The choice of procurement method will depend on the size, complexity and nature of the project, as well as the client’s specific needs and objectives. There are several contract procurement methods used in the construction industry. These include:
Traditional
This is the most common procurement method, where a client hires a design team to create drawings and specifications, then issues an invitation to bid to several contractors. The client then selects the contractor with the lowest bid.
Design & Build
In this method, a single contractor is responsible for both the design and construction of the project. This allows for a more streamlined process, with the contractor having more control over the design and construction process.
- Turnkey procurement; this is a method where a client hires a single contractor to design, build, and fully equip a project, then hand it over to the client when completed, ready to use. This method is also known as “design-build-operate” or “design-build-finance-operate” (DBFO).
Management Contracting
Similar to construction management procurement, this method involves hiring a management contractor to manage the project and hire specialized contractors for specific tasks. The management contractor acts as a general contractor and is responsible for the overall management of the project.
Partnering
The principles of partnering include a decision making process, mutual objectives, and an overall improvement in performance. As more projects are worked on in tandem, a greater understanding of how to accomplish best practice, reduce costs and attain value for money is achieved.
- Public-Private Partnership (PPP) procurement; this method involves a partnership between a public sector client and a private sector partner to finance, design, construct, and operate a project. This method is typically used for large-scale infrastructure projects.
- PFI;
- Target Cost;
- Prime Contracting;
Framework
This is a method in which a client establishes a pre-approved list of contractors or suppliers to be used on a series of projects over a period of time. This method allows the client to have a known pool of suppliers or contractors to call on when a new project arises, rather than going through the tendering process again.
Summary
The table below, provides a summary of the pros and cons for each one of the contract procurement methods described above:
Method | Advantages | Disadvantages |
Traditional |
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Design & Build |
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Management |
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Partnering |
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