Project procurement system selection model (with particular reference to Saudi Arabia)

In the last two decades there has been a significant change in the technical and economic conditions prevailing in the construction industry. The traditional methods of procuring projects are now inadequate to cope with these changes. To overcome the shortcomings of the traditional procurement methods, the construction industry has developed a large number of different procurement systems to secure the relationships between contract parties. The proliferation of different procurement systems has created the problem of how to determine the optimum procurement system for any particular project. A systematic approach for selection of the most appropriate system is now needed. Throughout this thesis an investigation has been made of many of the issues related to the successful formulation of a Project Procurement System Selection Model (PPSSM). The knowledge of client needs in the construction industry is essential to the project success. This research has considered the fundamental role played by client needs in the process of procurement selection. The various categories of procurement system that exist in the construction industry are presented in order to address the benefits and drawbacks of each system. A careful investigation of the rules and regulations governing the Saudi construction industry has contributed very significantly to the success of the model building. An examination of the existing models revealed a number of drawbacks which are discussed in detail in this research. A survey was conducted in Saudi Arabia with the aim of testing the PPSSM for effectiveness and efficiency and assisting the governmental agencies to select the most appropriate procurement system to implement their projects. For this purpose, a questionnaire was developed and divided into three major parts: Background information; Data needed to operate PPSSM; and Evaluation of the criteria used for the selection of the procurement system. The results of the first and third parts are generated from 100 responses to the questionnaire mailed to the 110 governmental agencies that represent the population of the study, giving an overall response of (91%). For the second part only thirty senior government agency officers were involved in order to maintain consistency of data needed to operate the PPSSM. The data were analyzed using computer statistical packages: Excel and Statistical Analysis System (SAS). On the basis of the synthesis process of the PPSSM, Saudi public clients have selected "design and build" as the most appropriate procurement system to procure their projects with an overall priority of 0.49. Design and manage, construction management, and management contracting ranked second, third and fourth with priorities of 0.258, 0.140 and 0.106 respectively. The outcome of the study demonstrates the effectiveness of PPSSM in helping the client in the construction industry to choose the right procurement system that best answers his needs and fulfills the project requirements.