WHY CONTRACTORS SUB-CONTRACT WORKS TO SUB-CONTRACTORS? Khairuddin Abdul Rashid This paper reports on a study to identify the presence and extent of contractors sub-contracting their works to sub-contractors, and to identify the motivation behind the practice. Literature review and a questionnaire survey among contractors were carried out and the findings confirmed the widespread presence of sub-contracting and that the level of sub-contracting is highest in building, civil engineering, mechanical, sanitary and water engineering works. In addition, the findings suggest the motivation for the contractors to sub-contract are: (i) internal i.e. negative attitude, financial constraints and insufficiencies in knowledge, experience, and skills; and (ii) external i.e. bureaucracies, constraints in the availability and timely supply of construction materials, plants and labour. Sub-contracting is contractually permissible, it is akin to out-sourcing. However, the practice of sub-contracting appears to be primarily due to addressing recurring operational problems rather than as carefully crafted strategy to achieve efficiency and to combat the negative effect of the cyclical nature of the construction industry. |
REFLEXIVE CAPABILITY MATURITY ASSESSMENT FOR FIRM MANAGEMENT OF MULTIPARTNER INTERNATIONAL PROJECTS Kerry London and Jessica Siva This paper reports the findings of a research project which was aimed at developing and promoting a greater understanding of the uniqueness of successful Australian-Malaysian partnerships and joint ventures undertaken on complex multi-partner mega construction projects. The aim of the investigation was to identify the critical success factors specific to such partnerships. The theoretical framework was grounded in a previous empirical study on design firm internationalisation which demonstrated that long-term success in international markets is enhanced by the management of integration of transformation of social, cultural and intellectual capital within the firm. A generic adaptive performance framework mapping the key performance indicators for each of these dimensions was developed which can be modified to unique contexts related to specific geographical localities. In the Australian Malaysian Institute study the framework is tested within the context of firm and shared partnership capital. The broad interpretive framework of adaptive performance was refined as a result of the findings of the four case studies of Malaysian organisations to develop a partnerships capacity performance measurement framework for Malaysian firms working on international projects. Six in-depth interviews were conducted with ten participants across the four Malaysian firms and a thematic analysis was undertaken of the transcripts. A reflexive capability maturity assessment tool was developed from insights gained into the underlying causes of key barriers coupled with common themes emerging in relation to the successful approaches used by case study firms to overcome those barriers. Specific examples of the case study firms’ demonstration of reflexive capability in the areas of market knowledge, design management and market entry are presented. |
TOWARDS OPEN SYSTEM IN HOUSING:
A JOINT-VENTURE OF BUILDING TECHNOLOGY FOR Zulkefle Ismail & Asiah Abdul Rahim & Mohammad Abu Eusuf Previous studies show that the implementation of Industrialized Building System (IBS) in Malaysia gives significant benefits the construction industry by reducing the site labour, clean site and fast construction. However, the qualities of the local IBS products are still being argued. Manufactured home constructed in developed countries appears to have cheaper construction cost compare to conventional method. The paper describes the idea of Joint-Venture (JV) project to improve quality of IBS product for manufactured homes in Malaysia. This technology of construction will be applied in this context. The study explores the possibility of introducing the prefabricated volumetric component to merge with the existing paneling of IBS which are available in Malaysia. The innovations which are emerging locally and from overseas would make these potential extensions possible. The construction industry should operate in a ‘zero waste and zero defect’ environment as given in the Egan Report (1998) for improving quality and speed of construction. Therefore, the study on technology transfer and implementation of manufactured home in European countries and Japan were explored. The opportunities of implementing JV for manufactured homes were not only sharing knowledge and innovative ideas but also for the success of sustainable construction. This could help the construction industry in Malaysia in promoting Green construction towards open system and sustainable development in housing. The methods of data collection include questionnaire, semi-structured interview and observation are carried out in United Kingdom. In conclusion, this study provide the possibility of getting more available |
MODERNISING THE MALAYSIAN CONSTRUCTION INDUSTRY THROUGH THE ADOPTION OF INDUSTRIALISED BUILDING SYSTEM (IBS) Kamarul Anuar Mohamad Kamar & Zuhairi Abd Hamid The Malaysian construction industry plays an important role in generating wealth to the country and development of social and economic infrastructures and buildings. The industry creates a multiplier effect to other industries, including manufacturing sector, financial and banking, agriculture, mining and professional services. Nonetheless, the industry is under a constant pressure to improve its performance. It needs to illustrate better image and reduces its dependency on cheap foreign workers. The current construction methods are also not in line with the government’s housebuilding target. The industry needs to react quickly to these issues and modernise its processes within the capacity and knowledge acquired. The aim of this paper is to highlight construction modernisation efforts in Malaysia through the adoption of Industrialised Building System (IBS). IBS is defined as a construction technique in which components are manufactured in a controlled environment (on or off site), transported, positioned and assembled into a structure with minimal additional site work. The paper presents the definition, advantages, business cases, government’s policies and challenges of adopting IBS in Malaysia. The paper also discusses findings obtained from the workshops conducted by the Construction Industry Development Board (CIDB) of Malaysia. The workshops have attracted participants from the industry stakeholders, professional bodies, government agencies and universities to discuss the challenges in implementing IBS and find the way forward. The workshops highlight the need to create more incentive for change, to establish IBS economic clusters, to improve in construction integration and supply chain, to improve IBS business strategy and to reform policy on foreign workers. |
Double Moral Hazard in Construction Contract Lei Shi, Taisuke Miyao and Kiyoshi Kobayashi In this paper, the contract schemes for construction projects in the developing countries are formulated in the form of an incomplete contract model, whereby the double moral hazard issues driven by the owners as well as contractors are investigated. The effort levels of the owners and the contractors are supposed to be unverifiable and mutually complementary with respect to costs risk reduction. It is shown that the moral hazard by the owner, who transfers the excessive cost overrun caused by the owner's indulgence to the contractor, may trigger the moral hazard by the contractor; thus, the moral hazard issues by the owner may lead to the overall inefficiency of the project. In this paper, the optimal risk allocation scheme between the owner in the developing countries and the contractor, which can deter the double moral hazard issues and enhance the project efficiency, is theoretically investigated. |
The Consequence of Inadequate Design on Building Maintenance Potential Muhammad Abu Eusuf Ph. D, Mansor Ibrahim Ph. D and Khairudding A. Rashid, Ph. D The purpose of this study is to categorize the defects and faults during the design stage that affect building maintenance potential in Malaysia. To perform this study it is essentially needs to organize field survey among the sustainable users such as constructors, builders, architectural/ engineering firms and owners from the east Malaysia. The survey included probable defects and the respondents were asked to indicate their degree of importance. The defects are grouped into several sets. The level of importance of the defects and the sets are measured and ranked by their rigorousness index for sustainable users. The aim of the present investigation is also to develop an advanced design model for the behaviour of structural components into account of the soil-structure-interaction. The results of tests on the performance of structural materials are presented. The experimental results indicate that the failure plane is observed on flat slabs, and the beam. |
The Application of Build, Operate, Transfer (BOT) Contract by Majlis Agama Islam Wilayah Persekutuan Malaysia (MAIWP) in Developing Waqf Land Dr. Azman bin Mohd Noor Build, Operate and Transfer (BOT) contract is a new contract applied in developing and constructing private and public infrastructure. It is a means of project financing and operating which has been practiced primarily in the area of private infrastructure in the developing countries. Recently, the application of BOT contracts has been implemented by some waqf institutions. The BOT structure gives a new direction in the field of waqf as it has capability to enhance waqf property for the public benefits. The involvement of waqf institution in developing its property and public infrastructures by way of BOT is proved to be a challenging exercise. The study examines the current practice of this contract in waqf institutions in general and in Majlis Agama Islam Wilayah Persekutuan in particular with reference to the contracts applied in terms of its compliance with the principles of Shariah. Besides, the study aims at identifying the Shariah issues and problems that might be faced by the waqf institution during the implementation of BOT. The study will look into the general idea of BOT contracts, its concept, structures, contents as well as operation. |
Efficient Multi-Attribute Procurement Auction Hiroshi Fukui and Kiyoshi Kobayashi In this paper, we consider a multi-attribute tender for project procurement, where the contractor is selected on the basis of price and quality. We analyze the tendering behavior of potential contractors in multi-attribute tenders and show that social surplus is maximized through competitive bidding with consumer-surplus-based quasi-linear scoring rules. We consider the case in which the aim of the government is to achieve socially efficient levels of quality that maximize social surplus and simultaneously improve the expected utility for the government. In order to achieve this aim, the introduction of the optimal lower limit of the bidding score is important. |
BUSINESS DEVELOPMENT OPPORTUNITIES THROUGH PURSUIT OF JOINT-VENTURE INITIATIVES IN CONSTRUCTION Christopher Nigel Preece and Sharina Farihah Hasan A joint venture involves two or more businesses pooling their resources and expertise to achieve a particular goal, eg the construction of a large building. The risks and rewards are also shared. Businesses of any size can use joint ventures to strengthen long-term business/marketing relationships, or to collaborate on short-term projects, but entering into a joint venture is a major decision. The benefits of a joint venture include: the costs and risks of the project are spread, improved access to financial resources, economies of scale and advantages of size, access to new technologies and customers, pre-empting competition and creation of stronger competitive units. Joint venturing can be a beneficial way to gain additional work and experience and expand a firm’s market penetration. But it should only be approached with full appreciation of the risks involved, and full knowledge of the prospective joint venture partners. Joint ventures offer a number of business development opportunities for construction firms. This exploratory and theoretical paper will examine how the pursuit and execution of joint venture opportunities may enhance the business development and marketing activities of firms, lead to more business opportunities, improve networks and relationships and create/enhance distinct and sustainable brands for JV partners. |
AN EVALUATION OF APPLYING GUARANTEED MAXIMUM PRICE (GMP) PROCUREMENT METHOD FOR PUBLIC CONSTRUCTION PROJECTS IN MALAYSIA Muhamad Rosdi Senam, Christoph Ehrhardt and Rapiah Mohd Zaini In ensuring successful delivery and completion of construction projects whether public-funded or private projects, the most appropriate and effective procurement method is needed. It is also recognized that one of the principal reasons for the poor performance of construction projects particularly in terms of Time, Cost and Quality is the inappropriateness of the procurement system. This paper seeks to present the findings of a research conducted by using questionnaire survey amongst targeted respondents of Public Works Department of Malaysia or known as Jabatan Kerja Raya (JKR) personnels in an attempt to evaluate the suitability of applying Guaranteed Maximum Price as an alternative method of procurement for public construction projects in Malaysia. Jabatan Kerja Raya (JKR) was chosen because as the technical arm of the government, it leads the implementation of public projects in Malaysia. As many researchers have indicated, not only in Malaysia but in other parts of the world as well, that there is a need for such alternatives to the long existing traditional or also called conventional procurements in the construction industry, one of which mostly used is the open tendering design, bid and build system. Such conventional procurement is always associated with common issues and problems such as cost overruns, delays, late or non-payments, disputes, adversarial nature, confrontational environment, low quality and workmanship, unreasonably too competitive contract prices and others. The research findings have indicated that there is a high need for such alternative procurements for the delivery of public projects in Malaysia and GMP is seen as one of those which could play that vital role. |
THE SHARI’AH PERSPECTIVE ON JOINT VENTURE FOR CONSTRUCTION WORKS Siti Nora Haryati Binti Abdullah Habib and Khairuddin Abdul Rashid This paper aims to provide an overview and understanding on Shari’ah compliant with specific reference to joint venture for construction works. In preparing this paper the study involves extensive literature review. In the conclusion, this paper reiterates that Shari’ah recognizes joint ventures that complies with the conditions set out in the Al-Qur’an, As-Sunnah, Ijma’ and Ijtihad. |
CLIENT LEADERSHIP CAPACITY ON INTERNATIONAL PROJECTS: EXPLORING THE CLIENT’S COMPLEX DECISION-MAKING ENVIRONMENT THROUGH A CRITICAL CULTURAL POLITICAL ECONOMY LENS Jessica Siva and Kerry London The global construction environment offers stakeholders a range of opportunities but is characterised by a high level of risks and uncertainty. Internationalisation is a relatively new field of research in the AEC sector and past research has largely focused on explaining the behaviour of the industry itself. To date there has been little research investigating the client’s leadership role. Much effort has been placed on positioning clients towards overall industry performance improvement, however, with little emphasis on the client’s capacity to undertake their role. Clients establish the decision-making environment through key early critical decisions including procurement strategy and team membership. To a large extent they establish a unique culture that project team members need to work within and make decisions, which is the social and cultural embedding of the economic activities on projects. This theoretical paper is positioned within a PhD study which undertakes a cultural political economy perspective to investigate the client’s central role in setting the boundaries within which decisions affecting budgets, quality, design, project organisational structure and team membership throughout the project lifecycle come to be made. A conceptual model for client leadership on international projects is developed based upon two contextual indicators which seeks to describe and explain the economic decisions clients make, which are deeply embedded in social relationships, shared meanings and cultural norms and the associated power and influence clients have on the political economy of international design and construction practice. This paper also seeks to develop a research question for future empirical testing. |
FRAMEWORK FOR A STANDARD FORM OF JOINT VENTURE AGREEMENT FOR CONSTRUCTION WORKS Khairuddin Abdul Rashid, Mohamad Shafiq Amin Samsuddin and Sharina Farihah Hasan The absence of a standard form of joint venture agreement for construction works has led parties intending to form a joint venture to resort to custom-made or in-house agreement often drafted by the parties themselves. Consequently, some joint venture agreements may have been established on ad-hoc and possibly incomplete basis and even entirely orally. In an effort to address this and other issues arising from the absence of a standard form of joint venture agreement a two-stage study was conducted. The first part of the study involved critical examination of joint venture agreements made available to the first author, and the second part of the study was carried out by way of a questionnaire survey among contractors currently involved or known to have been involved in joint ventures for construction works. The study provided high quality data and the data has been used towards developing a framework for a standard form of joint venture agreement for construction works. |
APPLICATION OF TARGET COST CONTRACTING IN THE CONSTRUCTION INDUSTRY OF HONG KONG Joseph H.L. Chan, Daniel W.M. Chan and Patrick T.I. Lam Background: The Construction Industry Review Committee of the Hong Kong Special Administrative Region advocates a wider application of target cost contracting (TCC) which aligns the objectives of both clients and contractors. This contractual arrangement is at a geminating stage of development in Hong Kong but it has been applied to urban rail projects with joint-venture arrangement in the construction industry over recent years. Objectives: This paper aims to describe the operational mechanism of TCC within the Hong Kong construction industry and to review the practices of such contractual arrangement, which is also applied in joint-venture construction projects in Hong Kong, with both local and international examples. Methodology: The objectives are achieved by a review of relevant international and local literature to identify potential pitfalls of applying TCC in construction. Results: The research findings of this study are expected to help the decision-makers to generate clearer insights into potential pitfalls of applying TCC at an early stage of project delivery and draw the lessons learnt from cases of TCC in both the local and international context. |
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Parameters Influence the Life of RC Buildings with Various Structural Components
Muhammad Abu Eusuf, Ph. D, Mansor Ibrahim, Ph. D, Maisarah Ali, Ph. D and Khairuddin A. Rashid, Ph. D |
