- Today, we're gonna talk
about construction procurement methods and which one is best
for your construction or development project.
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Before we jump in, let's just take a moment
to define what we mean by construction procurement.
Construction procurement is a process of purchasing goods
and services in relation to an end product.
In our case, it's usually buildings.
There are free common procurement routes that are used
to procure, design and construction of buildings.
They are traditional, design and build and management.
Whichever these is chosen, it should fit your criteria
for your business case that is also captured
in the project brief and project execution plan.
The first set of criteria often referred to in construction
as a golden triangle considers time, cost and quality.
However, there are other considerations such as constraints,
risks, financing, flexibility to change and complexity.
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So let's take a look at the options.
Starting with traditional.
Traditional is identifiable with the client who retains
the responsibility for the design and the contractor
is responsible for the construction.
Traditional has been around for a very long time
and it's standard practice in the construction industry.
The highlights of traditional procurement are,
the design is separate from the construction,
full information documentation is produced
before the contractor tenders the works,
the contractor will competitively tender
against other contractors,
except in some cases where negotiation takes place.
And there's also a professional construction consultant
who will act as the contract administrator.
The client has control over the design process
through their appointed designers and consultants.
Cost certainty is high because the information
has been detailed prior to tender and construction.
Design and construction are sequential processes.
And lastly, the risks are balanced between both parties.
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Next is design and build.
Design and build is a procurement route
where the contractor designs and constructs the project
to a lump sum agreement and acts
as a single point of responsibility.
The highlights of design and build procurement are,
the contractor is responsible for the design stage,
which is usually taken over from a developed design stage
by the client.
The contractor will also comply with a set
of employer's requirements that are produced by the client.
The contractor will also produce contractor's proposal
and a tender price that responds
to the employer's requirements.
The client also has no control over the design stage.
Design and construction run in parallel
to suit the contractor's program.
There's an element of cost certainty.
As the contractor has agreed the price
in the outset based upon a set
of robust employer's requirements,
the risk is low to the employer with regards to time
and cost certainty, but the risk is high to the employer
in terms of design, quality and flexibility of change.
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And lastly, we have management.
Management procurement is a process whereby a series
of trade packages or work packages are procured
and managed by a consultant or a contractor.
There are two forms of management procurement,
there's construction management,
and then there's management contracting.
The highlights of management procurement are,
the design runs in parallel with construction.
Early commencement is possible because the trade
and work packages are procured as,
and when required to the procurement schedule.
There's no cost certainty and the project proceeds
on the basis of a project cost plan.
Costs are controlled and monitored
during the construction process and the final cost
is only known once the last package has been placed.
Design changes can easily be incorporated
in the construction process.
The risk is high to the employer
in terms of cost and time certainty.
However, the risk is low to the employer in terms of design,
flexibility, change, and speed.
So to summarize, when procuring a construction project,
you should, one, review the project brief
to identify the objectives.
Two, review the objectives and put a score
in metrical criteria against these and three,
develop a procurement strategy that assesses the options,
traditional, design and build and management
and score these and assess these against the set criteria.
So I hope you found value in this video.
If you have any questions, please feel free
to contact us and we look forward to hearing from you.
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