3.

1 The Clients

The client is a main party in the construction

industry and provides the important perspective
on how construction industry performs. A client is
the initiator or promoter who wishes to have a
facility constructed and possesses the ownership
or has the authority to develop the land on which
the required facility will occupy. Essentially, the
client lay down the objectives and requirements
and then the construction industry turns those
objectives into reality.

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 The key role of the client in activating a
cultural shift in the industry through the
adoption of modern management concepts.
Clients are at the core of the process and their
needs must be met by industry
Categories of clients as follows;
i. Client can be either public or private
organizations.
ii. Clients can be categorize as either
experienced or inexperience, according to
their experience of implementing building
projects.
iii. Clients can also categorized according to
their business needs.

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 Client may divided into two broad categories.
They are:
i. The public sector clients comprising of:
Federal government
State governments
Local governments
The NFPEs, i.e., the public sector agencies,
statutory bodies, government owned and/or
government controlled companies
ii. The private sector clients comprising of:
Individuals.
Firms and corporations.
Associations, guilds, institutions and societies.
Other private bodies.

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 Clients in the construction industry according
to the following:
i. Expenditure whether high, medium or low
ii. The types of project they are initiating
such as residential, commercial, industrial
or civil
iii. The level of skills and expertise in the
construction industry
iv. The size of the clients organization

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 Different priorities determined by the clients
business case, clients generally have the following
needs in common. Customers not only aspect
certainty of performance in time, cost, and quality
criteria, but they are also seeking:
i. Functionality of their build project.
ii. Value for money.
iii. A durable and easily maintainable facility
with affordable running costs, no latent
defects, and easy rectification of any minor
problems.
iv. Clear allocation of responsibility amongst
members of the project team with minimal
exposure to risk for the client.
v. Minimal interference from external sources
such as regulatory authorities.
vi. Guarantees and good sales service.
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 Generally, the client may exist in one of three
broad which are:
i. Outside the construction industry
ii. Within the construction industry such as
government or local authority departments
with their own professional staff
iii. Partially outside the construction industry
such as property developers with associated
construction companies.

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 The government is the largest single client and
developer of construction projects particularly
in infrastructure projects. this evident from
the large sum of money allocated by the
government for physical and social
infrastructure under the successive five-year
Malaysia Plans
In practice, in UK for example, mostly the
client is an inexperience client who has no
industry-specific qualifications and may have
project responsibility only once or twice in
their lifetime. Normally, inexperience clients is
advised to purchase construction expertise
from outside the organization

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 Currently, as a result of the development of
innovative procurement system in this industry
that reduces the adversarial relationship
amongst project participants, the construction
team member moving closer to the client in an
attempt to achieve a more successful project
outcome. According to Rowlinson and
McDermott (1999), this resulted the client has
moved from being:
i. An occasional builder to a regular builder
ii. Nave of construction process to being
highly sophisticated
iii. A distance person or body to a much more
unfocused and temporary multiorganisation

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 Clients now play a more active role in building
projects than in earlier times. Client now
challenge all aspects of the building industrys
performance in search for better value, faster
construction and higher profit. However, the
key issue to be borne in mind is that the
clients is the financier and the initiator of a
construction industry project and provides the
most important perception on how the
construction industry performs.
Therefore, despite of their category and level
of expertise in the construction industry, it is
vital to understand their objectives and
requirements in order to provide exceptional
outcome parallel with their expectation.

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3.2 Clients procurement needs

Essentially, procuring a construction project within

the designated time, cost and quality is the prime
objective of clients. In addition, Latham (1995:11)
states that clients expectations on construction
projects will normally be the following:
i. Value for money
ii. Pleasing to look at
iii. Free from defects on completion
iv. Fit for purpose
v. Supported by worthwhile guarantees
vi. Reasonable running cost
vii. Satisfactory durability

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 The procurement strategies that will be imposed by the
clients can be categorically based on the following factors:
Time
Project duration or completion dates may be critical to the
success of project, and in some situations if not met could
lead to total failure in meeting a clients objectives. The
choice of procurement strategy can have a large impact on
the duration of a construction project.
Cost
In the event that a limited capital budget is the prime
consideration of the client, quality, in the form of reduces of
specification, is likely to be restricted and project duration
will be the optimum in terms of construction cost rather
than client choice. The degree, to which cost certainty is
required prior to commitment to construction or at project
completion, restricts procurement choice considerably. The
risk associated with abortive design fees are also a factor of
which clients should be aware.

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Quality
The quality of a building is influenced by
several factors including:
The briefing process
The suitability of materials
Components and systems and their
interrelationships within the total design
Quality control procedures that are in place
during both design and construction
It should be noted that quality is a subjective
issue, sometimes difficult to define and
identify. It may not necessarily mean a more
complex building or a higher specification.

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Accountability
Research carried out by Masterman (1992)
showed that private, experienced secondary
clients, i.e major and active manufacturers,
retailers, service organizations etc. indicated
accountability as the most important criterion
in ensuring project success.
Certainty of project objectives
Some forms of procurement such as
management contracting incorporate an
inherent facility to accommodate design
development throughout a project and others
are particularly unsuited to design changes
like design and build.

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Market conditions
The selection of the process to be used will vary
with the general state of the economy and should
also take into account the predicted changes to it
within the projects life. When the market is at low
points, contractors will be more willing to accept
risk, a situation which should be understood by the
client for its negative effects as well as positive,
since liquidations and claims are more likely to take
place in such conditions. Long project duration may
also involved changes in market conditions and
business environment which may have a significant
effect on clients and contractors cash flow and
progress of work.
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3.2 Clients most popular procurement system
There is a consensus of opinions by all
researchers and building practitioners around
the world that the traditional procurement
system is the most popular and widely adopted
by this industry to procure a construction
project . The popularity of this system is due to
a range of benefits but the most important
reasons are; most clients and contractors have
wide experience of it; the system offer some
price certainty if the design has been fully
scoped out prior to construction; and it gives the
client greater control of design as by default, the
client control the design team.

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3.3 Reason underlying clients preference to the
popular system

The reason underlying clients preferences to

the popular method lead to the followings:

Familiarity with traditional method

Building projects in Hong Kong are carried out
by traditional procurement system. Traditional
system has been the standard system for more
than a century in the UK and in those countries
that have adopted the system imposed by UK
and similar power.

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 Since the familiarity and predictability
arising from long used of traditional
procurement system in the construction
project, this system is viewed as standard
procedures by clients especially in public
sector.
For instance, Latham (1994) states that
after the client is satisfied with the brief and
the feasibility of the project, a typical clients
instinctive reaction is to get into ring up an
architect or engineer syndrome.

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 This situation is seen as for a usual client,
traditional system is the automatic
allocation of a specific construction
procurement system for a project.
On the other hand, insufficient knowledge of
other innovative procurement system also
lead to the preference of most clients to the
traditional system where all the building
participants have better knowledge and
indirectly would enhance their effectiveness
on their job.

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 In Malaysia, traditional system is mostly
adopted because of the most consultant and
key advisers are more familiar and
comfortable with this system.
Since the most clients and contractors as
well as building professionals would have
experience of it, this system remains popular
and be one of the factors that obstruct the
adoption of the innovation procurement
systems.

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 Desirefor lowest tender
Clients, particularly in private sector are
very preferred and attempted for the lowest
tender through the competitive pricing
processes.
Definitely, cost factor is the paramount
important to be considered by clients at the
outset of the project and to secure financing.
In addition, the attitude of clients are
require that the capital cost can be as lowest
as possible but wish to gain profit from the
capital invested as much as it can be.

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 Open or pre-qualified tender competition
using the traditional approach almost
always results in acceptance of the cheapest
fixed price for the specific work.
Therefore, the apparent attraction of the
traditional method as delivering the market
or cheapest price, at least initially, is widely
attributed to its continued popularity.

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 Prefer
the division of the design and construction
responsibility
In most literature, the innovation of new procurement
system attempts to overcome the problem in traditional
system. However, this target is not always achieved
This is because the adversarial and split responsibility
traditions runs deep and not easy to change
The clients prefer the earlier stage that is design stage to
be handled by professionals and then construction stage
handled by the contractors. This is to allow the
responsibility of each stages of the project to be borne by
the respective players. For instance, in the case of a
dispute, it would be much easier to point out who should
be responsible. There is a definitely clear that the client
and professionals are responsible for the design matters
while the contractor will take responsibilities on dispute
arise due to construction matters.

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 The appearance of alternative procurement system
is due to the shortcomings and dissatisfactions of
clients and building practitioners to the traditional
system approaches. This time there is an
increasing concern and discussion on alternative
procurement methods, drifting away from
traditional system.
Relational contracting approaches have become
more popular in recent years, and have appeared
in common forms such as partnering, alliancing,
and relationship management contracts.

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 There are vast opinions from the researchers
and the industry practitioners on the benefits
and prospects of Partnering and Alliancing
which can better be adopted not only to tackle
the downside in traditional systems but is
believed able to provide the increasing
complex requirement of clients.
Partnering and Alliancing are the
procurement approach or a bag of tools to
manage relationship and hold almost the
same philosophy which based on trust,
commitment and mutual objectives.

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4.1 Prospects of the new alternative system

Barlow at el (1997) in their study

resulted that the most dramatic
improvement in performance brought by
the new approach are:
Construction costs and delivery time had
fallen substantially.
Construction quality had improved.
Firms working relationships were better and
they were involved in far fewer disputes.

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 In addition, as cited in the most literature,
high degree of collaborative working
environment has promoted innovation and
provided opportunity to develop and refine
new skills.
These new procurement approaches provide
benefit not only for clients but also for
consultants and contractors. For instance,
they increase opportunity for financially
successful project because of non adversarial
win-win attitude. The authors further notes
that, they also enhance role in decision
making, as an active team member in
providing interpretation of design intent and
solution to problems.

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 This procurement approach is intended for
use in the construction industry and support
from across the board is vital in order to make
the concept of partnering a success in the
construction industry.

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4.2 Challenges

Regardless of the potential advantages resulting from

the adoption of the new approaches, they tend to lead to
risks and challenges. The potential challenges that
would be facing by the adoption of new approaches are
as follows:

Higher overhead and management cost

Complaints from contractors and suppliers include
that the new approaches were quite expensive for
them due to higher management overheads, plus an
uncertain pay-off by clients . This can become a crucial
challenge because clients and other parties are very
particular on cost effectiveness and therefore, decrease
in total contract cost is very essential and critical.

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Cultural issues
Matthews (1999) note that cultural issues of the
way a company works can be part of the problems
where adversarial ways run deep and are hard to
change.
The author state that in some cases, the initial
stage may adopt and come under the collaboration
relationship philosophy but this may change back
to the traditional philosophy as the work
progressed. For example, mistrust and
disbelieving between parties become part of the
challenges to be faced by the new approaches.
When the concept is established, understanding
and trust and positive working relationship
between members of partnering would lead
toward meeting both parties project objectives.

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 THANK YOU
for any further discussion, please
contact me at:
fadhilnavy@yahoo.com..............

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