Procurement Methods

Question 1

Define Procurement

Answer 1

Strategic process of how contracts for construction works are created, managed and fulfilled

Question 2

Factors that effect the procurement method chosen

Answer 2

-Speed of required construction
-Complexity
-Risk Transfer/Sharing
-Quality
-Flexibility
-Outturn price
-Client involvement
-Accountability
-Method and timing of contractor appointment
-Asset ownership

Question 3

Name the main types of procurement

Answer 3

-Traditional (Design-Bid-Build)
-Design & Build
-Construction Management
-Management Contracting

Question 4

Main characteristics of Traditional

Answer 4

-Finance and operation are controlled by the client
-Contractors only responsibility is building
-Consultants carry out design work

Question 5

Advantages of Traditional in terms of:
-Cost
-Time
-Quality
-Design Input
-Risk

Answer 5

-Set price of construction through BoQ. Any changes to design will impact cost
-Takes longer to set up. Process is longer as have to wait for design to be finalised before construction. No good if a quick turnaround is required
-Best option if quality is important, as client keeps control of design and specification
-Gives client greatest design input throughout the process
-Most risky

Question 6

Advantages of Management Contracting in terms of:
-Cost
-Time
-Quality
-Design Input
-Risk

Answer 6

-Client pays the price of the contracts plus a management fee
-Can be a lengthier process as reliant on construction manager
-Control of each contract rests with construction manager
-Contracts are between construction manager and the sub-contractors, rather than directly with the client. Client risk is minimal

Question 7

Characteristics of Management Contracting

Answer 7

• Project divided into several packages and management contractors are appointed for each package
  -Management contractors act as single point of contact
  -Early contractor involvement
  -Specialist works package contractors
  -Phased/periodic working

Question 8

Characteristics of Construction Mangement

Answer 8

• Similar to management contracting but client has direct contracts with all contractors
  –Early contractor involvement
  -Specialist works package contractors
  -Phased/periodic working

Question 9

Advantages of Construction Management in terms of:
-Cost
-Time
-Quality
-Design Input
-Risk

Answer 9

-Because the client has direct contracts with the contractors, can negotiate costs of each element through competitive tendering
-Can be time consuming to put in place
-Client retains control of quality
-Client has more control over design
-Higher risk of client. No one point of responsibility, but litigation has to go through the client

Question 10

Characteristics of Design and Build

Answer 10

Building contractor has responsibility for both design and construction
Minimal client involvement
Early contractor involvement

Question 11

Advantages of Design and Build in terms of:
-Cost
-Time
-Quality
-Design Input
-Risk

Answer 11

-Cost certainty of a fixed price with the contractor
-Good for a quick turn around. Single point of contact which can help fast track the project
-Client has little control over quality.
-Client has less say over the design, unless they state them initially
-All risk allocated to the contractor, takes away most risk from client