An evaluation of applying guaranteed maximum price (GMP) procurement method for public construction projects in Malaysia
Muhamad Rosdi Senam , Christoph Ehrhardt and Rapiah Mohd Zaini
In ensuring successful delivery and completion of construction projects whether public-funded or private projects, the most appropriate and effective procurement method is needed. It is also recognized that one of the principal reasons for the poor performance of construction projects particularly in terms of Time, Cost and Quality is the inappropriateness of the procurement system. This paper seeks to present the findings of a research conducted by using questionnaire survey amongst targeted respondents of Public Works Department of Malaysia or known as Jabatan Kerja Raya (JKR) personnels in an attempt to evaluate the suitability of applying Guaranteed Maximum Price as an alternative method of procurement for public construction projects in Malaysia. Jabatan Kerja Raya (JKR) was chosen because as the technical arm of the government, it leads the implementation of public projects in Malaysia. As many researchers have indicated, not only in Malaysia but in other parts of the world as well, that there is a need for such alternatives to the long existing traditional or also called conventional procurements in the construction industry, one of which mostly used is the open tendering design, bid and build system. Such conventional procurement is always associated with common issues and problems such as cost overruns, delays, late or non-payments, disputes, adversarial nature, confrontational environment, low quality and workmanship, unreasonably too competitive contract prices and others. The research findings have indicated that there is a high need for such alternative procurements for the delivery of public projects in Malaysia and GMP is seen as one of those which could play that vital role.
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