PROCUREMENT AND CONTRACTUAL ARRANGEMENTS FOR POST-DISASTER RECONSTRUCTION Kelvin Xi ZUO A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Civil Engineering, The University of Auckland, 2010 Abstract Disaster reconstruction management requires a different response to ordinary construction. One of the key factors to consider is the development of an appropriate and efficient procurement framework for rebuilding following a disaster event. The major aim of this research is to review, analyze and recommend procurement and contractual arrangements for disaster reconstruction. Two major research methods are used to achieve the research objective, namely, literature review and case studies. The theoretical framework of various procurement paths, which comprises procurement systems, contractual models and standard contracts, is firstly identified and analyzed for construction projects under normal time. The characteristics and suitability of each procurement path are summarized at the end of the first part of the literature review. The theme of disaster reconstruction is introduced subsequently including different disaster reconstruction theories, relevant guidelines and regulations, contractual models for reconstruction in New Zealand and overseas. The suitability of procurement systems to post-disaster reconstruction situations is then examined in theory and it is found that the integrated and management-orientated procurement systems are more suitable to be used for reconstruction. Five case studies on reconstruction processes after natural disasters are carried out with particular focus on their procurement and contractual arrangements, time, cost, quality considerations, and relevant guidelines and regulations. These studies include the reconstruction after two recent New Zealand floods in 2004 and 2005, Indonesian Banda Aceh reconstruction after 2004 Indian Ocean Tsunami, 1998 Yangtze River Floods and 2008 Wenchuan Earthquake reconstructions in China. The case studies confirm the suitability of the desirable procurement paths for reconstruction identified in the literature review. Conclusions on the overall research results and consequent recommendations are made at the end of the thesis for practical application of the procurement paths identified in this research for reconstruction. I Acknowledgements There are so many who have contributed directly or indirectly to the accomplishment of this research. My sincere thanks and gratitude are extended to: • Associate Prof. Suzanne Wilkinson, my supervisor, and Associate Prof. Regan Potangaroa, my co-supervisor for their consistent positive support and guidance along my PhD research and the drafting of this thesis. Without them, this would not have been possible. • The Resilient Organisation (Resorgs) Project that sponsored my PhD study into reconstruction procurement at the first place; The Resorgs research program leader Dr. Erica Seville, for her encouragement and guidance over my research, and organizing all these valuable and inspirational research team meetings, workshops, conferences, and exercises to build up the research network and bring everyone together. • Other lead researchers in the Resorg group: Dr Jason Le Masurier and Dr. Andre Dantas for their advices and helps at the beginning of my PhD research, and contacts for the New Zealand flood reconstruction case studies. • Our industry advisors: David Brunsdon and Dr Dean Myburgh, for their valuable advices and suggestions based on extensive experience in the industry, which help shaping the direction of this research to be more practical. Again for Dr Dean Myburgh for him taking time to read and revise my conference papers and set up the industry contacts for me to conduct interviews in Matata reconstruction case. • My friends and colleague PhD researchers: Fei Ying, Alice Chang, Tingting Liu, Bo Li, James Rotimi, Egbelakin Temitope, Mohammad Reza Zare, Naseem Ali, Reza Jafarzadeh, for the constructive discussions we had, and for Tingting and Bo, taking time to help me proof-read several parts of the document. • Exchange student Jetske van der Zon at Canterbury University at the early stage of my PhD research for helping collect data for both New Zealand case studies. • Those who helped me making contacts for my international case studies and facilitate my fieldtrips to the disaster zones: Prof. Qingyuan Wang, Dean of the Civil Engineering College at Sichuan University, Prof. Tan Dalu, Prof. Peng Yin, and Prof. Chen Hong, for facilitating and accompanying me in the fieldtrip of Wenchuan Earthquake case study; Prof. Rongqing Xiao, at Wuhan University, for posting my questionnaires to his contacts at Ministry of Water Resources and CWRC for my Yangtze River case study; • And my NGO colleagues who worked together with me during those two humid summers in Banda Aceh, for trying to make a difference by providing reconstruction houses for the victims post-tsunami. The experience I had in those two fieldtrips not only contributed to my research, but will also be inspirational to me for the rest of my life. And finally, to those who took part in the interviews and meetings with me, their time and feedbacks are most appreciated. II Table of Contents ABSTRACT ................................................................................................................................................................ I ACKNOWLEDGEMENTS ........................................................................................................................................... II TABLE OF CONTENTS .............................................................................................................................................. III LIST OF FIGURES ..................................................................................................................................................... VI LIST OF TABLES ...................................................................................................................................................... VII ACRONYMS AND ABBREVIATIONS ......................................................................................................................... IX CHAPTER 1: INTRODUCTION .....................................................................................................................................1 1.1 RESEARCH BACKGROUND ............................................................................................................................................. 1 1.2 OBJECTIVES & RESEARCH QUESTIONS OVERVIEW .............................................................................................................. 4 1.3 RESEARCH METHODS .................................................................................................................................................. 5 1.4 STRUCTURE OF THIS THESIS .......................................................................................................................................... 8 CHAPTER 2: LITERATURE REVIEW ........................................................................................................................... 11 2.1 PROCUREMENT SYSTEMS .......................................................................................................................................... 11 2.1.1 Introduction ................................................................................................................................................ 11 2.1.2 Separated procurement systems ................................................................................................................ 13 2.1.3 Integrated procurement systems ................................................................................................................ 16 2.1.4 Management-orientated procurement systems ......................................................................................... 19 2.1.5 Discretionary (collaborative) procurement systems ................................................................................... 23 2.1.6 Procurement systems used in NZ ................................................................................................................ 28 2.1.7 Summary of Procurement Systems and other relevant issues .................................................................... 30 2.2 CONTRACTUAL MODELS ............................................................................................................................................ 33 2.2.1 Traditional lump sum .................................................................................................................................. 35 2.2.2 BOOT family of total package ..................................................................................................................... 35 2.2.3 D&B vs. PM/CM .......................................................................................................................................... 37 2.2.4 On-call contracting ..................................................................................................................................... 38 2.2.5 Guaranteed maximum price (GMP) ............................................................................................................ 39 2.2.6 Full cost reimbursable model ...................................................................................................................... 39 2.2.7 Summary of