Masters Project Presentation;

Panel Contractor Satisfaction and Whether Collaboration and Partnering are Happening in a Bespoke Contract
By;

Mohd. Norizam Md. Salleh

(MPM September 2010 Intake) Matric No: CGS00534317 Date: Nov. 2012

Content
1.0 2.0 3.0 4.0 5.0 Introduction Review of Literature Research Methodology Data Collection & Analysis Discussion, Conclusion and Suggestion

1.0 Introduction 1. 2. 3. 4. 5. 6. 7. Background Study Problem Statement Objectives of the Study Key Question Scope of Study Significant of the Study Assumption and Limitation

Chapter 1: Introduction
1. Background Study
There are various type of contract uses in construction business in Malaysia. Standard local contract uses are PWD 203a/b, PAM, CIDB, IEM and etc. International standard contract uses namely JCT, APM, ICE, FIDIC, NEC and etc. Modified version or bespoke contract were uses in some industries e.g. oil and gas and telecommunication industries.

Standard form of contract

(Pros.) They have endured years of test. Designed by experts in the field. Provide a representative viewpoint of the industry they served and normally be a fair contract. Represent both parties on an equal and a fair share basis and not one-sided. Normally express the obligation of all the parties involved and clarify the project scope well. (Cons.) Always labelled as a traditional contract strategy. Blamed for the edgy relationship between the project provider and the contractors. Fail to perform as a team.

Bespoke contracts
In Malaysia its commonly used in the Oil and Gas and Telecommunication sectors. Involved specialist jobs and were carried out by registered panel contractors . (Cons.) Often labelled as one-sided contract as they were designed by the clients. (Pros.) Modern contract strategies such as win-win approach, partnering, joint decisions, collaboration, rewards, cooperation, trusts and etc. that may help in meeting the project common objectives time, cost and quality S & S can be found.

1.2 Problem Statement

Traditional contract strategies were always identified as a hindrance to a good working relationship between the client and the contractors. On the other hand, the modern contract strategies encourage the client and contractors to work as a team, work collaboratively, smart partnering, win-win approach, trust, cooperative, shared risk, reward and etc. Its encouraging the client and the contractors to work together towards achieving the common goals - to complete the project/task - on or ahead of schedule, within budget and at acceptable stipulated quality, safety and sustainability.

Problems to be addressed in this study are as follows; Are the panel contractors to a bespoke contract satisfied with the form of contract used and how it is managed by the client? Whether the modern contract strategy is being practised in a bespoke contract.

1.3. Objectives of the Study

To identify whether the panel contractors fully understand the form of contract use, specifically the bespoke form of contract. To identify whether the panel contractors are satisfied with the bespoke contract that were commonly used in the Oil & Gas and Telecommunication Sectors. To identify whether the modern contract strategies such as collaboration and partnering are being practiced in their contract.

1.4. Key Questions

80% of the key questions are adapted from Chan A. P. C. et al. (2004) and they are as follows; 1) Panel contractor satisfaction on the bespoke form of contract uses; 2) Establishment and communication of conflict resolution strategy; 3) Commitment to win-win attitude; 4) Regular monitoring of partnering and collaboration process; 5) Clear definition of responsibilities; 6) Mutual trust;

1.4. Key Questions (cont.)

8) Willingness to eliminate non-value added activities; 9) Early implementation of partnering process; 10) Willingness to share resources among project participants. 11) Ability to generate innovative ideas; 12) Subcontractors involvement;

1.5 Scope of Study

Whether the panel contractors fully understand the form of contract they use especially the bespoke form of contract. Whether the panel contractors are satisfied with the bespoke contract that is commonly used in the Oil & Gas and Telecommunication sectors. Whether the modern contract strategies such as collaboration and partnering are being practiced in their contract.

1.6 Significant of Study

Only a few study conducted related to bespoke contract. Whether the modern contract strategy such as collaboration and partnering are practised. Whether the panel contractor fully understood the bespoke contract. Might benefit other sectors.

1.7 Assumption & Limitation

Due to limited time this study is limited to a bespoke form of contract used by a Natural Gas Operator/Supplier. The targeted group is the panel contractors personel that exposed to form of contract uses. Will not discuss in detail the construction scope and form of contract used. Will not discuss detail comparison between bespoke form of contract and standard contract.

Chapter 2: Literature Review

1. 2. 3. 4. 5. 6. 7. Introduction Panel Contractors Satisfaction Bespoke Contract Collaborative Approach Partnering Research Instrument Summary

2.1 Introduction
In carrying out this research, the relevant topics in construction contract administration and interpretation such as panel contractor satisfaction, bespoke contract, collaboration and partnering were identified and discussed. The identification of keywords and important terminologies related to these research objectives were also defined.

2.2 Panel Contractors Satisfaction

Geyskens, I & Steenkamp (2000) urged that, the satisfaction level is one of the key factors which affect partnership development. However, satisfaction is a vague/unclear term. The contemporary measurement for partnership is concentrated in economic satisfaction and social satisfaction (Cited by Wong, 2009). Wong (2009) - There are five sub-directions to support fine tuning of Economic and Social Satisfactions. They are profitable; discount; quality enhancement; effectiveness; selling and marketing for Economic Satisfactions and feeling hostility; tactful criticism; mutual interaction; apocalypse; and polices for Social Satisfactions. Therefore its concluded, the panel contractors satisfaction to the form of contract uses in the contract can be seen at the level of pleasure the contractors feel such as how the contract were carried out and whether it satisfies them economically and socially.

2.3 Bespoke Contract

Bespoke is a British English word meaning an item made to a buyer's specification (personalised or tailored). The characteristic points of bespoke/tailoring contracts are the client/project provider's are in total control over the form of contract terms and the way the project should be managed. Basically, "bespoke contract" describes a high degree of "customisation" on how the form of contracts are structured and the relation between the client/project provider's and contractors. That is the reason why it is usually used in the specialised industries such as oil and gas, telecommunication, power plant and etc.

2.4 Collaborative Approach

The meaning of collaboration, is working together to achieve common goal. In traditional adversarial system, conflict, hostility and litigation between the client and contractors are normal phenomena. Such a climate actively militates against collective learning and knowledge sharing between parties. In opposition, under collaborative working, contractors share risks, pool knowledge and work together to solve problems at all stages and levels in the productive system, a process conceptualised as knotworking by some theorists (Bishop et al., 2009). Collaborative innovation occurs when organisations tap into a users expertise, and through collaborative support, is able to reduce their costs and increase satisfaction. Collaboration is a shift from a command-and-control state of mind to connect and collaborate which is towards modern strategy (Sawhney, 2002).

2.5 Partnering
Partner/partnering can be defined as a friend who shares a common interest or participates in achieving a common goal. In the construction industry partnering approach can be applied in meeting the three project objectives which are time, cost and quality. Ashworth (2006) - It is a procedure for improving working relationships, based on assumption that strong players make each other stronger; weak ones destroy each other and not only about systems and methods but it is essentially about people, enabling them to operate more efficiently, effectively and economically. American Arbitration Association (1993) - Partnering is a synergy, a cooperative, collaborative management effort among contracting and related parties to complete a project in the most efficient, costeffective method possible, by setting common goals, keeping line communication open, and solving problems together as they arise .

2.6 Research Instrument

Only item/factor i), was designed by the author and the rest items/factors ii) to xi) (80% of the questionnaires) were adapted from Chan A. P. C. et al., (2004); i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. Panel contractor satisfaction on the bespoke form of contract uses; Establishment and communication of conflict resolution strategy; Commitment to win-win attitude; Regular monitoring of partnering and collaboration process; Clear definition of responsibilities; Mutual trust; Willingness to eliminate non-value added activities; Early implementation of partnering process; Willingness to share resources among project participants. Ability to generate innovative ideas; Subcontractors involvement;

2.7 Summary
To achieve satisfaction, whatever form of contract used, the players need to understand and carry out their obligations well as per stipulated in the contract. This study can also determine whether modern contract strategies such as collaboration, partnering, win-win approach, jointly resolve problems, reward, cooperation, trust and etc. were practised. Outcome of this study should be able to determine whether the panel contractors have fully understood the form of contract (bespoke contract) use; whether they are satisfied with the bespoke contract that is commonly used in the oil and gas and telecommunication sectors; and whether the modern contract strategies such as collaboration and partnering are being practised in their contract.

Chapter 3: Methodology
3.1 Introduction 3.2 Research Design 3.3 Survey Method 3.4 Sampling 3.5 Likert Scale 3.6 Data Analysis 3.7 Research Frame Work

3.1 Introduction
Research methodology or research can be defined as a systematic approach in search of specific answers that can be tabled for those problems that have been identified. A research should be carried out to go through a certain systematic process to initiate new findings (Ranjit Kumar, 1996). The moment a method to carry out a research is identified, it is important to make the intentions and objectives are understandable and clear. Masters projects should not be over ambitious and its process must tally with the resources available. It should portray the total research methodology carried out in relation to research design, population, the research instrument, questionnaire design, data collections, data verifications, analysis process and summary.

3.2 Research Design

This research is a descriptive study and will use quantitative method to address all the questions arising in the problem statements and the key questions. The survey will be carried out using structured questionnaires and semi-structured interviews that are distributed and conducted within a specific group. Mohd. Majid (2000) stated that a descriptive research is a study to assemble information and to explain what is happening. This statement has been supported by Wiersma (1995) and he had added that the descriptive study is able to portray or give the information about certain thing, at certain time and decision making for future plan.

3.3 Survey Method

i) Semi structures interview ii) Questionnaires. Part A Respondents Background Part B - contain the necessary questions that are designed in order to identify and determine whether the researchs problem statements and the study objectives can be met. 80% of the elements in these questionnaires were adapted from Chan A. P. C. et al. (2004).

3.4 Sampling
Respondents
The research will focus on a selected group that will consist of the people who work with the panel contractors of a Natural Gas Provider. Among the respondents that will be targeted in this study are the contractors owner and the contractors management level e.g. the project managers, contract managers, construction manager and engineers.

Distribution of the Questionnaires

Via postage, email and by hand.

3.5 Likert Scale

Likert scale with a measurement point 1 to 5 to examine how strongly subjects agree or disagree with a statement is adopted in this study.

3.6 Data Analysis

All the data collected will be stored and analyse using Statistical Package for Social Science 18.0 for Windows (SPSS). It also uses to identify the reliability of the data collected. SPSS assist the author to elaborate on various statistical tests and the interpretation of the result analysed

3.7 Research Frame Work

These research steps provided a clear methodology framework. - Provides proper steps on how the study should establish the conceptual model and - to improve the level of understanding to the research methodology.

Chapter 4: Discussion, Conclusion and Recommendation

4.1 Introduction 4.2 Findings 4.3 Result from Data Collection 4.4 Testing Goodness of Data 4.5 Summary

4.1 Introduction
The questionnaires were focused on the respondents knowledge, understanding and experiences to a form of contract uses by a natural gas provider. All the data gathered were stored and analysed using SPSS 18.0. The data were analysed to determine and identify whether the results collected from the survey are addressing the research objectives;
To identify whether the panel contractors have fully understood the form of contract they use especially the bespoke form of contract. To identify whether the panel contractors are satisfied with the bespoke contract that were commonly used in the oil and gas and telecommunication sectors. To identify whether the modern contract strategies such as collaboration and partnering are being practised in their contract.

4.2 Findings
From 13 panel contractors, 48 respondents filled up and returned the questionnaires. 100% of the survey was carried out among the respondents related to the panel contractors registered with a Natural Gas Provider.

4.3 Result from Data Collection

4.3.1 Demographic of the Respondents The finding was considered good for this research as the respondent involved were;
consisted of matured and experiences workers came from high education background exposed to the form of contract uses & involves in construction management.

Therefore they should be able to understand the questionnaires and answer them correctly.

Figure 4. 1: Number of Years the Present Company in the Industry

More than 70% of the companies have been in this industry 11 years or more.

Figure 4. 2: Respondents Age.

62% belong to 30 - 39 and 40 49 age groups.

Figure 4. 3: Respondents Gender.

81.25% of the respondents are male and 18.75% are female.

Figure 4. 4: Respondents Marital Status.

83.33% were married and 16.67% are single. 62% of them are 30 years of age or older

Figure 4. 5: Respondents Education Background.

87.5% pose at least a diploma or higher.

Figure 4. 6: Respondents Current Position

31.25% are engineers, 22.92% are project managers, 8.33% are construction managers, 29.17% are directors/owners, and 8.33% are others.

Figure 4. 7: Respondents Number of Years Working in Current Company

About 79% of the respondents have been working in the company for more than 4 years.

Figure 4. 8: Respondents Number of Years Working in Oil & Gas Industry.

87.5% of the respondents have been working in the industry for at least 4 years or more.

Figure 4. 9: Respondents Total Number of Years of Working Experiences

93.75% of respondents have at least 4 years of working experiences.

Figure 4. 10: Whether Respondents Know What Bespoke Contract is?

83.33% of the respondents claimed they knew what a bespoke contract is and only 16.7% said they do not.

4.3 Result from Data Collection

4.3.2 Findings From the Key Questions

i)Panel Contractor Satisfaction on the Bespoke Form of Contract Uses

ii) Establishment and Communication of Conflict Resolution Strategy

iii) Commitment to Win-win Attitude

iv) Regular Monitoring of Partnering and Collaboration Process

iv) Clear Definition of Responsibilities

v) Mutual Trust

vi) Eliminate Non-value Added Activities

vii) Early Implementation of Partnering Process

ix) Willingness to Share Resources among Project Participants

x) Ability to Generate Innovative Ideas

xi) Subcontractors Involvement

4.4 Testing Goodness of Data

4.4.1 Reliability Statistics
It is important to check the reliability of the data. Therefore the data were analysed between their initial attributes, the whole data were tested for the average inter-correlations among the items measuring the concept using SPSS 18 to verify the datas reliability. Carried out on all 50 questions and the questionnaires fill up by the 48 respondents.

Cronbach's alpha is a reliability coefficient that indicates how well the items in a set are positively correlated to one another. The result shows that the Cronbach's alpha value is 0.950 and this mean the results are reliable, as the closer it to 1, the higher the internal consistency reliability is (Sekaran, 2003). Cronbach alpha based on standardized items is something similiar but is computed alpha when all scale items are standardized to have equal means and variances.

Chapter 5: Discussion, Conclusion and Recommendation

5.1 Introduction 5.2 Summary of main Findings Research Objective 1 Research Objective 2 Research Objective 3 5.3 Limitation 5.4 Conclusion 5.5 Recommendation for Future Studies

5.1 Introduction
All the research objectives listed in Chapter 1, will be addressed, imprecisely discussed and concluded via the findings obtained from the research questionnaires.

5.2 Summary of main Findings; Research Objective 1 Research Objective 2 Research Objective 3

Research Objective no. 1: To identify whether the panel contractors have fully understood the form of contract they use especially the bespoke form of contract? Majorities of the respondents have fully understood with the form of contract uses. This can be seen from the answer to question 11 of Part A, where 83.33% of the respondents claimed they knew what is bespoke contract is and only 16.7% do not. In addition when they were asked in question 1 of the Part B, whether they have fully understood about the form of contract uses, majorities answered they do understood with a median value of 3.833.

Research Objective no. 2: To identify whether the panel contractors are satisfied with the bespoke contract that is commonly used in the oil and gas and telecommunication sectors. Satisfaction is low. The feedback gathered from the questions base on the factor of, Panel Contractor Satisfaction on the Bespoke Form of Contract is that, out of twelve (12) questions, two (2) agreed, eight (8) undecided and two (2) disagreeing. Majority of the respondents claimed that they fully understood the bespoke contract that is shown by the mean value of 3.833. But most of them are undecided whether the form of contract use is fairly treated between the clients and the panel contractors.

Research Objective no. 2 (continued): Majority of the respondents are agreed that the payment was paid on time. The survey outcome also determined that no safeguard on the unforeseen risks were given by the client but again the respondents were undecided whether the good relation between the client and the contractors exist via new contract strategy was being practised in this contract and whether the client treated their V.O. and E.O.T. fairly. On the other hand when they were asked about taking legal action shall their V.O. and E.O.T. claims were rejected, majority of the respondents answered they disagreed to proceed with it. This disagreement also contributed to contractors satisfaction in the form of contract as less or no arbitration claims are one of the outcomes towards the practising of modern contract strategy. The form of contract and the client does not protect the panel contractors from the new submerged risk.

Research Objective no. 3: To identify whether the modern contract strategies such as collaboration and partnering are being practised in their contract. Majority of respondents agreed that most questions under the key questions of collaboration and partnering, Establishment and communication of conflict resolution strategy; Commitment to win-win attitude; Regular monitoring of partnering and collaboration process; Clear definition of responsibilities; Mutual trust; Willingness to eliminate non-value added activities; Early implementation of partnering process; and Willingness to share resources among project participants are happening in the contract that they served.

Research Objective no. 3 (continued): Collaboration and partnering are practised but not up to maximum. It was not confirmed until what degree they have been carried out. A new contract strategy which includes collaboration and partnering were practised but they were not properly monitored.

5.3 Limitation
Insufficient sample size for the wide range of questionnaires. Larger group results will be more accurate Honesty of respondents. Some of the respondents might not be truthful either they do not want to disappoint the client or they actually do not understand the questions asked. Respondents do not really understand or lack the knowledge about modern contract strategies that involve collaboration and partnering. No tools in confirming whether these respondents really knew what a bespoke contract is all about and fully understood the form of contract which is currently used.

5.4 Conclusion
Generally, the first second and third objectives are totally depending on the answers given by the respondents. The findings to these objectives were acquired from the data gathered and analyses from the survey questionnaires that were filled by the respondents that belong to the panel contractors of a Natural Gas Provider.

5.5 Recommendation for Future Studies

The study on panel contractor satisfaction can also be further deepened such as to determine their level of satisfaction or dissatisfaction. On the partnering and collaboration, further study can be conducted in order to determine to what extent they were practising and the success factors required in order to improve them. To widen the studies to include the clients representatives but surely some modification to the questionnaires are required in order to make them suitable for parties, the panel contractors and the clients representative to answer. To widen the studies and to carry out studies/surveys among the other Oil and Gas companies for comparison purposes.

5.5 Recommendation for Future Studies (cont.)

A study to include the Telecommunication sector too. This is important as in the later stage comparisons not only can be made among the companies in the same sector but also between these two industries. A study can be carried out to identify what are the factors that dissatisfied the panel contractors and the measures required to be taken in order to improve these situations. A study can also be carried out among the panel contractors who are dissatisfied with the form of contract and the way they were practises. This is to determine the reasons what make these panel contractors are still in this industry especially when this initial study had shown 70% of the companies were in this business for 11 years or more but yet majorities are undecided whether they are satisfied with the way the contract is managed.

Thank You