1

AN EVALUATION OF APPLYING GUARANTEED MAXIMUM

PRICE (GMP) PROCUREMENT METHOD FOR PUBLIC CONSTRUCTION PROJECTS IN MALAYSIA

1Muhamad Rosdi Senam 2Christoph Ehrhardt and 3Rapiah Mohd Zaini

1Health Facilities Branch Public Works Department of Malaysia Centrepoint North Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Malaysia

2Fakultaumlt Arkitektur und Gestaltung Hochschule fuumlr Technik Stuttgart

Schellingstraszlige 24 70174 Germany

3Faculty of Management Multimedia University 63100 Cyberjaya Selangor Malaysia

Email 1MrosdiSjkrgovmy 2christophehrhardtdeeycom 3rapiahmmuedumy

Abstract 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 Keywords Procurement Method Public projects Malaysia GMP

2

1 Introduction The construction industry has been long accused for poor performance adversarial atmosphere and notorious disputes (Barlow 2000) There has been a long time lsquoillnessrsquo spread out all over the industry lsquoConstruction projects are often plagued with delays cost-overruns and shoddy workmanshiprsquo (Feldman 2006) There are a lot of issues associated with it jeopardizing and contributing to the long years of underperformed construction industry Among those common problems are delayed projects cost-overruns poor quality these then lead to disputes among parties particularly between clients and contractors late payments and non-payments issues and others The traditional or conventional procurement approach which is characterized by a lsquowin-losersquo scenario is identified for partly responsible for such poor performance (Walker Hampson and Peters 2003) The traditional procurement method which has been strongly embedded and existing in the construction industry for so many years is seen as one of the major factor attributing to this situation This method is seen as no longer viable and suitable especially to cope with the many developments and changes taking place in the construction industry over the years for instance in terms of project complexity increasing clients expectation more parties participation shorter project duration given and others In addition to that lsquoConventional contracts have proven to be unsuitable for the effective delivery of projects with higher risks and complexityrsquo (Queensland Procurement Guide 2008) Also as stated by Black (2000) lsquoThe need for change in traditional relationships has for many years been recognized by the UK construction industry its client and governmentrsquo This is further supported that low bid contracting (which is common in traditional procurement) is the major factor that contribute to the underperformance projects with cost and time overruns and low quality (Feldman 2006) Inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of the key challenges under the Malaysian Construction Industry Master Plan (CIMP) introduced by the Malaysian government quite recently in 2006 The master plan was initiated as a call for improvement in some areas within the Malaysian public construction industry in particular (CIMP 2006) Low bid tendering which often results lsquounrealistically low contract pricesrsquo has been identified one of the major contributors to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP 2006) As a result of this many practitioners industry players from many parts of the construction industry have called for an alternative procurement method to overcome those long outstanding and repetitive construction projects problems There is a high need and urgent call for remedy to cure those already mentioned lsquosicknessrsquo Although a few attempts already made for this purpose such as introducing PPP (Public Private

3

Partnership) projects general lsquoPartneringrsquo projects promoting more on the use of Design and Build contract the same problems persisting and in fact in some projects are even worse and managing projects become more complex The Malaysian construction industry is not exempted from this global phenomenon In 2005 for example about 173 of 417 government projects were considered lsquosick projectsrsquo which were either more than 3 months delayed or abandoned (Sambasivan and Soon 2007) That means referring to that case alone one in every five public projects in Malaysia is delayed and thus problematic This scenario is believed to continuously existing and to some extent is worst as other worsening factors have emerged in the recent years as compared to the past such as incompetency and inexperienced contractors but that were awarded projects low quality of foreign construction workers inferior materials used not fulfilling the stipulated specifications and yet price is escalated over times fraudulence and deterioration of ethics in construction industry exaggerated claims difficulties in project supervision and others 20 Guaranteed Maximum Price (GMP) GMP is a relatively new procurement method which came about partly due to and meant for overcoming these problems It has been proven with some success stories in some countries and is adopted for private and government-funded projects for example in US Australia Germany and Austria and meets the recent development of the construction industry as projects are getting more complexes to be managed GMP provides price certainty to client clearly defined partnering relationship as opposed to adversarial nature scope certainty time savings open-book format and documentation shared project risk clear mutual project goals cost savings incentives for both client and contractor payment security to contractor and subcontractors down the line and lsquowin-winrsquo situation Die Deutsche Bauindustrie (2005) which is the German Association of Construction Industry has described GMP as an innovative partnering model that clearly stated six (6) strong elements of GMP partnering method compared to the traditional system This is shown in Figure 1 below

Partnershaftsmodell

EinbindungAusfuhrungskompetenz in

Planungphase

Eindeutiges Bau-Soll

RisikoMinimierung

Kosten-transparenz

GemeinsamesProjektcontrolling

Konfliktlosung-modell

4

Figure 1 Die Grundsatzliche Elemente Der Partnerschaftmodelle

Source Die Deutsche Bauindustrie(2005) These elements that are similar in principles as to the other literatures written on GMP

are

bull Einbindung Ausfuhrungskompetenz in Planungphase or construction

competency during planning phase

bull Eindeutiges Bau-Soll or common project objectives by all parties

bull Risiko Minimierung or minimum project risk

bull Konfliktlosung-modell or effective conflict management

bull Gemeinsames Projektcontrolling or effective project controlling by all

parties

bull Kosten- transparenz or cost transparency (lsquoopen-bookrsquo format)

In summary based on a few literatures Table 1 below highlights some of the main advantages of GMP as opposed to traditional design-bid-build open tendering and design and builds procurement methods

Features GMP Design-bid-build

Design and Build

Cost certainty for client radic X X

Encourage early scope definition

radic X radic

Encourage partnering Relationship

radic X X

lsquoOpen-bookrsquo format and cost transparency security of payments

radic X X

Overlapping of design and construction

radic X radic

Fast-track duration radic X radic

Time saving guaranteed project completion

radic X X

Encourage lsquono-blamersquo culture between parties

radic X X

Risk Sharing radic X X

Cost savings incentive for contractor

radic X X

Table 1 Main Advantages of GMP in Comparison to Design-bid-build and Design and Build

Sources PR Davies and P Stevenson 2004 Die Deutsche Bauindustrie(2005) New South Wales(NSW) Procurement Practical Guide 2008

A Tautschnig G Hulka 2002

5

30 Objectives of The Research The aim of this research is to address the issues of problematic and underperformance of traditional procurement method for public projects in Malaysia by providing Guaranteed Maximum Price (GMP) as an alternative procurement method Firstly to review the importance of procurement strategy in construction industry Secondly to evaluate the problems associated with the existing procurement method for public projects in Malaysia Thirdly to assess the current level of awareness and knowledge about GMP method among government construction practitioners in Malaysia and finally as the ultimate objective of the research to evaluate the suitability of applying GMP procurement method for public projects in Malaysia 40 Research Methodology The research has adopted questionnaire survey distributed via email to JKR respondents currently involved in public projects in Malaysia Jabatan kerja Raya (JKR) or Public Works Department is the main government technical agency in Malaysia being responsible for executing public projects in Malaysia Therefore having sample of respondents from JKR is appropriate and adequate reliable and representative in meeting the data collection objectives Prior to the distribution a pilot study was undertaken whereby the draft questionnaire was emailed to three (3) respondents This is important to get feedback and to check the reasonableness and practicality of the questionnaire A pilot study actually provides a lsquotrial runrsquo for the questionnaire (Naoum 1998) 41 Target Respondents A total number of sixty (60) respondents were identified and selected by the author at the beginning stage of the data collection phase The questionnaire was distributed by email to the sixty (60) potential respondents in March 2009 They were from various backgrounds such as architects engineers and quantity surveyors at different level of seniority It was anticipated that due to the uncertainties of the response longer time should be allowed for getting the questionnaire back from respondents Therefore a timeframe of three (3) weeks was seen sufficient for this purpose In the end a total number of twenty seven (27) replied questionnaires were received which represents a response rate of 45 The response rate is considered good because it falls within the normal response rate which is between 40 to 60 as stated by Naoum (1998) 42 Questionnaire Structure

6

The questionnaire was devided into five (5) sections The formation of the sections was linked to the four (4) research objectives There are three types of questions used which are open-ended question factual question and opinion question Open-ended question is used for respondentsrsquo background and working experience Factual question is used for objective descriptive and analytical question such as relating to previous procurement method mostly experienced by respondents questions requiring answer of lsquoyesrsquo or lsquonorsquo and others Opinion question using Likert Scale rating is designed for evaluation on the existing procurement method presently practiced in JKR and it is also evaluated on the suitability of applying GMP method Needless to mentioned the overall questionnaire structure and questions were designed to have a quick and good response rate 50 Survey Results For the purpose of data analysis the received questionnaire from respondents were then analyzed and interpreted in a structured manner to enable facts and findings to be drawn A well known software for research data analysis Statistical Packages for Social Sciences (SPSS) was used SPSS provided reliable data analysis hence served as a very useful tool for the research The detail results of the analysis will be discussed in the next part of this section by using appropriate tables figures and paragraphs The results of the survey indicated that most respondents strongly agreed that procurement method is very important and therefore has significant effect on the overall project success in the construction industry Secondly there are issues and problems associated with the existing procurement method for public projects in Malaysia The third findings indicated lower level of awareness and knowledge about GMP amongst government construction practitioners in Malaysia Fourthly majority of the respondents strongly supported GMP as an alternative procurement method to be applied for public projects in Malaysia 51 Respondentsrsquo Position in Organization As shown in Figure 2 (refer to Appendix) as part of the respondentsrsquo background majority of the respondents (60) were from middle group which was the senior officer This was followed by the junior officer made up to 19 (5) of total respondents This makes senior officers were the most responsive group One explanation that can be drawn from it is that since their position is in the middle looking from the organization hierarchy they are mostly involved in decision makings and thus have great influence on procurement method Interestingly the third fourth and fifth most respondents group were shared together by top management director and others (support group such as technical assistance to engineer) Each represented by two (2) respondents made up to 7 of total respondents The fact that all group of different levels were represented made the data reliable to support the

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

3

Partnership) projects general lsquoPartneringrsquo projects promoting more on the use of Design and Build contract the same problems persisting and in fact in some projects are even worse and managing projects become more complex The Malaysian construction industry is not exempted from this global phenomenon In 2005 for example about 173 of 417 government projects were considered lsquosick projectsrsquo which were either more than 3 months delayed or abandoned (Sambasivan and Soon 2007) That means referring to that case alone one in every five public projects in Malaysia is delayed and thus problematic This scenario is believed to continuously existing and to some extent is worst as other worsening factors have emerged in the recent years as compared to the past such as incompetency and inexperienced contractors but that were awarded projects low quality of foreign construction workers inferior materials used not fulfilling the stipulated specifications and yet price is escalated over times fraudulence and deterioration of ethics in construction industry exaggerated claims difficulties in project supervision and others 20 Guaranteed Maximum Price (GMP) GMP is a relatively new procurement method which came about partly due to and meant for overcoming these problems It has been proven with some success stories in some countries and is adopted for private and government-funded projects for example in US Australia Germany and Austria and meets the recent development of the construction industry as projects are getting more complexes to be managed GMP provides price certainty to client clearly defined partnering relationship as opposed to adversarial nature scope certainty time savings open-book format and documentation shared project risk clear mutual project goals cost savings incentives for both client and contractor payment security to contractor and subcontractors down the line and lsquowin-winrsquo situation Die Deutsche Bauindustrie (2005) which is the German Association of Construction Industry has described GMP as an innovative partnering model that clearly stated six (6) strong elements of GMP partnering method compared to the traditional system This is shown in Figure 1 below

Partnershaftsmodell

EinbindungAusfuhrungskompetenz in

Planungphase

Eindeutiges Bau-Soll

RisikoMinimierung

Kosten-transparenz

GemeinsamesProjektcontrolling

Konfliktlosung-modell

4

Figure 1 Die Grundsatzliche Elemente Der Partnerschaftmodelle

Source Die Deutsche Bauindustrie(2005) These elements that are similar in principles as to the other literatures written on GMP

are

bull Einbindung Ausfuhrungskompetenz in Planungphase or construction

competency during planning phase

bull Eindeutiges Bau-Soll or common project objectives by all parties

bull Risiko Minimierung or minimum project risk

bull Konfliktlosung-modell or effective conflict management

bull Gemeinsames Projektcontrolling or effective project controlling by all

parties

bull Kosten- transparenz or cost transparency (lsquoopen-bookrsquo format)

In summary based on a few literatures Table 1 below highlights some of the main advantages of GMP as opposed to traditional design-bid-build open tendering and design and builds procurement methods

Features GMP Design-bid-build

Design and Build

Cost certainty for client radic X X

Encourage early scope definition

radic X radic

Encourage partnering Relationship

radic X X

lsquoOpen-bookrsquo format and cost transparency security of payments

radic X X

Overlapping of design and construction

radic X radic

Fast-track duration radic X radic

Time saving guaranteed project completion

radic X X

Encourage lsquono-blamersquo culture between parties

radic X X

Risk Sharing radic X X

Cost savings incentive for contractor

radic X X

Table 1 Main Advantages of GMP in Comparison to Design-bid-build and Design and Build

Sources PR Davies and P Stevenson 2004 Die Deutsche Bauindustrie(2005) New South Wales(NSW) Procurement Practical Guide 2008

A Tautschnig G Hulka 2002

5

30 Objectives of The Research The aim of this research is to address the issues of problematic and underperformance of traditional procurement method for public projects in Malaysia by providing Guaranteed Maximum Price (GMP) as an alternative procurement method Firstly to review the importance of procurement strategy in construction industry Secondly to evaluate the problems associated with the existing procurement method for public projects in Malaysia Thirdly to assess the current level of awareness and knowledge about GMP method among government construction practitioners in Malaysia and finally as the ultimate objective of the research to evaluate the suitability of applying GMP procurement method for public projects in Malaysia 40 Research Methodology The research has adopted questionnaire survey distributed via email to JKR respondents currently involved in public projects in Malaysia Jabatan kerja Raya (JKR) or Public Works Department is the main government technical agency in Malaysia being responsible for executing public projects in Malaysia Therefore having sample of respondents from JKR is appropriate and adequate reliable and representative in meeting the data collection objectives Prior to the distribution a pilot study was undertaken whereby the draft questionnaire was emailed to three (3) respondents This is important to get feedback and to check the reasonableness and practicality of the questionnaire A pilot study actually provides a lsquotrial runrsquo for the questionnaire (Naoum 1998) 41 Target Respondents A total number of sixty (60) respondents were identified and selected by the author at the beginning stage of the data collection phase The questionnaire was distributed by email to the sixty (60) potential respondents in March 2009 They were from various backgrounds such as architects engineers and quantity surveyors at different level of seniority It was anticipated that due to the uncertainties of the response longer time should be allowed for getting the questionnaire back from respondents Therefore a timeframe of three (3) weeks was seen sufficient for this purpose In the end a total number of twenty seven (27) replied questionnaires were received which represents a response rate of 45 The response rate is considered good because it falls within the normal response rate which is between 40 to 60 as stated by Naoum (1998) 42 Questionnaire Structure

6

The questionnaire was devided into five (5) sections The formation of the sections was linked to the four (4) research objectives There are three types of questions used which are open-ended question factual question and opinion question Open-ended question is used for respondentsrsquo background and working experience Factual question is used for objective descriptive and analytical question such as relating to previous procurement method mostly experienced by respondents questions requiring answer of lsquoyesrsquo or lsquonorsquo and others Opinion question using Likert Scale rating is designed for evaluation on the existing procurement method presently practiced in JKR and it is also evaluated on the suitability of applying GMP method Needless to mentioned the overall questionnaire structure and questions were designed to have a quick and good response rate 50 Survey Results For the purpose of data analysis the received questionnaire from respondents were then analyzed and interpreted in a structured manner to enable facts and findings to be drawn A well known software for research data analysis Statistical Packages for Social Sciences (SPSS) was used SPSS provided reliable data analysis hence served as a very useful tool for the research The detail results of the analysis will be discussed in the next part of this section by using appropriate tables figures and paragraphs The results of the survey indicated that most respondents strongly agreed that procurement method is very important and therefore has significant effect on the overall project success in the construction industry Secondly there are issues and problems associated with the existing procurement method for public projects in Malaysia The third findings indicated lower level of awareness and knowledge about GMP amongst government construction practitioners in Malaysia Fourthly majority of the respondents strongly supported GMP as an alternative procurement method to be applied for public projects in Malaysia 51 Respondentsrsquo Position in Organization As shown in Figure 2 (refer to Appendix) as part of the respondentsrsquo background majority of the respondents (60) were from middle group which was the senior officer This was followed by the junior officer made up to 19 (5) of total respondents This makes senior officers were the most responsive group One explanation that can be drawn from it is that since their position is in the middle looking from the organization hierarchy they are mostly involved in decision makings and thus have great influence on procurement method Interestingly the third fourth and fifth most respondents group were shared together by top management director and others (support group such as technical assistance to engineer) Each represented by two (2) respondents made up to 7 of total respondents The fact that all group of different levels were represented made the data reliable to support the

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

4

Figure 1 Die Grundsatzliche Elemente Der Partnerschaftmodelle

Source Die Deutsche Bauindustrie(2005) These elements that are similar in principles as to the other literatures written on GMP

are

bull Einbindung Ausfuhrungskompetenz in Planungphase or construction

competency during planning phase

bull Eindeutiges Bau-Soll or common project objectives by all parties

bull Risiko Minimierung or minimum project risk

bull Konfliktlosung-modell or effective conflict management

bull Gemeinsames Projektcontrolling or effective project controlling by all

parties

bull Kosten- transparenz or cost transparency (lsquoopen-bookrsquo format)

In summary based on a few literatures Table 1 below highlights some of the main advantages of GMP as opposed to traditional design-bid-build open tendering and design and builds procurement methods

Features GMP Design-bid-build

Design and Build

Cost certainty for client radic X X

Encourage early scope definition

radic X radic

Encourage partnering Relationship

radic X X

lsquoOpen-bookrsquo format and cost transparency security of payments

radic X X

Overlapping of design and construction

radic X radic

Fast-track duration radic X radic

Time saving guaranteed project completion

radic X X

Encourage lsquono-blamersquo culture between parties

radic X X

Risk Sharing radic X X

Cost savings incentive for contractor

radic X X

Table 1 Main Advantages of GMP in Comparison to Design-bid-build and Design and Build

Sources PR Davies and P Stevenson 2004 Die Deutsche Bauindustrie(2005) New South Wales(NSW) Procurement Practical Guide 2008

A Tautschnig G Hulka 2002

5

30 Objectives of The Research The aim of this research is to address the issues of problematic and underperformance of traditional procurement method for public projects in Malaysia by providing Guaranteed Maximum Price (GMP) as an alternative procurement method Firstly to review the importance of procurement strategy in construction industry Secondly to evaluate the problems associated with the existing procurement method for public projects in Malaysia Thirdly to assess the current level of awareness and knowledge about GMP method among government construction practitioners in Malaysia and finally as the ultimate objective of the research to evaluate the suitability of applying GMP procurement method for public projects in Malaysia 40 Research Methodology The research has adopted questionnaire survey distributed via email to JKR respondents currently involved in public projects in Malaysia Jabatan kerja Raya (JKR) or Public Works Department is the main government technical agency in Malaysia being responsible for executing public projects in Malaysia Therefore having sample of respondents from JKR is appropriate and adequate reliable and representative in meeting the data collection objectives Prior to the distribution a pilot study was undertaken whereby the draft questionnaire was emailed to three (3) respondents This is important to get feedback and to check the reasonableness and practicality of the questionnaire A pilot study actually provides a lsquotrial runrsquo for the questionnaire (Naoum 1998) 41 Target Respondents A total number of sixty (60) respondents were identified and selected by the author at the beginning stage of the data collection phase The questionnaire was distributed by email to the sixty (60) potential respondents in March 2009 They were from various backgrounds such as architects engineers and quantity surveyors at different level of seniority It was anticipated that due to the uncertainties of the response longer time should be allowed for getting the questionnaire back from respondents Therefore a timeframe of three (3) weeks was seen sufficient for this purpose In the end a total number of twenty seven (27) replied questionnaires were received which represents a response rate of 45 The response rate is considered good because it falls within the normal response rate which is between 40 to 60 as stated by Naoum (1998) 42 Questionnaire Structure

6

The questionnaire was devided into five (5) sections The formation of the sections was linked to the four (4) research objectives There are three types of questions used which are open-ended question factual question and opinion question Open-ended question is used for respondentsrsquo background and working experience Factual question is used for objective descriptive and analytical question such as relating to previous procurement method mostly experienced by respondents questions requiring answer of lsquoyesrsquo or lsquonorsquo and others Opinion question using Likert Scale rating is designed for evaluation on the existing procurement method presently practiced in JKR and it is also evaluated on the suitability of applying GMP method Needless to mentioned the overall questionnaire structure and questions were designed to have a quick and good response rate 50 Survey Results For the purpose of data analysis the received questionnaire from respondents were then analyzed and interpreted in a structured manner to enable facts and findings to be drawn A well known software for research data analysis Statistical Packages for Social Sciences (SPSS) was used SPSS provided reliable data analysis hence served as a very useful tool for the research The detail results of the analysis will be discussed in the next part of this section by using appropriate tables figures and paragraphs The results of the survey indicated that most respondents strongly agreed that procurement method is very important and therefore has significant effect on the overall project success in the construction industry Secondly there are issues and problems associated with the existing procurement method for public projects in Malaysia The third findings indicated lower level of awareness and knowledge about GMP amongst government construction practitioners in Malaysia Fourthly majority of the respondents strongly supported GMP as an alternative procurement method to be applied for public projects in Malaysia 51 Respondentsrsquo Position in Organization As shown in Figure 2 (refer to Appendix) as part of the respondentsrsquo background majority of the respondents (60) were from middle group which was the senior officer This was followed by the junior officer made up to 19 (5) of total respondents This makes senior officers were the most responsive group One explanation that can be drawn from it is that since their position is in the middle looking from the organization hierarchy they are mostly involved in decision makings and thus have great influence on procurement method Interestingly the third fourth and fifth most respondents group were shared together by top management director and others (support group such as technical assistance to engineer) Each represented by two (2) respondents made up to 7 of total respondents The fact that all group of different levels were represented made the data reliable to support the

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

5

30 Objectives of The Research The aim of this research is to address the issues of problematic and underperformance of traditional procurement method for public projects in Malaysia by providing Guaranteed Maximum Price (GMP) as an alternative procurement method Firstly to review the importance of procurement strategy in construction industry Secondly to evaluate the problems associated with the existing procurement method for public projects in Malaysia Thirdly to assess the current level of awareness and knowledge about GMP method among government construction practitioners in Malaysia and finally as the ultimate objective of the research to evaluate the suitability of applying GMP procurement method for public projects in Malaysia 40 Research Methodology The research has adopted questionnaire survey distributed via email to JKR respondents currently involved in public projects in Malaysia Jabatan kerja Raya (JKR) or Public Works Department is the main government technical agency in Malaysia being responsible for executing public projects in Malaysia Therefore having sample of respondents from JKR is appropriate and adequate reliable and representative in meeting the data collection objectives Prior to the distribution a pilot study was undertaken whereby the draft questionnaire was emailed to three (3) respondents This is important to get feedback and to check the reasonableness and practicality of the questionnaire A pilot study actually provides a lsquotrial runrsquo for the questionnaire (Naoum 1998) 41 Target Respondents A total number of sixty (60) respondents were identified and selected by the author at the beginning stage of the data collection phase The questionnaire was distributed by email to the sixty (60) potential respondents in March 2009 They were from various backgrounds such as architects engineers and quantity surveyors at different level of seniority It was anticipated that due to the uncertainties of the response longer time should be allowed for getting the questionnaire back from respondents Therefore a timeframe of three (3) weeks was seen sufficient for this purpose In the end a total number of twenty seven (27) replied questionnaires were received which represents a response rate of 45 The response rate is considered good because it falls within the normal response rate which is between 40 to 60 as stated by Naoum (1998) 42 Questionnaire Structure

6

The questionnaire was devided into five (5) sections The formation of the sections was linked to the four (4) research objectives There are three types of questions used which are open-ended question factual question and opinion question Open-ended question is used for respondentsrsquo background and working experience Factual question is used for objective descriptive and analytical question such as relating to previous procurement method mostly experienced by respondents questions requiring answer of lsquoyesrsquo or lsquonorsquo and others Opinion question using Likert Scale rating is designed for evaluation on the existing procurement method presently practiced in JKR and it is also evaluated on the suitability of applying GMP method Needless to mentioned the overall questionnaire structure and questions were designed to have a quick and good response rate 50 Survey Results For the purpose of data analysis the received questionnaire from respondents were then analyzed and interpreted in a structured manner to enable facts and findings to be drawn A well known software for research data analysis Statistical Packages for Social Sciences (SPSS) was used SPSS provided reliable data analysis hence served as a very useful tool for the research The detail results of the analysis will be discussed in the next part of this section by using appropriate tables figures and paragraphs The results of the survey indicated that most respondents strongly agreed that procurement method is very important and therefore has significant effect on the overall project success in the construction industry Secondly there are issues and problems associated with the existing procurement method for public projects in Malaysia The third findings indicated lower level of awareness and knowledge about GMP amongst government construction practitioners in Malaysia Fourthly majority of the respondents strongly supported GMP as an alternative procurement method to be applied for public projects in Malaysia 51 Respondentsrsquo Position in Organization As shown in Figure 2 (refer to Appendix) as part of the respondentsrsquo background majority of the respondents (60) were from middle group which was the senior officer This was followed by the junior officer made up to 19 (5) of total respondents This makes senior officers were the most responsive group One explanation that can be drawn from it is that since their position is in the middle looking from the organization hierarchy they are mostly involved in decision makings and thus have great influence on procurement method Interestingly the third fourth and fifth most respondents group were shared together by top management director and others (support group such as technical assistance to engineer) Each represented by two (2) respondents made up to 7 of total respondents The fact that all group of different levels were represented made the data reliable to support the

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

6

The questionnaire was devided into five (5) sections The formation of the sections was linked to the four (4) research objectives There are three types of questions used which are open-ended question factual question and opinion question Open-ended question is used for respondentsrsquo background and working experience Factual question is used for objective descriptive and analytical question such as relating to previous procurement method mostly experienced by respondents questions requiring answer of lsquoyesrsquo or lsquonorsquo and others Opinion question using Likert Scale rating is designed for evaluation on the existing procurement method presently practiced in JKR and it is also evaluated on the suitability of applying GMP method Needless to mentioned the overall questionnaire structure and questions were designed to have a quick and good response rate 50 Survey Results For the purpose of data analysis the received questionnaire from respondents were then analyzed and interpreted in a structured manner to enable facts and findings to be drawn A well known software for research data analysis Statistical Packages for Social Sciences (SPSS) was used SPSS provided reliable data analysis hence served as a very useful tool for the research The detail results of the analysis will be discussed in the next part of this section by using appropriate tables figures and paragraphs The results of the survey indicated that most respondents strongly agreed that procurement method is very important and therefore has significant effect on the overall project success in the construction industry Secondly there are issues and problems associated with the existing procurement method for public projects in Malaysia The third findings indicated lower level of awareness and knowledge about GMP amongst government construction practitioners in Malaysia Fourthly majority of the respondents strongly supported GMP as an alternative procurement method to be applied for public projects in Malaysia 51 Respondentsrsquo Position in Organization As shown in Figure 2 (refer to Appendix) as part of the respondentsrsquo background majority of the respondents (60) were from middle group which was the senior officer This was followed by the junior officer made up to 19 (5) of total respondents This makes senior officers were the most responsive group One explanation that can be drawn from it is that since their position is in the middle looking from the organization hierarchy they are mostly involved in decision makings and thus have great influence on procurement method Interestingly the third fourth and fifth most respondents group were shared together by top management director and others (support group such as technical assistance to engineer) Each represented by two (2) respondents made up to 7 of total respondents The fact that all group of different levels were represented made the data reliable to support the

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

7

research study because all were important and their involvement in projects implementation including procurement activities were significant although having different roles 52 Respondentsrsquo Construction Disciplines Based on Figure 3 (Appendix) it was shown that quantity surveyors were the greatest number of respondents which was 49 (13) of all respondents That makes the data to be significant in terms of reliability because among those different practitioners quantity surveyors are mostly dealt with tendering contracts award and the selection of procurement method for projects The civil engineers were the second mostly representated discipline made up to 33 (9) of total respondents Architects and mechanical engineers were sharing the third and fourth most respondents each with 2 respondents counted to 7 There was only one (1) electrical engineer represented 4 of all respondents 53 The Importance of Appropriate Procurement Method for Projects Analysis as shown in Figure 4 (Appendix) was on how the respondents rated the importance of appropriate procurement method for construction projects The scale used ranging from zero (lsquo0rsquo) which represented lsquodisagreersquo to three (lsquo3rsquo) represented lsquostrongly agreersquo The first question was given an overall mean of 274 which means that in general respondents at least agreed or almost strongly agreed that selecting the appropriate procurement method was important for project Whereas the second question was rated 252 which also means that the most of respondents at least agreed that appropriate procurement method had significant effect on overall project success

54 Respondentsrsquo Mostly Experienced Procurement Method Based on Figure 5 (Appendix) as expected most of the respondents (85 or 23 respondents) had experience in Traditional Method The second mostly experienced procurement method was Design Build and Turnkey (DBT) made up to 11 (3) and followed by Project Management (PM) made up to 4 (1) There was no respondent had most experience in International Projects or PPP (Public Private Partnership) or Build Operate and Transfer (BOT) more than the Traditional Method Design Build and Turnkey (DBT) or Project Management (PM) 55 Respondentsrsquo Mostly Experienced Project Type Referring to the data analysis as shown in Figure 6 (Appendix) we can see clearly that most of the respondents which was 74 (20) had experience in building projects than the other type of construction projects This is due to the fact that building projects are significantly dominating the public projects in Malaysia in terms of numbers and overall monetary values as it covers most of the infrastructure and facilities needs such as schools hospitals administration offices religious buildings and so on Civil engineering projects such as roads and bridges was the second mostly

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

8

experienced project type rated which was 22 (6) of all respondents followed by special projects such as airports ports submarine and others at 4 (1) of all respondents No respondents have selected infrastructure works or renovation works as their frequently experienced project type 56 Respondentsrsquo Mostly Experienced Tendering Arrangement As shown in Figure 7 (Appendix) the majority of respondents had experiences in open tendering arrangement more than the others This was represented at 74 (20) of total respondents This means that open tendering used for traditional procurement method is still the most popular method for tendering of public projects The second mostly experienced tendering arrangement indicated by respondents was selective tendering made up to 15 (4) of total respondents Whereas the third frequently used tendering arrangement was direct negotiated tendering at 11 (3) of all respondents No respondents had selected pre-qualification as the mostly used tendering arrangement 57 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing

Procurement Method The respondents were asked in general whether they faced some difficulties with regards to the use of the procurement method they had indicated in the answers of the previous question (which 85 of respondents rated the traditional procurement) This was meant to get at glance impression from them on the subject matter The details of this subject were further highlighted to the respondents in other section of the questionnaire where they were asked about the typical issues and problems in the traditional procurement method As shown in Figure 8 (Appendix) the result is not surprising and in line with our thought as discussed in Chapter 1 and 2 as 81 (22) of total respondents had indicated lsquoYesrsquo compared to only 19 (5) indicated otherwise or lsquoNorsquo 581 Respondentsrsquo Opinion on Whether the Existing Procurement Methods

Can Be Improved The respondents were also asked after knowing that there are some difficulties and constraints as whether the existing procurement methods can be improved in order to overcome or mitigate those difficulties Having difficulties means that there are weaknesses lead to issues and problems within the system As shown in Figure 9 (Appendix) the result was overwhelming as 96 (26) almost all respondents had said lsquoYesrsquo compared to only 1 respondent said lsquoNorsquo counted for only 4 This analysis has shown that most respondents welcome any attempts for improvement in the procurement method Thus this is related to the second research objective 582 Respondentsrsquo Evaluation on Performance of the Existing Procurement

Methods

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

9

In this question the respondents were asked to evaluate the performance of the existing procurement method used They were given range of scale from zero (lsquo0rsquo) which represented lsquonot goodrsquo to three (lsquo3rsquo) represented lsquovery goodrsquo As shown in Figure 10 (Appendix) 44 (12) rated satisfactory which represented nearly half of all respondents 52 (14) have rated good and one (1) respondent counted for 4 have indicated very good This analysis shows that the performance of the existing procurement method falls between satisfactory and good which is moderate or medium thus need improvements 59 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods After asking questions on difficulties the need for improvements and knowing the performance with regards to the existing procurement method the respondents were asked to express their opinion whether such an alternative procurement method that can give better project performance The majority of them 85 or 23 respondents indicated lsquoYesrsquo compared to only 15 or four respondents indicated lsquoNorsquo as shown in Figure 11 (Appendix) This also further supports the research conducted by the author to introduce GMP into the public procurement method in Malaysia 510 Typical Issues and Problems Associated With Traditional Procurement

Method In this question the respondents were asked about their opinion on what were the common issues and problems associated with the traditional procurement method The problems were already identified and highlighted and they were asked about the frequency of occurrences of such problems This section is also referred to the second research objective The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquoneverrsquo to three (lsquo3rsquo) represented lsquovery frequentrsquo As shown in Figure 12 (Appendix) a few observations can be made The three (3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor with overall means of 219 207 and 200 respectively Based on ranking the overall means for the rest of the highlighted problems are as follows Cost overruns 163 Late payment 156 Communication breakdown 152 Low quality 141 Claims 141 Adversarial approaches 133 Low commitment from contractor 133 and Underestimated of contractorrsquos contract price 133 In general as indicated by the respondents all the typical problems have overall means more than lsquosometimesrsquo to lsquofrequentrsquo This also means that the majority of respondents acknowledged the fact that there were such problems in the traditional procurement method 511 Respondentsrsquo Knowledge About GMP

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

10

The respondents were posed a general question whether they knew GMP or not This question was meant to provide answers for the third research objective As shown in Figure 13 (Appendix) majority of the respondents 74 (20) answered they never heard of GMP before throughout their career period Whereas the other respondents only 26 (7) of all respondents indicated they have heard GMP before answering the questionnaire although we did not exactly know how much they knew about GMP In overall majority of respondents were not aware of GMP and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia 512 Respondentsrsquo Evaluation on the Suitability of Applying GMP At the beginning of the question it was mentioned clearly to the respondents that this part of the questionnaire was for the evaluation of the suitability of whether GMP can be applied by JKR for the execution of public projects in Malaysia Key characteristics of GMP were highlighted and presented in a table format to enable the respondents to give opinion and rating It has been mentioned at the beginning of this chapter on the main purpose of this question The respondents were given scale ranging from zero (lsquo0rsquo) which represented lsquonot importantrsquo to three (lsquo3rsquo) represented lsquovery importantrsquo The overall ratings given by the respondents would be the basis to indicate the suitability of GMP to be applied for public projects in Malaysia In other words It serves as the indications as whether the respondents supports or otherwise not the GMP As presented in Figure 14 (Appendix) in overall the results are very positive and encouraging as nine(9) of fourteen(14) GMP key characteristics were given high rating between 20 represented lsquoimportantrsquo and 30 represented lsquovery importantrsquo Based on ranking these characteristics with the overall means are Payment security 252 Scope certainty 241 Time saving 237 Project focus 237 Cost certainty 230 Reasonable cost to client 230 Open-book format 222 Partnering relationship 211 and lsquoWin-winrsquo situation 211 This strongly indicates that the majority of the respondents were in favor of GMP This also means that the majority of respondents strongly supported the GMP for public projects in Malaysia Whereas the other five (5) GMP characteristics were given rating between 10 represented lsquoslightly importantrsquo and 20 represented lsquoimportantrsquo Based on ranking the characteristics are Overlapping of design and construction 196 Encourages lsquoNo- blamersquo culture between parties 196 Fast-track project duration 189 Risk sharing 189 and Encourages contractorrsquos input at design stage 167 This also indicated a positive rating because these overall means are more closed to 20 means lsquoimportantrsquo than 10 Overall one key general observation that can be drawn from this analysis is that most respondents strongly supported the idea that GMP procurement method can be an alternative and thus should be applied for public projects in Malaysia 513 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

11

This analysis is for the last question of the questionnaire served as a further emphasis to the previous question on the suitability of applying GMP This is also related to the fourth research objective After evaluating all the key characteristics of GMP in the previous section and having considered what GMP could provide the respondents were asked one last question to conclude the questionnaire lsquohellipdo you think that GMP can be applied for public projects in Malaysiarsquo As shown in Figure 15 (Appendix) 93 (25) of respondents had answered lsquoYesrsquo and only 7 (2) of respondents indicated lsquoNordquo This result is again positive and consistent with the previous analysis as presented and discussed in Section 513 Thus the majority of respondents indicated that GMP was suitable and can be applied for public projects in Malaysia 60 Conclusions With a total number of twenty seven (27) replied questionnaires received which represents a response rate of 45 the author is in an opinion that the questionnaire survey can be regarded as representative survey thus provides representative findings that fulfill the objectives of the research The results from the questionnaire survey has shown that majority of the respondents almost strongly agreed that procurement method is important and therefore has significant effect on the overall project success in construction industry Most of respondents have given high rating on this issue The results from the questionnaire survey indicated that most the respondents acknowledged the fact that they encountered some difficulties with regards to the use of the existing which is mainly traditional procurement method In general majority of respondents have also indicated high scale rating on the highlighted issues and problems of the traditional procurement method with three(3) most frequent problems in the traditional procurement method are Delay Variation Order (or known as Change Order in some countries) and Incompetent contractor These findings are parallel with the initial statement mentioned before that inefficient and ineffective procurement method practices and contracting approaches have been identified and clearly highlighted as one of key challenges under the Malaysian Construction Industry Master Plan (CIMP) 2006 It has been identified that traditional procurement often with low bid tendering has often resulted lsquounrealistically low contract pricesrsquo which then leads to low quality delayed public projects together with lots of cost variations design changes claims leading to disputes and long litigation (CIMP2006) This is also consistent with the other literature review argument mentioned earlier on a study conducted by Marcos Feldman from Florida International University in 2006 that public construction projects in Miami Florida US were plagued with construction delays cost overruns and shoddy quality He then concluded that traditional low bid contracting was partly to be blamed and said lsquoLow bid contracting

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

12

is false economy encourages cost cutting and underperformance and does nothing to screen out bad contractorsrsquo Although it was referring to the case in the US but it reflects the same case in Malaysia The findings from the questionnaire survey has shown that in overall majority of respondents were not aware of GMP and they indicated that they have never heard of GMP before answering the questionnaire In other words GMP is not well known and this is believed to represent the reality among the JKR practitioners as well as in the whole construction industry in Malaysia This means that the level of awareness and knowledge about GMP is relatively low among government construction practitioners in Malaysia The last findings is that majority of the respondents have given a high rating therefore most of them agreed and supported GMP as an alternative procurement method for public projects in Malaysia In other words introducing GMP into Malaysian public projects is most welcomed and timely It is thus concluded that GMP is suitable should be adopted and can be applied by Jabatan Kerja Raya (JKR) Malaysia particularly and the Malaysian government in general as an alternative procurement method for public projects in Malaysia and as an attempt to overcome the current issues and problems in the traditional procurement system This move as to improve the procurement system is indeed in line with the Malaysian Construction Industry Master Plan (CIMP) made in 2006 by the Malaysian government As the Malaysian construction industry still has a long way to go this effort is also seen as critically vital in ensuring long term survival competency and competitiveness of the industry as a whole 70 Limitations the Study and Suggestions for Future Research The findings and the conclusions discussed in the previous section can be regarded as preliminary stage thus there is a lot more to be explored It is indeed acknowledged by the author that the strong support of applying GMP procurement method based on respondents having poor knowledge of GMP in general is one of the limitations of this research It is also recommended that due to the lacking of research and study conducted as the author regards this research as a pioneer research on GMP particularly for public projects in Malaysia further research need to be carried out as to develop the best and practical model of GMP that is tailored to the Malaysian environment In achieving it collaborative efforts suggestions ideas and feedback coming from various parties involved in the implementation of public projects other than JKR such as consultants and contractors are also seen as important to path the way for GMP success in Malaysia References

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

13

Abd Majid MZ Edum-Fotwe FT McCaffer R (1998) Sub-contracting or Co-contracting Construction Procurement Perspective Universiti Teknologi Malaysia and Loughborough University Abdul Rashid K Morledge R (1998) Construction Procurement Processess in Malaysia Constraints and Strategiesrsquo Jabatan Kerja Raya(JKR) Malaysia and The Nottingham Trent University Ameer N Ali N (2006) Construction Industry Payment amp Adjudication Act Master Builders Association of Malaysia (MBAM) Malaysia Quarterly Journal 3rd Quarter Publication pp 1-14 Beach R Webster M Campbell KM (2005) An Evaluation of Partnership Development in the Construction Industry International Journal of Project ManagementVol 23 pp 611-621 Barlow J (2000) Innovation and Learning in Complex Offshore Construction Projects Research Policy Vol 29 Black C Akintoye A Fitzgerald E (1999) An Analysis of Success Factor and Benefits of Partnering in Construction International Journal of Project Management Vol 18 pp 423-434 Boukendour S Bah R (2001) The Guaranteed Maximum Price Contract as Call Option Construction Management and Economics Chiang YH (2009) Subcontracting and Its Ramifications A Survey of the Building Industry in Hong Kong International Journal of Project Management Vol 27 pp 80-88 Che Munaaim ME (2006) Payment Woes Among Malaysian Contractors Master Thesis Universiti Teknologi Malaysia Clifton Clooney Group (2002) Procurement Options for Resource Recovery Facility Development ndash Redefining Project Management Australia New Hampshire State Education USA (2009) Construction Contracts and Delivery Method httpwwwedstatenhuseducationdoeorganisationprogramsupportbuildingAidConstructionContractsDeliveryMethods1htm [Accessed2009 March 9] Contract Policy Guaranteed Maximum Price Contracts Princeton University USA June 2006 httpwwwprincetonedufacilitiesadministrative_servicescontract_administrationpdfSection7-8pdf [Accessed2009 February 27] CMAA (Construction Management Association of America) (2007) Construction Delivery Approaches Davis PR Stevenson D (2004) Undertanding and Applying Guaranteed Maximum Price Contracts in Western Australia Curtin University of Technology Perth Denzin N Lincoln Y (1998) Collecting and Interpreting Qualitative Materials Thousand Oaks California US Sage

14

Die Deutsche Bauindustrie (2005) Partnering Bei Bauprojekten Berlin access httpwwwbauindustriededyndataarticle-00159029-018-Partnering-Lang-Endf1pdf [Accessed2009 March 15] Duncan WR (1996) A Guide to The Project Management Body of Knowledge Project Management Institute (PMI) USA Elias S (2002) GMP ndash The Misundertood Contract BCRELinkscom articles httpwwwbcrelinkscomarticleselias1htm [Accessed2008 December 30] Fieldman M (2006) Best Value in Publicly Funded Projects Contractor Selection in Two County GOB Projects Florida International University Gander A Hemsley A (1997) Guaranteed Maximum Price Contracts CSM United Kingdom Gogulski P (2002) Avoiding Construction Claims Through Guaranteed Maximum Contracts httpwwwexpertlawcomlibrarybusinessconstruction_gsmhtml [Accessed 2009 January 30] Hashim M Li MCY Ng CY Ng SH Shim MH Tay L (2007) Factors Influencing the Selection of Procurement Systems by Clients Universiti Teknologi Malaysia Holloway S (2003) Pitfalls in Cost-Plus Contracts The Newsletter of the ABA (American Bar Association) on the Construction Industry Jenkins N (2008) A Project Management Primer ndash Basic Principles ndash Scope Triangle ProjectSmartcoukhttpwwwnickjenkinsnet [Accessed 2009 April 22] Jian Zuo Ness D Zillante G (2006) The Clientrsquos Role in Driving an Appropriate Project Culture Leading to Innovative Performance Outcomes University of South Australia Kaiser DJ (2006) The Illusion of The Guaranteed Maximum Price The Project Management Standard Project Management Institute (PMI) USA KPMG International (2007) Construction Procurement for the 21st Century Kluenker C (2001) Risk vs Conflict of Interest ndash What Every Owner Should Consider When Using Construction Management Construction Management Association of America (CMAA) Love PED Skitmore M and Early G (1998) Selecting A Suitable Procurement Method For A Building Project Construction Management and Economics Malaysian Construction Industry Master Plan (CIMP) (2006) Construction Industry Development Board (CIDB) Kuala Lumpur httpwwwcidbgovmy[Accessed 2009 February 2] Mohd Danuri MS Che Munaaim ME Abdul Rahman H Hanid M (2007) Late and Non-payment Issue in The Malaysian Construction Industry ndash Contractorsrsquo Perspective Universiti Malaya

15

Mohd Nazir NZ (2006) Late Payment Problems Among Contractors in Malaysia Master Thesis Universiti Teknologi Malaysia MooreD (2006) Successful Project Delivery ProQuest Education Journal Naoum SG (1998) Dissertation Research and Writing for Construction Students Butterworth Heinemann Procurement Practice Guide (2008) Contracts Used for Construction Projects New South Wales Government httpwwwmanagingprocurementcommercenswgovausystemindex_ppgdoc [Accessed 2009 January 26] Procurement Guidance Series (2008) lsquoRelational Procurement Options ndash Alliance and Early Contractor Involvement Contractsrsquo Queensland Government Chief Procurement Office Australia Riecke VR (2004) Public Construction Contracting Choosing the Right Project-Delivery Method Georgia Institute of Technology USA Rochester M (2005) Contracting Options for Procurement Management and Maintenance of Assets ndash The Choices and Trends 115th IPWEA (Q) North Queensland Branch Conference Bowen Australia 24th ndash 26th November 2005 Rogoski R (2001) Government Construction Projects Move to Eliminate Confusion Delays The Business Journal of the Greater Triad Area Sambasivan M Yau WS (2006) Causes and Effects of Delays in Malaysian Construction Industry International Journal of Project Management Vol 25 pp 517-526 Saunders M Lewis P Thornhill A (2003) Research Methods for Business Students 3Rd Edition Pearson Education Limited Harlow Steadman T (2006) Cost-Plus Guaranteed Maximum Price Contracts International Construction Newsletter Spring 2006 Clifford Chance Strang W (2002) The Risk in CM lsquoat-Riskrsquo Construction Management Association of America (CMAA) Tan YC (2006) A Handbook for Improving Real Estate Project Delivery in Malaysia Analysis Comparison and Selecting the Best Method Master Thesis Massachusets Institute of Technology USA Tautschnig A Hulka G (2002) Die Besondere Eignung des GMP-Modells fur ldquoFast-Trackldquo Projekte im Hochbau Universitat Innsbruck Austria Trochim WMK (2006) Deductive and Inductive Thinking httpwwwsocialresearchmethodsnetkbdedindhtm [Accessed 2009 March 21] Turner JR Simister SJ (2001) Project Contract Management and a Theory of Organisation International Journal of Project Management Vol 19 pp 457-464

16

Walker DHT Hampson K Peters R (2002) Project Alliancing vs Project Partnering a Case Study of the Australian National Museum Project Supply Chain Management An International Journal

Appendix

17

Respondents Position in Organisation

2 75 19

2 7

16 60

2 7

directorjuniorothersseniortop management

Figure 2 Respondentsrsquo Position in the Organisation

Respondents Background

2 7

9 33

1 42 7

13 49ArchitectCivil EngineerElectrical EngineerMechanical EngineerQuantity Surveyor

Figure 3 Respondentsrsquo Construction Disciplines

The Importance of Appropriate Procurement Method For Projects

274

252

240 245 250 255 260 265 270 275 280

Procurement

Effect on Project

Likert scale

Mean

Figure 4 The Importance of Appropriate Procurement Method

for Projects

18

Respondents Mostly Experienced Procurement Method

23 85

3 11 1 4

TraditionalDesign Build amp Turnkey (DBT)Project Management (PM)

Figure 5 Respondentsrsquo Mostly Experienced Procurement Method

Respondents Mostly Experienced Project Type

20 74

6 221 4

BuildingCivilSpecial project

Figure 6 Respondentsrsquo Mostly Experienced Project Type

Respondents Mostly Experienced Tendering Arrangement

20 74

4 15

3 11

openselectivenego

Figure 7 Respondentsrsquo Mostly Experienced Tendering Arrangement

19

Respondents Opinion on Whether Having Difficulties Using the Existing Procurement Method

22 81

5 19

yesno

Figure 8 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing Procurement Method

Respondents Opinion on Whether the Existing Procurement Methods Can be Improved

26 96

1 4

yesno

Figure 9 Respondentsrsquo Opinion on Whether the Existing Procurement Methods Can Be Improved

Respondents Evaluation on Performance of The Existing Procurement Method

12 44

14 52

1 4

satisfactorygoodvery good

Figure 10 Respondentsrsquo Evaluation on Performance of the Existing Procurement Methods

20

Respondents View on the Need for Alternative Procurement Method

23 85

4 15

yesno

Figure 11 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods

Typical Issues and Problems with Traditional Procurement

Delay 219

Variation Order 207

Incompetent contractor 200

Costoverruns 163

Late payment 156

Communication breakdown 152

Low quality 141

Claims 141

Adversarial 133

Low commitment 133

Underpriced 133

000 050 100 150 200 250

Likert scale

Mean

Figure 12 Typical Issues and Problems Associated With Traditional Procurement Method

Respondents Knowledge About GMP

yes 7 26

no 20 74

yesno

Figure 13 Respondentsrsquo Knowledge About GMP

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

17

Respondents Position in Organisation

2 75 19

2 7

16 60

2 7

directorjuniorothersseniortop management

Figure 2 Respondentsrsquo Position in the Organisation

Respondents Background

2 7

9 33

1 42 7

13 49ArchitectCivil EngineerElectrical EngineerMechanical EngineerQuantity Surveyor

Figure 3 Respondentsrsquo Construction Disciplines

The Importance of Appropriate Procurement Method For Projects

274

252

240 245 250 255 260 265 270 275 280

Procurement

Effect on Project

Likert scale

Mean

Figure 4 The Importance of Appropriate Procurement Method

for Projects

18

Respondents Mostly Experienced Procurement Method

23 85

3 11 1 4

TraditionalDesign Build amp Turnkey (DBT)Project Management (PM)

Figure 5 Respondentsrsquo Mostly Experienced Procurement Method

Respondents Mostly Experienced Project Type

20 74

6 221 4

BuildingCivilSpecial project

Figure 6 Respondentsrsquo Mostly Experienced Project Type

Respondents Mostly Experienced Tendering Arrangement

20 74

4 15

3 11

openselectivenego

Figure 7 Respondentsrsquo Mostly Experienced Tendering Arrangement

19

Respondents Opinion on Whether Having Difficulties Using the Existing Procurement Method

22 81

5 19

yesno

Figure 8 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing Procurement Method

Respondents Opinion on Whether the Existing Procurement Methods Can be Improved

26 96

1 4

yesno

Figure 9 Respondentsrsquo Opinion on Whether the Existing Procurement Methods Can Be Improved

Respondents Evaluation on Performance of The Existing Procurement Method

12 44

14 52

1 4

satisfactorygoodvery good

Figure 10 Respondentsrsquo Evaluation on Performance of the Existing Procurement Methods

20

Respondents View on the Need for Alternative Procurement Method

23 85

4 15

yesno

Figure 11 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods

Typical Issues and Problems with Traditional Procurement

Delay 219

Variation Order 207

Incompetent contractor 200

Costoverruns 163

Late payment 156

Communication breakdown 152

Low quality 141

Claims 141

Adversarial 133

Low commitment 133

Underpriced 133

000 050 100 150 200 250

Likert scale

Mean

Figure 12 Typical Issues and Problems Associated With Traditional Procurement Method

Respondents Knowledge About GMP

yes 7 26

no 20 74

yesno

Figure 13 Respondentsrsquo Knowledge About GMP

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

18

Respondents Mostly Experienced Procurement Method

23 85

3 11 1 4

TraditionalDesign Build amp Turnkey (DBT)Project Management (PM)

Figure 5 Respondentsrsquo Mostly Experienced Procurement Method

Respondents Mostly Experienced Project Type

20 74

6 221 4

BuildingCivilSpecial project

Figure 6 Respondentsrsquo Mostly Experienced Project Type

Respondents Mostly Experienced Tendering Arrangement

20 74

4 15

3 11

openselectivenego

Figure 7 Respondentsrsquo Mostly Experienced Tendering Arrangement

19

Respondents Opinion on Whether Having Difficulties Using the Existing Procurement Method

22 81

5 19

yesno

Figure 8 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing Procurement Method

Respondents Opinion on Whether the Existing Procurement Methods Can be Improved

26 96

1 4

yesno

Figure 9 Respondentsrsquo Opinion on Whether the Existing Procurement Methods Can Be Improved

Respondents Evaluation on Performance of The Existing Procurement Method

12 44

14 52

1 4

satisfactorygoodvery good

Figure 10 Respondentsrsquo Evaluation on Performance of the Existing Procurement Methods

20

Respondents View on the Need for Alternative Procurement Method

23 85

4 15

yesno

Figure 11 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods

Typical Issues and Problems with Traditional Procurement

Delay 219

Variation Order 207

Incompetent contractor 200

Costoverruns 163

Late payment 156

Communication breakdown 152

Low quality 141

Claims 141

Adversarial 133

Low commitment 133

Underpriced 133

000 050 100 150 200 250

Likert scale

Mean

Figure 12 Typical Issues and Problems Associated With Traditional Procurement Method

Respondents Knowledge About GMP

yes 7 26

no 20 74

yesno

Figure 13 Respondentsrsquo Knowledge About GMP

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

19

Respondents Opinion on Whether Having Difficulties Using the Existing Procurement Method

22 81

5 19

yesno

Figure 8 Respondentsrsquo Opinion on Whether Having Difficulties Using the Existing Procurement Method

Respondents Opinion on Whether the Existing Procurement Methods Can be Improved

26 96

1 4

yesno

Figure 9 Respondentsrsquo Opinion on Whether the Existing Procurement Methods Can Be Improved

Respondents Evaluation on Performance of The Existing Procurement Method

12 44

14 52

1 4

satisfactorygoodvery good

Figure 10 Respondentsrsquo Evaluation on Performance of the Existing Procurement Methods

20

Respondents View on the Need for Alternative Procurement Method

23 85

4 15

yesno

Figure 11 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods

Typical Issues and Problems with Traditional Procurement

Delay 219

Variation Order 207

Incompetent contractor 200

Costoverruns 163

Late payment 156

Communication breakdown 152

Low quality 141

Claims 141

Adversarial 133

Low commitment 133

Underpriced 133

000 050 100 150 200 250

Likert scale

Mean

Figure 12 Typical Issues and Problems Associated With Traditional Procurement Method

Respondents Knowledge About GMP

yes 7 26

no 20 74

yesno

Figure 13 Respondentsrsquo Knowledge About GMP

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

20

Respondents View on the Need for Alternative Procurement Method

23 85

4 15

yesno

Figure 11 Respondentsrsquo Opinion on the Need for Alternative Procurement Methods

Typical Issues and Problems with Traditional Procurement

Delay 219

Variation Order 207

Incompetent contractor 200

Costoverruns 163

Late payment 156

Communication breakdown 152

Low quality 141

Claims 141

Adversarial 133

Low commitment 133

Underpriced 133

000 050 100 150 200 250

Likert scale

Mean

Figure 12 Typical Issues and Problems Associated With Traditional Procurement Method

Respondents Knowledge About GMP

yes 7 26

no 20 74

yesno

Figure 13 Respondentsrsquo Knowledge About GMP

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia

21

Respondents Evaluation on the Suitability of Applying GMP

Payment security 252Scope certainty 241

Time saving 237Project focus 237

Cost certainty 230Reasonable cost 230

Openbook 222Partnering 211Win win 211

Overlapping 196No blame culture 196

Fast-track 189Risk sharing 189

Contractors input 167

000 050 100 150 200 250 300

Likert scale

Mean

Figure 14 Respondentsrsquo Evaluation on the Suitability of Applying GMP

Respondents Opinion on Applying GMP for Public Projects in Malaysia

yes 25 93

no 2 7

yesno

Figure 15 Respondentsrsquo Opinion on Applying GMP for Public Projects in Malaysia