementsystemandthereforehavebeenexcludedfromtheanalysis.Theremainingweightingswere
thenexaminedtodeterminewhetherornottherespondentsgavesimilarweightsforthesamecriterionfor
differingprojecttypes.

Contractors and consultants indicated the procurement methods used by percentage value of work
commissionedfortheyears1993and1994(Table1).Itcanbeclearlyseenthatthepercentagevaluesdiffer
significantlyforbothcontractordesignandbuildandtraditionallumpsummethods,althoughitcanbe
concludedthattheprocurementmethodsindicatedweredominantwithinthemarketplaceintheperiodof
analysis.Furthermore,itisshownthatdesignandbuildderivativesgenerallypredominate.Barclay(1994)
alsosupportsthesefindings.
Clients
Themostcommonformofarrangementusedbytheclientrespondentsisthetraditionallumpsumand
documentation(56%),withnovationthenextmostpopularsystem(18%),andthemanagementsystemof
design, manage and construct the least used (3%). Seventyfour per cent of clients procured their
developmentlessthanoneyearpreviously.Clients wereclassifiedintoeitherinvestors,propertyand
development companies, local and central government authority or occupiers (Turner, 1990). Clients
weightedeachcriterionusingthescaleindicatedinthequestionnaire.Eachclienttypewasclassifiedin
termsoftheirexperienceofmarketandtechnicalknowledgeoftheconstructionindustry(Table2).The
timeperiodastowhentheyhadcompletedtheirlastbuildingprojectwasusedasthebasisforverifying
clientsandtheirperceivedsatisfactionordissatisfactionwiththeformofprocurementmethodactually
implemented.Theclassificationofclients'marketandtechnicalknowledgeoftheconstructionenvironment
isasfollows:

goodknowledgeofbothtechnicalandmarketfactors;

goodtechnicalknowledgebutlimitedornomarketknowledge;

limitedornotechnicalknowledgebutafirmunderstandingofmarketfactors;and

limitedornoknowledgeofbothtechnicalandmarketfactors.

Theclassificationofbuildingstypeswhichclientsprocuredareasfollows:

residential;

commercial;

recreational;

administrationandcivic;

industrial;

hospital;

educational;and

other.

Eachclient'sweightswererankedinorderofpreference.Themeanweightsofeachclienttypewere
calculatedalongwiththecorrespondingmeanrank(Table3).Thecoefficientofconcordance(W)(Kendall
andBabingtonSmith,1939)wascalculatedforeachclienttypetoestablishaconsistencyinrankingsfor
the predetermined parameters (Table 4). The results indicate that there is no consistency with the
weightingsfortheutilityfactors.Therefore,itcanbeconcludedthatdifferentclientshavedifferentneeds.
Thecoefficient(W)forlocalandcentralgovernmentauthoritiesismarginallybelowthesignificancelevel
of0.70,thusindicatingthatwithalargersamplearelationshipbetweenselectioncriteriapreferencesand
theclientmaybecomeevident.
ClientsindicatedtheirsatisfactionwiththeprocurementmethodadoptedareshowninTable5.Seventyper
centofclientswhoweresatisfiedwiththeprocurementoftheirbuildingsimplementedadesignandbuild
system,whereastheremaining30%implementedatraditionalsystem.Moreover,itwasfoundthatclients
hadallusedanindependentprojectmanagerastheirrepresentativeandprincipaladviser.Clientswere
questionedonthefactorsthatcontributedtotheirsatisfaction.Thefollowingfundamentalfactorswere
identified:

completionoftheprojectontimeandtobudget;

completiontothedesiredtechnicalspecificationandquality;

teamworkandcommitmentfromallparticipants;

abilityofparticipantstounderstandthegoalsandobjectivesoftheproject;

effectivecommunicationbothformallyandinformallybetweenparticipants;and

anindependentprojectmanager.

Thoseclientswhoweredissatisfiedwiththeirprocurementmethodwerethosewhohadimplemented
constructionmanagementandtraditionallumpsummethods(Table6).Completionofthebuildingwithina
stipulatedtimeperiodwasafundamentalreasonclientsimplementedaconstructionmanagementmethod.

Thisledtootherprominentcriteriabeingneglected,thusotherprioritiesoftheclientwerenotevaluatedin
aholisticmanner.Moreover,anindependentprojectmanagerwasnotusedbytheseclients.Thefollowing
fundamentalfactorswereidentifiedascontributingtoclients'dissatisfaction:

projectnotcompletedontimenortobudget;

projectnotcompletedtothedesiredtechnicalspecificationandquality;

lackoffeedbackfromparticipantstotheproject'sperformance;

lackofinvolvementthroughouttheproject;

poorcoordinationandcommunicationbetweenparticipants;

conflictingadvisefromconsultants;and

noprojectmanagertoactasanintegratingdevicebetweenparticipants.

Fromtheresultsobtained,itisevidentthatthereareparticularfactorswhichcontributetoclientsatisfaction
andtheseshouldbeconsideredpriortotheselectionofaprocurementmethod.Insummary,thefactors
contributingtosatisfactionaresomewhatsimilartoMastermanandGameson's(1994)'clientneeds',viz.:

aneedtobekeptinformedandactivelyinvolvedatallstagesoftheproject;

aneedforcertaintyoffinalcost;

aneedforcertaintyofthedayofcompletion;

aneedtoachievevalueformoney;and

aneedtoobtainthelowestprice.

AstudybyWalker(1994)oftheAustralianconstructionindustry,foundthatexperiencedorsophisticated
clientsaremorelikelytoachieveasuccessfulprojectoutcome.However,fromthisresearchthekeyfactor
contributingtoprojectsuccesswasnotnecessarilytheexperienceoftheclient,buttheirabilitytorecognise
theroleandfunctionofanindependantprojectmanagementorganisationwhichactedasafocalpointfor
projectparticipants.MastermanandGameson(1994,pp.8184)haveidentifiedthedesireoftheclienttobe
involvedandinformedabouttheproject,referringtostudiesofclientneedsbyBennettandFlanagan
(1983)andHewitt(1985)whichfoundthatclientsneededactiveinvolvementandtobekeptinformed.The
lackofinvolvementbytheclientwasidentifiedasafactorcontributingtotheirdissatisfaction.Thisfactor
wascommonamongstclientswhoclassifiedthemselvesashavingagoodknowledgeofbothtechnicaland
marketfactorsandthosewithlimitedornoknowledgeoftheindustry.Masterman(1994),inadetailed

studyofthebasisuponwhichclientsselectaprocurementmethod,foundthattheneedoftheclienttobe
involvedandinformedofthefinalcostandcertaintyofcompletionwereamongstthefirstoftheirpriorities
whenselectingaprocurementroute.Itisconcludedfromthisresearch,nevertheless,thatthepriorities
identifiedbyMasterman(1994)arenotconsistentwiththefindingsidentifiedherein.Itwasfoundthat
clientsdonothavesimilarneedsintheirprocurementobjectives.ThefactorsidentifiedbyMasterman
(1994) were, however, considered in hindsight by the client when they were dissatisfied with the
procurementprocess.Gameson(1992,pp.203207)hasshownthatconstructionprofessionalstendtotake
adominantanddiagnosticroleintherelationshipwithinexperiencedclients,butthatrolebecomesless
supportive and less influential when dealing with experienced clients. Consultants may agree on the
fundamentalobjectivesoftime,costandqualitybutwillplaceemphasisontheperformancestandards
which affect their own expertise. This was found to be the case with dissatisfied clients who had
implementedaprocurementsystemontheadviseoftheirconsultantsratherthananindependentproject
managerwhocouldtakeaholisticapproachoftheclients'strategicprojectobjectives.
Consultants
Thirtyfiveconsultantscompletedandreturnedthequestionnaires.Ofthese,14%werearchitects,57%
projectmanagersand29%quantitysurveyors.The mostpopular methodofprocurementforthewhole
sampleofrespondentswasfoundtobetraditionallumpsum(42%),followedbynovation(34%),contractor
designandbuild(16%),andturnkeyandpackagedeals(8%).Allconsultantsthoughtthatthereasonsfor
thepopularformswere(1)clientwantstoreducetheamountofrisktheyarewillingtotakeduetothe
prevailingeconomicclimate,(2)clients'mainpriorityiscostandcertaintyintimesofrecession,and(3)
clientsrequirelumpsumbeforeconstructioncommences.The leastpopular methodofprocurementfor
these respondents were found to be (1) management method design, manage and construct, (2)
management method management contracting, (3) traditional method cost reimbursement, and (4)
traditionalmethodprovisionalquantities.Allconsultantsconsideredsystems(2),(3)and(4)tobenot
popularwithinthemarketplacewith90%statingthatmethod(1)wasunpopular.
The architects and quantity surveyors subsamples principally weighted the traditional method of
procurementwiththehigherutilitypreferences(exceptinthecaseofcostreimbursementform),whereas
theprojectmanagerssubsampletendedtoshownopreferencetowardanyparticularsystem;theirapproach
to weighting each parameter against each procurement method tended to be impartial (i.e. show no

favouritism).Therewasnodoubtarchitects'andquantitysurveyors'priorityweightingsfavouredtraditional
lumpsumandtraditionallumpsumwithprovisionalquantities.
Themeanvaluesoftheconsultants'utilityweightingsforeachcriteriaagainsteachprocurementmethodare
showninTable7.TheresultsindicatethatmethodA(traditionallumpsum)providesthebestquality(mean
weighting100.00)andbestpricecompetition(meanweighting94.50),methodE(turnkeyandpackage
deals)isthemostcertain(meanweighting100.00),bestforriskallocation/avoidance(meanweighting
109.70)andbestforresponsibility(meanweighting95.60),methodF(novation)isthebestforavoiding
arbitrationanddisputes(meanweighting95.60)andmethodG(constructionmanagement)isthespeediest
(meanweighting90.50),mostflexible(meanweighting95.60)andbestforcomplexity(meanweighting
105.0).Thesmallestcoefficientofconcordancewas0.61(forarbitrationanddisputes)andthiswastakento
indicatetheexistenceofareasonableconsensusonthevalueoftheweightings(Table8).
PROCUREMENTPATHDECISIONCHART
A Procurement Path Decision Chart (Skitmore and Marsden, 1988) was produced for each client
respondentusingthemeanutilityvaluesoftheconsultants'weightsfromTable7juxtaposedwiththe
clients'criteriaweightings.AnexampleisshowninFig.2.Eachprocurementmethodwasranked,withthe
highestresultbeingranked1.MethodFinthisexample,withatotalweightingof84.59,representsthe
'appropriate'formofprocurementmethod.Atotalof41chartswereproducedinthiswayoneforeach
client respondent and in every case the appropriate form of procurement system is the design and
constructnovationform,withthetraditionallumpsumanddocumentationformrankedasthesecond
choice,irrespectiveofthetypeofclientorbuildinginvolved.
Thepositionsofranksforthetraditionalmethodswithprovisionalquantitiesandtheremainingdesignand
constructmethod,tendtobeconsistentthroughoutallthecharts(ranks3to5,butonoccasionsexchange
places).Constructionmanagement,managementcontracting,anddesignandconstructoccupiedranks6,7
and8,withmanagementcontractingpredominantlybeingrankedeighthandthepositionsoftheremaining
managementmethodsexchangingrankingpositions.Thetraditionalcostreimbursementformwasranked
ninthforallthecharts.
CONCLUSIONS

Itisshownthatsimilarclientsdonotingeneralhavesimilarneedsintheirprocurementobjectives.This
mayofcoursebeduetothedifferentnatureoftheirindividualprojectswhetherthesameclienthasthe
sameneedsfordifferentprojectsisnotexaminedhere.Thereisaconsensus,however,thatthecriteria
proposed,andtheirweights,arethemselvesappropriateforeachprocurementmethod.Thattheapplication
oftheseweightsintheProcurementPathDecisionChartsshouldresultinthesameprocurementdecisionis
totallyunexpectedandsuggeststhatareplicationofthisstudyisneeded.Itshouldbenoted,however,that
thetwomostcommonprocurementmethodsusedbytheclientrespondentsarethetraditionalandnovation
andtheProcurementPathDecisionChartfoundthesealsotobethemostappropriate,albeitinreverse
order.Thelowrankingsforconstructionmanagement,managementcontractingandcostreimbursement
may be due to the intrinsic uncertainty involved in these methods. NEDO (1985) suggests that the
managementsystemofferspricecertaintyalthough,atthetimeofcontract,theexactnatureanddetailofthe
oftheprojectarenotgenerallyestablished.Inourview,managementformsasaderivationofaformof
primecostcontractandarethuslackinginpricecertainty.
Thedeviceofaguaranteedmaximumpriceissometimesoffered,butitisonlypossibletoobtainprice
certaintyifthemaximumbeingguaranteedishighenough,ineffecttocontainatargetfigurethatincludes
sufficientcontingency.Amaximumguaranteedpriceconceptisnotoftenpossibletoobtainbeforethetime
whenaconstructioncontractneedstobesigned.Thecostreimbursementformisasystemwherebythe
contractorispaidtheactualorprimecostforanindeterminateamountofworkandinadditionanagreed
feeispaidtocovermanagement,overheadsandprofit.Itispossiblethatthisformisnotfavoured,asthe
resultantfinalcosttotheclientisdifficulttodetermine.Aswithconstructionmanagementandmanagement
contracting,feesarepaidontheactualcostoftheworkundertaken.Moreover,Barclay(1994)foundfrom
hisstudiesthatthedesign,manageandconstructformhasnotbeenusedthatextensivelywithinAustralia,
hencethelowerweightsandthelowoverallaggregaterank.
Asimplesetofcriteriahavebeenidentifiedasbeinggenerallyadequateandsufficientforprocurement
selectionandthatthereisareasonableconsensusontheirappropriateweightingsforeachpath.Moreover,
greater involvement and interaction between client and consultants is indicated for a more effective
procurementprocess.Itissuggestedthatparticipantshavetoputasidetheirownobjectivesbyconsidering
theclientsstrategicprojectobjectivesinaholisticmanner.Thiscanbeeffectivelyachievedthroughtheuse
ofaprojectmanagementorganisationwhichactsasacontrolmechanismfortheclientandparticipants.The

results indicate that design and construct options juxtaposed with a project management organisation
generallysatisfyclients'needs.However,furtherempiricalresearchisrequiredtotestthevalidityofthese
findingsiftheselectionofthemostappropriatemethodistobeidentified.
REFERENCES
Barclay, J. (1994) A comparison between traditional and nontraditional forms of contracting for the
procurement of building projects. BSc thesis, School of Construction Management, Queensland
UniversityofTechnology,Australia.
Bennett,J.(1986)ConstructionManagementandtheCharteredQuantitySurveyor.SurveyorPublications,
London,UK.
Bennett,J.andFlanagan,R.(1983)Forthegoodoftheclient.Building,1April,2627.
Bennett,J.&Grice,A.(1990)Procurementsystemsforbuildings.InQuantitySurveyingTechniques:New
Directions,P.S.Brandon(ed.),BSPProfessionalBooks,Oxford,UK.
Brandon, P.S., Basden, A. and Hamilition, I.W. (1988) Expert System: The Strategic Planning of
ConstructionProjects.RoyalInstitutionofCharteredSurveyors,UniversityofSalford,UK.
Franks,J.(1990) BuildingProcurementSystems.CharteredInstituteofBuilding,Englemere,KingsRide,
Ascot,UK.
Fellows, R.F. (1993) Contracts for Refurbishment. School of Architecture and Building Engineering,
UniversityofBath,UK.
Fellows, R.F. and Langford, D.A. (1980) Decision theory and tendering. Building Technology and
Management,October,3639
Fellows,R.F.,Langford,D.A.,Newcombe,R.andUrry,S.(1983) ConstructionManagementinPractice.
LongmanScientific&Technical,London,UK.
Gameson, R.N. (1992) An investigation into the interaction between potential building clients and
constructionprofessionals.UnpublishedPhDthesis,UnversityofReading,UK.
Hamiliton,I.W.(1987)Developingexpertsystemsformanagementapplications.InBuildingCostModelling
andComputers,P.S.Brandon(ed.),E.&F.N.Spon,London,pp.441451.
Hewitt,R.A.(1985)Theprocurementofbuildings:proposalstoimprovetheperformanceoftheindustry.
Unpublishedprojectreport,CollegeofEstateManagement,Reading,UK.
Ireland,V.(1982)Variablesinbuildingprojectsandtheachievementofobjectives.Proc.P.M.F.National
Conference,Sydney,Australia,September,pp.3949.

 Ireland, V. (1985) The role of managerial actions in cost, time and quality performance of high rise
commercialbuildingprojects.ConstructionManagementandEconomics,3,5987.
Kendall, M.G.and BabingtonSmith, B. (1939) The problem of m rankings. Annuals of Mathematical
Statistics,10,275287.
Liu,A.N.N.(1994)Fromacttooutcomeacognitivemodelofconstructionprocurement.Proc.CIBW92
InternationalProcurementSymposium,'EastMeetsWest',DepartmentofSurveying,Universityof
HongKong,47December1994.
Masterman,J.W.E.(1992)AnIntroductionintoBuildingProcurementSystems.E.&F.N.,Spon,London.

Masterman,J.W.E.(1994)Astudyofthebasisuponwhichclientsoftheconstructionindustrychoosetheir
buildingprocurementsystems.UnpublishedPhDthesis,UMIST,Manchester,UK.
Masterman,J.W.E.andGameson,R.N.(1994)Clientcharacteristicsandneedsinrelationtotheirselectionof
buildingprocurementsystems.Proc.CIBW92InternationalProcurementSymposium,'EastMeets
West',DepartmentofSurveying,UniversityofHongKong,47December1994.
Nahapiet, H. and Nahapiet, J. (1985) A comparison of contractual arrangements for building projects.
ConstructionManagementandEconomics,3,217231.
Naoum,S.G.andLangford,D.A.(1988)Aninvestigationintotheperformanceofmanagementcontractsand
thetraditionalmethodofbuildingprocurement. ConstructionManagementandEconomics, 4,351
360.
NationalEconomicDevelopmentOffice(NEDO)(1983)FasterBuildingforIndustry.NEDC,London.
NationalEconomicDevelopmentOffice(NEDO)(1985)ThinkAboutBuilding.NEDC,London.
Singh,S.(1990)Selectionofappropriateprojectdeliverysystemforbuildingconstructionprojects.Proc.CIB
W90 International Symposium on Building Economics and Construction Management, Sydney,
Australia,pp.469480.
Skitmore,R.M.andMarsden,D.E.(1988)Whichprocurementsystem?Towardsauniversalprocurement
selectiontechnique.ConstructionManagementandEconomics,6,7189.
Turner,A.(1990)BuildingProcurement.MacmillanSurveyingSeries,London.
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December1994.

Table1.Incidenceofuseofannualworkcommissionedofprocurement
methodsfortheyears1993and1994

Procurementmethod

Contractors
(%byvalue)

Consultants
(%byvalue)

Contractors'designandbuild
52
16
Turnkeyandpackagedeals
9
8
Novation
26
34
Traditionallumpsum
13
42

Table2.Summaryofclientclassification

Client
Marketandtechnicalknowledge
Buildingtype

Goodknowledgeofbothtechnicalandmarketfactors

Commercial

%
80

Goodtechnicalknowledgebutlimitedornomarket
Residential
20
knowledge

B
Goodknowledgeofbothtechnicalandmarketfactors
Residential
30
Commercial

50

Recreational
20

C
Goodknowledgeofbothtechnicalandmarketfactors
Other(airports)
18
Educational

Limitedornotechnicalknowledgebutafirm
understandingofmarketfactors

Industrial

Limitedornoknowledgeofbothtechnicalandmarket
factors

Commercial

Admin.&Civic

Limitedornotechnicalknowledgebutafirm
understandingofmarketfactors

Educational

18

Limitedornoknowledgeofbothtechnicalandmarket
factors

Educational

18

Hospital
9

D
Goodknowledgeofbothtechnicalandmarketfactors
Hospital
25
Admin.&Civic

12.5

Residential

12.5

Limitedornotechnicalknowledgebutafirm
understandingofmarketfactors

Educational

25

Limitedornoknowledgeofbothtechnicalandmarket
factors

Recreational

12.5

Hospital

12.5

Key: (A)investors;(B)propertyanddevelopmentcompanies;(C)occupiers;(D)localandcentralgovernmentauthorities.

Table3.Meanweightsandranksofclienttypes

Criteria
A
B
C
D

Weight Rank Weight Rank Weight Rank Weight Rank

Speed
13
6
20
1
14
5
17
4
Certainty
16
4
18
3
15
5
19
2
Flexibility
15
5
12
7
9
8
14
6
Quality
13
6
15
6
17
4
18
4
Complexity
8
8
9
8
10
7
11
8
Responsibility
18
3
17
4
16
4
13
7
Arbitration
anddispute
8
8
9
8
17
3
14
6
Pricecompetition
17
4
16
5
19
2
20
1
Riskallocation/
avoidance
18
2
17
4
12
7
13
7

Key: (A)investors;(B)propertyanddevelopmentcompanies;(C)occupiers;(D)localandcentralgovernmentauthorities.

Table4.Coefficientsofconcordanceforclients

Clienttype

Coefficientofconcordance
(W)

Investors
0.57
Property&developmentcompanies
0.27
Occupiers
0.25
Local&centralgovernmentauthorities
0.64

Table5.Percentageofclientssatisfiedwiththeirprocurementmethod

Clienttype

Novation

Design Contractors Traditional

&manage design&
lumpsum
build

Investors

Property&developmentcompanies

15
Occupiers
35
5
Local&centralgovernmentauthorities

15

10

20

Table6.Percentageofclientsdissatisfiedwiththeirprocurementmethod

Clienttype

Construction
management

Investors
10
Property&developmentcompanies
5
Occupiers
10
Local&centralgovernmentauthorities

Traditional
lumpsum

28
28

19

Table7.Meanutilityfactorsofcriteriaforprocurementmethods

Criteria
Procurementmethods

A
B
C
D
E
F
G
H
I

Speed
Certainty
Flexibility
Quality
Complexity
Riskallocation/
avoidance
Responsibility
Arbitration/
disputes
Pricecompetition

52.5
88.5
75.6
100.0
80.6

56.5
80.6
86.3
95.6
78.5

45.6
29.1
65.2
58.3
55.0

76.2
90.3
59.6
60.5
75.6

80.0

70.0
88.6

10.0
75.2

96.8
20.0

75.3

65.3
94.5

10.0
76.7

70.8
44.7

79.6
100.0
45.0
45.5
50.0

83.5
85.6
73.8
85.2
95.3

90.5
55.6
95.6
73.6
105.0

88.6
50.2
94.8
71.2
100.0

81.5
53.8
85.2
84.5
85.5

109.7 92.5
92.5
95.6

45.0
90.5

40.0
36.0

50.0
35.8

40.0

83.5
42.0

58.3
62.5

55.2
90.0

57.6
90.0

80.0

95.6
40.0

Key: (A)traditionalsinglelumpsum,(B)traditionalprovisionalquantities,(C)traditionalcostreimbursement,(D)
contractorsdesignandbuild,(E)turnkeyandpackagedeals,(F)novation,(G)constructionmanagement,(H)management
contracting,(I)designandmanage.

Table8.Coefficientsofconcordanceforconsultants

Selectioncriterion
Coefficientofconcordance
(W)

Speed
0.73
Certainty
0.85
Flexibility
0.99
Pricecompetition
0.65
Riskallocation/avoidance
0.96
Responsibility
0.86
Quality
0.70
Arbitration&disputes
0.61

Complexity

0.94

FIGURECAPTIONS
Figure1.Categorisationofbuildingprocurementsystems.
Figure2.Exampleofaprocurementpathdecisionchart.