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MSC(QS) PROGRAM (BATCH-3)

2023 (SEMESTER 1st)

ASSIGNMENT

INDIVIDUAL’s MASTER PROJECT

BNV7200

TOPIC

ANALYSING THE TENDER PROCEDURE AND ITS


COMPLICATIONS IN THE CONSTRUCTION INDUSTRY
PROPOSAL

BASEER-UR-REHMAN
BCU ID: 23207366/1

HORIZON ID. TECH-Msc-0323-1172


HORIZON ID. TECH-Msc-0323-1172
Table of Contents

Abstract 05

Chapter 1: Research Introduction


1.1 Introduction
1.2 General background and rationale 06
1.3 Research Aim 06
1.4 Research objectives 06
1.5 Scope of Research 06
1.6 Limitation of Research 07
1.7 Research Methodology 07
1.7.1 Main Structure of Dissertation 07

Chapter 2: Complications in tendering process


2.1 Introduction 09
2.2 Discrepancies in tender documents 09
2.3 Poor Documentation 09
2.4 Design complications 09
2.5 Issue of Transparency 10
2.6 Complications created by client through the amendment in
Standard documents 10

2.7 Problems of Unethical Practice in Tendering 10


2.8 Major Problem in Estimating for Tendering 10
2.9 Tender complications Impacts on construction Phase 11

Chapter 3: Proposed the Mitigation Measures to Improve the


Tendering
3.1 Introduction 12
3.3 Selection of suitable Procurement s S t r a t e g y 12
3.3 Minimized the Errors through the usage of BIM Technology in Tendering 13

3.4 Risk response to reduce impact in Tendering Process 13


3.5 Education and Training 13

Chapter 4: Research Methodology


4.1 Introduction 14
4.2 Research approach 14
4.3 Qualitative research 14
4.4 Quantitative research 14
4.5 Mixed method research 15
4.6 Selection research methodology for this Study 16

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4.7 Questionnaire design 16
4.8 Data collection and analysis 16

Chapter 5: Questionnaire Analysis


5.1 Questionnaires analysis 17

Chapter 6: Conclusion and Recommendation


6.1 Conclusion 18
6.2 Recommendation 18

Chapter 7: References
7.1 References 19

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ABSTRACT
It is always risky and complicated to work in the construction industry. Consequently,
Contractors in the construction industry are facing difficulties during the tendering process as a result of
complex designs, non-professional participation, short tender submission deadlines, design issues,
unfinished design usage in tenders, discrepancies in tender documents, corruption in tendering, an
incorrect form of contract selection, unethical practice in the construction industry, misunderstanding,
communication gaps, difficulties identifying risks in tenders, difficult risk assessment, complicated risk
management process, estimation errors, lack of innovation, lack of collaboration and integration of
technology in tendering, poor documentation, the client selected the wrong procurement strategy and
the wrong tender type, and the contract was amended in the client's favor. In this research, perceptions
the discrepancies between tender document, obstacle for estimation of tender, tender team negligence
in tendering process and also identify mitigation measures to improve the current tendering system in
construction industry. The purpose of this dissertation study is to identify the complications in
tendering, and how they might be controlled. Various literatures reviewed and also conducted
questionnaire survey for generating this dissertation.

In order to identify the weak gaps in the current tendering system, the literature about tendering,
tender types, tendering legal perspectives in the construction industry, tendering methods, tendering
processes, and E-tendering is reviewed. As part of reviewing literature and understanding current
tendering system, mitigation measures can be established to improve these weak gaps. Mitigation
measures are discussed in this dissertation, including comprehensive procurement strategies as per
project nature, and IT integration. It can be improved by updating electronic devices, introducing
organization codes of ethics and conduct, education and training, mitigating risks, utilizing BIM
technology, integrating and collaborating traditional tenders with E-tendering, etc.

Key Words: Complications in tendering process, its identification and mitigation.

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CHAPTER 1
1. RESEARCH INTRODUCTION

1.1 Introduction

The first chapter will provide an overview of the study's background and the problems it
addresses. Gaps will be identified through this examination of previous research, which will be filled by
this research. Aims and objectives will be addressed within limitations and scope of the methodology and
the dissertation structure will also be defined.

1.2 General Background and Rationel

UAE's economic position has slowly improved since the 2008 global financial crisis. Oil is the
major source of income, followed by tourism, trade, real estate, and retail sales. According to the IMF
survey in 2014, GDP increased 4.3%. As a result of rapid economic growth and the rise in population of
the United Arab Emirates, mega development infrastructure projects have become necessary, according
to the World Bank Report (2007) on construction development. It follows that the UAE Government
plans to invest money in infrastructure projects like the Etihad Rail Network, which connects all UAE
cities with other Gulf countries (Gulf News, 13 February 2017).

Owners or clients want their projects delivered smoothly with no disputes and complications
during construction process. Clients also want their investments protected and increased in value. In
order to deliver construction infrastructure projects successfully, a carefully selected and appropriate
procurement strategy is necessary. The client invites a tender to select a contractor who will submit the
highest price offer to complete the project based on drawing, specifications, time schedule, and contract
terms. The tender process can be problematic due to some gaps and these gaps make selecting the
appropriate contractor difficult.

1.3 Research Aim

The aim of this study to identify solutions to improve the tendering system, this study identifies
difficulties Contractor’s face while working on Infrastructure projects in the UAE during the tendering
process.

1.4 Research Objectives


The following objectives support the aim.
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1. Analyzing the complications during the tendering process and highlighting their impacts
during the construction phase.
2. Determine the current practices of tendering in the UAE construction industry.
3. Proposing mitigation measures for tendering complications.

1.5 Scope of Research


The study process is limited to analyzing the tendering process, highlighting its problems, and
developing a systematic approach to meet the objectives of the research. To achieve the objectives,
summarize the data and write a conclusion. Providing a balanced conclusion that provides
recommendations for improving the tendering system with collaborative mechanisms in the construction
industry.

1.6 Limitation of Research


A separate study, this one discusses only tendering processes and their complexities, as
well as who fills these gaps in order to make a collaborative and innovative tendering system.

1.7 Research Methodology


This methodology includes collecting primary and secondary data from books, journals, online
articles, electronic media, published research papers, and other sources including case studies and online
surveys. To achieve the objectives of the research, research method approaches should be used as
guidelines.

The research process is consisting of 07 chapters.

1.6.1 Main Structure of Dissertation


The dissertation is containing following Seven chapters.
Chapter 1 – Introduction of Dissertation
Chapter 2 – Complications in tendering process
Chapter 3 – Mitigation Measures and Innovated the current tendering system
Chapter 4 – Design and Research Methodology
Chapter 5 – Data analysis and discussions
Chapter 6 –Conclusion and Recommendations
Chapter 7 –References

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Research methodology is demonstrated through the diagram as follows:

Research Methodology (source: developed with literature review concept)

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LITERATURE REVIEW

CHAPTER 2
2.0 COMPLICATION IN TENDERING PROCESS

2.1 Introduction
In this chapter, a literature review is presented about tendering complications in tendering processes,
including estimating, opening tenders, and awarding tenders. The tendering process has been affected by
the amendment of FIDIC clauses for the benefit of the client. It is explained in this chapter why it is very
complicated during the tender process to consider its impacts in the tender estimation, as well as the risks
which created the problems during the tender process. We will discuss why wrong estimation occurs in
tendering and its impact on construction.

2.2 Discrepancies in tender documents


According to James and Brain (2001), most tender documents are mixed during the
printing and binding process, causing discrepancies during tender pricing. As a result of combining
tender documents, they tend to repeat or conflict with each other, resulting in discrepancies and/or
ambiguities. BOQ carried code for an old design even though tender documents carried the latest design.
Based on the BOQ specification, the contractor priced the BOQ without considering the drawing.
Discrepancies in tender drawings, specifications, missing details, material price change and previous data
cannot be used have caused problems for the Estimator (Al Harbi et al., 1994).

2.3 Poor Documentation


During construction procurement, tendering is the process of selecting the contractor who will
execute the project. Most tender documents are unclear in practice. According to Laryea, S (2011), poor
quality tender documentation still complicates estimation during tendering. Furthermore, poor quality
tender documents can result in inaccurate estimates, disputes with contractors, and difficulty finalizing
the tender and executing the project.

2.4 Design Complications


To execute complex designs, exceptional skills and construction methodologies are required
(Arain et al., 2004). The complexity of a design is causing problems in tendering estimation, but the
complexity of an estimation for a simple design is quite comparable to that of a complex design.
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2.5 Issue of Transparency
There are big issues for leakage of confidential documents or information due to human
involvement at all stages of tendering. This has created a negative image of traditional tendering
methods. The manual analysis of a tender can lead to unfair breakdowns and mistakes, negatively
impacting the entire tendering process, as Lavelle & Andrew (2009) suggest.

2.6 Complications created by client through the amendment in Standard documents


In most cases, the Client adds clauses to the tender to protect himself (Eric 2009). It is possible
for the client to benefit from omitting and adding clauses to the original Standard Conditions of Contract
during the construction phase, but contractors neglect these clauses due to the short deadline for
tendering and competition among bidder contractors to win the project. Client transfers most escalation
risk to contractor. In the construction stage, the contractor may claim escalation, so the client removes the
escalation clause from the contract, which is why the tender document states that the quoted price is valid
until the project is completed (Karim 2009).

2.7 Problems of Unethical Practice in Tendering


Human behavior has contributed to the development of corruption techniques in the
construction industry, according to Laland & Brown (2011). In addition to creating a trend for corruption,
culture of corruption attracted individuals to pay gifts as bribes, it is dishonest business dealing for
construction business (Getz & Volkema, 2001). Several companies are financing individuals to get
projects due to corruption blame affecting the construction industry. Due to corruption in the construction
industry, honest contractors have difficulty getting contracts, resulting in increased project costs for all
contractors, some contractors wasting tender expenses, tendering ambiguity, economic damage,
blackmail, illegal hearings, fines, blacklisting, and reputation image issues (Stansbury, 2005). Based on a
report by the Malaysian construction industry, 17.3% of 417 government-funded projects were low
quality. Due to unethical behavior, some projects have been damaged (Malaysia Ministry of Works,
2005). According to Rahman, et al., 2007, unethical behavior has negatively affected the quality of
construction projects.

2.8 Major Problem in Estimating for Tendering


Based on Al-Hasan (2004) and the literature review, several estimation problems are
encountered during the tendering process, such as a shortage of estimates, incomplete drawings,
inadequate specifications, uncompleted drawings, and outdated cost data. Project management quality is
poor because of a lack of trust in structured site feedback. Traditional and conventional methods are often
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ineffective in dealing with estimation issues in the modern world, according to Curran (1989). According
to Bryan (1991), estimating construction is time-consuming and repetitive. Based on World Bank
construction cost data report (2002), how does the estimator build up the cost estimation during the
tendering process?
Problem 1 - Choice of work Methodology
Problem 2- Productivity of crew
Problem 3- Cost of labour
Problem 4- Cost of Material
Problem 5 - Location Problems for estimation during tender pricing
Problem 6- Assessment of Sub contractor Quotations
Problem 7- Construction Estimating Errors in taking short cuts

2.9 Tenders complications Impacts on construction Phase


In the construction industry, tendering competition is increasing; therefore, problems arise,
such as limited trust, poor cooperation, and ineffective communication, as well as adversarial working
relationships among all parties involved in the construction industry. Construction can be delayed, claims
handled and resolving complicated, costs increased and litigation is easily facilitated by this type of
relationship (Chan et al., 2008). Tender document discrepancies and unethical practices are affecting the
construction phase and harming the industry's image. Taillandier et al. (2015) report that construction
projects are complicated to construct, due to the fact that many stakeholders are involved in the tendering
process and in the construction process itself, which creates a risk impact on the project.

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CHAPTER 3
3.0 PROPOSED THE MITIGATION MEASURE TO IMPROVE THE TENDERING

3.1 Introduction
This chapter discusses the solution of problems encountered during the tendering process for
infrastructure projects. Mitigation measures were proposed, including selecting an appropriate
procurement strategy, adopting advanced procurement approaches, integrating IT into the tendering
process, minimizing errors through the use of BIM technology during tendering, implementing
sustainability concepts in tendering, responding to risks, providing training and education, and taking
precautions at tender stage.

3.2 Selection of suitable Procurement strategy for improve the Current Tendering System
By choosing an appropriate procurement strategy, construction industry tendering can be
improved and complications can be eliminated. In the early stages of strategy preparation, it provides
solutions to tendering problems. According to Peter Davis (2006), clients can take into account all
obstacles during the finalization of strategy, including political, legal, social, cultural, economic, project
size, changes in legislation, construction difficulties, and selection criteria for contractors along with
tendering methods. Therefore, the project must be constructed based on a wide-ranging procurement
strategy. The procurement approach helps identify the most suitable methodologies for completing a
project on time, within budget, and with good quality. In a study by Gordon (1994), it was found that a
good selection of procurement route can result in a sustainable tendering process by reducing 5% the cost
of a project. Using new approaches to procurement, such as partnering, two-stage tendering, etc., can
eliminate risk in the tendering and construction processes. Choosing the right procurement route has
delivered the project on time, within budget, efficiently, and fairly.

Procurement strategy and Procurement route

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3.3 Minimized the Errors through the usage of BIM Technology in Tendering
According to Latham (1994), construction industry problems include design deficiencies,
inadequate tender documents, poor performance of the industry as a result of mismanagement, generating
BOQs with incorrect measurements and insufficient descriptions for tendering, and over procurement of
materials due to manual quantity takeoff errors. The industry needs to adopt new technologies and
integrate them with current tendering systems. BIM is a new development in construction. Through BIM
technology, these problems gap can be filled in construction by estimating tendering, analyzing tenders,
and easily submitting tenders within timeframe, generating BOQs, taking of quantities, estimating costs,
cash flow, controlling costs, scheduling, interim payments, and material calculations within a short period
of time.

3.4 Risk response to reduce impact in Tendering Process


The key objective of risk response is to minimize the potential risk impact and improve its
control (Chien et al., 2014). The term is used as a risk treatment. The risk response is the most important
stage. According to Fan et al (2015), knowledge of similar historical cases helps develop risk response
strategies. Risk retention, risk prevention, risk transfer, and risk mitigation are among the types of
techniques used to reduce or eliminate risks.

3.5 Education and Training


The construction industry is evolving rapidly with respect to technologies in tendering, as well
as electronic integration. To adopt new technology and innovated tendering techniques for the
construction industry, new skills and modern professional education are necessary. Minimizing problems
in tendering can be helpful. To develop new innovative skills in existing & new professionals, the current
education system needs to be reviewed (Foresight 2000).

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CHAPTER 4
4.0 RESEARCH METHODOLOGY

4.1 Introduction
According to Santiago-Dele Fosse et al., 2016, research methodology should span a broad
range and be able to cover every step of the research process. Research methodology supports finding the
easy solution to eliminate problems, Rajasekar et al (2006). As a result, the collected field data is
deliberated and compared with the literature review to reach the final conclusion. Research can be
conducted using various methods. Various selection criteria will be used to determine the most
appropriate techniques.

4.2 Research approach


The data is collected and analyzed using various methods and sources in a research approach.
A qualitative, quantitative and mixed method can be used for a research study according to Creswell
(2013), but most research studies are conducted with qualitative and quantitative approaches. Stable and
statically recoded quantitative approach. Most construction companies use qualitative research methods,
according to Banaitene and Banaitis (2012).

4.3 Qualitative research


In this research method, whenever problems are identified, questions are raised and answers
are needed for those questions based on available unstructured data. Creswell (2013) used a non-
numerical data collection method. Qualitative research is a method for understanding human behavior
towards any type of problem and finding their reasons. During classification of the response, additional
parameters can be added to facilitate deep understanding of the issues. Data can be explained more by
these parameters (Bryman 2004). Researchers are prone to influencing research. The quality of research
depends on researchers' skill and experience in collecting data as it plays a significant role in influencing
its quality. By cross-checking the facts, this method develops a good understanding of problems.

4.4 Quantitative research


Creswell (2013) stated that existing concept of quantitative research is certified through the
exploratory linkage among the variables. In numerical shape are measured the variables, there is
possibility if it is needed measured in other form it can be converted later in a numerical data form.
Developed the facts is based on numerical data form (Fellows & Liu 2009). The main objective of

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quantitative research is delivered the numerical data for statistical analysis through deep studies.
The quantitative research is required data to collect through several methods such as paper survey, online
surveys, telephonic survey, and personnel interviews with same topic professionals etc.

Qualitative and Quantitative Approaches

4.5 Mixed method research


There are some weaknesses to both qualitative and quantitative methods (Creswell 2013).
Qualitative data tends to be open-ended, so there is no easy way to arrange responses, while quantitative
data tends to be closed-ended. Combining qualitative and quantitative research provides a deeper
understanding of complexity and covers weak areas in one method with another (Teddlie & Tashakkori,
2011). Mixed methods of research methodology are used here.

4.6 Selection Research Methodology for this Study


A key objective of the study is identifying, analyzing, and studying the consequences of
tendering complications in the construction industry and also to propose mitigation measures for
improving the tendering process. The key first step in research is knowing what it is (Caputi & Balnaves,
2001). Mixed methods of research combine both quantitative and qualitative methods for data collection
and analysis, according to Jennifer.W (2013). Quantitative data can be explored in detail using qualitative
data. Using this methodology, Jennifer.W (2013) generated an advanced systematic integrated research
methodology that mixes qualitative and quantitative approaches.

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4.7 Questionnaire Design Survey
As a method of collecting data, questionnaire surveys are used. Using their professional
experience or opinion is supported to get the information. Information collected should be accurate,
reliable, and supported by objectives. Survey questionnaire is sent to respond, questionnaire itself needs
to be designed.

4.8 Data Collection and Analysis


Online survey software is designed especially for questionnaire surveys for dissertations. Each
individual can select which software is easiest to use and saves time for both researchers and respondents.
During this "pilot study", a draft of the questionnaire survey was sent to some professionals for feedback.
The final form was then prepared after receiving feedback from the professionals. The final questionnaire
was sent to the same construction industry professionals working in different positions (Estimator, QS,
Commercial Manager, Cost Controller, Contract Manager, etc.) for clients, consultants, contractors, and
subcontractors.

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CHAPTER 5
5.0 QUESTIONNAIRE ANALYSIS

5.1 Questionnaire Analysis


Questionnaires were distributed online with closed ended questions. A WhatsApp group
(200 professions including estimators, Qs, estimation managers, commercial managers, contract
managers, etc) circulated questions to professionals in the construction industry. A Facebook link
circulated the questions among professionals in the same field. We received 99 responses (only 99
persons responded, but more than 200 professionals received the questionnaire). There were 99
comparatively good responses and most of the findings were confirmed. The respondents were asked all
the important questions.

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CHAPTER 6
6.0 CONCLUSIONS AND RECOMENDATION

6.1 Conclusions
Many problems have been encountered during the tendering process in the construction
industry. It is During the literature review and case study, these major problems were identified,
including difficult identification and assessment of internal and external risks, discrepancies in tender
documents, unethical practices in construction, corruption, a lack of innovation in the tendering process,
estimation errors, wrong assumptions considered in tendering, negligence by the tendering team, complex
design, incomplete design during tendering, design faults by the generate designer, etc. Identifying weak
gaps in current tendering system and associated problems such as lack of innovation collaboration, lack
of professionals, lack of knowledge of local laws, knowledge of market trends, lack of resources, lack of
planning, professionals feeling uncertain about adopting new approaches. Based on the analysis of
various type trend related literature, proposed mitigation techniques, such as new procurement
approaches, IT integration with traditional tending, risk reduction or transfer strategies, etc. These
mitigation measures can help improve tending.

6.2 Recommendations

According to the study, the most important areas on which to focus in order to reduce or
minimize the complications associated with tendering are those that need to be addressed so that an
enlightening tender system can be developed in the future. Based on the literature review, the case
studies, and the questionnaire survey conducted as part of this study, recommendations will now be made
based on the findings of the study.

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CHAPTER 7
7.0 REFERENCES
 Creswell, J. W. (2003). Research design: Qualitative, quantitative, and mixed methods approach (2nd ed.).
Thousand Oaks, CA: Sage Publications, Inc.
 Creswell, J. W., & Clark, V. L. (2007). Designing and conducting mixed methods research. Thousand Oaks,
CA: Sage Publications, Inc.
 Kajewski. S (2006) 'CRC Construction Innovation.' Guidelines for Successful E- Tendering Implementation, 1-6
 Brian Eggleston (2006) 3rd edn. The NEC 3 Engineering and Construction Contract Gulf Construction, Two-
stage tendering is a useful option, Dec 31 2008 Issue
 Chartered Institute of Building (CIOB) (2006) Corruption in the UK Construction Industry
 :Available at: http://www.ciob.org.uk/document/corruption-uk-construction-industry.
 Brown, D. J., & Lord, R. G. (1999). The utility of experimental research in the study of
transformational/charismatic leadership. Leadership Quarterly, 10(4), 531-539
 Al-Hasan, M. et al (2005) An investigate into current cost estimate practice of specialist trade contractor,
Liverpool John Moores University, Liverpool, UK.
 BCIS (2009), eTendering Survey Report, Published by BCIS cost information service of RICS, UK.
 Brook, M 2008, Estimating and Tendering For Construction Work , 4th ed. uk . Brook, M. (2012). Estimating
and tendering for construction work .
 James ,B.Longbottom, Brian E Rawling& Associates.(2002) construction cost data
 workbook,World Bank.US.
 Alexandersson, G.,Hulten, S. (2003) The problems of Predatory Bidding in Competitive Tendering. Swedish.
 Infrastructure Tender Process In UAE available on
 http://www.emiratesbusinesslaw.com/infrastructure-tender-process- in-the-uae/ Method of tendering available
on ;https://theconstructor.org/construction/types-of- tendering-methods-in-construction/6372/
 Tender evaluation: https://www.inf.gov.nt.ca/sites/inf/files/3.8_tender_evaluation.pdf
 http://gulfnews.com/business/economy/uae-s-gdp-growth-projected-to-bounce-back-in- 2018-1.2059299
 Andi (2006) The importance and allocation of risk in Indonesian construction projects, Construction
management and economics, vol-24, p 69-80
 Sustainable tendering guidelines http://www.lgnsw.org.au/files/imce- uploads/39/sustainable-tendering-
guidelines.pdf.
 Code of ethics available on:
 http://www.longservice.nsw.gov.au/data/assets/pdf_file/0016/3283/TIPP_2.5_Code_of Ethics_and_Conduct.pdf
 Tender process :http://www.emiratesbusinesslaw.com/infrastructure-tender-process- in- the-uae/
 Code of ethics https://www.icaew.com/membership/regulations-standards-and- guidance/ethics/code-of-ethics-
b/part-b-200-230
 Ramus,J.,Birchall, S. and Griffiths,P. (2006) Contract Practice for Surveyors. 4th ed. uk.
 Murdoch, J. and Hughes, W. (2000) Construction Contracts Law and Management. 3rd .uk.
 Evans Peck Pty Limited, (2006) Tender guidelines for tendering for Australians Construction Association.
 BCIS (2009), eTendering Survey Report, Published by BCIS cost information service of RICS, UK.
 Alexandersson, G.,Hulten, S. (2003) The problems of Predatory Bidding in Competitive Tendering. Swedish.
 Al-Hasan, M., Ross, A., & Kirkham, R. (2006). An investigation into current cost estimating practice of
specialist trade contractors.
 FIDIC 1999 Conditions of Contract for construction of building and engineering works.

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