Procurement

SC Quantity Surveyors can provide advice on procurement and the best method of procurement for the project. Whatever level of construction procurement is required SC Quantity Surveyors have the knowledge and experience to guide clients towards a successful construction project.

Procurement Services for Consultants and Private Clients:

  • Advice on the most appropriate procurement method for the project
  • Contractual advice
  • Contractor selection advice
  • Preparation of tender and contract documentation ie. bills of quantities & schedules of rates
  • Forms of contract
  • Reviewing tender documents ie. drawings and specifications

Construction Procurement Systems & Selection

On any construction project it is vitally important to select the right method of procuring the construction works. Not only is it important to choose the right contractor but it is vital that the contract documentation and form of contract is appropriate to the project.

In basic terms Procurement is the process used to obtain construction projects. It involves the selection of a contractual framework that clearly identifies the structure of responsibilities and authorities for participants within the building process.  It is a key factor contributing to overall client satisfaction and project success. The selection of the most appropriate procurement method is consequently critical for both clients and project participants, and is becoming an important and contemporary issue with the building industry.

It is vital that clients make the correct choice of construction procurement method in an increasingly complex situation, with a wide range of objective criteria and procurement systems available quantity surveyors have an important role to preform in building procurement selection because choosing the right procurement method is vital to the success of a building project.

Construction clients range from experienced clients who may have their own professional team and an effective procurement policy to the inexperienced client with little or no knowledge of procurement methods and who requires extensive professional advice. Furthermore the needs of clients vary considerably with regard to certainty of price, cost limits, time requirements, complexity of design and many other factors.

Construction Procurement Systems

 A number of different procurement routes and options exist in the construction industry:-

  1. Traditional (Design-bid-build)
  2. Design and Build
  3. Management Contracting
  4. Construction Management
  5. Design and Manage

Traditional Procurement System

The traditional procurement system remains by far the most popular method, followed by design and build. The other forms of procurement in aggregate only form a small percentage of construction transactions. The traditional structure for project procurement is seen as a sequential method because the employer takes his scheme to an advanced stage with his professional team before appointing a contractor. The designer is employed to advise the client, design and ensure that the work is kept within the cost limit and that it complies with the standards required. A Quantity Surveyor can be engaged to give guidance on design costs and budgets, prepare bills of quantities, check tenders, prepare interim valuations and advise on the value of variations. The contract price/sum is often based on a bill of quantities provided by the Quantity Surveyor which quantifies, so far as possible, every aspect of the works. Consultant structural and services engineers may be employed by either the client or his advisers to design the specialist parts of the project.

The contractor only has responsibility for construction and not for design. Separating responsibilities for design and construction is seen as the primary reason for the move to alternative contractual arrangements. This can, and unfortunately often does, lead to disputes about whether defects are really design defects (for which the employer is responsible) or defects in materials and workmanship (for which the contractor is responsible). The other major disadvantage of this procurement route is that the final design of the project is often not fully completed before construction work commences on-site and this can and often does create problems and price uncertainty.

The Traditional Procurement Method showing the contractual arrangements is shown below

Design and Build

A design and build contract is a contractual arrangement whereby the contractor offers to design and build a construction project for a contract sum which is inclusive of both the design and construction costs.

The design and build contractual arrangement is an attractive option for clients. It simplifies the contractual links between the parties to the main contract because the contractor accepts responsibility for both design and construction. The client instead of approaching an architect for a design service, chooses to go directly to the contractor for a complete design and build service.

In design and build procurement the client may choose to retain the services of an architect and quantity surveyor to act as independent professional advisers for the client to provide essential advice in terms of cost, time and quality, and also to assess the building contractor's proposals with regards to both design and cost, and to monitor the work on site. Valuations for payments on account will be made by the employer's quantity surveyor and he will value any variations requested by the employer and negotiate them with the design and build contractor.

A design and build contractor may commission design and cost services from outside design and cost consultants such as an architect or quantity surveyor, or he can employ an in-house design team from within his own contracting organisation.

In design and build contracts the design evolved by the contractor is more likely to be suited to their own organization and construction methods and this should result in a saving both in time and cost of construction. The final building should, however, result in lower production costs on site, a shorter design and construction period and an overall saving in cost to the client, after taking into account the savings on design fees.

Design and Build contracts provide the client with a single point of contact. However, the client commits to the cost of construction, as well as the cost of design, much earlier than with the traditional contracts.

The benefits of design and build contracts for clients include:-

  1. single-point responsibility for both design and construction;
  2. prices which reflect more closely the final cost to the client;
  3. inherently more buildable designs and proposals submitted;
  4. overlap of design and construction phases leading to early completion on-site and thereby savings in cost.

A major disadvantage of design and build contracts is the discouragement of possible variations by the client. Where clients consider these to be necessary they often have to pay an excessive sum of money for their incorporation within the finished building.

Each contractor invited to tender for design and build work is carefully selected not only for its financial standing and construction record but also for its design capability and management structure for the work.

A client may not realize the importance of independent professional advice from an architect or quantity surveyor in design and build contracts. The selection of a design and build contractor should be based on a brief of the employer's requirements. This brief should ideally be prepared by independent professional advisers and costed by them, so that the contractors are tendering on a brief that is within the employer's budget. It is costly for design and build contractors to tender in competition, as each contractor will have to produce a design to meet the brief and a price for construction. Tender lists will generally be shorter than for traditional contracts.

There are distinct advantages with design and build contracts which enables the contractor to use his management skills and experience in the pre-contract period to ensure that the design and performance are more closely coordinated and better related to time and cost. Economy and efficiency should flow from the continuity of joint experience.

The Design and Build Procurement Method showing the contractual arrangements is shown below

Design and Build Procurement