Procurement Strategy for a Construction Project

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1.0 Introduction

To select a suitable procurement strategy for a construction project, there are some issues which need to consider. From all of those issues, there are 3 big issues that mainly affect the selection decision which are time, cost and quality. There is several type of procurement strategy available in market that commonly used for construction project and each of the common method will be analyze and compare to find the most appropriate method for this project. The choice of procurement strategy is very important to the success of a construction project. Therefore, the characteristic of each strategy have to analyze and also its relative advantages and disadvantages. A recommendation of most appropriate procurement strategy will be made after analyzed the all factor that affect the procurement selection.

2.0 Report

Background of project
Project type : Office and Store
Client: Robert Gordon University
Source of fund: Public Funding
Time length: 12 months
Time for construction : 8 months
Time for full design,
BQ and tendering: 7 months

For this office and store project, there are numbers of procurement strategy which is commonly used and suitable for it. The types of procurement strategies are as below :

1.Traditional Lump Sum Contracts
For this type of contract, contractor and design team are two separated body which respond directly to the client. Client hires the design team and select the most suitable a main contractor to carry out the whole project. Normally, for this type of contract, all the drawing and document had completed before the selection of contractor.

Advantages :
Price certainty
Good quality of work
Changes can be evaluated
Disadvantages :
Take longer time because have to wait the design team to complete full design before go to tender stage •Claim of delay may happen due to design not fully detailed. •Poor communication between the design team and contractor.

2.Management Contracting
This type of procurement strategy is a ‘fast track’ strategy. Client pays a sum of money to hire a management contractor to manage the whole construction project. Therefore, some early work can be carried out before the design is complete. The contract for the construction projects are between the management contractor and sub contractor. The final cost for the project can not be identified until the final work has been awarded.

Advantages :
Shorter construction time
Management contractor can advise client during the design stage •Some risk can be transfer to management contractor
Disadvantages :
Pre construction price uncertainty
Delay of works may occur due to ineffective management.
3.Contract Management
Another ‘fast track’ strategy where work can be carry out before the design is complete. Construction manager is appointed in early state may benefit to the client. For this strategy, client have direct contract with the trade contractor. Same as management contracting, the final cost for the project can not be identified until the final work has been awarded.

Advantages :
Suitable for project with high level of complexity
Client control the design
Change of design has little impact on the project time table •Direct contract with sub contractor can get a lower price Disadvantages :
Pre construction price uncertainty
Most of the construction risk falls on client
Construction manager has little risk
Client has to be experienced in order to undertake this type of contract

4.Design and Build
For design and build strategy, the only main contractor will undertake both design and construction responsibility. Client provides contractor the specification of the building for the contractor to design and build. Normally, the work carried out will achieve the minimum requirement. In some cases, this type of procurement is extended to cover...
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