An Introduction to Procurement in Construction

A project may be considered successful if the building is delivered at the stipulated time, to budget, as per specifications, and built in a safe environment (Lester, 2007); these criteria, and others, are, usually, carefully considered when choosing the right procurement route.

The procurement process is the method used to acquire goods and/or services, which must, carefully, be managed to ensure that good value is obtained; the correct goods or services are purchased, a high level of quality is obtained, timescales are met and good relationships are maintained between the Client and the Contractor.

The selected route should follow a strategy which fits the objectives of the client’s business plan. Considerations are likely to include:

  • Speed Cost • Quality • Specific project constraints • Risk
  • Asset ownership Financing

Masterman (2002) classified construction procurement into four systems: Separated, Integrated, Management Oriented and Discretionary.

1.   Separated or ‘Design-Bid-Build method’


  • Based on a linear and sequential process with little or no parallel working
  • The design is the responsibility of the Client, and the implementation is that of the contractor.
  • Client prepares the brief, followed by the appointment of a consultant/designer as project’s leader, who develops and finalises the detailed design
  • Competitive tendering starts once detail desi n is co plete
  • Tender is based on full detailed but approximate Bill of Quantities
  • Types: Re-measurement Contract with approximate Bill of Quantities, schedule of rates or cost reimbursement
2.   Integrated or Design & Build (D&B)


  • known as design-and-build, design and construct or one-stop-shop .

integration of the design and construction at the same_ time

  • the contractor assumes full responsibility for the design and construction under one single financial transaction
  • Types: Conventional D&B, Novation D&B, Develop & Construct, package deal, and Turnkey
3.   Management Oriented


  • Originated in Sweden and developed in t e USA.

The Contractor is appointed on a professional basis as an equal member of the design team providing construction expertise.

  • The Contractor manages and coordinates the inception, design, and construction phases of the project, through the entire project
  • Reimbursement is based on Lump Sum or percentage fee for the management services plus the prime cost of construction
  • Types are: Management Contracting, Construction Management and Design and
4.   Discretionary


  • Administrative and cultural framework
  • Client imposes very specific management style or culture Any optional means of controlling the project by the Client
  • A strategy that satisfies client’s development and/or operational needs
  • Types are: Partnering, PPP and PFI

An in-depth into the various categories and types may be addressed in the next article.

First Edition (March/April)


Mohammed Elaida MCIOB

Mohamed holds a Master’s degree in project management; he is a chartered construction manager, a chartered commercial manager, examiner and Malta representative of the CICES.

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