Different Procurement
Methods
Edina Nagy
Lajos 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
Traditional
Design
Bid
Build
Traditional
Design and Build Procurement
Extreme A – Client-led design and build
Extreme Z – Contractor-led design and build
Extreme A
Client-led Design and Build
Extreme Z
Contractor-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
All design risk is ultimately
carried by the client
Design and build
Procurement
The major risks lie with the
contractor
Capable of obtaining the best
The contractor assumes
contract price for the full scope greater financial risk and this is
of the works
often reflected in the price
It is not suitable for fast track
projects
Suitable for fast track projects
Client retains control over the
It is more problematic to
design team and quality can be
control design and quality
assured
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
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Different Procurement Methods