CIVE 4406 Project Initiation and Budgeting Chapter 2

Questions and Answers

What is the definition of procurement?

Procurement is the act of obtaining goods or services, typically for business purposes.

Which procurement system was traditionally practiced in Malaysia before the 1990s?

Built, Operate and Transfer (BOT)

Project Management Consultancy (PMC)

Design and Build (D&B)

Traditional procurement system (correct)

The new procurement practices in Malaysia were introduced in the 1980s.

False

What percentage of the industry used the traditional method in 2009 according to CIDB?

96.6% Signup and view all the answers

List two examples of procurement systems used in Malaysia.

Design and Build (D&B) and Turnkey system. Signup and view all the answers

The traditional procurement method has been a standard practice in the construction industry for ______ years.

150 Signup and view all the answers

In the traditional procurement method, the design process is integrated with the construction process.

False Signup and view all the answers

What is one responsibility of the client in the traditional procurement process?

To supply full documentation such as drawings and bills of quantities before the contractor can be invited to tender. Signup and view all the answers

Study Notes

Contractual Arrangements

Procurement involves acquiring goods or services, crucial for business operations.
Essential for large-scale purchasing by companies.

Procurement System in Malaysia

Malaysia's procurement system is influenced by British practices, adapted since the 1990s.
Transitioned from traditional methods to advanced systems like Design and Build (D&B) and Built, Operate and Transfer (BOT) to manage rising project complexities.
Traditional methods remain predominant, comprising over 96% of projects as of 2009 and 2010.

Examples of Procurement Systems

Common procurement systems identified include:
- Lump Sum-Drawing and Specification (LSDS)
- Lump Sum-Firm Bills of Quantities (LSBQ)
- Lump Sum-Approximate Bills of Quantities (LSABQ)
- Design and Build (D&B)
Turnkey system ranked lowest among the top five procurement systems used.
Surveys show Architects, Quantity Surveyors, and Civil Engineers favor traditional methods (LSDS, LSBQ, LSABQ).

Traditional Procurement (Design-Bid-Build)

Established as the standard procurement method in the construction industry for 150 years.
Features:
- Separation of design and construction phases.
- Comprehensive documentation required from the client beforehand for contractor bidding.
Clients retain design control through appointed consultants (e.g., architects), limiting contractor responsibilities in design.
Contractors are generally selected through competitive tendering, focusing on the lowest bid.
Professional consultants (architects, quantity surveyors) are typically appointed by clients to oversee contract execution.

Description

This quiz covers Chapter 2 of CIVE 4406, focusing on project initiation and budgeting concepts. Key topics include contractual arrangements, phases of a project, development of project estimates, and economic feasibility studies. Test your understanding of these essential project management principles.