BQS 559-ASSIGNMENT 1 (PROCUREMENT) GROUP SYAZRUL

DEPARTMENT OF QUANTITY SURVEYING FACULTY OF
ARCHITECTURE, PLANNING AND SURVEYING,
UNIVERSITY TEKNOLOGY MARA KAMPUS PERAK

PROFESSIONAL

PRACTISE

"CADANGAN MEMBINA DAN MENYIAPKAN UTC KOMTAR, DI
SEBAHAGIAN RUANG TINGKAT 2 DAN 3 KOMTAR, NAIKTARAF
KAWASAN BERKAITAN DI TINGKAT 1,2 & 3 SERTA KERJA-KERJA

BERKAITAN DI BANGUNAN KOMTAR, DAERAH TIMUR LAUT,
PULAU PINANG"

PREPARED FOR:
PROFESOR MADYA DR KHARIZAM ISMAIL

PREPARED BY:

1.NIK MUHAMMAD SYAZRUL BIN MOHD SAIDI 2 0 2 1 3 0 1 7 8 9

2.NUR NADIAH BINTI RUSLAN 2021393357

3.NUR SYAZA NADIA BINTI MOHD SAAD 2021505435

4.SHAFIKA ARRISHA BINTI SHAMSUL AMIR 2021124269

5.SITI NUR AFIQAH BINTI BAHAROM 2021393575

CONTENTS

01 INTRODUCTION
02 LITERATURE

REVIEW

03 RESEARCH
METHODOLOGY

04 DATA ANALYSIS
05 CONCLUSION AND

RECOMENDATION

06 REFRENCES

2

Chapter 1:

INTRODUCTION

3

INTRODUCTION

Malaysia's construction industry is one of the first to
contribute to the country's gross domestic product. The
contribution range is between 4% to 6% every year, according
to the economist. This demonstrates that the building sector
is extremely important to Malaysia and will continue to be so
for the coming years, as the country's population grows and
so does the need for housing. The example of developers in
Malaysia are Sime Darby Property, Gamuda Land, Mah Sing
Group, Eco World Development Group, and others.

Architect, engineer, landscape designer, interior designer,
and quantity surveyor are all employed by each party. The
tasks of a quantity surveyor might include preparing of bill
quantities and tender documentations, final account
preparation, tender and contract document preparation, work
evaluation for interim certificate, and document preparation
for variations of works.

A case study is a well-known research study and one of the
most typical systematic investigations used to gather facts
and information about the research's subject. The case study
research approach is particularly beneficial for evaluating and
examining whether scientific ideas and models actually
operate in practice. Furthermore, the case study does not just
provide scientific ideas, but it also includes a viewpoint that is
intended to provoke a rational debate about the case study.
There are no right or incorrect answers in a case study.



For our case study, we use “CADANGAN MEMBINA DAN
MENYIAPKAN UTC KOMTAR, DI SEBAHAGIAN RUANG
TINGKAT 2 DAN 3 KOMTAR, NAIKTARAF KAWASAN
BERKAITAN DI TINGKAT 1,2 & 3 SERTA KERJA-KERJA
BERKAITAN DI BANGUNAN KOMTAR, DAERAH TIMUR LAUT,
PULAU PINANG. The tender is open to Bumiputera's that has
a Grade 7 license which has been registered with Lembaga
Pembangunan Industri Pembinaan (CIDB).

4

Chapter 2:

LITERATURE
REVIEW

5

The client and other project
participants must choose the most
appropriate procurement technique
because it is a significant aspect that
leads to overall client happiness and
project success (Ramanathan and
Narayanan,2016). Due to the large
variety of procurement methods
accessible to project developers on the
market today, multiple comparisons of
how the various procurement methods
fared at the end of the building phase
have been made. This are a few of
procurement types that usually had
been use in construction project in
Malaysia.

2.1 TYPE OF
PROCUREMENT

6

TRADITIONAL
PROCUREMENT

The traditional procurement process separates the project's design and construction phases
(Ramanathan and Narayanan,2016). The client directly employs both a team of professional
consultants to design the project and a contractor to build to that design. The design will be in
charge by the architect while the construction will be in charge by the contractor. The contractor
has no design responsibility unless the parties agree that the contractor will design a specific
aspect of the work. This allow the client to keep a close check on how his project objectives are
being carried out. Due to their sequential strategy, traditional procurement has been identified as
the slowest delivery technique. The project design phase should be completed before the building
portion of the project started using the traditional method.

Advantage Disadvantage

The employer or client can control Required long time before the
and determine a each stage of the project can start due to the selection
design. of the consultant and selection of
contractor
Very high standard in relation to
architectural design and quality of High risk for the client if there are
material used for the project. mistakes in the design of the project

there is a lot of experience with the Often, there are delays in the project
type of procurement. and often exceed the budget

7

DESIGN &
BUILD

A common trend in Malaysia's construction industry, particularly for large mega projects like the Twin
Petronas Towers, Kuala Lumpur International Airport, Malaysia North South Highway, Penang Bridge,
and others, is adopting the Design and Build procurement process (Seng and Yusuf 2006).Design-build
procurement method can be defining as a project delivery approach in which the owner specifies the
project's specifications and awards the contract to a single contractor to execute and be liable for the
project's design and construction. Based on the requirements statement provided on the client’s brief,
the contractor will hire an architect and engineer firm to design the project (Saaidin, S. et.al. 2016).
According to Razi,et. al. (2020), in many countries, the Design and Build procurement method of
delivery is identified as the best replacement for most public and private projects, and it is viewed as
one of the alternative

Advantages

Advantage Disadvantage

Cost is lower : Potential costs savings can In terms of quality, the contractor may
be realized because it has high value exploit a specification that is open to
engineering capabilities due to close interpretation and choose the cheapest
coordination between the architect, route.
engineer and the contractor
There is also the risk that the client may
Cost is certain (Employer’s Perspective): have to pay more if the contractor has to
The contract price is either fixed or lump take on an unreasonably high level of risk
sum and the cost for the project is certain. due to a lack of design clarity when
tendering
Shorter completion time By combining
the appointment of the designer and a
contractor into one step, the DB method
eliminates time lost in the conventional
DesignBid-Build process.

8

MANAGEMENT
CONTRACTING

Management contracting procurement is construction process in which a series of independent works
or trade contracts are executed and managed by the main contractor which is called by management
contractor. Management contracting procurement method is using in large and complex projects.The
phrase "management contracting" refers to a method of procurement in which a single firm (the
management contractor) is in responsible for managing the whole construction project's execution.
The contractor gets paid a fee for managing the project through the various work packages, rather than
doing the actual job (JCT, 2021). According to Heming, P. (2021), instead of hiring a single Main
Contractor, the developer hires various subcontractors that known as Trade Contractors.
Management contractor is engaged to planning and programming all stages of the project, contribute
his experiences on buildability to the design. The client, design consultants, and contractor must all
work together and have trust in each other in order for this sort of procurement to be effective.

Advantages

Advantage Disadvantage
Employer bearing high
Speed from inception to contractual risk
completion
Employer contractual
Greater flexibility for remedies unclear
changes and better
communication lines Relatively expensive and
coordination problems
Benefit of the contractor's
experties

9

2.2 SELECTION OF
CONTRACTOR

The process of selecting a According to Fong, P.S., and Choi, S.K. (2000), The
contractor in the construction lowest tender price is typically stated as the most
industry is known as tendering significant component in securing a contract in
and it entails producing tender most contemporary selection methods, and the
documents that define the lowest tender price is frequently cited as the
project and then requesting most important factor in getting a contract.
potential contractors to submit Aside from selecting the lowest tender price, the
tender proposals from which a final contractor selection should include a cost,
decision may be made. time, and quality trade-off. However, in the
examination of tenders for government projects,
It is essential to select a good the tender price still takes precedence over other
aspects. Because taxpayers finance government
contractor for the job because projects and contractors are vetted before
tenders are invited, offering contracts to the
not all contractors are experts in lowest bidder can assist to avoid charges of
corruption.
all types of work. This is simply
Furthermore, by valuing contractors in advance, a
one of the factors to consider in prequalification approach may be employed to
assure their quality. Instead of being distracted
order to ensure a successful by other commercial considerations, this strategy
allows the owner's bid review team to focus
project delivery for different completely on the project's specialised
characteristics. Clients, on the other hand, will be
delivery methods. Because of its able to choose the finest applicants from among
those who have showed interest in participating
uncertainties and difficulties in in the bidding process. The goal of
prequalification is typically to decrease the
standardisation, contractor number of possible bids as well as to assess
contractor ability. In this case, it's critical to
evaluation has been evaluate not just if the contractor satisfies the
fundamental standards, but also how well they're
characterised as a particularly met. Not all elements are equally important to
the client. The most difficult part is deciding on
problematic procedure. It's proper values for the various criteria. (Huang, X.
2011).
tough to weigh all of the trade-
The key factors that influence to
offs involved in making a choose a contractor is made on the
basis of qualitative, subjective, and
decision, particularly when there
ambiguous information. Whatever
are so many unknowns owing to method is utilised, the relevance of
three factors, namely time, money,
environmental concerns. If the
10 and quality, must be considered.
customer is inexperienced, it

may be necessary to seek

guidance from professionals. The

general contractor management

usually makes the contractor

selection, which is based on

intuition and past experience.

There are no standardised sets of

rules for the evaluation process

(Zavadskas, E.K., Turskis, Z., and

Tamosaitiene, J. 2008).

2.3 Tendering Procedure

Tendering is a method of inviting prospective contractors to submit offers for a particular project. In
most public tendering procedures, the project team is chosen only on the basis of cost, with no regard
for technical or management qualities. The selection to go along with the cheapest option, especially in
complicated, uncertain, and expensive projects, can lead to disagreement and long-running
arguments. On the other side, the lowest bid does not automatically signify the best team. While a
project's complexity increases, the tendering system must adapt to guarantee that the project's
expectations and requirements are taken into account when making a decision. When adopting
collaborative approaches, tendering procedures based on competence and value are essential such as
Integrated Project Delivery (IPD) or project alliancing (Schottle, A., Arroyo, P., and Bade, M. 2015). Open
tendering, selective tendering, negotiated tendering, and serial tendering are some of the tendering
procedures that can be used to secure a tender (Designing Building, 2021).

OPEN TENDER

In the engineering and construction industry, open tendering is the most prevalent tendering
technique utilised by both the government and the private sector. It will encourage anyone to enter a
tender to supply the needed goods or services, and it will allow every organisation an equal chance to
submit a tender by employing open tender (Opus Kinetic, 2019). A pre-qualification procedure may be
used on larger projects to establish a short list of suitable competitors from those who expressed
interest in the contract. The short-listed candidates will then be requested to submit tenders.
Furthermore, this form of tendering procedure has been criticised as a time-consuming and costly
method that invites bids or expressions of interest from a large number of suppliers, some of which
may be utterly unfit for the contract, resulting in a waste of time, effort, and money. This process, on
the other hand, allows for the most competition and has the added benefit of allowing new or
developing suppliers to compete for jobs, allowing for more innovation. It can reduce the number of
firms tendering in the prequalification process, and it can reduce the amount of time spent by rejected
candidates if it uses a common prequalification questionnaire. Furthermore, this approach can be
performed in a single or two-stage tendering process. During the first stage, a limited appointment is
set up to allow the contractor to begin the job, and a fixed price for the contract is negotiated. It
permits a contractor to be chosen before all of the relevant information is gathered, and it allows them
to propose a set price for the two stages.

11

2.3 Tendering Procedure Cont'd

SELECTIVE TENDER

Selective tendering happens when tenderers are chosen from a list of contractors or consultants who
have been prequalified for the project and the contract value range, with prequalification based on a
track record of applicable satisfactory capabilities. Only where there is a continuous workload in a
certain category of work over a two-year period will the prequalified tender lists be established. On a
list of contractors or consultants that will be invited to tender, prior performance, tender possibilities,
project location, and other variables will be considered. Selective tendering may also be beneficial for
specialised or complex contracts, as well as contracts with only a few suitable firms. Selective tendering
is anticipated to be faster and less wasteful than open tendering because there is no prequalification
process as part of the tender procedure and only contractors who are known to be appropriate for the
proposed contract are asked to submit offers. It can also give the client more confidence that their
needs will be satisfied. As a result of this method, small contractors or those attempting to break into a
new market face a disadvantage in that they will have no touch or relationship with clients because
they are new to the business. Furthermore, this process appears to introduce bias into tendering by
rejecting people for no apparent reason other than their personal preference. It may also lead to
potential contractors contacting clients and consultants on a frequent basis to confirm that they are on
the right lists. This will cause the clients' and consultant's work to be disrupted.




NEGOTIATED TENDER

A negotiated tender is essentially a one-stage tender in which only one contractor and the client are
involved. As a result, the customer receives negotiated tenders and selects one contractor to submit a
tender response for the project (Futurelearn, 2021). From the tendering process to dispute settlement,
this approach has always been used in the construction and engineering business. Negotiating with a
single contractor is ideal for highly specialised contracts or extending the scope of an existing contract
in this manner. It can ensure that the client is dealing with a reputable contractor, reduce the length
and expense of tendering, and allow for early supplier involvement. Unfortunately, unless the
negotiating framework is clearly defined, an aggressive environment may develop even before the
contract is awarded. Negotiating in the absence of competition to reach an agreement that is
satisfactory to both sides can be difficult and time-consuming. Furthermore, unless there are
exceptional circumstances, many public institutions and government agencies will not allow negotiated
tenders, as proving value for money in the current market is challenging. It will also not allow due to a
lack of responsibility. A negotiated tender, on the other hand, has a fair chance of being approved as
satisfactory by the customer because selection is based on previous successful working relationships
between the client and the selected contractor (Futurelearn, 2021).

12

2.3 Tendering Procedure Cont'd

SERIAL TENDER

A serial tender differs from a continuity tender in that the successful firm is informed at the tender
stage that it will be called upon to fulfil a number of individual contracts in the future, each of which will
be extremely identical. The prices mentioned in the bills of quantities will be used to value similar work
on future projects if they are not identical to the original being valued. When a large project needs to
be finished in stages, serial tendering is utilised in conjunction with selective tendering and nomination.
Furthermore, serial tendering can be used when a client has a continuous schedule of work that they
want to be completed by a single contractor. Typically, the works are simple, repetitive tasks such as
dwelling construction or upkeep. Even if some of the design work on some of the proposed works is
still ongoing, the broad scope of the sequence of planned works will be known at the initial tender
stage. Serial tendering is simply a standing offer to complete a series of projects using the initial
project's priced bills of quantities as the master priced document. Furthermore, the appointment is
based on a pricing schedule that has been agreed upon for the types of services that will be included in
the plan. Future contracts are based on the original pricing document, which can be updated
appropriately in accordance with the price adjustment process provided in the initial tender
agreement. As a result, the customer believes that negotiating with a single contractor over a long
period of time is less expensive than tendering for different projects with multiple contractors.

13

2.4 CONTRACT USE

A contract is an agreement formed In the construction sector, the
by two or more people with standard form of contract is one of
particular terms and guarantees to the most important means of
perform something in exchange for improving a potentially fractious
benefits, which good is known as a relationship in order to accomplish a
consideration. The contract is the common goal. It evidences the legal
legislation that only has legal effects relationship between the parties in
and has the qualities of a contract. A the contract and provides the
Contract is a legally binding administrative procedures necessary
arrangement. A contract negotiated for realization of the legal
expressly for the construction of an relationship.
asset or a group of assets that are

closely connected or interdependent A. Public Work Department (PWD
in terms of design, technology and 203A) Form
function. In other words, a

construction contract offers a legally The Public Works Department of
Malaysia (PWD) is a government body
enforceable commitment for both in charge of contract forms
PWD203A. These are the traditional
the owner and the builder that the contract types based on bills of
quantities (203A) created for usage in
completed project will get the public sector or government projects
in both construction and civil
specified amount of pay or that the engineering contracts. PWD Contract
forms are home-based forms in which
compensation would be allocated in risks are known to the local industry,
whereas a lump sum contract is
a given manner. In Malaysia, there combined with either bills of
quantities or a schedule of rates.
are several standard contract forms, There is a separation of construction
and design in this sort of contract,
including Pertubuhan Akitek where the customer hires a design
team to deliver a comprehensive
Malaysia (PAM), Public Works design to the contractor.

Department (PWD) and International

Federation of Consulting Engineers

(FIDIC). The usage of each however is

dependent on the type of project, the

nature of the project and the finance

involved. Wilkinson and Scofield

(2010), for eample highlight the

procurement system as having a

substantial influence on the

attainment of project time, cost and

quality objectives. 14

2.4 CONTRACT USE
(CON'T)

Furthermore, under numerous oany payments due to the contractor,
from the performance bond as a debt
clauses of Condition of Contract PWD owed to the contractor. This adds to
the appeal of PWD203A purchases
Form203A, the Superintendent among Malaysians.

Officers (S.O.'s) were in charge of B. Pertubuhan Arkitek Malaysia
(PAM) Form
general supervision and direction of
The Pertubuhan Arkitek Malaysia
the works. Insignificant decisions on (PAM) standard form of contract has
been widely used by the Malaysia
damages for non-completion are Building Industry over the last 40
years. This type of contract is often
included in clause 40, delay and utilised and used in private-sector
construction projects (Zakaria, et al.
extension of time is included in 2013). Since its first introduced in
1969, PAM contracts have had four
clause 43, events and consequences versions of the standard form. PAM
Contract 2018, which is new in the
of contractor default are included in industry is the most recent form of
the PAM contract. As the previous
clause 51, effect of force majeure is version PAM Contract 2006, PAM
Contract 2018 also comes into two
included in clause 57, termination on version which is with quantities and
without quantities (Edgeprop, 2018).
corruption is included in clause 53
According to Edgeprop (2018), the
and arbitration is included in clause most recent edition of the contract
comprises the rights and obligations
65 where applicable. of employers and contracts as well as
items that have a significant impact
This phrase is exclusively reserved for on the regular progress of works,
the Appendix which is mentioned in certificate of extension of time, and
the clauses 3.0, 4.0, and 5.0. (Zakaria, retention term. The current version of
et al. 2013). Next, according to
Fahime et, al (2011) as cited in
Zakaria, et al.(2013), the project
manager controls and monitors the
work throughout construction using
bills of quantities, which is a
significant aspect of PWD 203A. As a
result, the contractor is accountable
for performing the job in accordance
with the required quantities
specified in the contract terms.
Furthermore, under PWD 203A, the
government has the authority to
deduct such expenditures, expenses
and on-cost charges or any portion of

15

2.4 CONTRACT USE
(CON'T)

the PAM contract is being updated to FIDIC contracts are agreements in the
ensure that the forms remain
relevant and effective in today's construction and installation
economic environment, taking into
account commercial, professional, industries that serve as global
and political considerations. As a
result, the most recent PAM 2018 standards. These contracts were
contract incorporates new rules and
regulations, as well as comments developed by the International
from the industry and practitioner
experiences. It also contains a new Federation of Consulting Engineers,
mechanism for settling disputes
through 'Expert Determination'. Net, which was founded by three
according to Zakaria, et al. (2013)
estimate that 90% of private-sector European countries which are France,
construction contracts are based on
the PAM form. Because the risks are Belgium and Switzerland. This sort of
recognised to local industry, the PAM
form is a home base form that is contract was first used in 1915. In
supposed to be used as a
construction contractor rather than a terms of construction agreements,
civil engineering contract.
FIDIC's primary purpose was to create

standard contracts that could be

utilised for a wide range of

construction and installation

projects, Any project created

wherever in the world is constructed

on the same core principles. These

standard agreements are the result of

decades of building and installation

project experience and they are

documents that balance the interests

of both parties involved (Moreanu, D.

C. Internal Federation of Consulting 2015).
Engineers (FIDIC) Form

FIDIC stands for International The contractor typically constructs
the works in line with the design
Federation of Consulting Engineers supplied by the employer under the
standard conditions for this sort of
which its headquarters located in contract. However, some aspects of
Contractor which are designed, civil,
Geneva, Switzerland. FIDIC mechanical and electrical, and
construction works may be included
documents are recommended for in the works.

building or engineering works

designed by the employer or by his

representative, the engineer.

16

2.5 CONTRACT PRICE STRATEGY

The pricing strategy refers to the client's method of receiving a price for construction
work and paying the contractor once the work is finished. There are several price
methods from which to pick. In the majority of situations, the client or his professional
team determines which pricing plan to use for a particular project. In the procurement
documents, the price strategy will be outlined. Both the client and the contractor are
exposed to risks under the contract. The contractor will price all of his risks, and he will
be reimbursed for any expenses made as a consequence of occurrences that are the
employer's responsibility, CIDB (2021).

According to HMS News (2021), construction contracts can be structured in one of two
ways which are fixed price or cost reimbursable. Both pricing methods include
advantages and disadvantages for the client and general contractor, as well as subtypes
and variations that assist balance and avoid risks. A customer may choose a fixed price
contract because it guarantees project cost certainty. A contractor, on the other hand,
may prefer cost reimbursable contract pricing to reduce the risk of smaller profit margins
or projects that become completely unprofitable.




17

2.5 CONTRACT PRICE STRATEGY CONT'D

I. FIXED PRICE

Fixed-price contracts are agreements to pay Furthermore, even if a Contractor effectively
a pre-determined price before starting work. lowers the risk of cost overruns or other
A fixed price contract might use a lump sum unexpected costs, the fixed pricing
or a unit price. A lump sum contract is one in agreement comes with its own set of risks.
which the parties agree to pay a specified The client's unexpected circumstances
sum before the contract is awarded. A might sometimes complicate the situation.
contractor can get at a suitable price by When the client is forced to borrow extra
estimating units of necessary labour and funds to cover the adjustments, a large
materials, adding profit and overhead, and number of change orders might slow
calculating the total, including a buffer operations and possibly require bank
amount to allow for expected fluctuations. approval. As a result of the time spent
The contract may use the unit pricing collecting additional money, the contractor
system, with loaded rates included in each may lose time, making it difficult for the
line item, HMS News (2021). contractor to finish the project on schedule.
When a client interrupts with a project in this
Furthermore, if the contractor's estimates way, it's vital to have crucial contract terms in
are incorrect or unforeseen charges result in place that allow the Contractor to recover
expenditures exceeding the budget, the expenses associated with such damages,
contractor will reimburse the additional stated HMS News (2021).
costs. Because of the risk of an incorrect
offer, this pricing technique requires the
Contractor's extreme caution and attention
while bidding for a contract. On the other
hand, if the contractor completes the task for
much less than the contract price, the
contractor benefits from the financial
savings, HMS News (2021).




18

2.5 CONTRACT PRICE STRATEGY CONT'D

II. COST REIMBURSEMENT

A cost reimbursable contract is one in which the contractor is paid an extra
charge in addition to being repaid for the actual expenses spent while
executing the operation. A cost reimbursable contract is used when the nature
or scope of the work to be done cannot be clearly defined at the beginning,
and the risks involved with the operation are significant, Designing building
(2020). According to HMS News (2021), a cost reimbursable contract requires
substantially less accuracy during the bidding process since any unforeseen
expenditures are passed on to the client instead of the Contractor.

Furthermore, there are four different methods to organize these contracts in
order to make a profit which are Cost Plus Fixed Fee (CPFF), Cost Plus
Incentive (CPI), Cost Plus Award, and Cost-Plus Percentage of Cost (CPPC). A
contract in which the contractor is paid a portion of the materials cost plus a
fixed fee. This can be a completion contract, in which the contractor must finish
the project and provide a cost report before the fee is paid, or a term contract,
in which the contractor must spend a certain amount of time to the project
before the fee is paid. Next, if the contractor keeps costs low or completes the
work on schedule, a cost-plus incentive contract pays a higher fee. This type of
contract, which is used to promote positive project performance, includes a
goal cost and charge, a minimum and maximum fee, and a mechanism for
increasing the fee. A cost-plus award contract provides a higher fee if certain
project requirements are met, and it's generally based on the buyer's
subjective opinion. This type of contract is commonly used when objective
measures aren't suited for a given deal. The price for the final cost plus, which
is a cost-plus percentage, rises with the project's expenditures. Because the
contractor has no financial incentive to keep expenditures under control, this is
rarely used. In reality, federal agencies are not allowed to apply this
contracting method, Upcounsel (2020).

In a nutshell, this is a high-risk method of contracting for the client because
the final cost is unknown when the contract is signed. The contract must
explain exactly what expenses the contractor is allowed to claim for. This is a
difficult strategy that must be carefully studied since, while some direct costs
are straightforward to calculate, some shared costs are not, Designingbuilding
(2020).

19

Chapter 3 :

RESEARCH
METHODOLOGY

20

3.0 RESEARCH
METHODOLOGY

In this study, we decided to use a qualitative method for several compelling
reasons. In general, qualitative research methods are especially helpful in
determining the importance of people to their living experience. This study
aims to clarify how people in construction industry interpret the current
practice collection, analysis, and use of practice data procurement systems
in the Malaysian construction industry during a pandemic. We investigated
the experience of individuals with specific questions about the practice of
public procurement systems.

In addition, qualitative research can investigate phenomena such as
emotions and thinking processes that are difficult to separate and
understand with conventional research methods. In addition, qualitative
research methods are ideal for investigating phenomena in natural habitats
and capturing social processes in context. Specifically, we analyzed the data
using a constant comparative approach to clarify the strengths and
weaknesses of the procurement system.Specifically, we analyzed the data
according to a certain comparative approach to clarify the strengths and
weaknesses of the procurement system.

DATA COLLECTION METHOD

Case studies require data source convergence, also known as triangulation,
to produce comprehensive findings that accurately reflect the participants'
knowledge. In general, to ensure the case study's credibility, interviews should
be done carefully. As a result, you should focus on targeted sampling, which
includes people from construction industry, sample sizes, and interview
participant that are acceptable. Researchers must identify who the
gatekeeper of knowledge is early on in order to gain access to the greatest
sources and obtain the most comprehensive data sets. So, these are all the
methods that we use to do data collection:

21

i) Interview

Through interviews with Miss Hidayah, we were able to identify and gain
experience with those who are called key sources of information. Key
informants are familiar with the research environment and speak
eloquently about their knowledge, and their understanding can help
observers understand both what happened and what caused it. This is
the details of the person that we interviewed:

Name:
Miss Nur Hidayah Binti Ishak

Age: 34

Company’s Name:
Penang Development Corporation (PDC)

Department:
Bahagian Pengurusan Bangunan

Position: Quantity Surveyor

Phone’s Number: 017-5537757

The participant in this study were interviewed face to face by our
representative of our group member, Nur Syaza Nadia. We also
interviewed her via online platforms such as WhatsApp, and phone
conversations. Open-ended questions were used during the interview
to encourage participants to answer the questions freely and openly.
Investigations or clarification questions were used to obtain additional
information or clarification from participants, where necessary.

21

ii) Document Review

Data was mainly collected through interviews, but documents were also
collected and evaluated. Document review was used to clarify or support the
participant's statements and provide detailed analysis of the case.
Documents such as journal articles, reports, and other sources available on
the Internet.

iii) Case Study

Research using this research method usually collects data from one or more
sites over a period of time. Data is usually obtained from “multiple sources of
evidence”, including interviews and documents. (Gounder, 2012). In addition,
this method provided us with many benefits. As researchers, we were
interested in the overall outcome of the study. As students, it was interesting
to receive information and experiences from project participants. We realized
that the latter advantage showed that the results of this study could make a
significant contribution to demonstrating changes in procurement during a
pandemic. The research was focus on project titled

"CADANGAN MEMBINA DAN MENYIAPKAN UTC KOMTAR, DI SEBAHAGIAN
RUANG TINGKAT 2 DAN 3 KOMTAR, NAIKTARAF KAWASAN BERKAITAN DI
TINGKAT 1,2 & 3 SERTA KERJA-KERJA BERKAITAN DI BANGUNAN KOMTAR,

DAERAH TIMUR LAUT, PULAU PINANG".

22

Chapter 4 :

DATA
ANALYSIS

23

4.1 BACKGROUND OF CASE STUDY

The title of the project is “Cadangan Membina Dan
Menyiapkan UTC Komtar Di Sebahagian Ruang Tingkat
2 & 3 Komtar, Naiktaraf Kawasan Berkaitan Di Tingkat
1, 2 & 3 Serta Kerja-Kerja Berkaitan Di Bangunan
Komtar, Daerah Timur Laut, Pulau Pinang“. The tender
is only open for Bumiputera’s that has Grade 7 license
which has been registered with Lembaga
Pembangunan Industri Pembinaan (CIDB) and E-
Perolehan of Penang State Government.




The project used PWD 203 (REV.1/2010) as a form of
tender. The type of procurement method is
traditional method. Besides that, this project used an
open tender as their type of tender method.

The tender date open on the 31 July 2019 as stated in
tender advertisement. They can get the document
tender at Bangunan Pengurusan Bangunan which is
located at Level 1, Bangunan Tun Dr. Lim Chong Eu,
No.1, Persiaran Mahsuri, Bandar Bayan Baru, 11909
Pulau Pinang . The tenderer are required to submit
their price tender at Tender box at Pengurus Besar,
Perbadanan Pembangunan Pulau Pinang, Bahagian
Khidmat Pengurusan, Level 3, Bangunan Tun Dr. Lim
Chong Eu, No.1, Persiaran Mahsuri, Bandar Bayan Baru,
11909 Pulau Pinang before 27 August 2019 at 12.00
noon. The contractor are selected by the client based
on the tender report that are prepared by the Quantity
Surveyor.

A total of sixteen (16) tenderers has been entering
the tender and all of them was successfully managed
to submit their bids before the closing date. Out of
the sixteen (16) tenderer, only eight (8) were
approved for consideration. After all of the
comparisons have been made, only one (1) has
awarded which is Pembinaan YSBT (M) Sdn. Bhd.




24

BRIEF OG PROJECT BACKGROUND

PROJECT TITLE

Cadangan Membina Dan Menyiapkan UTC Komtar Di Sebahagian Ruang Tingkat 2 & 3 Komtar, Naiktaraf
Kawasan Berkaitan Di Tingkat 1, 2 & 3 Serta Kerja-Kerja Berkaitan Di Bangunan Komtar, Daerah Timur
Laut, Pulau Pinang



NO OF CONTRACT

PPPP/B/T6/2019

NAME AND ADRESS OF MAIN CONTRACTOR

Pembinaan YSBT (M) Sdn. Bhd.
86-1-3, 86 Avenue Residences, Lengkok Perak, 10150 Pulau Pinang

REGISTERED CLASS

G7

CONTRACT SUM

RM10,381,800.00

CONTRACT PERIOD

20 WEEKS

DATE OF COMMENCE

15 OCTOBER 2019

DATE OF COMPLETION

2 MARCH 2020

DEFECT LIABILITY PERIOD

36 MONTHS

25

LIST OF DESIGN TEAM AND
CONTRACTOR

CLIENT Penang Development Corporation
No. 1 Persiaran Mahsuri, Bandar
Bayan Baru, 11909 Bayan Lepas,

Pulau Pinang.




ARCHITECT AND Penang Development Corporation
QUANTITY SURVEYOR No. 1 Persiaran Mahsuri, Bandar
Bayan Baru, 11909 Bayan Lepas,

Pulau Pinang.




MECHANICAL AND M.E.I Consultant Sdn. Bhd.
ELECTRICAL ENGINEER Level 20, BHL Tower, 51, Jalan
Sultan Ahmad Shah, 10050 Pulau

Pinang.






CONTRACTOR Pembinaan YSBT (M) Sdn. Bhd.
86-1-3, 86 Avenue Residences,
Lengkok Perak, 10150 Pulau

Pinang.

26

4.2 TYPE OF For this case study the type of
PROCUREMENT procurement that had been chosen
as the procurement are
All of the method that have been mention tradisional contracting. Penang
before are widely use. Especially for the Development Corporation usually
traditional contracting are the most use this type of procurement in
widely use and well known in the there project.
construction industry as they usually had .

been the main form of contract

procurement. All of the type of

procurement there have their own

advantage and disadvantage. Traditonal EMPLOYER /CLIENT
contracting method means that the

construction contract will be signed by

the client and the contractor. The client PROFESSIONAL

task which will be through out by the TEAM MAIN
CONTRACTOR
architect to provide drawings and

complete with all off the specification and

make a payment. The contractor

responsibility are only for the DOMESTIC SUB NOMINATE SUB
construction aspect in term of quality of CONTRACTOR CONTRACTOR
material and workmanship. The design
and build method the client wil brief, the


contractor will hire an architect and

engineer firm to design the project.

Design and build are normally on

lumpsum fixed prices basis. The For the pandemic situation, there do

management contract , the contractor is not have any different on the uses of
the types of procurement in the
paid to a fee to manage the building of project. Maybe it may have change
for the procurement in term of the
the project on behalf of the client . The clauses as mention by Miss Hidayah
ishak
management contractor's also

participant extend from the precontract

to the end of post contract.

27

4.3 SELECTION For this case study, method of open
OF CONTRACTOR tendering was chosen for calling
tenders. Tender advertisement is
A client requests the preparation of a tender show on the newspaper which
document to finish a certain project as part of include tittle of the project,
the contractor selection process. A submission condition of tenderer, location and
in response to a call for bids can lead to the date of tender sold, tender document
establishment of a contract when the parties cost, location and date of site visit,
want to begin contractual relations. The location and tendering date closed.
owner's offer to review the bids received and
engage into a contract to execute the project if The tender is only open to
the bid is approved is known as a call for
tender. Tenderers accept that offer by making a Bumiputera's that has a Grade 7
bid that meets the tender specifications'
requirements. The written or implied terms of license which has been registered
the tender document regulate the contractual
rights and responsibilities of the parties to with Lembaga Pembangunan
contracts. A bid also serves as an invitation to
enter into a contract. This is the contract that Industri Pembinaan (CIDB).
will be used to finish the project for which bids
were invited. When a bid is accepted, the Advertisement is show on the
contract terms and bid papers become the
contract terms and conditions. Open tendering, newspaper which include tittle of the
selective tendering, and negotiate tendering are
the three methods of calling a tender. project, condition of tenderer,

All of these methods have benefits and location and date of tender sold,
drawbacks. As a result, it must be examined
before deciding on a method to utilise. There tender document cost, location and
are a few elements that are commonly utilised
to determine the best tendering process. Before date of site visit, location and
deciding on a method for calling tenders,
numerous considerations must be examined. tendering date closed.
The size, shape, and kind of the structure must
all be considered first. The project's nature and PEMBINAAN YSBT (M) SDN. BHD
complexity must also be examined. Following has been selected as the contractor
that, the contractor's expected early for this project.
involvement in the design process and the
approach will be determined based on the For the pandemic situation, the process
client's financial resources. for selecting the contractor is
maintained. But selective tendering
method may be the best to select the
contractor. The qualified contractor will
be call through Google Meet and choose
the best contractor that have the best
experience to do the project.

28

4.4 TENDERING PROCEDURE

For this case study, the tender method used is Open Tender

1.PREPARATION
2. APPROVAL OF TENDER

At the first stage of tendering process is preparation. Client will To find the main contractor for the planned project, the client
appoint architecture and other design team to proposed must choose one method of tender selection. The contractor
project. For my case study project, PENANG DEVELOPMENT must advise and assist the client in making the best selection
CORPORATION prepared the final completion of drawings and possible for the planned project. The client has chosen open
submit to the PENANG DEVELOPMENT CORPORATION. The tendering as the method of selection for this project. The
consultant received the drawing and take off all element based consultant is responsible for preparing all documents
on the drawing and specification. In this stage, the client needs pertaining to the open tendering technique. The procedure
to determine the type of condition of contract that need to be of tender selection is critical for the client to make an
used for the proposed project, the condition of contract has educated judgement when selecting a responsible contractor
been used was the PWD 203 (REV 1/2010). to complete the project.

3. DOCUMENTATION

The QS are responsible to prepare the Bill of Quantities and 4. INVITATION
complete the taking off. The works are discussed and laid
out in detail in the BQ and drawings. The tender document is Invite the contractor to submit a bid for the planned project. The
prepared by PENANG DEVELOPMENT CORPORATION for the client can market the proposed project through tender
client to refer and the contractor to buy the document. advertisement because this is an open tendering process. To
Letters of invitation to tenderers, letters of acceptance, engage in tendering, the clients must describe the requirement
schedules of rates, and other documents must be included and terms of the contract in this tender announcement. Our
in the tender document project marketed itself in the newspaper for this project. The
tenderer has the option of attending the project's site visit. The
5. PROCESSING contractor is permitted to purchase the tender document from
our firm in order to fill out the pricing for bidding on the project.
There will be no tender document submissions after the Before the closing date, all contractors will be given opportunity
closing date. The tender validity period began at that point. to price the BQ and submit the tender document.
The contractor offer will be in charge of keeping the tender
secure. The tender committee is in charge of opening the 6. CONTRACT AWARD
tender and stamping the contract. After that, only the
contractor who submits and prices the tender receives an Both successful and unsuccessful tenderers will be notified after
evaluation. The tender evaluation will be completed as the contract has been awarded. The tender administrator
soon as practicable. For this, project PENANG generates the tender decision notification, which is a letter of
DEVELOPMENT CORPORATION prepared the tender report acceptance that is exclusively sent to the successful tenderer. The
and do the tender evaluation to all tender received. The tender document will be signed by the contractor. The letter of
arithmetical check, completion of document, reasonable acceptance is a legally binding document that is attached to the
completion time, and capabilities of tenderers are under contract. Following receipt of the successful contractor's letter of
consideration. Then, the quantity surveyor will recommend acceptance, a formal contract is drawn up. The contractor must
which contractor is the most suitable to undertake the get a performance bond from a locally incorporated bank,
project. insurance company, or financial institution that is licenced to
conduct business in Malaysia. The approach is the same in a
pandemic situation because most projects were tendered before
the pandemic and are still being delayed due to the pandemic
condition. However, the PENANG DEVELOPMENT CORPORATION
started to imply more direct negotiation in awarding the contract.
They also started to increase the number of tender invitation
after the pandemic.

29

4.5 TYPE OF CONTRACT USE

A contract is a legally binding agreement between the parties named in the
agreement to carry out all of the terms and conditions mentioned in the
agreement. The condition that all parties to the contract agree the conditions of
the claimed contract is a precondition requirement for the execution of a contract,
among other things. Construction contracts are fundamentally distinct from large
service contracts. Construction contracts come in a variety of forms. The contract
is chosen based on the pricing foundation and the contract strategy that best
satisfies the project goals.

The various categories provide diverse approaches to pricing, risk transfer,
performance accountability, cost certainty and complexity. On behalf of the
contractor, it is necessary to complete and reach a minimum level of quality of
work required, while the client is responsible for payment to the contractor doing
the job instructed to be correctly completed. It further emphasised that the parties
to the contract must intend for their agreement to be recognised and enforced by
law, and that the law will recognise and enforce the contract. There are several
sorts of contract use in every project. The forms of contracts that are often utilised
for the proposed project are shown below.

For this case study, the type of contract use is PWD 203 (Rev.
1/2010). This standard form of contract to be used where
drawings and Specifications form part of the contract.

The contractor which is PEMBINAAN YSBT (M) SDN. BHD. need to construct, complete,
test and commission the Works in accordance with the Specifications, Contract
Drawings and any other document specified in the Contract Documents. For design,
the contractor shall submit to the S.O all the drawings, specifications, calculations and
any other relevant information.

After the process of preparing the bills of quantities, the tender will be issued to the

tenderer for pricing. For instance, the employer appoints Penang Development

Corporation Bahagian Pengurusan Bangunan as the architect to prepare a design for

the project. Next, QS in Penang Development Corporation will appoints as the quantity

surveyor of this project to prepare the cost estimate and Bill of Quantities according to

the architect drawings. After the preparation is done, it will issue to the contractor for

so that they can price the bill and submit the tender. The tenderer awarded is the

Pembinaan YSBT (M) Sdn. Bhd. 30

4.6 CONTRACT For this case study, the project uses fixed price
PRICE STRATEGY contract based on bill of quantities (BQ). PEMBINAAN
YSBT (M) SDN. BHD. will prepare the BQ which have
ADOPTED been measured based on the drawings and
specifications. A BQ was issued to the contractor for
For this case study, this project used lump sum or them to prepare the price for carrying out the works.
fixed price contract price strategy. This is the most The benefits will be that the cost will be more
typical type of construction contract. The contract precise, and the contractor will be able to manage
sum in a lump sum contract is the amount that the the expenses since there will be less variations. After
client agrees to pay the contractor for completing the pandemic, the contract price strategy will be
task, which is predetermined and stated in the maintained by the client.
contract. PAM, PWD, CIDB, and FIDIC are lump sum
contracts with interim payment provisions that require In the case of a pandemic, an extension of time
the employer to pay the contractor on a regular basis clause can usually be claimed for natural disasters.
as the work progresses on site. The contractor usually However, it is dependent on the type of contract used
receives interim payments for work completed by the project. Some contract forms provide that the
according to monthly valuations. As a result, movement control order is under force majeure
payments are required at various points during the clauses, such as natural disasters. As a result, the
job, rather than at the end of the contract. contractor can request the extension of time but must
first obtain approval from the S.O. or Architect.
Contracts with bills of quantities (BQ) and those Because fixed price contracts can be changed under
without BQ are two types of lump sum contracts. specific conditions, such as natural disasters. In this
These sum and figures quantities are obtained from case study, the contractor can claim an extension of
drawings and specifications, as well as any other time because of the natural disaster. The chances of
information about the proposed works' design. The obtaining the claim are strong because the
client's agent, who is QS, will prepare the BQ in government ordered the project to be extended due
contracts with BQ. It is the form of a schedule with the to a natural disaster because of COVID-19.
description and quantities of the components of the
works. In the BQ, the contractor sets a price to each
item of work. The sum of the prices inserted against
each item in the BQ collectively makes up the total
tender prices. The BQ priced by the contractor forms
part of the contract.

31

Chapter 5 :

CONCLUSION &
RECOMMENDATION

32

5.1 CONCLUSION

Many parties are involved in the project, either before or after the
contract is signed. As a result, they should always communicate
with one another in order to generate high-quality work. The
project owned by the public sector is more likely to use the same
procurement method that they utilised for their own QS.
Nonetheless, they may hire another QS Consultant Company to
assist with the project by delivering the greatest services. The
government sector also like to refer to prior projects that are the
same or comparable to their planned project in order to begin it as
soon as feasible. Failure to finish a project on time, within budget,
and with high quality will be compounded if it is conducted via an
ineffective procurement technique.

The traditional procurement is used in our case study. Traditional
contracts are the most well-known forms of contracts in the
engineering and construction industries since they have been the
main method of contract procurement for many years and are still
widely utilised today. The client and the contractor sign the
construction contract in this method. The client's responsibility as
represented by the architect is to supply drawings and
specifications as well as make payment. As a result, one of the
advantages of using this method during the pandemic covid-19 is
that it is simpler to apply than other procurement methods.

Lastly, the contract used for this project is PWD 203 (Rev. 1/2010)
and the project uses fixed price contract based on bill of quantities
(BQ). The contractor which is PEMBINAAN YSBT (M) SDN. BHD. will
prepare the BQ which have been measured based on the drawings
and specifications. This project used an Open Tendering procedure.
The consultant are responsible in preparing the tender evaluation
in order to select the most suitable contractor for the project

34

5.2 RECOMMENDATION

This day construction industry sector has become wide and it also
will increase more possibility problems. This is a few
recommendation that can improve and boost the efficiency which is
e-tendering. Since nowadays we are in the pandemic of Covid 19
this tendering are the best solution and recommendations. E-
tendering is a part of the process of conducting procurement
online, particularly to make sourcing suppliers more efficient. From
the time the requirement is advertised to the time the contract is
placed, none of the software used in the process is installed on the
computers of either the procurer or the supplier, and all paperwork
exchanges are done via the internet. It automates the process of
managing tenders through this totally digital framework, enabling
for smoother, more regulated procurement that allows the procurer
to monitor and assess bids with simplicity. Improved cost
reductions with less process time, manual overhead from
discussions, and paper involvement, compared to the manual
process, can provide significant savings. All tendering data can be
accessed through a single portal. As a result, rather than needing
email and individual document printouts to analyse responses,
providers may be compared and rated here. Suppliers can also be
alerted of modifications or updates to the process through an e-
Tender system in a consistent and collective manner, ensuring that
there is minimum prejudice.

35

Chapter 6 :

REFERENCES

36

6.0 REFERENCES

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37

APPENDICES

39

40

41

42