Different Procurement Methods

Edina NagyLajos Kiss

Szabolcs Hornyák

Overview

1. The Procurement

2. Traditional Procurement

3. Design and Build Procurement

4. Management Procurement systems

5. Comparing Traditional and Design and Build

Procurement

6. References and further reading

The Procurement

Procurement describes the merging of activities undertaken by the client to obtain a building.

Common types of procurement are:

–Traditional Procurement–Design and Build Procurement–Management Procurement Systems

Design Bid Build

Traditional

Traditional

Extreme A – Client-led design and buildExtreme Z – Contractor-led design and build

Design and Build Procurement

Extreme AClient-led Design and Build

Extreme ZContractor-led Design and Build

Management Procurement Systems

Management procurement systems are often used to speed up the procurement processes.

Common types:

• Management Contracting• Construction Management

Management Contracting

As an alternative to the traditional approach, the client may decide to appoint a management contractor to engage and manage a number of work package subcontractors.

Management contracting enables the client to create a competitive situation between management contractors at the appointment stage of the project.

Management Contracting

Construction Management

In this situation the construction management consultant or construction manager joins the design team early in the project.

The construction manager’s services are based on a negotiated fee with the client simply to supervise and plan the work to be undertaken by the work package contractors.

Construction Management

Advantages and Disadvantages of these methods

These are suitable for: – fast track projects – complex buildings – a developing brief

Disadvantages:– total cost of the project is not usually known

until the project – damages for delay are difficult to pin on one

subcontractor– the client takes all the risk, particularly in the

construction management

Comparing Traditional and Design & Build Procurement

Similarities between the two methods:

– Suitable for all clients, including inexperienced clients

– Price certainty is secured early in the project 

– Firm contractual date for completion

Differencies between the two methods

Traditional Procurement Design and build Procurement

All design risk is ultimately carried by the client

The major risks lie with the contractor

Capable of obtaining the best contract price for the full scope of the works

The contractor assumes greater financial risk and this is often reflected in the price

It is not suitable for fast track projects

Suitable for fast track projects

Client retains control over the design team and quality can be assured

It is more problematic to control design and quality

References and further reading

1. What does it mean procurement? – pp. 26

2. What are the advantages and disadvantages of the traditional

procurement? – pp. 29-30

3. What it means to design and build procurement? – pp. 31

4. What are the disadvantages of the management procurement systems?

– pp. 38

5. What are the similarities and differences between the traditional and the

design and build? – pp. 29-30/35

6. What is similar to the traditional procurement and construction

management? – pp. 35-36

1Construction Planning, Programming and Control/Brian Cooke and Peter Williams. – 3rd. ed.2008

Thank you for your attention!