PROCUREMENT
Procurement, in the context of a construction project and in many wider commercial contexts, refers to the process of obtaining a product or service. On a construction project, it is a way of allocating design and construction responsibility. For example, deciding and allocating contractual responsibility for the design and construction of a project.
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Every project is unique and presents different challenges, and every client’s objectives and expectations are different. At the early stages of the project we will help you choose the most appropriate form of procurement for your project. Often the choice of the procurement route is driven by considerations of ‘time’, ‘cost’, and ‘quality’ in relation to the design and construction of the building.
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Each procurement method follows a well established set of rules and procedures, and each method comes with its own degree of benefits, risk, and budget constraints. Further information on these can be found below.
TRADITIONAL
This is the most common form of procurement. With this type of procurement the design process is separate from the construction stage. The architect typically prepares (on behalf of the client) a full tender package, including but not limited to drawings and associated documents. Contractors are then invited to tender their price to carry out the works. Main features of this procurement route include:
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Appointment of the successful Contractor is normally by competitive tendering.
A full tender package is required for the tender process, meaning time is needed to prepare the information adequately.
The Client has control over the design through their appointed consultants (i.e. architect, structural engineer etc).
The overall process (from design to completion) is often longer due to the fact that design and construction are separate sequential processes.
For the client there is a degree of certainty on construction costs since a contract sum is agreed at the tender stage, although this may need to be adjusted later if the works are varied.
The client will normally need to appoint a professional consultant to act as Contract Administrator. The architect often carries out this role.
Changes or variations to the design are possible as the works progress but this can result in additional costs and an extended construction duration.
The Contractor is obligated to finish the works within a specified time, although the Contract Administrator can extend the completion date if there are delays for reasons listed in the contract.
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In summary this is a relatively low risk form of procurement which offers the highest quality finished product for a reasonable cost. The disadvantage is the length of time needed to realise the project since the design and construction stages are separate.
DESIGN & BUILD
With this form of procurement the Contractor is responsible for undertaking the design and construction of the work for an agreed lump sum price. With this option the client only has control over the design included in the employer’s requirements. Main features of this procurement route include:
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The extent of the Contractor’s design responsibility can vary depending on how much design has been carried out by the client (or their consultants) and is included in the client’s requirements.
Sufficient time must be allowed to prepare the client’s requirements which are normally compiled by the client’s consultant team (architect, structural engineer etc). Time is also required for the Contractor to prepare their design proposals and tender.
The client’s requirements can range from a simple accommodation schedule, to a fully worked up scheme.
The Contractor’s design proposals should match the client’s requirements.
Design and construction can be carried out in parallel. This has the benefit of shortening the overall project duration. Although the project duration can vary depending on how much design responsibility is placed on the Contractor.
The contract sum is agreed pre-construction so there is reasonable cost certainty for the client.
The Contractor is required to complete the works within the contract period.
If the client makes changes to the works during the construction stage this may result in additional costs to the client, and additional time to complete the construction work.
There is no requirement for an independent Contract Administrator. Instead the contract is initiated by the Contractor. The client may appoint an Agent to advise or act on his behalf.
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In summary Design & Build is a relatively low risk form of procurement for the client with the ability to shorten time frames of the project to help see the finished product sooner. However with D&B there is often less control over the quality of the design and the execution of the design at the construction stage.
MANAGEMENT
Under this form of procurement the overall design is the responsibility of the client’s consultants, and the main contractor is responsible for defining the separate packages or trade contracts, and then managing the implementation of this work through separate trades or works contracts. Main features of this procurement route include:
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The client appoints consultants to prepare project drawings, a project specification, and a cost plan.
The client will need to appoint an independent contract administrator as part of the professional team.
It is beneficial for the proposed contractor to be involved as early as possible as they will provide expertise in terms of buildability and programming of the works packages.
Design can proceed in parallel with construction so early starts on site are often possible and overall project time can be reduced as a result.
There is no certainty over cost at the outset and work proceeds on the basis of the cost plan. The final cost of the project will not be known until the final works package is let, however costs can be monitored and controlled by the employer’s professional team.
The client has control over design throughout the project through their professional team (architect, structural engineer etc).
Design changes are possible during the construction phase, provided that the changes do not affect work on packages already let, which can result in aborted work.
Completion within the contract period is an obligation of the contractor, and extensions of time cannot be granted without permission from the contract administrator.
In summary Management sees the risk largely with the employer/client, in respect of costs and time. A degree of trust and in-house expertise is required for management procurement projects. However this is a low risk option for the employer in terms of design and quality because of the control they have over the professional team.