PROCUREMENT METHODS

PROCUREMENT METHODS

1. TRADITIONAL METHOD

2. DESIGN AND BUILD

3. CONSTRUCTION MANAGEMENT
 TRADITIONAL METHOD

is based upon rigid separation of design and construction

The promoter, usually after undertaking a feasibility study, appoint a

team of consultant (led by architect/engineer) to under take the detail
design.

The design team prepares detailed drawing, specifications and often

Bill of Quantities.The tender documents are prepared and the contract
awarded, usually to the contractor with the lowest bid.
CONTRACTUAL AND FUNCTION RELATIONSHIP

CLIENT

DESIGN ARCHITECT ACTING AS QUANTITY

CONULTANTS DESIGN LEADER AND SURVEYOR
PROJECT MANAGER

MAIN CONTRACTOR

NOMINATED / NAMED DOMESTIC

SUBCONTRACTORS SUBCONTRACTOR

Contractual relationship

Functional relationship
Alternative relationship
 ADVANTAGES

• the design has been fully developed and uncertainties

eliminated before tenders are invited.

• competitive pricing among main contractors.

• the selection of the bid that is most advantageous to the client

• existence of a priced bill of quantities enables interim valuations to

be assessed easily and variations to be quickly and accurately valued
by means of pre-agreed rates

• provides a higher degree of certainty that quality and functional

standards will be met than when using other systems
 ADVANTAGES

allows for nomination of particular specialist by clients.

Clear accountability and tight control at every stage;

well tested in practice and in law.the selection of the bid that is most
advantageous to the client

generally a high degree of certainty on the basis of the cost and

specified performance before a commitment to build.

• provides a higher degree of certainty that quality and functional

standards will be met than when using other systems
 DISADVANTAGES

the bids obtained can only considered as indicative of the

final cost and the client is thus vulnerable to claims for additional
financial reimbursement from the contractor.

sequential, fragmented and confrontational nature of this system

can result
- lengthy design and construction periods
- poor communication between clients and the project team
- problems of buildability.
 DISADVANTAGES

the separation of the design and construction process tends

to foster a ‘them and us’ attitude between designers and
contractors which reduces the team spirit that experience to be
vital for the satisfactory conclusion of a construction project.

Greater co-ordination and control is required because several

parties with different contractual relationship telations are involved.

late demands for change, by introducing variations,

- one of the main causes of delay, increased cost, lead to a
permissive attitude to design changes
 DESIGN AND BUILD

• one building contractor or a construction company to take full

responsibility and carry sole liability for the design and construction
of a building

• main characteristics
- Early delivery of project is required
- Project is of technical complexity
- There is the need for early start on site
- Price certainty (usually fixed lump sum) is required prior to
production
- Construction project is prestigious and hence single point
responsibility is required
- Economy (time, cost, function, quality, value for money) is
required.
 ORGANISATION STRUCTURE

CLIENT
CLIENT’S
AGENTS

MAIN
CONTRACTOR

CONTRACTOR’S PROJECT TEAM

QUANTITY ARCHITECT ENGINEER CONTRACTOR’S MANAGER

SURVEYOR
CONTRACTOR’S SITE TEAM

SITE SITE SITE SUPPORT

MANAGER ENGINEER SURVEYOR STAFF

Contractual relationship
Organisational relationship
 ADVANTAGES

• The integrated design and construction allows for design and

management input from the building contractor
- leads to production efficiency in terms of cost and time

• simplified contractual arrangement between client and contractor

with a single point responsibility
- improve communication channels between parties to contract.

• closer contractor/client relationship leads to a more efficient design

• client’s total financial commitment is known at an early stage

• potential for early completion and lower overall costs

• project duration is shortened due to contractor’s familiarity with his or

her system and parallel working on design and construction
 DISADVANTAGES

• tendering cost is high as contractors must design and produce

accurate proposals as well as estimates.

• the building contractor’s in-house design expertise may be

insufficient to solve the client’s construction project needs efficiently.

• tender comparison becomes complex as it involves evaluation of

design, quality and construction cost

• responsibility for defective design can be complicated by liability

dates and time limitations

• client will find it difficult and/or costly to introduce variations once

production has commenced on site.
 CONSTRUCTION MANAGEMENT

 delivery of a high-quality construction product on time at the

least cost

 similar to the management contract approach except

• construction manager - consultant - employed by the
client in a purely managerial capacity
• direct contractual relationship between the various works
contractors and the client
• The design team and construction manager possess
equal professional status.
• client has direct responsibility for his or her project and
flexibility in procuring the various specialist services.
ORGANISATIONAL STRUCTURE FOR CONSTRUCTION MANAGEMENT

CLIENT

DESIGN CONTRUCTION
TEAM MANAGER

WORKS CONTRACTORS

Contractual relationship

Organisational relationship
 ADVANTAGES
 construction manager
 provides the design team with positive advice
 enables a completed construction product of high quality to
be obtained on time
 early involvement in design
1. advise on production of build able designs
2. identify conflicts between parties
3. review drawings and the specification
 encourage production of build able designs can improve
productivity and so reduce costs.
 ADVANTAGES

 The good contractual relationship between parties

 enables the client to exercise some control and influence over
production

 The overlapping of design and production phases

 lead to accelerate production and early completion of the project

 Advanced orders of items on long delivery (which will be need

early in production) can be arranged
 DISADVANTAGES

 budget can be set up in the multi-packaging of the work

 not possible to obtain a total price until the last bid package is
awarded

 client

 is exposed to a high degree of risk

- construction manager - not take responsibility for late
completion, faulty workmanship and so on

 risks the costs of abortive work as the project may not fully
planned prior to commencement of production

 pays more in professional fees

 DISADVANTAGES

 Failure to manage and coordinate work package interfaces

adequately
 cause construction disputes and contractual claims

 Works contractors are subjected to the provision of some site

facilities
 normally supplied by the main contractor under a
conventional contract
THANK YOU