See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/48268005 Services provided by project management consultant in Malaysian construction industry Conference Paper · June 2006 Source: OAI CITATIONS READS 10 7,871 1 author: Dzulkarnaen Ismail Universiti Teknologi MARA, Perak Branch, Seri Iskandar Campus 21 PUBLICATIONS 112 CITATIONS SEE PROFILE Some of the authors of this publication are also working on these related projects: Project Management Success for Post Disaster Reconstruction Project: A Conceptual Framework View project Development of Model for integration of Automation and Robotics in IBS View project All content following this page was uploaded by Dzulkarnaen Ismail on 28 July 2016. The user has requested enhancement of the downloaded file. VOLUME 1 Citation : Dzulkarnaen Ismail, Rosli Mohamad Zin and Hafizah Mohd Latif (2006). Services Provided By Project Management Consultant in Malaysian Construction Industry. International Conference In The Built Environment In The 21st Century (ICIBE 2006), pp. 267-276. 13-15 June 2006, Renaissance Kuala Lumpur Hotel, Kuala Lumpur, Malaysia. SERVICES PROVIDED BY PROJECT MANAGEMENT CONSULTANT IN MALAYSIAN CONSTRUCTION INDUSTRY Dzulkarnaen Ismail1 , Ir Dr. Rosli Mohamad Zin2, Hafizah Mohd Latif3. 1 Building Department, UiTM Sri Iskandar, Perak 2 CTMC, Universiti Teknologi Malaysia 3 Building Department, UiTM Sri Iskandar, Perak Abstract: Project Management Consultant (PMC) has become an important entity in the construction industry and the use of its services has increased significantly in recent years. Even though PMC concept is relatively new in Malaysia, applied only after Malaysia had successfully completed the Petronas Twin Tower Project and the KL International Airport (KLIA Project), several issues related to failure of the PMC concept have been raised by the public and government. As a result of the many PMC failures highlighted by the mainstream media, the success of completed projects handled by Project Management Consultant had been overshadowed. This study is carried out to investigate the services provided by Project Management Consultant (PMC) in the Malaysian construction industry. A framework of PMC Services that suits the local construction environment was developed from the combination of three Project Management Consultant’s Contract based on the case studied carried out. The study found that most of the services listed by the author were regarded by the respondents as “important” services and should be carried out by the Project Management Consultants. The results of the survey for the level of satisfaction on the services provided by Project Management Consultant (PMC) show that the respondents had categorized the level of satisfaction under two main factors which are satisfied and fairly conducted. Keywords: Project Management; Malaysian Construction Industry 1. INTRODUCTION The construction industry is often known as a very highly fragmented industry with a large number of activities involving different parties and professionals such as architects, engineers, quantity surveyors, contractor teams, suppliers, financiers and others. By being a fragmented industry, management efficiency and competency in the industry is needed to gain a higher level of competitiveness. The needs for such an approach has become more important and more pronounced, not only due to the increased size and complexity of building projects but also as a result of growing participation by international contractors. One of management solutions that has been widely used to improve efficiency of a project is through the use of Project Management Consultant (PMC) services. The use of its services has increased in every construction industry throughout the world. Even though the practice of using PMC services is new in Malaysia, more widely applied only after Malaysia had successfully completed the Petronas Twin Tower Project and the KL International Airport (KLIA Project), there are more than 100 private companies of various sizes and track records registered under the Treasury that have procured Project Management Consultancy (PMC) services since 1999. The question is whether the services provided by PMC is adequate in ensuring that projects are completed accordingly within the budget or 267 cheaper, are of high quality and meet the client needs. Hence, this study was carried out to investigate the services that are currently and should be provided by Project Management Consultants (PMC) in the Malaysian construction industry as well as to measure the level of satisfaction on the services provided by Project Management Consultant in the construction industry. 1.1 Problem statement Most individual companies and organizations, which require the Project Management Consultancy services, do not have enough resources and expertise to carry the role of PMC. By considering these factors, the government of Malaysia under the Ministry of Finance had entrusted the Project Management Consultant (PMC) to manage government projects with the intention that these projects are completed efficiently on time, within budget and of the specified quality. However, the government’s good intention to obtain services provided by Project Management Consultants has recently raised several issues and problem that are discussed by the public and government. From the issues of computer labs and 16 “sick” schools and five community colleges with structural defects, the closing of Sultan Ismail Hospital in Johor Bahru due to fungal outbreak caused by faulty air-conditioning and the latest issue where the key Middle Ring Road in Kuala Lumpur had to be closed after cracks were found. As a result of these issues, the government has decided to no longer use the services of PMC and reverted to the relevant agencies such as Public Work Department (PWD) and ministries to oversee new projects. Are the services provided by the Project Management Consultant as agreed in the agreement not sufficient enough? However, the issues of Project Management Consultant Firm highlighted by the media have not been fairly delivered and have influenced the government’s decision to stop the services of PMC Firms. Therefore, it is important for Project Management Consultants to define the services that they provide, so that their scope of work is clear in order to prevent any prejudice and misunderstanding on their services in future. It is also important for Project Management Consultants to define the scope of services they need to carry out in such circumstances due to the increased size and complexity of building projects and to be more competitive in the era of globalization. In line with this view, Morris (1994) has seen the need of project management services to be defined in the context of the increasing magnitude of projects undertaken around the world and the requirement for owners to be more competitive in their execution. 1.2 Objectives Of The Study The main objectives of the study can be documented as follows:i) To develop a framework of Services that should be provided by Project Management Consultant (PMC) ii) To identify the type of services that should be provided by Project Management Consultant (PMC) iii) To determine the level of satisfaction regarding the services provided by Project Management Consultant (PMC) 268 1.3 Scope of Research This research was carried out with a careful study based on cases study and data collected from the questionnaires. The scope of research will focuses on the private and government projects using Project Management Consultant (PMC) services. This study focused on the types of services that provided by Project Management Consultant of the project. The study is limited to project management of construction and infrastructure projects undertaken by Project Management Consultant in Klang Valley and Putrajaya. 2. LITERATURE REVIEW 2.1 Malaysian Scenario Malaysia's rapid economic development and the transformation process from an upper middle income developing country towards the industrialized and developed nation status as envisaged in Vision 2020 has created the environment for the development of the construction industry. The construction industry has played an important role in establishing the infrastructure required for socio-economic development and contributing directly to economic growth (Abdullah, 2004). By considering these factors, the government of Malaysia under the Ministry of Finance had entrusted the Project Management Consultant (PMC) to manage government projects with the intention that these projects under PMC can be delivered efficiently on time, within budget and of the specified quality. The Malaysian government good intention to obtain services provided by Project Management Consultant had turned into several issues and problem that have been discussed by the public and government recently. As a result of highlighting the issues that PMC faced by the mainstream media, the government of Malaysia had terminate the services of PMC. Hussein (2003) added that while some, if not a majority cases, the PMC have fared quite well. But there are also some that have totally gone awfully wrong and these have caused great concern and anxiety to some quarters in the government due to its impact to the government socio-economic drive. It is imperative to all concerned that this ‘abnormality’ has to be address. To understand project management, you must first recognize what a project is (Harold, 2004). 2.2 Definition of project A “Project” can be defined loosely as an item of work which requires planning, organizing, the dedication of resources and the expenditure funds, in order to produce a concept, a product, or a plant (James and Albert, 1994). B.S. Dhillon (2002) on the other hand, define project as a plan of work job assignment, or task (it is also referred to as job or task). Harold (2003), however, defines project to be any series of activities and task that have a specific objective to be completed within certain specification, have defined start and end dates, have funding limits, consume human and non human resources, and are multifunctional. 269 2.3 Definition of Project Management The Charted Institute of Building (2002) define project management as, “the overall planning, control and coordination of project from inception to completion aimed at meeting a client’s requirements and ensuring completion on time, within cost and to required quality standards”. There are various definition of project management reveals in literature review, but the closest that can be used for proposed of this research is one defined by Walker (2002), “Project management as the planning, control and coordination of a project from conception to completion (including commissioning) on behalf of a client. It is concerned with the identification of the client’s objectives in terms of utility, function, quality, time and cost, and the establishment of relationships between resources. The integration, monitoring and control of the contributors to the projects and their output, the evaluation and selection of alternatives in pursuit of the client’s satisfaction with the project outcome are fundamental aspects of construction project management”. 2.4 Project management consultant There is no specific definition of project management consultant. Most of the writers and researchers described the management consultant by their roles and responsibility and services that they provided using tools and skills they have in delivering a task assigned by the client or the owner of the project. Ernest (1988), in his books stated that the management consultant often serves in several ways, many of which assist in keeping the project confidential until time for public release. The management consultant also provides an outside, imperial sources of information and appraisal of the entire project feasibility. Unfortunately, there is some confusion among us with the terms we used to describe “consultant”. Martin (2001), in his research paper title “What client employees say about consultant” states that organizations use consultants to help accomplish significant goals, such as facilitating organization change. Consultants may be hired to advise or design the plan for change, but they are often not asked to participate in the implementation of their designs. 2.5 Types of Services provided by Project Management Consultant Project management services are not a substitute for top management’s own reporting structure. They are the independent sources of objective information that prudent management demands from a situation involving risk (Philip, 2000). In line with Philip (2000) views, CIOB in 1988 clarified that the intention of the appointment of a Project Manager is to relieve the client of responsibility of providing an organization to deal with the design and construction of the project. The client retains the degree of control necessary for him to satisfy his wishes and preferences and will be required to make key decisions. 2.6 Client Satisfaction and Factor influencing the success of consulting management project From the study carried out by Lim (2000), it was found that the need to construct projects effectively was the modus operandi of the industry in the past, the need to provide effective service is now the model of successful contractors / builders today. 270 We shall be more service based than product based. This statement is supported with the survey carried out by Jaafar (2005) which concluded that the level of client’s satisfaction did depend on the services rendered by the project consultant, contractors, time, quality, cost and the most important criteria to the clients were that the project delivered met with the specified requirements of the client. On the other hands, Tang et. al (2003) stated that client satisfaction, both internal and external, is a function of quality services, quality of product, and quality of manner to customers. William (2002) added that Customers will distinguish their satisfaction with a particular encounter from their overall satisfaction with the firm’s services. 3. RESEARCH METHODOLOGY The study forms Research methodology for this research consists of four steps as below. 1. Literature review 2. Case Study 3. Questionnaire survey 4. Analysis of data 3.1 Literature Review Literature review was undertaken to get the general view of the investigation carried out by the author that are relevant to the research as well as to help the researcher meet the objectives highlighted. 3.2 Case Studies Case studies of actual Project management contracts had been carried out with the objective to identify the scope of services provided by Local Project Management Consultancy. The case studies were carried out to meet the first objective of this investigation which to identify the services that should be provided by Project Management Consultant (PMC). There are four (4) projects undertaken by both private and government firm had been selected randomly to fulfill this objectives. From the four projects, the writer of this report had only managed to get three (3) projects due to its private and confidential document and tight policies that the firm had to follow. 3.3 Questionnaire Survey An industry survey had been carried out by the author and distributed to the parties who liaised with the Project Management Consultant services respectively. In order to distribute the questionnaire to the target population, the questionnaire was piloted. A pilot questionnaire, drafted from the findings of literature and case studies had been used prior to developing of the final questionnaire. The purpose of piloting was to make sure that the questions will provide the required data, clearly and easy to understand. The questionnaire first had been tested to different groups, which include researcher supervisor, colleague whom related to the disciplines and some of the potential groups of respondent. Some adjustment and correction had been made based on the comments received by the researcher. The total numbers of 150 questionnaires then distributed to 271 the potential respondent in Klang Valley (which include Kuala Lumpur and Klang) and to some respondent in Putrajaya. Out of 150 questionnaires, only 41 questionnaires were returned which represent 27.3 % of the total questionnaire distributed. The parties’ responds to the questionnaires included the clients, contractors, architect, project engineer, project manager, project executives and the consultants. 3.4 Data Analysis All the collected data from the questionnaires are analysed in two steps or methods. There are Frequency and Average Index. Frequency analysis is used as preliminary analysis. This method will show the frequency and the percentage. The frequency represented in the form of table and pie chart. In order to generate the result, the researcher had used the Statistical for Social Science (SPSS), version 11.0. The average index is calculated as follow (Al-Hammad et al., 1996). Based on the assumed values stated earlier, x1 = frequency of the “very important” or “vary satisfy” and corresponding to a1 = 1, x2 = frequency of the “important” or “satisfy” and corresponding to a2 = 2, x3 = frequency of the “moderately important” or “fair” and corresponding to a3 = 3, x4 = frequency of the “Less important” or “Less satisfy” ” and corresponding to a4 = 4, = frequency of the “Not important” or “Not satisfy” ” and corresponding to a5 = 5. 4. RESEARCH FINDINGS AND ANALYSIS Three (3) PMC’s contract had been reviewed to generate the framework which suites to Malaysian Construction Industry. All the collected data from the questionnaires are analysed in two steps or methods which are Frequency and Average Index. Frequency analysis is used as preliminary analysis. This method will show the frequency and the percentage for both results on level of importance and level of satisfaction on PMC’s services. 4.1 Framework of Services that should be provided by the Project Management Consultant The combination of this three (3) consultants contract will developed the actual services which need to be carried out by the PMC in practice. The writer had combined the description of services of the three contracts and had developed a framework of services which is listed as one of the objectives in this study. From the framework, the writer had conduct an industry survey using the questionnaires to measure the level of importance and level of satisfaction of each service listed in the case study. Table 4.1 below shows the framework of services that should be provided by the Project Management Consultant in Malaysia. 272 Table 4.1; Framework of Services that should be provided by the Project Management Consultant in Malaysia N o List of Services Description of services 1 Client’s Requirements and Scope of Works To analyse the project definition in functional terms to meet the performance objectives and advising the clients with respect to the definition, consistency, practicability and controllability of all aspect of the project 2 Feasibility Study To carry out feasibility studies, appraisal and ensuring that it is feasible functionally, technically and financially 3 Preliminary Requirements 4 Contract and Legal Considerations 5 Scheduling 6 Meetings 7 Reporting Management of Design and Other Consultants 8 9 Procurement 1 0 Budgeting and Estimating 1 1 Cost Control 1 2 Management of Construction 1 3 Expediting 1 4 Payment Certification 1 5 Quality Control 1 6 Commissioning Site visit and planning of site layout and arranging of early site arrangement and arrangements for geological investigations, site survey and analyzing the soil investigation reports and to prepare in brief project summary which include ‘Schedule of Accommodation’ for every building Advising on the terms and conditions of contracts, Preparing the contract document, To prepared Letter of Offer (LO) and Letter of Acceptance (LA) and assist the client on terms and condition inside both contract Preparing various levels of project schedules for planning and implementation and monitoring all the activities, provide input to the project schedule regarding construction activities and examining and analyzing the project planning Convening meetings on a fortnightly basis or more frequently as the need arises, meeting with consultant, client, and contractor at least once a month, and acting as Chairman of such Project Management Meeting Prepare Meeting report and Monthly progress report Coordinating the services of the Design Consultants and other professional Consultant, Examining and considering all plans produced by the Design Consultant, examine and controlling all designs and plans, and liaise to the relevant authorities for approval Appropriate documents for calling for tenders or proposal, assisting client in calling for prequalification of tenders, submitting a report on tenders received and make recommendations, preparing and submitting of ATDA (As Tendered Detail Abstract), and analyzing and examining all proposed tender rate To prepare budget and business plan, and assist the client on the price negotiating Control of Variation works, minimising wastage of materials and financial control over all payments, analyzing and controlling of costing and analyzing any application made for changes of work, monitoring of changes in scope and the preparation of required budget variation To ensure timely completion of the Project and instructing the Contractors on any incomplete works and defects, monitoring of project progress, take reasonable measures to control progress, arrange for site inspection, monitor any defect, and arrange for repair works To coordinate the Contractor's work in accordance with his programme and site planning and progress chasing in the event, taking immediate action on the construction issues, solving problem on site, dealing with local authority on application for approval for ‘Certificate of Fitness’ and preparation of Certificate of Practical Completion Arranging for Financial Statements showing expected final costs and preparing and recommending the certification of all final accounts, and assisting the client on payment to the contractor To ensure that the building plant installations and all services operate in conformity with the requirements and design specifications, supervise and controlling of all test on site, As a witnesses of all test carried out by the contractor, to arrange for inspection, to ensure the quality of works when necessary and to prepare the report before handling over to the client To assist client to obtain the issuance of the relevant Certificate of Fitness, to provide client a maintenance, operating and service manual, to assist and ensure that client receives a full set of as-built drawings and preparing a programme for maintenance 273 Services Provided by PMC Table 4.2: Degree of Importance of services that should be provided by Project Management Consultant in Malaysian Construction Industry 1 = Very Important List of Services Client’s Requirements and Scope of Works Feasibility Study Preliminary Requirements Contract and Legal Considerations Scheduling Meetings Reporting Management of Design and Other Consultants Procurement Budgeting and Estimating Cost Control Management of Construction Expediting Payment Certification Quality Control Commissioning 5 = Not Important Average % Index 1 % 2 % 3 % 4 % 5 28 68 13 32 0 0 0 0 0 0 1.32 23 56 10 24 7 17 0 0 1 2 1.68 12 29 22 54 7 17 0 0 0 0 1.88 19 46 18 44 4 10 0 0 0 0 1.63 16 13 7 39 32 17 20 23 25 49 56 61 5 5 7 12 12 17 0 0 2 0 0 5 0 0 0 0 0 0 1.73 1.80 2.10 19 46 18 44 4 10 0 0 0 0 1.63 14 34 18 44 9 22 0 0 0 0 1.88 17 41 16 39 7 17 1 2 0 0 1.80 20 49 17 41 4 10 0 0 0 0 1.61 24 59 15 37 2 5 0 0 0 0 1.46 10 12 22 15 24 29 54 37 26 18 16 18 63 44 39 44 4 9 2 7 10 22 5 17 1 2 1 1 2 5 2 2 0 0 0 0 0 0 0 0 1.90 2.02 1.56 1.85 The respondents to the question were asked to rate the degree of satisfaction on the list of services provided by the PMC which is included in the table provided in the questionnaires. The results of the survey for the level of importance on the list of services that should be provided by Project management Consultant (PMC) shows that most of the services listed by the author were approved by the respondent as importance services and should be carried out by the PMC. 274 Level of Satisfaction on Services Provided by PMC Table 4.3: Degree of satisfaction on services provided by Project Management Consultant in construction industry in Malaysian Construction Industry 1 = Very Satisfy List of Services Client’s Requirements and Scope of Works Feasibility Study Preliminary Requirements Contract and Legal Considerations Scheduling 5 = Not Satisfy Average % Index 1 % 2 % 3 % 4 % 5 4 10 23 56 14 34 0 0 0 0 2.24 3 7 22 54 16 39 0 0 0 0 2.32 3 7 23 56 14 34 1 2 0 0 2.32 4 10 18 44 18 44 1 2 0 0 2.39 4 10 15 37 22 54 0 0 0 0 2.44 Meetings 6 15 20 49 12 29 2 5 1 2 2.32 Reporting Management of Design and Other Consultants Procurement Budgeting and Estimating Cost Control Management of Construction Expediting Payment Certification 3 7 13 32 19 46 5 12 1 2 2.71 3 7 14 34 24 59 0 0 0 0 2.51 2 5 18 44 20 49 1 2 0 0 2.49 3 7 16 39 19 46 3 7 0 0 2.54 2 5 17 41 15 37 6 15 1 2 2.68 6 15 15 37 15 37 5 12 0 0 2.46 1 3 2 7 16 22 39 54 19 14 46 34 3 2 7 5 2 0 5 0 2.73 2.37 Quality Control 5 12 8 20 20 49 8 20 0 0 2.76 Commissioning 2 5 18 44 18 44 3 7 0 0 2.54 The respondent were asked to rate the degree of satisfaction on the list of services provided by the PMC which is included in the table provided in the questionnaires. The results of the survey for the level of satisfaction on the services provided by Project management Consultant (PMC) shows that the respondent had categorized the services provided by the Project Management Consultant under two main factor which are “satisfy” and “fair”. 5. CONCLUSION From the case study carried out by the author in Chapter 5 of this report, the writer had combined the description of services of the three contracts and had developed a framework which consists of 16 lists of services that need to be carried out by PMC. This study is not intended to be specific or limiting in scope but is intended to define what would normally be done in actual project management contract. This study is primarily intended to serve as a guide to Project Management Consultant Firm in respect of the suggested scope and extent of services and also for the guidance of the clients who may wish to engage a PMC Firm offering project management services. From the results of the survey for the level of importance on the list of services that should be provided by Project management Consultant (PMC) it can be concluded that most of the services listed by the author were approved by the respondent as “importance” services and should be carried out by the PMC. The results of the survey 275 also found that the level of satisfaction on the services provided by Project management Consultant (PMC) had been categorized under two main factor which are “satisfy” and “fair”. It can be concluded that most of the PMC did performed in their services whereas only some of the PMC failed to execute the responsibility assigned. 6. REFERENCES Abdullah, Fadhlin (2004), “Construction Industry & Economic Development: The Malaysian Scene”, Johor, Malaysia, Penerbit Universiti Teknologi Malaysia. Al-Hammad, A-Mohsen and Assaf, S. 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