PROCUREMENT SYSTEM PRACTICE IN CONSTRUCTION INDUSTRY DURING PANDEMIC COVID-19

BQS559

PROFESSIONAL PRACTICE I

CENTRE OF STUDIES FOR QUANTITY SURVEYING
FACULTY OF ARCHITECTURE, PLANNING, AND SURVEYING

UNIVERSITI TEKNOLOGI MARA (UiTM) SHAH ALAM

PROCUREMENT
SYSTEM PRACTICE IN
MALAYSIAN
CONSTRUCTION
INDURSTRY DURING
THE PANDEMIC

CASE STUDY 1

ENGINEERING, PROCUREMENT, CONSTRUCTION, AND
COMMISSIONING (EPCC) OF PGU-I GAS PIPEL INE REPLACEMENT
PROJECT (GRAPHITE)

CASE STUDY 2

CADANGAN MEMBINA DAN MENYIAPKAN SEBUAH KOMPLEKS

PEMBANGUNAN INSAN 2 TINGKAT DI SUNGAI BULOH, DAERAH

PETALING, SELANGOR DARUL EHSAN.
PREPARED FOR :
MADAM NAQIYATUL AMIRAH BINTI MOHD SAID

BQS559 AP2244I
PROFESSIONAL PRACTICE I
GROUP 4
PREPARED BY:

NURHALIZA BINTI BAHAROM NAWAR ATHIRAH NAFIS BINTI HAMDAN
(2021483376) (2021832668)

NUR HADFINA BINTI HASSAN SA'IDATUL SALAMAH BINTI MOHD HASHIM
(2021483282) (2021832648)

MUHAMMAD FARIS IRFAN BIN MUHAMAD FADZLI
(2021855598)

TABLE OF CONTENT

CHAPTER 1 - INTRODUCTION

CHAPTER 2 - LITERATURE REVIEW

TYPES OF PROCUREMENT
SELECTION OF CONTRACTOR
TENDERING PROCEDURE
CONTRACT USE PAM/PWD
CONTRACT PRICE STRATEGY

CHAPTER 3- RESEARCH METHODOLOGY

CHAPTER 4- DATA ANALYSIS

TYPES OF PROCUREMENT
SELECTION OF CONTRACTOR
TENDERING PROCEDURE
CONTRACT USE PAM/PWD
CONTRACT PRICE STRATEGY

CHAPTER 5 - CONCLUSION AND RECOMMENDATION

CHAPTER 1

INTRODUCTION

INTRODUCTION

Procurement in construction refers to the services and goods required
to successfully complete a build from start to finish. For such a
corporation to maximise its efficiency on each project, it must be
tackled strategically. Procurement is a method for satisfying a client's
development and operating needs in terms of the provision of
developed facilities over a certain life cycle. Making the contract,
selecting the contractor, determining the contract pricing, and
economic concerns such as labour, materials, plants, and capital are all
part of this method. With the development of the coronavirus and the
creation of actions by governments and commercial sectors, it has
become clear that the consequences would be serious, and that the
pandemic will touch many sectors of the economy, including
construction (R. Assaad, 2021). This condition, on the other side, has an
impact on project procurement during the Covid-19 pandemic.

In particular, three different types of procurement systems are
used in the Malaysian construction industry which are
traditional/conventional, design and build, and management systems
(Hasyim et al., 2006; The CIOB report, 2010), but a fourth, namely the
Relational (alternatively called 'Modern') system, covering
contemporary methods such as Alliancing and Private Finance
Initiative (Love et al., 1998), appears to be the 'current flavour'
especially for (M. Jaafar and N. Nuruddin, 2012). The coordinated
methods , processes and procedures for getting a construction product
are referred to as project procurement.

This report will make appropriate comparison of two case studies
with the current procurement trend and the procedures with previous
situation before pandemic. The case study "Cadangan Membina dan
Menyiapkan Sebuah Kompleks Pembangunan Insan 2 Tingkat di atas Lot
P.T 51044, Mukim Pekan Baru Sungai Buloh, Daerah Petaling, Selangor"
has been chosen for this assignment. Tetuan Yayasan Anak-anak Yatim
Wardatul Jannah, a private client, is behind this development. The
project involves the building and completion of a two-story human
development complex with basic facilities and accompanying external
works.

CHAPTER 2

LITERATURE REVIEW

TYPE OF PROCUREMENT

Procurement is a process in the construction industry in order
to complete the projects within the financial, time frame and
the quality based on the project framework, responsibilities,
and the authorities of the main parties involved (H. s. Jayasena
and N.S. Senevirathna, 2012 as cited in Syed Zuber S. Z., et. al.,
2019). In recent years, there have been a lot of improved
traditional processes as the conventional system had major
issues and flaws to adapt to new technology so it is depend on
the types of the project to be choose the perfect system that
can be used. The chosen system will have all parties aware of
their connection amonG them. Parties involved such as clients,
design consultants, contractors, suppliers and manufacturers
will be directly engaged with the procurement process. All
parties' involvement is different each stage in the construction
process (Tajul Ariffin H. L., et.
al., 2018).

When client wishes to choose any system he

wants, the major concern would be:

Cost of the project
Time taken to finish the project
Performance and the quality of the

building to be construct.

TYPES OF PROCUREMENT THAT WILL BE DISCUSSED IS INCLUDE:



TRADITIONAL PROCUREMENT DESIGN AND BUILD (D&B)

TYPE OF PROCUREMENT

TRADITIONAL PROCUREMENT DESIGN AND BUILD (D&B)

Traditional procurement is basic
In this form of procurement, the

procurement that had used for such a
contractor will be done the design

and build the project and all risk

long time and is still relevant to be
would be allocated to the contractor
used nowadays even though the

alone.
construction industry wants to drive to


IR4.0.
The features is:
The features is: Contractor will be appoint in two-

Contractor will be appointed during
stage tendering.
tendering and responsibilities is
Client only can change the design

limited to construct a building of the
before contractor been awarded.
project. Design and construction can be done

All consultant (architect, quantity
at the same time so it will reduce

surveyor) and designer is responsible
the time.
for all contract administration and
Valuation and payment are solely in

design works. the hands of contractor.
Main contractor will have contractual
The scope of the consultant is

arrangement and main contract with
confined to contract management.
the client. The client is in charge of finance

Design need to be prepared before
and operations.
tendering process to construction

begin and it really takes time. STRUCTURE OF THIS SYSTEM

STRUCTURE OF THIS SYSTEM

CLIENT CLIENT

CONSULTANT CLIENT'S
AGENT
CONTRACTOR
CONTRACTUAL
RELATIONSHIP DESIGN & BULID
CONTRACTOR

SUB-CON SUPPLIER DESIGNERS

FUNCTIONAL SUB-CON SUPPLIER
RELATIONSHIP

CLIENT WILL APPOINT PROFESSIONAL TEAM TO CLIENT HAVE SINGLE POINT OF CONTRACT
ASSIST THE PROJECT. NEXT, MAIN CONTRACTOR AND COMMIT WITH THE COST OF
WILL CONSTRUCT THE BUILDING BASED ON THE CONSTRUCTION. DESIGN AND BUILD
DRAWING BY ARCHITECT AND THEY WILL HAVE CONTRACTOR WILL HAVE THEIR OWN
RESPONSIBILITY TO ALL PROFESSIONAL TEAM. TEAM AND HAVE FULL LIABILITY IN THE
BESIDES, CONTRACTOR WILL APPOINT SUB- CONSTRUCTION. CHANGES IN THE DESIGN
CONTRACTOR TO CONSTRUCT ITEM THAT MAIN BY CLIENT CAN AFFECT THE CONTRACT
CONTRACTOR IS CAPABLE TO DO. LASTLY, SUB- AND IT WILL BE INCLUDE MORE COST.
CONTRACTOR WILL FIND THE SUPPLIER FOR
SUPPLY MATERIAL IN THE CONSTRUCTION.

SELECTION OF CONTRACTOR

TENDERING IS THE PROCESS OF MAKING AN OFFER, BID OR PROPOSAL,
OR EXPRESSING INTEREST IN RESPONSE TO A REQUEST FOR TENDER. A
TENDER IS A SUBMISSION THAT MADE BY A PROSPECTIVE SUPPLIER IN
RESPONSE TO AN INVITATION TO TENDER. AN EFFECTIVE BID
MANAGEMENT AND TENDER PROCESS PROVIDE A POSITIVE EVALUATION
APPROACH WHICH LEADS TO NOT ONLY THE APPOINTMENT OF
APPROPRIATE SUPPLIERS BUT TO ENSURE THAT THE ONGOING
RELATIONSHIP IS MUTUALLY BENEFICIAL. ACCORDING TO FONG, C. K.
(2006) DEFINE ‘TENDER’ TO MEAN ‘A FORMAL WRITTEN OFFER, USUALLY
MADE ON A PRESCRIBED FORM, BY ONE PARTY TO CARRY OUT WORKS AT
A PRESCRIBED PRICE OR TENDER SUM AND WHICH IS CAPABLE OF BEING
TURNED INTO A CONTRACT UPON THE ACCEPTANCE THEREOF BY THE
PARTY TO WHOM THE OFFER IS MADE (OFFEREE).

METHOD 1
OPEN TENDERING

THERE ARE THREE TENDERING METHODS FOR THE SELECTION OF
CONTRACTORS DURING TENDERING PROCESS WHICH ARE OPEN
TENDERING, SELECTIVE TENDERING AND NEGOTIATION. THE
ORGANIZATION REQUESTING THE TENDER WILL DECIDE THE TYPE OF
METHOD THAT WILL BE USE. THE FIRST METHOD WILL BE OPEN
TENDERING. THIS METHOD IS MOST COMMON AND THE MAIN TENDERING
PROCEDURES APPLIED BY BOTH THE GOVERNMENT AND PRIVATE
SECTOR. IT ALLOWS ANYONE TO SUBMIT A TENDER FOR SUPPLY GOODS
AND SERVICES REQUIRED AND OFFERS AN EQUAL OPPORTUNITY TO AN
ORGANIZATION TO SUBMIT A TENDER. HOWEVER, NOT ALL WHO BID
WILL BE SUITABLE FOR THE CONTRACT BECAUSE THEY REQUIRED TO
SUBMIT ALL INFORMATION REQUIRED AND IT WILL TAKE MORE TIME IN
ORDER TO EVALUATE THE TENDERS AGAINST THE STATED SELECTION
CRITERIA.

SELECTION OF CONTRACTOR

METHOD 2
SELECTIVE
TENDERING

THE NEXT METHOD IS SELECTIVE TENDERING WHICH A SELECT TENDER
IS ONLY OPEN TO A SELECT NUMBER OF CONTRACTORS. TENDERERS ARE
INVITED TO SUBMIT TENDER OFFERS BASED ON SEARCH CRITERIA AND
THEIR POSITION ON THE DATABASE (L. SAMUEL, 2017). THIS METHOD
WILL GIVES CLIENTS A BIGGER CONFIDENCE THAT THEIR REQUIREMENTS
WILL BE MET AND SATISFIED. A SELECTIVE NUMBER OF TENDERER CAN
BE FROM THE DATABASE OR BUSINESSES THAT THE CLIENT HAS
WORKED WITH PREVIOUSLY WHICH MEANS THAT THE TENDERER IS
FULLY TRUSTED BY THE CLIENT. SELECTION TENDER CAN BE FOUND IN
TWO WAYS WHICH ARE FROM AN ADVERTISEMENT AND THE SECOND
WAY IS THE SHORT-LISTED CONTRACTORS BY THE EMPLOYER AND
CONSULTANTS BASED ON THEIR EXPERIENCE.

METHOD 3
NEGOTIATION

THE THIRD METHOD IS NEGOTIATION TENDER WHERE A SINGLE
CONTRACTOR WILL BE APPOINTED TO TENDER FOR A PROJECT BY THE
EMPLOYER. NEGOTIATED CONTRACTS ARE LESS RISKY OF COST
OVERRUNS AND TIME DELAY (B. G. KANG ET. AL, 2018).
THEBCONTRACTOR WILL BE GIVEN MORE TIME TO STUDY THE PROJECT
AND SINCE THE CONTRACTOR IS PART OF THE PROJECT TEAM AT A
VERY STAGE OF THE PROJECT, THIS WILL RESULT IN BETTER
COMMUNICATION AND INFORMATION FLOW BETWEEN PARTIES.
NEGOTIATED TENDERING WITH A SINGLE CONTRACTOR IS USUALLY FOR
HIGHLY SPECIALIST CONTRACTS, OR FOR EXTENDING THE SCOPE OF AN
EXISTING CONTRACT. THIS METHOD CAN BE AVAILABLE FOR OPEN OR
SELECTIVE TENDERING IF A NEGOTIATED TENDER FAIL OR THE CHOSEN
CONTRACTOR IS UNABLE TO UNDERTAKE THE WORK.

TENDERING PROCEDURE

The process of requesting bids for significant projects is known as tendering, and it is
typically used by government organizations. Eliminating bias and corruption in the
awarding of contracts to construction businesses is the primary goal of the tendering
process in that industry. It is an offer to the contractor from the owner to complete some
job at a set cost and within a specified timeframe. The nature of the contract, the
complexity of the construction, the level of skill required, and other factors all have a role
in the type of construction tendering procedure the employer intends to use.

The tendering process that will be covered includes:
Open Tender
Selective Tender

The primary tendering method used in construction by both PRODUCE TENDER DOCUMENT
the public and private sectors is an open tender. In order to
attract interested contractors to submit a bid, the ADVERTISE THE PROJECT
government or client publishes a notice about the tender
offer in the local newspaper and media, providing specifics FORWARD DOCUMENTS TO
and important information about the planned work. PROSPECTIVE BIDDERS

ADVANTAGES DISADVANTAGES RECEIVE TENDERS AT DUE
TIME AND DATE
Any contractor that is interested Due to an excessive number of
may submit a bid. As a result, it contractors submitting bids, the EVALUATE THE TENDERS
permits an unidentified contractor
tender list may be lengthy. APPOINT CONTRACTOR AND
to bid on the job. SIGN CONTRACT AGGREEMENT

Enabling impartial selection of the Strict adherence and conformity
tender list. The best deal will be with the rules are necessary.
offered to the customer.

Offers the most value for the money It makes it more difficult to
possible. establish lasting relationships with

suppliers.

Assuring healthy competition It forbids the supplier from taking
without forcing anyone to accept part in formulating the technical

any offers. requirements.

TENDERING PROCEDURE

Selective tendering is one of the different kinds of tendering PRODUCE TENDER DOCUMENT
systems that only permits certain vendors to submit bids. In
other words, only vendors who have already been prequalified SELECT BIDDERS FROM A
can submit bids. According to the project's specifications, the SHORTLIST
vendor's capabilities, and previous results, prequalification
selection criteria may be established. The majority of the time, FORWARD DOCUMENTS TO
clients ask suppliers to submit prequalification paperwork SELECTED BIDDERS
prior bidding stage. A select group of qualified suppliers
(contractors) will be selected in accordance with the project's
criteria from the submitted papers. The bid documents for
these chosen suppliers (contractors) will be the only ones they
receive.

ADVANTAGES DISADVANTAGES

The tendering procedure Less competition.
requires little time.

Ability to choose a reputable, Prone to bias. RECEIVE TENDERS AT DUE
skilled contractor at a fair price. TIME AND DATE

Easy to evaluate. Can be dangerous (at the EVALUATE THE TENDERS
negotiation stage).

Short and simple tendering A barrier to new contracting APPOINT CONTRACTOR AND
process. businesses. SIGN CONTRACT AGGREEMENT

STANDARD FORM OF CONTARCT

According to Fong, C.K. (2006), a collection of terms and conditions
regulated by an organisation within the construction industry for broad
applicability and integrated as part of the provisions of a construction
contract are referred to as "standard forms of contract." A standard form is
a pre-printed contract with pre-determined contract terms that has been
expressly drafted by professional and government groups for use in
building projects. A standard form of contract is a standardised agreement
that establishes a framework for contracting parties' rights, obligations, and
responsibilities in regards to construction work to be completed.
Authorities, bodies, or alliances composed of professionals, client
representatives, advisory councils, government representatives, and others
predetermine it.

TYPE OF STANDARD FORM OF CONTRACT

THE STANDARD FORM CONTRACT ISSUED

BY THE PUBLIC WORKS DEPARTMENT OF

MALAYSIA, PERTUBUHAN ARKITEK

MALAYSIA, INSTITUTE OF ENGINEERS OF

MALAYSIA, AND CONSTRUCTION

CONSTRUCTION INDUSTRY DEVELOPMENT BOARD ARE
INDUSTRY
PUBLIC WORK AMONG THE STANDARD FORMS OF
DEPARTMENT DEVELOPMENT
PERTUBUHAN PARTIES (CIDB) CONTRACT AVAILABLE FOR
(PWD) ARKITEK
CONSTRUCTION INDUSTRY PARTIES TO
MALAYSIA (PAM)
CHOOSE AND ADOPT IN THE MALAYSIAN

CONSTRUCTION INDUSTRY.

EXAMPLE

WILKINSON AND SCOFIELD (2010)

STATE THAT THE PROCUREMENT

METHOD CHOSEN HAS A

SUBSTANTIAL IMPACT ON A

PROJECT'S ABILITY TO MEET ITS

SCHEDULE, COST, AND QUALITY

INSTITUTE OF GOALS
ENGINEERS
MALAYSIA (FIDIC) OTHER COMPANY

STANDARD FORM OF CONTARCT

TYPES OF STANDARD FORM OF CONTRACT

PWD The Malaysian government department in charge of PWD203A TYPE OF FORM PWD CONTRACT
contract forms is the Public Works Department (PWD). These are
the most common types of contracts based on bills of quantities JKR Form 203A (Rev 1/2010) based on bill of
(203A) created for usage in public sector or government projects quantities
for construction and civil engineering contracts. According to JKR Form 203 (Rev 1/ 2010) based on drawings and
Fahime, Zuhairuse, and Muhammad Farihan (2011), the key specification
element of PWD 203A is bills of quantities, where the project JKR Form 203N (Rev 1/2010) nominated
manager monitors and supervises the work through the planned subcontractor
schedule throughout construction. JKR Form 203P (Rev 1/ 2010) nominated supplier
JKR Form DB (Rev 1/ 2010) Design and built

TYPE OF FORM PAM CONTRACT The PAM form is believed to be used in 90% of PAM
private-sector construction contracts (Sundra,
Standard Form of Building Contract 2006 2010). Because the risks are recognised to
(with Quantities) local industry, the PAM form is a home base
Standard Agreement and Condition of PAM form that is supposed to be used as a
Contract 2018 (with Quantities) construction contractor rather than a civil
Standard Form of Building Contract 2006 engineering contract (PAM, 2006).
(without Quantities)
Standard Agreement and Conditions of PAM
Contract 2018 (without Quantities)

CIDB The Construction Industry Development Board TYPE OF FORM CIDB CONTRACT
Malaysia (CIDB) has developed and published its
own standard forms for building works as well as a CIDB Standard form of Contract
form for nominated sub-contractors. It is for Building Work (2000 Edition)
understood that they want to produce forms for Standard Form of Contract for
design and construct and civil engineering tasks in Nominated Sub-contractors -
the future. However, the two types of contracts are Form CIDB(NSC)/ 2002
not extensively used in the construction business at
the moment.

TYPE OF FORM FIDIC CONTRACT For construction or engineering projects established FIDIC
by the employer or his agent, the engineer, the
FIDIC Conditions of Contract for International Federation of Consulting Engineers
Construction (Red Book) recommends FIDIC documentation (Mushtaq, 2007).
FIDIC Conditions of Contract for Plant and The parties involved in FIDIC contract papers are the
Design/Build contracting authority/employer, the contractor (which
FIDIC Conditions of Contract for EPC is a contract between employers), and an engineer
Turnkey Project (Silver) authorised to manage the FIDIC Contract on behalf of
FIDIC Short Form of Contract the Green the employer.
Book

PETRONAS PETRONAS is one of big company which TYPE OF FORM CONTRACT
CONTRACT produce their own standard form of contract
AGREEMENT in order to protect their own interest as the Petronas Gas Berhad Contract
employer in the project. Therefore, for any Agreement
investor that interested in applying for any Gas Processing Agreement (GPA)
proposed project require to take a license of Gas Transportation Agreement
a Petroleum Arrangement (PA) contract, (GTAs)
between PETRONAS and the investors which Agencies Servies Agreement (ASA)
refer as contractor.

CLAUSE RELATED TO
COVID-19

FORCE MAJEURE

A common clause in construction contracts that protects parties from liability if
they are unable to fulfil their contractual obligations due to events beyond
their control. Because force majeure is included in the risk allocation under
construction contracts, it's important to pay special attention to the
contractual wording to understand the ramifications and implications of such
clauses, which can vary depending on the contract type.

Can contractor that affected due to Can the construction contract be deemed
MCO entitled to claims EOT? frustrated due to MCO?

The use of force majeure under PAM and EOT Whereas contract frustration is a severe
differs, with PWD being able to implement EOT concern, the mere existence of the MCO would
owing to a supply chain interruption. Significant not be sufficient to constitute an event of
force provisions, on the other hand, can be frustration, because the MCO is temporary in
utilised in PAM contracts. Contractors who utilise nature and relatively brief in the grand scheme of
the PAM form have greater EOT than things, and the contractor should be entitled to
contractors who use the PWD form. EOT.

Can a contractor terminate the construction Who would be responsible for the additional cost
contract (other than by reason of frustration) if the incurred due to the new conditions imposed by
MCO is prolonged? the authorities as a result of MCO?

PAM 2018 - As the suspension of works has A contractor can claim additional costs in the
been ordered by the Architect and the time categories of losses and expenses, although
of suspension exceeds the delay time, the compliance with laws, statutes, regulations and
contractor may terminate the construction any conditions imposed by the authorities is
contract under Section 26.1 for other almost certainly the responsibility of the
reasons of frustration. contractor anyway.

CONTRACT PRICE STRATEGY

CONTRACT PRICE

FIXED PRICE

LUMP SUM REMEASUREMENT

BILL OF DRAWING & APPROXIMATE BQ SCHEDULE OF
QUANTITIES SPECIFICATIONS RATES

All pricing are All pricing are An approximate It is used when
based on Bill of based on drawing BQ is subject to has sufficient
Quantities and specifications remeasured and is information of
provided by the used if there is work description
A firm bill of design team. insufficient info-s but it cannot be
to prepare a firm quantified.
quantities is used The lump sum BQ at the tender
price is firm, stage, or if it is
to obtain a lump- subject only to decided that a firm
variations which BQ is not
sum price for a may be instructed
necessary.
during the course

fully-designed of the Contract It is less-time
Works.
consuming and
project. The work very easy but Total cost of
typically, there will
required is be more variations project is
and there will be
measured and cost uncertainty. depending on

described

precisely, the

meaning that it remeasurement

can be priced and variations.

accurately. As a

result, tender

prices should be

reliable and good

financial control

should be

possible.

CHAPTER 3

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

This research was performed by the following approaches:

Data Collection Sources

Primary and secondary data were the two types of sources used to compile
this study. Primary sources are first-time collections of primary data. This
source was discovered through interviews with the responsible party and hard
documentary facts. Secondary data is information that has already been
gathered by other researchers for analysis or use by others. Journals, theses,
articles, and websites will all be used to find data for this source.

Data Collection Sampling

Purposive and selective sampling was utilized in the data collection for this report. To
ensure that the data collection can obtain comprehensive information about the case
studies employed, this sampling has the following goal. The individuals selected for
this sampling are:
Case Study 1 - En. Izaidi @ Mohd Izaidi bin Ibrahim who positions in Commercial
Manager at MMC Engineering Sdn Bhd
Case Study 2 - En. Abd. Aziz bin Ali who position in Contract Executive at ARQS
Consult.

Data Collection Method

Case studies were the method of data collecting used in this paper. Case
studies were selected because this subject requires in-depth knowledge of the
case being researched, and this type can be very helpful to gain a deeper grasp
of the project. The chosen case studies give us thorough information about
procurement. The interview was conducted via Google Meet and WhatsApp.

Data Analysis

Data for this case study were analysed using unstructured text-based data. These
facts come from case studies of every procurement contract, Google Meet recordings,
and observation notes.

Research Process

IDENTIFY ESTABLISHED REVIEW DATA ANALYZE PRODUCE A
THE THE LITERATURE COLLECTION DATA REPORT

PROBLEM OBJECTIVES

CHAPTER 4

DATA ANALYSIS

BACKGROUND OF THE CASE

STUDY PROJECT

Overview of the Project

ENGINEERING, PROCUREMENT, CONSTRUCTION AND
COMMISSIONING (EPCC) OF PGU-I GAS PIPELINE
REPLACEMENTPROJECT (GRAPHITE)

Client

PETRONAS GAS BHD.

Main Contractor

MMC ENGINEERING SDN. BHD.

Contract Sum Project Description

RM 200,000,000.00 INSTALL AN APPROXIMATE 33.3KM LONG NPS36
(36”)
Contract Period PIPELINE WITH ASSOCIATED PIPELINE FACILITIES
FROM GAS
35 MONTH PROCESSING KERTIH (GPK) TO BUKIT ANAK DARA
KIJAL,
KEMAMAN, TERENGGANU.

Scope of Work

OIL AND GAS WORKS

DATA ANALYSIS

PROJECT ENGINEERING, PROCUREMENT, CONSTRUCTION AND

RCOEPMLMACISESMIOENNITNGPR(EOPJCECC)TO(GFRPAGPUH-IIT
GEA) S PIPELINE

TYPE OF EPCC - Engineering, Procurement, Construction and
PROCUREMENT Commencing

METHOD

METHOD OF Selective Tendering method
TENDERING

TENDERING o Employer obtained list of qualified contractors after
PROCEDURE advertising project in selective tender
o Prequalification is required for the tenderer.
o The invitation to bid will go to the chosen tenderer.
o Construction will start after the contract is granted.
o Employers receive finished work from contractors.

CONTRACT Petronas Gas BHD Agreement
USED Lump sum contract - Drawing and specifications

CONTRACT
PRICE

STRATEGY

BACKGROUND OF THE CASE

STUDY PROJECT

Overview of the Project

2-STOREY SINGLE BUILDING HOUSE LOCATED AT LOT

P.T 51044, MUKIM PEKAN BARU SUNGAI BULOH,

DAERAH PETALING, SELANGOR DARUL EHSAN

Contract Sum Client

RM 1,690,000.00 YAYASAN WARDATUL JANNAH

Contract Period Main Contractor

12 MONTH CONTRACTOR
NOBLE HOUSE DESIGNER HOMES SDN

BHD

Type of Building

HEALTH AND WELFARE CATEGORY
BUILDING BASED ON THE CIDB
CATEGORY OF BUILDING.

Scope of Work

PRELIMINARIES, BUILDING WORKS,
EXTERNAL WORKS, PROVISIONAL SUM,

MECHANICAL & ELECTRICAL WORKS

DATA ANALYSIS

PROJECT CADANGAN MEMBINA DAN MENYIAPKAN SEBUAH KOMPLEKS


PPEETMABLAINNGG,USNEALANNINGOSARND2ATRIUNLGEKHASTA
DNI SUNGAI BULOH, DAERAH


TYPE OF
Traditional Procurement Method
PROCUREMENT


METHOD

METHOD OF
Open tendering method
TENDERING

TENDERING
This is the tendering procedure process of our selected case
PROCEDURE study project:
o The Employer selects a qualified team.
o The hiring procedure is started by the employer or the expert
group.
o Construction starts after the contract is awarded.
o Delivering finished job to the employer is the contractor duty.

CONTRACT
PAM Contract 2006
USED

CONTRACT
Fixed price contract - Bill of quantities
PRICE


STRATEGY

JUSTIFICATION

TYPE OF
Project 1 employs the EPCC procurement strategy since it
PROCUREMENT
relates to oil and gas construction projects. As their
intended project involved building work, project 2
METHOD employed conventional techniques. Due to their
disparate preferences for the proposed initiatives, both
projects employed various types of procurement
processes for the project. As both of these projects were
offered before COVID, there will be no difference in the
procurement process between before and after COVID.

METHOD OF
For case study project 1, employs a selective tendering strategy
TENDERING since they require the chosen contractor to have prior
experience working with gas pipes measuring 36' in diameter in
order to complete the project. As a result, only pre-qualified
contractors are permitted to submit a bid.

The case study project 2 that we chose uses the open tendering
process because the project is simple and does not really call for
any expertise throughout the tender. Given that the project is
minimal in scope and that they preferred a low bidder, an open
tender is the best technique. The contractor who won the tender
is Noble House Designer Homes Sdn. Bhd.

TENDERING
In efforts to gain qualified contractors to submit bids for case
PROCEDURE study 1, the employer will publicise the project. After the
contractor has been chosen, the contractor will carry out the
entire tendering process. Then, calls for the employer to
designate their own qualified team to handle all tendering
procedures. As a result, the contractor for project 1 must first
pass the pre-qualification process in order to be hired.

According to the expert team's recommendations to the
employer, the contractor for our selected second case study will
be chosen following the evaluation procedure. Before COVID-19,
both tendering processes are completed. However, both
tendering processes will remain the same for Covid-19.

JUSTIFICATION

CONTRACT
·Different contract types are applied in the two case studies.
USED Given the size of Petronas Gas BHD, they employ their own
custom agreement for Project 1 to safeguard their interests.

Regarding of our second case study project in Sungai Buloh, it
makes use of PAM Contract 2006, since this project is not related
to government and it is the most often used standard form in
Malaysia's private sector. Because the contract form employed is
a universal contract form, its use is unaffected by the pandemic
or before it even starts. The terms won't be altered in any way.

CONTRACT
Because all components are preliminary based on the drawing
PRICE
and specifications, Project 1 is a lump sum contract. The contract
price is paid in accordance with the Payment Milestones.
STRATEGY Payments are made by the contractor upon achievement of
milestones at the agreed-upon percentage for each milestone.
There will be no such quantities in this project because it will be
priced solely on the basis of the drawing and specifications.

In the meanwhile, Project 2 will use a Fixed Price contract based
on a bill of quantities. All prices of this project will be determined
by the amount, drawing, and specifications provided by the
design team. The payment for the contractor will be based on
the work done. There will be no change on contract priced
strategy for both types of contract during covid-19 pandemic.

CHAPTER 5

CONCLUSION

CONCLUSION

Nevertheless, the pandemic's impact and consequences are
affecting the entire world, and the building industry is not
immune. While some people try to work from home, homeschool,
and order meals online and have it delivered to their homes, the
majority of construction employees are still needed on the job.
It was necessary for them to be present due to the nature of
their profession. They have no choice but to be exposed to the
virus in order to supply people with housing, facilities, and
other development structures.

Following to pandemic Covid-19, there are not much changes
in the procurement system applied in the construction projects
during tendering process. However, there are changes during
construction process which there are many additional standard
operational procedures (SOPs) such as requirement to wear face
masks, and sanitisation of the site regularly and many more.

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