An Introduction to Procurement in Construction

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.