Contract Management: Guidance Note on Procurement

Contract management encompasses three stages: preparation and planning activities prior to contract award, contract administration during contract implementation, and contract closure.

Towards Adoption of Smart Contract in Construction Industry in Malaysia

The revolution of Malaysian Construction 4.0 through emerging technologies has brought a paradigm shift that has digitalized the construction sector. There is a need to adopt a computerized protocol to assist in automating the performance of a contract to meet future digital challenges. Therefore, this paper aims to serve as a pioneer study to investigate the implementation of the Malaysian construction industry to adopt smart contracts. This study adopted a qualitative scientific methodology, whereby a systematic review was conducted to gather the benefits and challenges of implementing smart contracts in the construction industry. Further, interview sessions were arranged to collect data from the construction contract management experts. The research findings unveil that due to the self-executing attribute of smart contracts, the implementation of smart contracts could provide a better apportionment of risks in a contract. The study also finds that the challenges in implementing smart contracts are severe. For instance, the smart contract is irreversible and immutable and prone to human error. The study concludes that it is more suitable to apply and implement a smart contract to a short-term contract that is not subjected to variation. Furthermore, a smart contract can enhance the efficiency in managing the contracts, such as reducing time and managing the conflicts and disputes that arise during the contract duration. The developed implementation framework is significant for the construction personnel, especially those dealing with the contract administration. The implementation of smart contracts in construction could boost contract administration and management discipline via investment in this new technology.

Analyzing procurement fraud in the US Navy

Purpose The purpose of this paper is to analyze an ongoing fraud case in the US Navy involving the procurement of ship-husbanding services. The fraud acts will be analyzed from three perspectives–contract life cycle, internal controls and fraud schemes. Design/methodology/approach A data search was conducted to collect publicly available documents issued by the US Department of Justice (DOJ). A content analysis was used to analyze the fraud acts by aligning them with the contracting phase, internal control component and fraud scheme category. Findings The majority of the fraud occurred in the contracting phases of contract administration, followed by procurement planning and then source selection. The majority of the fraud occurred because of internal control component weaknesses in the control environment followed by information and communications. The majority of the fraud was aligned with the fraud scheme of collusion, followed by billing, cost and pricing. Research limitations/implications Because this is an ongoing investigation, additional DOJ information will become available and provide additional insight on the contracting phase, internal control component and fraud scheme. Practical implications The analysis suggests that the Navy’s lack of trained personnel, capable processes and effective internal controls result in the increased vulnerability to procurement fraud in its husbanding support services program. Originality/value To the best of the authors’ knowledge, this study is the first to analyze fraud through the lens of auditability theory, specifically by the contracting phase and internal control component. Public agencies can enhance fraud detection and deterrence efforts by understanding how weaknesses in contracting processes and internal controls may increase an organization’s vulnerabilities for fraudulent activities.

Quantity surveyor's ethical responsiveness on construction projects: issues and solutions

PurposeStudies showed that construction consultants' ethical negligence is a contributing factor to the time and cost over-run of projects. There is limited research on the issues that may have hindered construction consultants' ethical responsiveness during contract administration. Studies regarding influencing factors in the context of Nigeria's quantity surveyors' (QS) ethical responsiveness are rare. Thus, the study aims to investigate the perceived issues and proffers initiatives to promote QSs' ethical responsiveness on construction projects in Nigeria.Design/methodology/approachTo determine the perceptions of QS regarding ethical responsiveness, a phenomenologically driven perspective via face-to-face interviews was conducted with 12 senior professionals in Lagos and Abuja that showed interest in participating in the study and were interviewed. A thematic approach was adopted to analyse the collated data.FindingsEconomic, societal and professional issues emerged as the three groups of issues that hindered QS's ethical responsiveness on construction projects in a developing country setting such as Nigeria. Findings show that for ethical responsiveness to be expressed on projects, key stakeholders should be ethically responsible. This is currently missing, especially in public construction projects. Initiatives that can promote key stakeholders' ethical responsiveness on construction projects are examined in this paper.Practical implicationsThe paper embraces an important practical implication because practices associated with QS's unethical responsiveness and behavioural impacts on construction projects were identified. This will stir both the regulatory professional bodies and policymakers to enforce and implement feasible initiatives that can promote key stakeholders' collaborative ethical responsiveness on construction projects.Originality/valueThis paper is amongst the few papers that attempted to uncover issues that hinder QS's ethical responsiveness on construction projects in a developing country setting via a qualitative approach. Since these issues are rampant in developing countries, findings from this paper can be used to promote QS's ethical responsiveness in other nations with similar unethical issues.

Promoting Health and Safety in Construction through the Procurement Process

This study explored the impact of considering health and safety (H&S) in the construction procurement process based on the extent of H&S implementation on projects. Underpinned by information integration and rational decision-making theories, the study evaluated how the integration of H&S objectives into the overall project objectives, and the subsequent consideration of H&S matters in procurement decisions, influence H&S implementation on projects. Data were collected using questionnaire surveys from 287 respondents in Ghana who had direct involvement in the project procurement process. The survey explored the extent of H&S integration into the procurement process and its subsequent impact on H&S implementation. Path analysis was carried out to determine the causal relationships between the various procurement processes and H&S implementation. The results demonstrate that setting H&S objectives and integrating H&S into the planning stage decisions have a significant impact on the extent to which H&S matters are considered in the tendering and tender evaluation stages, as well as the H&S provisions in conditions of contracts. It also showed that adequate H&S consideration in these procurement stages subsequently influences H&S consideration in contract administration and monitoring and ultimately influences the extent of H&S implementation. These findings demonstrate the importance of integrating H&S in all aspects of construction procurement to promote H&S implementation on projects.

Rigless Remote Intervention: A Case Study of Combo Unit Utilization in Mahakam Offshore East Kalimantan

Mahakam block has been producing for over 40 years and now is in declining phase. Daily drilling and well intervention operations are still actively carried out to sustain and prolong the natural decline curve. Efficiency measures are taken out in each and every aspect of operations to support the diminishing values. One of them is the reduction of offshore platform sizing. Future minimalist platforms have limited top deck space which will further be reduced by the prevalence of: 1. Fixed platform equipment (generators, crane, etc.), and 2. Hazardous area requirement for Zone 0, Zone 1, and Zone 2. The future minimalist platform has a deck space area of approximately 221 m2, not yet taken into account said the reduction factors. The presence of the hazardous area and fixed equipment can reduce the free deck space availability down to 20% from the total deck space. These platforms are not originally designed with well intervention work in mind. However, the past 40 years proves that well intervention should never be left out when extending well’s lifetime is the objective. Well intervention unit, depending on the intervention type, requires top deck space from 26 m2 up to 92 m2 of free space, and an additional 3-4 m2 for lifting, means such as mast unit if the platform does not have a crane. Moreover, in a remote intervention mode, where no supporting barge is present, space requirement above the top deck became crucial as there is no alternative to back load unit to the barge incase the top deck beingover crowded. To support the continuity of remote intervention being more efficient alternative to barge-supported operation, the well intervention team initiates the feasibility study using combo unit as a replacement for conventional slickline and electric line unit. There are three types of combo unit presented in this paper, 1. Split Combo Unit, 2. Combined Drum Combo Unit, and 3. Digital Slickline Combo Unit. These types of unit can reduce the deck space requirement by 30%, reducing number of personnel needed from eight (8) to five (5) personnel in a single shift, improving operation timing efficiency, and improves the contract administration aspect. Despite the seemingly positive results, there are still issues to be resolved, both technical and non-technical, for combo unit to be an all-rounder solution for wireline work. This paper shall provide an early level observation and analysis for the feasibility of combo unit as remote well intervention unit, starting from the methodology to the corresponding results and lesson learnt.

Probing the Crisis of Regional Connectivity Instigated by the Natural Disasters, Mizoram, India

Mizoram, in eastern Himalayas of India, is educated but thinly populous young state of area 21081sq km with hilly forest cover of (≈90.68%) The major connectivity is by roads of length 8912km (2019) that connects India’s mainland, Myanmar and Bangladesh and about no rail tracks. The state is housed in various folds and faults over Indo-Burmese tectonic zone (Indo Eurasian plate tectonics), and housed adjacent to 950 Ridges. The booming craggy state is combatting with its road network progress due to frequent low magnitude tremors, landslides, floods, and heavy rainfalls. The data of earthquakes, landslides, rainfall, and road progress were collected, and analyzed. The connectivity growth is reported tough and challenging within forests, broken relief, frequent ghats roads, and deep gorges, in topography that hinders the progress in pavement growth. Present study focuses on the ameliorative measures of hill road construction in Mizoram by adhering to the IRC: 52-2019, changing modus operandi of national contract bids, amateurish engineering design, procurement policies, bidder’s expertise and commitment for execution. The non-availability menial labours and technocrats have stemmed many legal issues & disputes between the government and the contractors. Faulty planning, engineering design, executant’s approach, procurement policies and the contractor’s skill, contract administration and construction management, road safety challenges, contract documentation, and inability of deployed bidders needs to be improved in Mizoram. To cater the needs of up-gradation/ new constructions, the hurdles warrant cutting edge impulses through EIA, EMP, DPR, amateurish design, and updating procurement policies that should supersede the orthodox practices.

Ambiguity factors in construction contracts entailing conflicts

PurposeConflicts, claims and disputes are inherent in most construction projects. Acceptable degree of commonality in the interpretation of contract provisions is critical in effective contract administration. This study aims to assess the effects of contract ambiguity factors on construction conflicts, highlighting the causes of divergent interpretations using fuzzy technique for order of preference by the similarity-to-ideal-solution (TOPSIS) method.Design/methodology/approachFuzzy TOPSIS framework with 27 ambiguity factors is constructed by conducting a comprehensive literature review, accompanied by a pilot study. Questionnaire survey is formed, and one-to-one interviews are arranged with 35 contract administration experts.FindingsThe findings indicate that (1) ambiguity due to excessive changes in the bill of quantity (BOQ) (including ambiguous provisions related to BOQ changes), (2) incomplete clauses that do not describe the scope of the intended work purely, (3) ambiguity due to excessive amendments in the scope of works (including ambiguous provisions related to scope changes), (4) ambiguous enforceability including excessive demands and (5) ambiguous goal and performance requirements are the top five ambiguity factors affecting construction conflicts.Research limitations/implicationsPresented framework is performed referring to ambiguity factors in all type of construction contracts in the general sense. However, the identified factors may vary depending on the project type, contract type, procurement method or use of standard contract forms (such as NEC, FIDIC).Originality/valueThe literature lacks the investigation of ambiguity factors in construction contracts, yet the assessment of the effects of contract ambiguity is essential to minimize conflicts.

Impact of Risk Factors on Construction Projects’ Completion Cost in Nigeria

Construction projects are prone to a number of risks due to their complexity, dynamic nature, capital intensive nature and involvement of many stakeholders. These risks if left unmanaged will negatively influence the completion cost and other primary objectives of construction projects. Numerous studies have been conducted globally to determine the potential risks that negatively impacts construction projects; however, the risks aren’t alike across all the regions and the potential degree of impact may changes with time. This study assessed the impact of risk factors on completion cost of construction projects in Nigeria. Data was collected using structured questionnaires administered to 192 construction practitioners using convenience sampling technique. Descriptive statistics (mean and standard deviation) were used to analyse the data. The study found ‘inadequate cost estimate’ (MS = 4.39), ‘risk incurred due to bribery and corruption’ (4.30), ‘increase in prices of materials’ (4.25), ‘increase in cost of labour’’ (4.11), ‘poor cash flow management’ (4.04) ‘mistakes/errors in design’ (4.04) and ‘mistakes during construction’ to be the topmost risk factors that impact on project completion cost. The study concludes that ‘economic’, ‘financial’ and ‘contract administration and project management’ related factors group are those with high impact on project completion cost.

A Case Study of S-Curve Analysis: Causes, Effects, Tracing and Monitoring Project Extension of Time

S-Curve analysis in the construction interpreted as managing project with knowledge and traceable in the context of sustainable construction while displays the cumulative costs, labour hours or other quantities plotted against time. In the contract administration, delays in completing a construction project led to the breach of contract but, in contracts itself allow the construction period to be extended where there are delays that are not the contractor's fault. Under those circumstances, a presentation of a case-study regarding the analysis of S-Curve of a life project drew comparative interpretation of project performance towards project delivery schedule has been conducted in private initiative project. This study aims to investigate and examine the factors that cause delays in construction projects from the perspective of S-curve representations. The paper aims to provide in depth light about the existing causes of project delay and describe the key sources of financing problem and identify the consequences of contraventions of contract. Two distinct parts divided which are refers to the methods used to assess the perceptions of clients, consultants, and contractors on the relative importance of causes of delay in a project and referred to the procurement and documentation to analyse the delay. As a result, an Extension of Time (EOT) granted and identically changed the progress towards extension time where better planning demanded for improvement and restoration progress kept on track. This paper presented a practical and comparative S-Curve within extension of time to ensure delivery of project on schedule. In the long run, the identified causes are combined into 16 factors. Finally, the result of this match was brought in order to critically understand and provide a guideline to contractor in preparing EOT application and choose reliable factor based on the specific circumstances of project delay factors thorough review conducted to reveal the nature of EOT application techniques. Doi: 10.28991/cej-2021-03091679 Full Text: PDF