Plan de operaciones

Masterman (2002) defines procurement systems as organisational structures to carry out construction projects suggested by the client, while Rameezdeen and Ratnasabapathy (2006) explain procurement systems as conditions and ways of successfully undertaking a project in order to achieve its objectives. The public sector continues to decide appropriate procurement systems for the construction, maintenance and re-construction of public urban facilities and services. Procurement systems are often categorised as traditional and non-traditional. Rashid

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et al (2006:3), as well as Griffith and Sidwell (1995), outline procurement systems currently used as: Design-Bid-Build; Construction Management at Risk; Design and Build; and Integrated Project Delivery.

2.5.1 Traditional procurement system

Traditional procurement system is simple to understand for many stakeholders, hence the frequent utilisation of the method. Using this type of procurement system, the client reaches an agreement with the design team to carry out public urban infrastructure work as well as the designs (Thwala and Mathonsi, 2012:15). Thereafter, a contractor is appointed, based on the designs computed by the design team. The client is thus in agreement with both the design team and the contractor. Turina, Radujković and Car-Pušić (2008:1) assert that the design-bid-build, widely known as the traditional procurement system, includes three phases: the design phase, the tendering phase and the construction phase. The process is sequential:

subsequent phases cannot occur before the previous one is complete. Bennet (2003) explains that the contractors to carry out the works are selected using one of the following processes:

open tendering, selective tendering or negotiated tendering. It is the client who decides which tendering process to use to select the appropriate contractor to carry out the construction works after the design team completes the designs.

Davies, Love and Baccarini (2008:8) also clarify that the traditional procurement system involves the selection of consultants responsible for carrying out the designs and cost management, on behalf of the client, for public urban infrastructure projects. Thereafter, the contractor is selected through the tendering process to execute the public urban infrastructure projects. The contractor is appointed, based on the completed designs of the design team.

According to Davies et al (2008:8) and Rashid et al (2006:2), in the traditional procurement system there are three kinds of contracts to meet the objectives of the client: lump sum contracts, measurement contracts and cost reimbursement contracts (Rodriguez, 2017; Seng and Yusof, 2006:1).

A lump sum contract is where all the parties establish a fixed (subject to fluctuations) contract sum that will cover all the necessary items, and it is used to minimise design and contract administration costs (Davies et al, 2008:8).

Davies et al (2008:9) explicate that in measurement contracts, a contract sum is established from re-measuring all the required items on completion of the project. This is often used

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where a fixed sum cannot be established at the start of a project. Designing Buildings (2017) further clarifies that measurement contracts are used where reasonable design detail can be achieved but the amount cannot be accurately determined. Excavation works are often carried out using measurement or re-measurement contracts since an actual amount cannot be determined on earthworks.

Lastly, Davies et al (2008:9) state that cost reimbursement, widely known as cost plus, contracts occur when a contract sum is reached by means of identifying the actual cost of the items and adding an amount for the overheads and profit for public urban infrastructure projects. Items include labour, materials and plant. Designing Buildings (2017) explains cost plus contract as an agreement between the client and contractor whereby the contractor is reimbursed the actual amount incurred in undertaking the construction works, as well as an additional fee. The contract is often used where the public urban infrastructure projects contain high risks and where the scope of the work cannot be determined at the beginning.

2.5.2 Non- traditional procurement systems

Thwala and Mathonsi (2012:15) explain that non-traditional procurement systems were developed to minimise the disadvantages of the traditional procurement system. Non-traditional systems find collective solutions for financial or political obstacles. In addition, the systems establish common ground to put the design team and the contractor under a single roof in carrying out the project. Further, the system considers the functionality and management of the built structure (Masterman, 2002). Moreover, non-traditional procurement systems are divided into three categories: the integrated procurement system, the management procurement system and the collaborative procurement system (Thwala and Mathonsi, 2012:16; Masterman, 1996).

2.5.2.1 Integrated procurement system (design and build)

The integrated procurement system is a single corporation providing the design and the construction services, as asserted by both Thwala and Mathonsi (2012:16) and Ashworth (2001). The client does not have to get into a contract with the design consultants and then the contractor. The process of moving from one corporation to the other is eliminated by this procurement system. Rashid et al (2006:4) clearly reveal that it is ideal to use integrated project delivery so that the risk is shared amongst all the stakeholders involved, such as the designer, contractor and the client, through partnership agreements.

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Rodriguez (2017) also asserts that the integrated procurement system, widely known as design and build, is carried out by a single organisation. Often the contractor takes responsibility for the design work, in addition to the construction work. It is used for its certainty on establishing the contract sum. When it comes to the design and build, the appointed contractor often does not have sufficient expertise in the design field, thus the design team is outsourced by the contractor to carry out the design work; the design team should be identified during the tendering phase (Davies et al, 2008:11).

Rashid et al (2006:4) also explain that design-build system involves having different professionals for the design and construction works under a single entity. In other words, all the phases of the project are carried out by a single entity under one contract. Before the design and build contract commences the client appoints design professionals to provide schematic designs to give an idea of what the client intends to construct. Thereafter, the appointed design and construct contractor completes the designs and undertakes the public urban infrastructure projects. The design and build procurement system is used where the private sector is selected to undertake the design and the construction works on behalf of the public sector in exchange for a fee (Seng and Yusof, 2006:1).

2.5.2.2 Management procurement system

When it comes to the management procurement system, the client appoints a management organisation to provide the designs and to manage the construction works, rather than having different organisations handling the designs and managing the construction works. In this type of procurement system, the client is more involved than in other procurement systems (Thwala and Mathonsi, 2012:16). Davies et al (2008:14) assert that a management organisation is appointed to handle all phases of the public urban infrastructure project, including the designs and the construction works. There are several kinds of management procurement systems: Design and management; Management contracting and Construction management.

Davies et al (2008:14) state that during management contracting, a project team and a management team are appointed. The management team assists the project team during the initiation phase of the public urban infrastructure project. The management organisation provides advice and guidance to the project team for a fee that is settled by the client.

The design and manage route is similar to management contracting in the sense that a contractor is paid a fee for the service provided and that the contractor takes responsibility for

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both the design and construction teams (Victorian State Government, 2006). In construction management, the contract of works is direct between the client and the contractor, thus providing the employer larger control of the project. Since the employer has a larger control of the project, the management contractor cannot determine when the project will be completed or what the final cost will be (Mortledge, Smith and Kashiwagi, 2006). Thwala and Mathonsi (2012:16) refer to the CM procurement system as construction management at risk (CMR). The CMR acts as a consultant to the client during the design phase and as a contractor during the construction phase. During the construction phase, the CMR makes sure to deliver the project within the required time, quality and cost.

2.5.2.3 Collaborative procurement system

Bakker et al. (2008) shares that collaborative procurement simply means a cooperative engagement of two or more orgainisations involved in the purchasing process. Jost et al.

(2005) clearly asserts that collaboration procurement system provides increased effectiveness of the project at hand, and provides “improved efficiency through reduction of transaction costs and increased economics of scale through bundling purchasing volumes” (Leenders and Fearon, 1997; Johnson, 1999), since this involves multiple parties. While Reck and Long (1998) states that the most critical aspect of collaborative approach for procurement is the accessing and sharing of strategic skills from the parties involved.

2.6 SOURCES OF FINANCING PUBLIC URBAN INFRASTRUCTURE PROJECTS