Building Economics：Individual Assessment

1. Yam Yih Hwan (0305861)
Individual Assignment
Acer Sdn. Bhd. has submitted the lowest tender price among the three invited
tenderers. However, the client still requested that the Acer Sdn. Bhd. to provide further
discount of 30% from the overall tender sum in order for the management to consider
their tender. With a total reduction of 30%, the new tender price will be RM
79,883,405.00. A huge reduction in cost may affect the overall project in terms of time
and quality as well.
Nowadays, projects are carried out under certain constraints, in term of cost, time
and scope. These three is an important factors that usually affect the effectiveness or
buildability of a project. It commonly known as the Triple Constraint, shown in
Figure 1 as a Triangle form. Each constraint forms the vertices to achieve the quality
of the project.
 Projects must be delivered within cost
 Projects must be delivered on time
 Projects must meet the agreed scope – no more, no less
 Projects must also meet customer quality requirements
Figure 1. The Triple Constraint

2. By achieving the right balance of time, cost and scope, it became the key
success to any projects. The balance of the three will vary according to the particular
requirements of the client. In this scenario, it clearly stated that the client would
prefer the project to be at a minimum cost, but did not stated that when will be the
completion period, or any other certain features.
In this case, the client may have a finite budget; the Contractor will either have
to reduce its scope or increase its time in order to achieve client’s requirement in term
of reduction on cost. However, if the client choose to reduce the project's time,
Contractor will either have to increase its cost or reduce its scope. Since the deadline
date for delivery of the project was not stated. Contractor may prolong the construction
period in order to achieve the reduction on cost. The scope of the project is either not
fully defined or understood from the start may causes failure of a project. It may
became a major issue when client tend to increase a project's scope, and the Contractor
will either have to increase its cost or time later on.
The triple constraint is about balancing each constraint to reach a successful
conclusion. As the project progresses, the Contractor may find that any changes
impact one or more of the constraints. As a Consultant Quantity Surveyor, we are
need to advise and educate our client about the Triple Constraint, in order to create
the best balance, and be aware of all changes that will impact cost, time and scope.