Procurement Method Selection for Building Maintenance Projects: The Case of Malaysian Public Universities

doi:10.4236/wjet.2014.23B002

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World Journal of Engineering and Technology, 2014, 2, 7-13

Published Online September 2014 in SciRes. http://www.scirp.org/journal/wjet

http://dx.doi.org/10.4236/wjet.2014.23B002

How to cite this paper: Chua, S.J.L., Ali, A.S. and Alias, A. (2014) Procurement Method Selection for Building Maintenance

Projects: The Case of Malaysian Public Universities. World Journal of Engineering and Technology, 2, 7-13.

http://dx.doi.org/10.4236/wjet.2014.23B002

Procurement Method Selection for Building

Maintenance Projects: The Case of Malaysian

Public Universities

Shirley Jin Lin Chua, Azlan Shah Ali, Anuar Alias

Faculty of Built Environment, University of Malaya, Kuala Lumpur, Malaysia

Email: [email protected], asafab@um. edu .my, [email protected]

Received May 2014

Abstract

The purpose of this paper is to implement and validate a decision making framework for building

maintenance projects. The growing importance of maintenance sector not only in Malaysia but al-

so increasingly globalized, the difficulty in selecting an appropriate procurement method and lack

of research in this area provide an impetus for this research. There were 19 procurem ent selec-

tion criteria identified. In addition, there were 4 types of procurements methods which include

outsourcing by specialist term contract, outsourcing by tendered schedule term contract, out-

sourcing by repair and maintenance contract and outsourcing by measured term contract identi-

fied to be the most popular procurement methods adapted by public universities currently and at

the same time were considered most important. The decision making framework was developed

based on AHP technique and principles. Expert Choice Software was employed as development

tool where the criteria and alternatives were integrated into the framework. Finally, structured

interview was conducted to validate the framework developed. The validation process was carried

out through structured interview with selected public university.

Keywords

Analytic Hierarchy Process, Expert Choice Software, Procurement Method, Building Maintenance

Manag em en t, Public Universities

1. Introduction

Procurement system of a project is a key factor which contributes to the overall client satisfaction and project

success. Ng et al. [1] agreed that project success is depends on the selection and use of a suitable procurement

strategy. This is supported by Hui and Tsang [2] which claimed that the two main success factors in building

maintenance management are selecting the most appropriate procurement strategy and implement it in a proper

way. Improving the universities’ building maintenance management systems by selecting the most appropriate

procurement method is si gnificant if universities wish to provide conducive learning envi ronment a nd research

centre for university organization, students, faculty members, parents and other users. Hashim et al. [3] claimed

S. J. L. Chua et al.

that it is a co mplex and i ntimid ate task for the c lient and t he client ’s advisers to select the most appro priate p ro-

curement method due to the amplification of demand on quality services for building or space, changes in busi-

ness environment and the ever evolving market trend resulting in emergence of various procurement strategy.

Thus, the tasks of decision makers to select the most appropriate procurement method becoming more challeng-

ing.

Alhazmi and McCaffer [4] mentio ned t hat the nat ure in selecting procurement method requires a suitable de-

cision-making technique to evaluate the procurement methods against certain criteria systematically. This paper

pre sents a stud y of the selecti on of pr ocure ment metho d for build ing maint enance manag ement through the use

of Multiple criteria decision making (MCDM) particularly Analytic Hierarchy Process (AHP). The finding of

this study will act as a to ol to guide the decision maker to select the most suitable a nd appr opriate procurement

method that will i mp r ove the maintenance management in Malaysia.

2. Building Maintenance Procurement Strategy

Masterman [5] explained that project procurement act as the organizational structure where a group of people

are brought together and organized systematically in term of their responsibilities, duties, roles and interrela-

tionship between them. Ibbs and Chih [6] mentioned that the use of a suitable procurement method can affect

project efficiency and success. T his statement is true for local, regional or global project in scope.

Different procurement method will have different effect on the time, quality and cost of the project therefore

it is very cr ucial to co nsider al l factors in the selectio n of the most app ropria te procure ment strategy. This is be-

cause each type of procurement system has its own feature and peculiarity that will have effect on the quality,

cost and time of the project which is more likely to be known as project performance. Thus, selecting an appro-

priate procurement method is very essential to obtain optimum project performance.

There were 4 types of procurement methods identified to be the most popular procurement methods adapted

by public universi tie s curr ently which include :

1) Outsourcing by Measured T er m Contract (MTC);

2) Outsourcing by Spe c ia list Term Contract (STC);

3) Outsourcing by Tendered Schedule Term contract;

4) Outsourcing by Repair and Maintenance Contract (RMC).

2.1. Possible Assessment Procurement Selection Criteria

Love et al. (1998) highlighted that owners that ha ve similar nature do not certainly ha ve similar needs. In fact,

the needs rely on many factors and are usually specific to t he particular p roject. It is esse ntial to e stablish a li st

of procurement selection criteria before various procurement methods were evaluated. The procurement selec-

tion criteria should reflect the requirements and characteristics of the client, project and external environment

(Luu et al., 2003a; Kumaraswamy and Dissanayak, 2001 and Ambrose and Tucker, 1999). A list of criteria for

procurement methods selection in building maintenance project was established. There were 19 criteria which

wer e categorized in three main categories that were clients’ requirement, project characteristic and external en-

vironment or factor shown in Table 1.

2.2. Decision Making Framework

Ratnasabapathy and Rameezdeen [7] highlighted that it is strategically essential to make sure the selection of

procurement method is done systematically and in a closely controlled manner. Masterman [8] claimed that the

practice of procurement selection available is rather unstructured and unplanned. Many clients select procure-

ment methods in a cursory way simply based upon biased conservative decisions and past experience. In fact,

some clients even employ certain procurement method by default without making a deliberated choice. Thus,

Cheung et al. [9] suggested that the use of the AHP technique in decision making process enables the decision

maker to structure a complex problem in the form of a simple hierarchy and to evaluate a large number of qua-

litative and quantitative factors in a systematic manner under multiple criteria. It is a logical way for people to

make decisions.

Multiple Criteria Decision Making (MCDM) particularly the Analytic Hierarchy Process (AHP) was em-

ployed in this study. Decision is made based on multiple criteria that enables the decision maker to derive his

S. J. L. Chua et al.

Table 1. List of final procurement selection criteria.

Abbrevia tio n used Criteria

C1 Clients’ Requirements

C1.1 Experience contractor availability

C1.2 Q ualit y level

C1.3 Knowledge of the strateg y

C1.4 D eg ree o f responsibility

C1.5 C li en t ’s f in ancial capability

C1.6 Price competition

C1.7 Time Certainty

C1.8 S p eed

C1.9 P ublic acc oun tability

C1.10 Clarit y of sc ope

C1.11 Involvement of owner in the project

C1.12 Working relation s hip

C1.13 Intuition and pas s experience

C1.14 Client in house technical c apab ilit y

C1.15 Price or cost certainty

C2 Project Characteristic

C2.1 Existing building condition

C2.2 Project size

C3 External Environment/Factor

C3.1 Objective or policy of organi zation

C3.2 Gover nm e n t po licy

own set of importance weightings for the selection criteria according to the building or project characteristics.

The application of AHP and Expert choice which able to calculate the judgment consistency assure that the de-

cision maker judgments are consistent and the final decision is made well. The decision makers are able to re-

examine and revise the judgments for all level of the hierarchy and it shows where the inconsistency exists and

how to minimize it in orde r to improve the decision.

3. Research Design

The implementation and validation process was carried out through structured interview with a selected public

university. Structure interview is chosen so that the researcher can explain the framework in detail to the res-

pondents, clarify any doubts arises by the interviewees and at the same time the researcher able to examine the

level of understanding of the respondents towards the topic and the framework. The two main purposes of this

structured interview are:-

1) The interviewees are requested to do a pair-wise comparison with the assessment criteria and procurement

option which has been developed in the Expert Choice software

2) The interviewees also requested to evaluate the proposed decision making framework in term of its capa-

bility, applic a bility and validity.

During the interview, the framework was demonstrated to the interviewee. Then, the interviewees were asked

to run the framework and were asked to evaluate the framework in term of capability, applicability and validity.

4. Results and Discussion

The validation process was carried out through structured interviews with the maintenance personnel that in-

volve in the decision making process in selecting procurement method for building maintenance work. The in-

S. J. L. Chua et al.

terviewee is selected from the maintenance and facilities’ maintenance management department of one of the

public univers ity in Malaysia.

The building maintenance department in the university named as Department of Development and Mainten-

ance. The university was established on 18th of May 1970. The structured interview was conducted on 25th of

April 2013 with an assistant head of quantity surveying department. Quantity surveying department deals mat-

ters relating to contracts, thus the interviewee who had 17 years of experience were appropriate to be inter-

viewed because she involved in the decision making process in selecting the most appropriate procurement

strategy. The interview session was held in a meeting room and the all the pairwise comparison judgments was

done and evaluation pro cess was made after discussion.

All the pairwise comparison judgments made in Expert Choice software were synthesis to obtain vector of

priorities. All the vector of priority for main criteria, sub criteria and alternatives were tabulated in Table 2.

Based on the result obtained, the interviewee priority main factor in selecting the most approp riate procurement

metho d for mainte nanc e of a ir-conditioning services are proj ect characteristics (0.540), external environment or

factors (0.297) and clients’ requirements (0.163). The abb reviation used for sub criteria can be referred to Table 3 .

All main criteria judgments consistency ratio (CR) were 0.01 that were less than 0.10 (<0.10) which represent

good consistency.

The result of priority obtained for pairwise comparison among sub criteria under clients’ requirements in se-

lecting the most appropriate procurement method for maintenance of air-conditio ning ser vices and ra nking can

be referred to Table 3. The consistency ratio value is 0.09 which was lesser than 0.10 (<0.10), therefore the

judgments consistency is acceptable. The two sub criteria under project characteristics (C2) which were existing

building condition (C2.1) and project size (C2.2) obtained equally 0.500 priority vector. This result revealed that

existing building condition and project size were equally important when selecting the most appropriate pro-

curement method for maintenance of air-conditioning services. While for objective or policy of organization

(C3.1) and government policy (C3.2) which is under external e nvironment or factors ( C3), the interviewees feel

that policy of organization government policy (0.750) are more important compared to objective or policy of

organization (0.250). Both judgments for sub criteria under C2 and C3 obtained 0.00 (<0.10) consistency ratio,

thus the consistency ratio was accepted.

From Table 2, the r e sult indicated that for sub criteria u nd e r client s’ requirements (C1) that were C1.6, C1.13,

C1.14 and C1.15 has more strength when performing outsourcing by repair and maintenance contract. Sub crite-

ria C1.4, C1.5, C1.7, C1.8, C1.9, C1.10, C1.11, C1.12 and C1.14 perform better under outsourcing by specialist

term contract while none perform better under outsourcing by tendered schedule term contract. There are 3 sub

criteria have more strength under outsourcing by measured term contract which were C1.1, C1.2 and C1.3.

While for sub criteria under project characteristic (C2) and external environment or factor (C3), C2.1, C2.2,

C3.1 and C3.2 perform better under outsourcing by specialist term contract although C3.1 and 3.2 has equally

performance for outsourcing by specialist term contract and outsourcing by repair and maintenance Contract. All

the judgments made obtained value of CR less that 0.10 (<0.10) that was acceptable.

Table 4 revealed vectors of priorities for the alternatives with respect to the main factor and alternatives’

vector of overall priorities. The results indicated that outsourcing by specialist term contract (0.402) was more

preferable among t he four a lterna tives fo r clien ts’ req uireme nts. As t he val ue of co nsistenc y is 0.0 9 < 0.10, the

consistency judgment was acceptable. While for project characteristics (C2), outsourcing by specialist term con-

tract (0.487) was also more preferable. On the other hand, external environment or facto rs (C3) obtained 0.368

priority vector for both outsourcing by specialist term contract and outsourcing by repair and maintenance con-

tract. The consistency ratio for both project characteristics (C2) and external environment or factors (C3) ob-

tained 0.06 (<0.10) consistency ratio that was acceptable.

The vector of overall priorities for the four alternatives as shown in Table 4 indicated that outsourcing by

specialist term contract (0.432) which obtained the highe st of vector of o verall prio rities is the be st procure ment

method maintenance for air-conditioning services in that particular university. This is followed by outsourcing

by repair and maintenance contract (0.300), outsourcing by Measured Term Contract (0.160) and outsourcing by

tendered schedule term contract (0.1 08).

5. Conclusion

The proposed framework was well received by the interviewee and the interviewee admitted that the selection of

the procurement process proposed was decided on a judgmental basis which was not simply based upon pre-

S. J. L. Chua et al.

Table 3. All vector of priorities for main criteria, sub criteria and alternative.

Abbreviation Used Description V ect o r of Prio rities Ra nking

C1.1 Experience d contractor av ail a bil i ty 0.015 12

C1.2 Q ualit y level 0.016 11

C1.3 Knowledge of the strateg y 0.019 10

C1.4 D eg ree o f responsibility 0.015 12

C1.5 Client's financial capability 0.186 2

C1.6 Price competition 0.228 1

C1.7 Time Certainty 0.044 8

C1.8 S p eed 0.074 5

C1.9 P ublic acc oun tability 0.01 14

C1.10 Clarit y of sc ope 0.056 7

C1.11 Involvement of owner in the project 0.033 9

C1.12 Working relation s hip 0.059 6

C1.13 Intuition and pass experience 0.012 13

C1.14 Client in house technical capability 0.093 4

C1.15 Price or cost certainty 0.141 3

Table 4. Vector of overall priorities with respect to main criteria.

Main Criteria Clients’

Requirements

(C1)

Project

Characteristics

(C2)

External

Environment/Factors

(C3) Vector of

Overall

Priorities

Vector of Prio rities 0.163 0.540 0.297

CR 0.01 0.01 0.01

Alternatives Vecto r of Prio rities

Outsourcing by Repai r a nd Maintenance Co ntra ct 0.328 0.242 0.368 0.300

Outsourcing by Specialist Term Contract 0.402 0.487 0.368 0.432

Outsourcing by Tendered Schedule Term Contract 0.14 0.107 0.096 0.108

Outsourcing by Measured Term Contract 0.13 0.163 0.169 0.160

CR 0.09 0.06 0.06 0.05

*CR = Consistency Ratio

vious experience and perception. The evaluations done by interviewee regarding the proposed decision making

framework revealed the Decision Making Framework for Procurement Method Selection of Building Mainten-

ance Management for Public Universities developed was good in terms of capability, applicability and validity

in assisting the decision-makers to select the most appropriate procurement method in building maintenance

work. Thus, t he pro posed d ecisio n making fr ame work wil l be ca pabl e to assist the decisi on-makers to select the

most appropriate procurement method.

Acknowledgements

The autho rs gra te full y ack no wled ge the fi nanc ial s upport of the University of Malaya Research Grant (UMRG),

grant no RG183/12SUS established at the University of Mala ya, Sustainability Science Research Cluster.

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