Articles on procurement added to Site 4th December 2011

Cost Reimbursement or Prime Cost – An Overview

Under a cost reimbursement or prime cost contract arrangement the contractor is appointed, possibly in competition, but on many occasions by negotiation, to carry out the works on the basis that he is paid his actual costs. He also receives a fixed fee or percentage for overheads and profit, which if competitive tendering is possible, can form the basis of the tender….. Read More

Guaranteed Maximum Price Contracts – An Overview

Both the Employer and Contractor may find a guaranteed maximum price arrangement attractive. For the Employer, a major advantage is that the Employer is relieved from the worry of the project exceeding the budget. The Employer is attracted by the Guaranteed Maximum Price element a Guaranteed Maximum Price Contract. This is coupled with the attraction of the Scope of Works being…. Read More

Introducing Management Contracting

Management Contracting differs from that of other more traditional procurement methods in that the management contractor is appointed to manage the construction of the project rather than simply build it. The Contractor is usually selected in competition, early in the programme on the basis of a tender fee for pre-commencement services and construction services during and after the project as well as a lump sum or guaranteed maximum for site staffing and facilities. As well as price, the experience and past performance of the Management Contractor is a major factor in the selection….. Read More

Procurement through Design and Build

Normally a contractor is selected, in competition to execute a project under the Design and Build option. Tenders are invited on the basis of an Employer’s Requirements document prepared normally by the Employer in consultation with his design team. The Employers Requirements set out the project needs in terms specification, function and performance of the building required and if applicable will also define planning and any other…. Read More

Procurement with Bills of Quantities and Approximate Bills of Quantities

Bills of Quantities

Bills of Quantities are used to obtain an equal basis to obtain a price in competition normally a lump sum tender price based upon the priced Bills of Quantities is normally tendered in competition by a pre-selected or pre-qualified list of contractors. Selection of a Contractor is made on the basis of the Tenderer pricing the measured Bills of Quantities which are prepared in accordance with the specified standard method on measurement. In Malaysia the two main standard forms of measurement are:

SMM2 – Standard Method of Measurement of Building works (Second Edition) produced by the Institution of Surveyors Malaysia.

CESMM3 – Civil Engineering…. Read More


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