1. Presentation Title FACTORS INFLUENCING
PROCUREMENT ADOPTION IN CONSTRUCTION
Building vs Infrastructure Projects
by S. Vithyashini, B.A.K.S. Perera
&
D.M.G.A.N.M. Sumanarathna
MERCon 2016
5-6 April 2016
Presentation Title
My name My position, contact information or project description

2. Background Construction industry is unique in nature (Rijn, 2005)
Procurement is the process used to deliver construction projects (Ey, Zuo, & Han, 2014)
Adoption of an accurate procurement method is an essential requirement (Kumaraswamy & Dulaimi, 2001)
Based on Selection Parameters an appropriate procurement method can be adopted (Thanh, Thomas, & Swee, 2003)
Project Characteristics
Client’s Requirements and Characteristics
External Environmental Factors.
MERCon 2016

3. Research Problem
Numerous surveys has been carried out on ‘Construction Procurement Selection’
According to Hauf (1976), the four comparison categories of construction comparisons are;
Private construction vs. Public construction Covered by Jayasena (2009)
Building construction vs. Heavy/civil construction (Infrastructure)
Investment building vs. Consumption building
Total construction vs. New construction
This research tends to get the solution for the problem of “Is there any significant difference between Building Construction and Infrastructure construction regarding the procurement selection criteria, in Sri Lanka?”
A null assumption is made as; “There is a difference between Building Construction and Infrastructure construction regarding the procurement selection criteria, considering the Sri Lankan Cotext”
MERCon 2016

4. Aim and Objectives Aim Objectives
This research aimed to determine the level of significant difference between Building Construction and Infrastructure construction regarding the procurement selection criteria in Sri Lanka
Objectives
Identify the various procurement selection criteria and parameters which are used both in Building and Infrastructure projects
Identify the top twenty substantial parameters influencing the procurement selection
Rank the identified parameters in both Building and Infrastructure projects
Compare the ranked parameters in both sectors to analyse the significance of difference of procurement selection criteria
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5. Literature Findings
Procurement Methods are majorly classified as Traditional and non-traditional systems
Initially, only three requirements were considered; Time, Cost, and Quality
Now, it is complicated due to complexity of clients’ expectations and construction projects
Having two major categories; Building and Infrastructure, both categories have their own requirements and characteristics
Thus, a procurement method should be compatible with the project type, address the technical topographies, financial and other possible risks to lead the project towards the success
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6. Literature Findings Contd…
Trend of Construction Projects in Sri Lanka
Type of Construction
2009
2011
2013
Value of work done (Rs. Mn) %
Building
28,633
45.5
37,623 48
57,960
51.1
Highway
19,581
31.1
25,505
32.6
30,381
26.8
Bridge
825
1.3
3,301
4.2
10,429
9.2
Water supply & Drainage
10,103 16
7,226
1,058
0.9
Irrigation & Land Drainage
443
0.7
962
1.2
6,697
5.9
Dredging & Reclamation
180
0.3 44
0.1 1
0.0
Other
3,230
5.1
3,659
4.7
6,904
6.1
Total
62,995
100
78,320
113,430
Source: (Department of Census & Statistics, 2010, 2012, 2015)
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7. Literature Findings Contd…
Available Procurement Methods
(Source: Ratnasabhapathy, 2006, p.7)
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8. Literature Findings Contd…
Client’s Requirements
Cost related Factors
Capital Cost
Maintenance cost
Cost Certainty
Price Competition
Financial Risk
Tendering Cost
Time Related factors
The early start of project
Time for Planning and Designing
Time for Tendering and Evaluation
Construction time and Speed of construction
Quality Related factors
Design improvement and Reliability
Workmanship
Aesthetic appearance
Complexity of the project
Other general factors
Allocation of Responsibilities
Accountability
Transparency
Familiarity
Flexibility
Disputes and Arbitration
Project Characteristics
Project Type
Project Size
Project Cost
Time Constraints
Payment method of the project
Integration of Design and Construction of the Project
Project Funding Method
Site Risk Factors
Construction Method
Degree of Innovation Technology Involvement
Client’s Characteristics
Types of client
Experience level of the client
Technical and financial capability of the client
Willingness of client to bear risks
Client’s willingness to be involved
Client’s trust towards other parties
Clear express of end user’s requirements
CONSTRUCTION PROCUREMENT SELECTION
External Environment
Internal Environment
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9. Literature Findings Contd…
Factors influencing in procurement adoption were identified
Client Requirements
Client Characteristics
Project Characteristics
Influence on the choice of procurement method in both Building and Infrastructure projects in Sri Lanka???
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10. Research Methodology Research Approach Quantitative Approach
Delphi Technique (Questionnaire Survey)
Series of questionnaires to experts
Reiterating same questions
Providing group feedback from previous rounds
Delphi Rounds
Numbers of rounds – 3
Panel of experts
Experience in SL construction industry
Good knowledge on procurement systems
Size of panel – 36
Quantity Surveyors, Manager Contracts, Civil Engineers
Client and Consultancy Organizations
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11. Research Methodology Contd…
Evaluation Methodologies
Mean weighted rating
Mean weighed rating of each parameter is computed to deliver an indication of the importance of the factor
Relative Important Index (RII)
Relative Importance Index was used to rank the factors according to their significance in affecting procurement system selection
Coefficient of Variation (COV)
Coefficient of Variation (COV) delivers the standard deviation as a percentage of the mean and it is effective to evaluate relative variability of numerous responses
Hypothesis Testing
Statistical test using Spearman’s and Pearson’s Rank Correlation Coefficient
Spearman’s and Pearson’s coefficients (r) can indicate the relationship between ranks
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12. Research Findings Delphi Round One
Factors influencing on procurement selection in SL:
21 Client requirements 07 Client characteristics and 11 project characteristics were accepted by more than 50% of the experts for both categories
05 additional client requirements and 02 project characteristics influencing on procurement selection were introduced by experts. Maintenance Cost, and Aesthetic appearance were suggested for building projects. Quality and safety policy, Number of long lead-time items involved were suggested for Infrastructure projects.
Tendering cost is removed since it suggested by less than 50% of respondents
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13. Research Findings Contd…
Delphi Round Two
To achieve the second objective…
Identification of Top Twenty Significant Factors Influencing Procurement Selection for Building and Infrastructure projects
Category
Building projects
Infrastructure projects
Cost Related Factors 05 04
Time Related Factors 01
Quality Related Factors 02
Other General Factors
Client's Characteristics 03
Project Characteristics 06 08
Client Requirements
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14. Research Findings Contd…
Delphi Round Three
Final ranking of the parameters have been done as per the utility scores given by the experts
The panel was requested to enter a utility score between 10 and (to exterminate the zero error) with 10 representing ‘very least favorable’ and 110 representing ‘very most favorable’
Cannot reject the null hypothesis (H0) since the Spearman’s Rank Correlation Coefficient and Pearson's Ranked Correlation Coefficient were bigger than alpha
Null hypothesis H0: ρ= 0 (There is no correlation between rankings)
Alternative hypothesis H1: ρ≠ 0 (There is a correlation between rankings)
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15. Conclusions
This study was completely grounded on Delphi methodology in order to extort a gang of exclusive parameters which highly manipulating the procurement selection.
Several Client requirements, Client characteristics, and project characteristics were identified.
Top Twenty Significant Factors Influencing Procurement Selection for building projects and civil projects were identified.
final ranking of the parameters have been done as per the utility scores given by the experts.
While comparing the rankings, it was identified There is no correlation between rankings.
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16. Recommendations
Success outcome of the projects will extremely hinge on apposite planning of works and correct selection of procurement path.
Consideration of proper selection parameters were obtained a special place on procurement selection of construction projects.
Professionals who involving in procurement selection of construction projects, must have extensive knowledge on selection parameters which influencing the choice of procurement path for a project
Consideration of more factors may help the construction projects to obtain the subsidy of newly evolving procurement systems by evading the cultural influence of selection.
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17. Further Studies
According to Hauf (1976), the four comparison categories of construction comparisons are;
Building construction vs. Heavy/civil construction
Private construction vs. Public construction
Investment building vs. Consumption building
Total construction vs. New construction.
The first category was covered by a previous research by Jayasena (2009) and the second category was covered through this study. Since the third and fourth categories are not covered, it can be suggested as a further research.
Further research can be carried out to identify the relationship between proper consideration of the procurement selection parameters and performance level of construction projects.
As a further research to this study, identification of suitability of available procurement systems for each factors can be suggested.
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18. References
Hauf, D. H. (1976). Building Contracts for Design & Construction (2nd ed.). John Wiley & Sons Inc.
Jayasena, H. (2009). Factors Affecting Construction Procurement Selection: Study of Private sector vs. Public sector. Department of Building Economics. (Unpublished B.Sc. in Quantity Surveying Dissertation). University of Moratuwa: Sri Lanka.
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19. Thank You

20. Format of Delphi rounds
Instrument
Questionnaire 1
Questionnaire 2
Questionnaire 3
Purpose
To gather an exclusive group of selection parameters which influence the procurement selection
To identify the top twenty significant parameters separately in both categories.
To assess the level of significance and rank the parameters against building and civil procurement selection criteria.
Number of experts selected 34
Data base for the design of Questionnaire
Literature review
Results from round one
Results of factor analysis carried out for round two results
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21. Percentage of Response
Panel of experts
Designation
Number of Experts
First Round
Second Round
Third Round
Project Manager 04
Manager Contracts 03 02 01
Civil Engineer
Chief Quantity Surveyor 07 05
Senior Quantity Surveyor 13 12 11
Quantity Surveyor
Total Responses 34 30 26
Percentage of Response
100%
88.24%
76.48%
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22. Top 10 measures in Building construction procurement choice
Selection Parameter
Rank
Avg. Utility Factor
Cost Certainty/Completion within the budget 1
95.23
Project Cost 2
83.85
Financial Risk 3
83.50
Construction Method 4
81.42
Project Size 5
81.19
Price Competition 6
74.73
The early start of project 7
73.92
Complexity of the project 8
73.65
Project Type 9
73.50
Time Constraints 10
70.23
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23. Top 10 measures in Civil construction procurement choice
Selection Parameter
Rank
Avg. Utility Factor
Time Constraints 1
93.23
Project Size 2
89.96
Quality and safety policy of the Client / Government 3
89.12
Price Competition 4
83.15
Project Cost 5
79.96
Construction Method 6
79.00
Cost Certainty/Completion within the budget 7
76.77
Project Funding Method 8
75.42
Financial Risk 9
75.04
Professional team performance 10
74.65
MERCon 2016