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Description
Saudi Arabia has been having many issues with large construction projects such as delays, low performance and high cost. Some studies show that around 70% of the public projects in Saudi Arabia are delayed. These issues have resulted from many factors. One of the factors believed to be delaying projects is the Saudi procurement system. The Saudi procurement system only selects contracts based on the lowest bid price offered. However, the Saudi procurement system has been found to not only produce delayed low quality projects, but also has resulted in higher costs.
This paper shows how to modify the Saudi procurement system by implementing a clarification phase, which is the most important phase in the Performance Information Procurement System (PIPS). The clarification phase requires the bid’s winning contractor to submit a project scope, a project schedule, to identify risks that not their responsibility, performance measurements and a milestone schedule. The PIPS system has been one of the most successful systems around the world and has shown a 98% success rate in six different countries with risks and cost reductions up to 30%.
This research conducted a survey of 157 engineers, 33 consultants, 9 owners, 5 vendors, 13 academics, and 28 architects to develop the public procurement system in Saudi Arabia. The participants work in government sectors with an interest in the Saudi Arabian procurement system. 80.61 % of participants believe that the traditional Saudi procurement system consistently selects poor performing contractors. Moreover, 95.97% of participants think that the selection of contractors based only on the lowest price criterion affects projects negatively. Also, 96.20% of participants in the survey feel that there needs to be a change in the traditional Saudi Arabian procurement system. 88.7% of participants agree to require the contractor to identify risks, and 96.03 % of participants agree that the contractors must have a plan. Moreover, 95.45% of participants agree to require a contractor review the scope of a project and verify that it is correct. Finally, 82.18% of participants agree to require a contractor to resolve all owner concerns before signing a contract to improve construction projects performance. The paper shows the need to change the Saudi procurement system and a solution to this growing problem.
This paper shows how to modify the Saudi procurement system by implementing a clarification phase, which is the most important phase in the Performance Information Procurement System (PIPS). The clarification phase requires the bid’s winning contractor to submit a project scope, a project schedule, to identify risks that not their responsibility, performance measurements and a milestone schedule. The PIPS system has been one of the most successful systems around the world and has shown a 98% success rate in six different countries with risks and cost reductions up to 30%.
This research conducted a survey of 157 engineers, 33 consultants, 9 owners, 5 vendors, 13 academics, and 28 architects to develop the public procurement system in Saudi Arabia. The participants work in government sectors with an interest in the Saudi Arabian procurement system. 80.61 % of participants believe that the traditional Saudi procurement system consistently selects poor performing contractors. Moreover, 95.97% of participants think that the selection of contractors based only on the lowest price criterion affects projects negatively. Also, 96.20% of participants in the survey feel that there needs to be a change in the traditional Saudi Arabian procurement system. 88.7% of participants agree to require the contractor to identify risks, and 96.03 % of participants agree that the contractors must have a plan. Moreover, 95.45% of participants agree to require a contractor review the scope of a project and verify that it is correct. Finally, 82.18% of participants agree to require a contractor to resolve all owner concerns before signing a contract to improve construction projects performance. The paper shows the need to change the Saudi procurement system and a solution to this growing problem.
ContributorsAlofi, Ahmed Abdulrahman (Author) / Kashiwagi, Dean (Thesis advisor) / Sullivan, Kenneth (Committee member) / Kashiwagi, Jacob (Committee member) / Arizona State University (Publisher)
Created2015
Description
Research has shown that construction projects in Saudi Arabia have had a perceived poor performance for the past three decades, from 1970-2016. The Saudi construction industry relies on a Contractor Classification System (CCS) to determine contractors’ capabilities, and prevent underperformance. Through this study, a survey was conducted among persons involved in the Saudi Arabian construction industry to identify the perception of the performance of the Saudi Arabian construction industry, and the satisfaction with the CCS. The results of the survey showed that 71.59% of the participants agreed that the CCS does not accurately assess contractors’ capabilities for projects they are allowed to work on. A critical review of the CCS is presented through a case study and comparisons are made from worldwide CCSs found in a literature review. All the parts of the Kingdom of Saudi Arabia’s CCS, including the work flow and the evaluation criteria were reviewed. Several observations of the CCS include a lack of transparency in the process, no performance feedback, complexity of the system, the system being outdated in relation to the worldwide systems, and no continuous performance measurements. To develop an appropriate continuous performance measurement model and benchmarking, other worldwide performance measurement models and benchmarking models were reviewed and discussed. Through these findings, a modified version of the current CCS was developed. A test was performed on the financial assessment portion of the developed model using 5,751 contractors who were classified at the time of this study. The results showed that only 14% of the 5,751 contractors are financially capable in their respective CCS grades. The proposed new CCS model which is outlined in this study includes two major modifications. The first modification is on existing components, which will improve the transparency, simplicity, and speed of the CCS process. The second modification is the addition of a new component, which will continually track contractor performance over time and motivate contractors to improve their performance.
ContributorsAlmutairi, Saud (Author) / Kashiwagi, Dean (Thesis advisor) / Kashiwagi, Jacob (Committee member) / Sullivan, Kenneth (Committee member) / Arizona State University (Publisher)
Created2017
Description
ABSTRACT
The current Saudi Arabian (SA) procurement system leads to many losses in money and benefits in projects. Also, the use of the traditional procurement system in SA has been identified as one of the causes for poor performance in the delivery of construction and the major risk to the SA government. A questionnaire has been developed and carefully designed based on literature review. The purpose of the survey was to identify the validity of the recent claims that the procurement system in SA is broken and to improve the current SA procurement system. The questionnaire was sent out to 1,396 participants including included 867 engineers, 256 consultants, 93 contractors, 35 owners and 132 architects and 13 academics.
All participants have been registered and licensed professionals at the SA Council for professional engineers, who work in both private and public sectors. The participants are interested in the SA procurement and contracts system with experience ranging from one to more than twenty-five years with the majority of twenty-five years of experience in common construction sectors such as; residential and commercial buildings, healthcare buildings, industrial building and heavy civil construction.
Most of the participants from both private and public sectors agreed with the survey questions subject matter regarding: zone price proposals, contractors' evaluation, risks, planning, projects' scope, owners concern and weekly risks reports (WRR). The survey results showed that the procurement system is the major risk to projects, affects construction projects negatively and is in need of improvement.
Based on the survey and literature review, a model, called Saudi government performance procurement model (SGPPM), has been developed in which the most expert contractor is chosen through four phases: submittals& education, vendors selection, illustration and execution. The resulting model is easy to implement by SA government and does not require special skills or backgrounds.
The current Saudi Arabian (SA) procurement system leads to many losses in money and benefits in projects. Also, the use of the traditional procurement system in SA has been identified as one of the causes for poor performance in the delivery of construction and the major risk to the SA government. A questionnaire has been developed and carefully designed based on literature review. The purpose of the survey was to identify the validity of the recent claims that the procurement system in SA is broken and to improve the current SA procurement system. The questionnaire was sent out to 1,396 participants including included 867 engineers, 256 consultants, 93 contractors, 35 owners and 132 architects and 13 academics.
All participants have been registered and licensed professionals at the SA Council for professional engineers, who work in both private and public sectors. The participants are interested in the SA procurement and contracts system with experience ranging from one to more than twenty-five years with the majority of twenty-five years of experience in common construction sectors such as; residential and commercial buildings, healthcare buildings, industrial building and heavy civil construction.
Most of the participants from both private and public sectors agreed with the survey questions subject matter regarding: zone price proposals, contractors' evaluation, risks, planning, projects' scope, owners concern and weekly risks reports (WRR). The survey results showed that the procurement system is the major risk to projects, affects construction projects negatively and is in need of improvement.
Based on the survey and literature review, a model, called Saudi government performance procurement model (SGPPM), has been developed in which the most expert contractor is chosen through four phases: submittals& education, vendors selection, illustration and execution. The resulting model is easy to implement by SA government and does not require special skills or backgrounds.
ContributorsAlofi, Ahmed Abdulrahman (Author) / Kashiwagi, Dean (Thesis advisor) / Sullivan, Kenneth (Committee member) / Kashiwagi, Jacob (Committee member) / Arizona State University (Publisher)
Created2017