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CM4 Term Paper Brief
Option 2: Critically evaluate the potential of economic theory of construction
procurement as a decision-making tool in the selection of procurement systems.
Background
In this assignment, you are required to draw on a solid theoretical and evidential ground to
critically review the transaction cost theory of construction procurement. You are expected to
meet the following requirements:
1. Show a thorough understanding of TCE and its application to construction procurement
(i.e., explain the theory in your own way).
2. You can choose a context of interest, including non-private finance delivery systems
(traditional method, design-build, management system), Public-Private Partnerships or
collaborative delivery systems.
3. Conduct a literature review that is broad enough to cover most of the important techniques
suitable for procurement system selection and discuss their limitations.
4. Develop a framework to compare the strengths and limitations of existing techniques (TC
based and non-TC based approaches).
5. Building on the result of point 4, you should make a proposal for the way the TC based
theory can be transformed into a decision-aiding tool.
6. Apply the tool you propose to a real-life project and explore the additional insights, if any,
one might gain from the application of TC theory to procurement system selection (for
this, you can consider contrasting the suggestions made by the TC approach and other
methods and explain the disparity, if any.)
Word length
3000 words
Required readings
See the key papers of transaction cost theory of construction procurement in the bibliography
section. Read as many as you can.
Useful information sources/references
1. Your literature review is expected to cover important papers on construction procurement
from the leading project/construction/engineering management journals, including:
ASCE Journal of Construction Engineering and Management (A*)
2
International Journal of Project Management (A)
Construction Management and Economics (A)
ASCE Journal of Management in Engineering (A)
Building Research and Information (A)
IEEE Transactions on Engineering Management (A)
Project Management Journal (B)
2. Conventional delivery systems
1) The Bartlett library has many textbooks on construction procurement systems, such
as
A. Franks, J. 1998, Building Procurement Systems: A Client’s Guide, 3rd edition,
Longman, UK.
B. Masterman, J.W.E. 2001, An Introduction to Building Procurement Systems, E&FN
Spon, London, UK.
2) The following studies on procurement system selection could be useful
A. Sidwell, T. 2001, Literature Review- Value Alignment Process For Project
Delivery.
B. Love, P.E.D., R.M.Skitmore and G.Earl, 1998, Selecting A Suitable
Procurement Method for A Building Project, Construction Management and
Economics, 16, 221-233.
C. Skitmore R.M. and D.E. Marsden, 1988, Which Procurement System?
Towards A Universal Procurement Selection Technique, Construction
Management and Construction, 6, 71-89.
3) HM Treasury’s Procurement Guide
https://www.gov.uk/government/publications/infrastructure-procurement-route
map-a-guide-to-improving-delivery-capability
4) HM Treasury’s Green Book
https://www.gov.uk/government/publications/the-green-book-appraisal-and-eval
uation-in-central-governent
3. Public-Private Partnerships
1) World Bank (2014). Public-Private Parnterships: Reference Guide (Version 2).
Washington
http://www.worldbank.org/en/news/feature/2014/09/09/public-private-refere
nce-guide-version-2
2) UK Private Finance 2 (PF2) procurement guides
https://www.gov.uk/government/publications/private-finance-2-pf2
4. Collaborative delivery system
Cabinet Office (2014). New Models of Construction Procurement. London, HMSO.
• Cost Led Procurement
• Integrated Project Insurance
• Two Stage Open Book
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