Per­fect­ing pro­cure­ment

The GCC’s tril­lion-dol­lar con­struc­tion sec­tor is rich with growth op­por­tu­ni­ties, but its megapro­jects need im­proved con­tract pro­cure­ment strate­gies to suc­ceed

Construction Week - - COMMENT - NEHA BHA­TIA

The G CC con­struc­tion in­dus­try’ s def­i­ni­tion of‘ pro­cure­ment’ is in need of a thor­ough re­vamp, Con­struc­tion Week’s in­ter­ac­tions with top com­pa­nies and chief ex­ec­u­tive of­fi­cers have in­di­cated in 2018. This ex­er­cise, chal­leng­ing though it may seem, could re­sult in greater pro­duc­tiv­ity and cost sav­ings, both of which are highly sought-af­ter by re­gional con­struc­tion lead­ers. More im­por­tantly, re defin­ing the mean­ing of pro­cure­ment could also help the Gulf’ s vi­tal con­tract­ing sec­tor avoid pay­ment de­lays and con­struc­tion dis­putes.

ALEC’s Kez Tay­lor, China State Con­struc­tion En­gi­neer­ing Cor­po­ra­tion Mid­dle East’ s Yu Tao, and Laing O’ Rourke Mid­dle East’ s Mark An­drews are some of the many con­trac­tors, con­sul­tants, and an­a­lysts that have out­lined the im­por­tance of con­tract for­mu­la­tion in dis­cus­sions with

Con­struc­tion Week dur­ing the course of this year (page29).

These are prom­i­nent in­dus­try vet­er­ans call­ing for an es­sen­tial in­dus­try-wide change, but they are not the only sup­port­ers of this pos­i­tive dis­rup­tion. Lawyers and le­gal ex­perts, in their in­ter­ac­tion sat the Con­struc­tion Week: Dis­pute Res­o­lu­tion Ques­tion Time sem­i­nars in Dubai( March 2018) and A bu D ha bi( Oc­to­ber 2018) have also high­lighted the need for bet­ter-drafted con­tracts to boost ef­fi­cien­cies( page 92).

Mar­ket ex­perts that Con­struc­tion Week has in­ter­acted within 2018 agree that the on us to im­prove con­tracts lies with clients. Their sug­ges­tions for de­vel­op­ers in­clude re­vis­it­ing the lan­guage of a typ­i­cal con­struc­tion con­tract, en­sur­ing that it is fair to the con­trac­tor, and uni­fy­ing the doc­u­ment’ s guide­lines–re­gard­less of whether it isled by the re­gion ally pop­u­lar Fidic, or equally ubiq­ui­tous global for­mats such as Rib a, New En­gi­neer­ing Con­tract, and Joint Con­tracts Tri­bunal.

At the heart of these ideas is the un­der­stand­ing that em­ployer ten­der­ing pro­cesses must im­prove. Ten­ders must be re­al­is­tic in terms of their costs and time lines, and de­vel­op­ers must foster a bid­ding en­vi­ron­ment that curbs un­der cut­ting and price wars, con­tract­ing and le­gal pro­fes­sion­als have told Con­struc­tion Week.

The re­gional con­struc­tion sec­tor is al­ready fa­mil­iar with e-pro­cure­ment pro­cesses and their ben­e­fits, such as greater trans­parency and busi­ness clar­ity. Digit is at ion is rapidly mak­ing strides in the lo­cal con­struc­tion sec­tor, and some real es­tate gi­ants in the Gulf, such as Shar­jah’ s Shurooq, are us inge-ten­der­ing plat­forms to stream line their pro­cure­ment op­er­a­tions.

The cre­ation of an ideal pro­cure­ment en­vi­ron­ment will re­quire a shift in mind set from all in­dus­try pro­fes­sion­als, and may take some­time to be achieved. How­ever, the Gulf’ s clients, con­trac­tors, and con­sul­tants have a healthy track record of in­no­vat­ing and adapt­ing to change, so the wait may well be a short one.

“Ten­ders must be re­al­is­tic in terms of their costs and time­lines, and de­vel­op­ers must foster a bid­ding en­vi­ron­ment that curbs un­der­cut­ting and price wars.”

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