factors affecting the selection of procurement methods in the construction projects in gaza strip

138 Pages·2014·1.83 MB·English

The Islamic University – Gaza ةزغ – تييلاسلإا تؼياجنا
Faculty of Engineering تسذُهنا تيهك
Higher Education Deanship ايهؼنا ثاسارذنا ةداًػ
Construction Project Management تيسذُهنا غيراشًنا ةرادإ

FACTORS AFFECTING THE SELECTION OF
PROCUREMENT METHODS IN THE
CONSTRUCTION PROJECTS IN GAZA STRIP

ةزغ عاطق يف ثاءاشَلإا غيراشي يف ءارشنا تقيرط رايتخا يف ةرثؤًنا مياىؼنا

Partial fulfillment of the requirement for the degree of Master of Science in Civil
Engineering

Prepared by
Osama I. El Agha

Supervised by
Dr. Nabil El Sawalhi

Thesis is submitted in partial fulfillment of the requirement for
Degree of Master of Science in Civil Engineering – Construction Management

The Islamic University of Gaza
December, 2013

وـيـ حرنا ٌـىحرنا ِمـ نا وسـ ب
ٌَاَكَو ُىَهْؼَت ٍُْكَت ْىَناَي َكًََهَػَو َتًَْكِحْناَو َباَتِكْنا َكْيَهَػ َُّهنا َلَزََْأَو
اًًيِظَػ َكْيَهَػ َِّهنا ُمْضفَ
113 حٜٚا - ءاسُنا جسٕس
ويـ ظؼنا للها قذص

I
DEDICATION

This thesis is dedicated

To my parents for their unlimited support.
To my wife for her continuous encouragement.
To my daughters (Mai and Mayar) who were missing my direct
care during my study.
To all of my family, colleagues and friends for their help and support.
To those who give of themselves so that others may live.

Osama El Agha

II
ACKNOWLEDGEMENT

 Iam grateful to my supervisor Dr. Nabil El Sawalhi for his professional
advice, useful guidance, and excellent support through all stages of preparing
this thesis. Dr El Sawalhi careful check and useful response have made a
great contribution to the production of this thesis in its final form.

 Appreciation is also expressed to construction management teaching staff
at the Islamic University for their support and encouragement.

 Many thanks to Dr. Samir Saffi for his support in analyzing the study survey
data.

 Kind gratitude and sincere acknowledgment to Engineering consultancy offices,
NGO‟s, government agencies, international agencies, municipalities in the Gaza
Strip who participated in filling out the questionnaires and provided valuable
information for this study.

 Finally, I must express my sincere thanks to all those people who made this
thesis possible and an enjoyable experience for me.

III
Abstract
The selection of an appropriate procurement method is becoming an increasingly
important issue due to a complex decision-making that has to be made by clients early
in the project lifecycle. The aim of this research is toimprove and enhance procurement

system in the Gaza Strip construction industry through identify, evaluate and rank
essential the factors that affect the selection of traditional and the non-traditional
procurement methods from procurement experts and consultants‟ perspectives.
An extensive literature review of various procurement methods and factors which
influence the selection of an appropriate method for construction projects in Gaza Strip
was conducted.
A survey questionnaire was carried out to elicit professionals' views on factors that
influence the selection of procurement method for their planned projects; a total of 68
organizations (i.e. 29 procurement experts and 39 consultants operating in Gaza Strip,
Palestine) responded to the survey. The data was then analyzed using the Statistical
Package for Social Sciences (SPSS) and the factors ranked according to their Relative
Importance Index (RII).
The results indicate that the top six significant factors that have most influence on the
selection of procurement methods in the Gaza Strip in construction projects are: price
competition; degree of project complexity; time constrains of project; project size;
client's financial capability and client's experience in procurement methods. This
research concludes that there is no variety of procurement methods used in the Gaza
Strip construction industry where a traditional procurement method with a measure and
pay method based on bill of quantities is preferred. This is because of the most of
professionals' in Gaza Strip are not familiar and not widely experienced with the other
alternative procurement methods.
One of the main recommendations of this research is to use the proposed conceptual
framework using the multi-attribute utility approach (MAUA) as a decision support
system for the selection of appropriate procurement method for construction projects in
the Gaza Strip.

IV
ثحبنا صخهي
حٛهًػ حتٕؼظن ًاشظَ كنرٔ حغنات حًْٛأ خار حٛضق ذٛٛشرنا غٚساشي ٙف ٗهثًنا ءاششنا حقٚشط ساٛرخا حٛهًػ دذثطأ
ساشقنا غُط ٌأ ثٛدٔ ،عٔششًنا جاٛد جسٔد ٍي شكثي دقٔ ٙف ُّػ بُٕٚ ٌ و ٔأ كناًنا فشط ٍي ساشقنا راخذا
واظَ زٚزؼذٔ ٍٛسذذ ٗنإ فذٓٚ ثذثنا ازْ ٌئف عٔششًنا حاجَ ٗهػ شٛثك شٛثأذ ّن ءاششهن حًئلاًنا حقٚشطنا راخذات
حقٚشط ساٛذ را ٙف شثؤذ ٙرنا ميإؼنا ةٛذشذٔ ىٛٛقذٔ ذٚذذذ للاخ ٍي جزغ عاطق ٙف ذٛٛشرنا حػاُط ٙف خاٚشرشًنا
. خاٚشرشًنا ءاشثخٔ ٍٛٚساشرسلاا ءاسأ ٙظقذ للاخ ٍي ءاششنا
ءاششنا حقٚشط ساٛرخا ٙف شثؤذ ٙرنا ميإؼنأ حفهرخًنا ءاششنا قشطن حقتاسنا خاساسذنا ٍي ذٚذؼنا عاشؼرسا ىذ ذقن
شثؤذ ٙرنا ميإؼنا ىْلأ ًٍُٛٛٓنا ءادأ خٛضٕرن جادأك ٌاٛثرسا واذخرسا ىذٔ ،جزغ عاطق ٙف خاءاشَلإا غٚساشًن ٗهثًنا
عاطق ٙف حهياػ حًظُي ٌٕرسٔ حَٛاًث دذؼن خسي مًػ ىذ ثٛد ،ذٛٛشرنا غٚساشي ٙف ءاششنا حقٚشط ساٛرخا حٛهًػ ٙف
ٍػ ًلاثًي خاٚشرشي شٛثخ ٌٔششػٔ حؼسذٔ ،حٛسذُٓنا حٚساشرسلاا ةذاكًنا ٍػ ًلاثًي ٘ساشرسا ٌٕثلاثٔ حؼسذ( جزغ
ساٛق ىذٔ )SPSS( جياَشت واذخرسات ٌاٛثرسلان حٛئاظدلإا خاَاٛثنا مٛهذذ ىذ ذقٔ ) غٚساشًهن حكناًنا خاسسؤًنا
. )RII( حٛثسُنا حًْٛلأا ششؤًن ًاقفٔ آثٛذشذٔ ءاششنا حقٚشط ساٛرخا ٙف جشثؤًنا ميإؼنا حًْٛأ حجسد
ذٛٛشرنا غٚساشي ٙف جزغ عاطق ٙف ءاششنا حقٚشط ساٛرخا ٙف شثكلأا شٛثأرنا آن ٙرنا ميإؼنا ىْأ ٌأ ٗنإ جئارُنا شٛشذٔ
حٛناًنا جسذقنا ،عٔششًنا ىجد ،عٔششًنا ءآرَا دقٔ خادذذي ،عٔششًنا ذٛقؼذ حجسد ،شؼسنا ٗهػ حسفاًُنا :ْٙ
حؼٛثطٔ عَٕ ،شطاخًنا ةُجذ ،خاٚشرشًنا ٙف مْؤي ىقاط شفٕذ ،ءاششنا قشط حفشؼي ٙف كناًنا جشثخ ،كناًهن
.ٙهذًنا قٕسنا ٙف حفهرخًنا ءاششنا حًظَأ شفٕذ ، عٔششًنا
خاءاشَلإا حػاُط ٙف حيذخرسًنا ءاششنا عإَأٔ قشط ٙف عُٕذ دٕجٔ وذؼن ثذثنا ازْ ضهخٚ كنر ٗنإ حفاضلإات
كنرٔ "خاًٛكنا لٔذج" حقٚشط واذخرسات حٚذٛهقرنا ءاششنا حقٚشط ساٛرخا ةهغلأا مضفٚ ثٛد ،جزغ عاطق ٙف ذٛٛشرنأ
ىٓٚذن حٛفاكنا جشثخنا شفٕذ وذػٔ جزغ عاطق ٙف ءاششهن ٖشخلأا قشطنا ٗهػ خاٚشرشًنا ءاشثخ فٛخك وذػ ةثست
.حهٚذثنا قشطنا ِزْ غي مياؼرهن
حطاخنأ اْساٛرخا ىرٚ ٙرنا ءاششنا حقٚشط دَاك ارإ اي حفشؼًن حشرقًنا مًؼنا ساطإ واذخرسا ٗنإ حساسذنا ِزْ ٙطٕذ
ٙف خاٚشرشًنا ءاسذي حفشؼي بٕجٕت ًاضٚأ حساسذنا ِزْ ٙطٕذٔ اًك ،حُٛفنا حٛداُنا ٍي لا وأ حٚذجي ْٙ اي عٔششًت
مقت حهٚذثنا ءاششنا قشط ىٓفٔ حساسد ٗهػ ىٓؼٛجشذٔ حفهرخًنا ءاششنا قشط ٗهػ ٍٛٚساشرسلاأ حفهرخًنا خاسسؤًنا
.حٛسذُٓنا غٚساشًنا ٙف حيذخرسًنا ءاششنا حقٚشطت صاخنا ساشقنا راخذا

V
Table of contents

Dedication ……………………………………………………………………....
II
Acknowledgement ……………………………………………………………...
III
Abstract …………………………………………………………………………
IV
ثحبنا صخهي ……………………………………………………………………….
V
Table of contents ………………………………………………………..……... VI
List of abbreviations …………………………………………………..………. X
List of Tables …..……………………………………………………………….. XI
XIII
List of figures ……………………………………………………………..…….

Chapter 1: Introduction …………………………………….…………..…….. 1

1.1 Introduction …………………………..…………….………………………………. 1
1.2 Importance of the research …………….………………………………………….... 3
1.3 Research aim ………….…………………...……………………………….............. 3
1.4 Research objectives ………………………..……………………………………….. 3
1.5 Statement of the problem …………………….………….…………………………. 4
1.6 Research limitations …………………………..……………………………………. 4
1.7 Thesis structure …………………………………………………………………….. 5

Chapter 2: Literature review …………………………………………………. 6

6
2.1 Definitions of procurement method …………………………………………………
6
2.2 Background for procurement methods history ………………………………………
9
2.3 Issues for future procurement ………………………………………………………..
10
2.4 Types of procurement methods ……………………………………………………..
2.4.1 Traditional procurement method (Separated) …………………………… 1 1
2.4.1.1 Lump sum contract method …………………………………… 1 3
2.4.1.2 Measurement contract method ……………………………….. 14
2.4.1.3 Cost reimbursement contract method ………………………… 15
2.4.1.4 Key points for traditional procurement method …………….... 17
VI
2.4.1.5 Advantages and disadvantages of traditional procurement ……. 18
2.4.1.6 When should traditional procurement method be used …...…... 18
2.4.2 Design and construct procurement method (Integrated) …………..….... 19
2.4.2.1 Key points for design and construct procurement method ..….. 24
2.4.2.2 Advantages and disadvantages of design and construct
procurement method ……………….…………………………………. 26
2.4.2.3 When should design and construct procurement be used …..…. 26
2.4.3 Management procurement method (Packaged) …………..……………… 27
2.4.3.1 Management contracting procurement method …..…………... 27
2.4.3.2 Construction management procurement method ………..……. 29
2.4.3.3 Design and manage procurement method…..…………………. 30
2.4.3.4 Key points for management procurement method …………..… 30
2.4.3.5 Advantages and dis. of management procurement method.….... 31
2.4.4 Public private partnership procurement method " PPPP" ……..…………. 32
2.5 Factors affecting the selection of procurement method ………..………………........ 33
2.6 The decision to select procurement method ………………………..……………….. 40
2.7 Local studies …………………………..……………………………………………. 41
2.8 Chapter summary …………………………………………..……………………….. 43

CHAPTER 3: Reasearch methodology ………….……..……………………..….…... 47

3.1 Introduction ………….…………………………………………………………….. 48
3.2 Research design ……………………………………………………………..……… 48
3.3 Interview ………………………………..………………………………………….. 49
3.4 Developing the questionnaire ………………….…………………………………... 50
3.5 Statistical analysis tools ………………..…………………………………………... 51
3.6 Methodology for this research ……………..………………………………………. 52
3.6.1 Study and investigate the major practices of variant types of procurement
methods used in Gaza Strip construction industry ………....……………. 52
3.6.2 Identify and rank the factors affecting the selection of procurement
method……………………………..……………..……………………… 52
3.6.3 Build a framework for the selection of procurement method in Gaza Strip 55
3.7 Pilot study ………..………..………………………………………………………... 55
3.8 Instrument validity ………………..………………………………………………... 56
3.8.1 Validity test …………………………………………………………….... 57
VII
3.8.1.1 Criterion-related validity test ………………………….……… 57
3.8.1.2 Structure validity test ………………………….……………… 59
3.9 Instrument (Questionnaire) reliability ……………………..…….………………... 60
3.10 Research sample ……………….………………………………………………….. 62
3.11 Sample size, questionnaire distribution and collecting data …...………..………... 62
3.12 Method of data analysis ……………..…………………………………………….. 64

CHAPTER 4: Results and discussion ……………………………….…..…………... 66

4.1 Introduction …………………….…………………………………………………... 66
4.2 Organizational profiles …………………..…………………………………………. 66
4.2.1 Position of respondent ……………………………………….…………... 66
4.2.2 Experience years of the respondents ………………………………..……. 67
4.2.3 Qualification of the respondents ………………..………………………... 67
4.2.4 Type of institution ………………...……………………………………… 68
4.2.5 Type of projects the organizations are dealing with ………………..……. 68
4.2.6 Value of projects executed in the last five years …………...…………….. 69

4.3 Factors affecting the selection of procurement method ………….………..…........... 69
4.3.1 Main factor groups affecting the selection of procurement method ……... 69
4.3.2 The relationship among the selection of procurement method groups..…. 72

4.4 Sub-factors affecting the selection of procurement method ……………..…...……... 73
7
73
4.4.1 Group one: Sub-factors related to client ……………..…………………...
4.4.2 Group two: Sub-factors related to cost ………………..…………………. 74
4.4.3 Group three: Sub-factors related to time ……………………..………….. 75
4.4.4 Group four: Sub-factors related to risk ………..………………………… 76
4.4.5 Group five: Sub-factors related to project characteristics ……………..… 77
4.4.6 Group six: Sub-factors related to external environment ……..…………... 78
4.4.7 Ranking of sub-factors affecting the selection of procurement method in
the Gaza Strip …………...……….………………………………………. 80

4.5 Perspective about procurement methods used in Gaza Strip ………………………. 86
4.5.1 The satisfaction about procurement system of different organizations ..… 86
4.5.2 The most common procurement method selected by organizations ..……. 87
VIII