BACHELOR OF SCIENCE IN BUILDING ECONOMICS (YEAR THREE)
Does a procurement route determine the type of contract to be used?
DEFINING KEY WORDS
Procurement is the process of establishing the most appropriate method of managing the construction project and selecting the best team to design, deliver and sometimes operate the required facility.
Procurement route: The term 'procurement route ' is used to describe the often complex network of relationships which are formed between clients, consultants and construction companies, to enable a building project to be realized. It is important to distinguish the contractual relationships from managerial links, and in complex modern procurement systems this is sometimes far from easy.
From a Legal Point of View, a contract is a mutual agreement between two or more parties that something shall be done, an agreement enforceable at law.
According to FIDIC, a contract means the General Conditions, the Supplementary Conditions, the Specifications, the Drawings, the Bill of Quantities, the Tender, the Letter of Acceptance, the Contract Agreement, and such further documents as may be expressly incorporated in the Letter of Acceptance or Contract Agreement.
From my personal perspective, the procurement route determines the type of contract to use but to some extent. This means that the decision of the procurement identifies the contract structure and thus the contract type but is not the only factor in perspective when determining the choice of contract type to use; as there are other factors, such as risk, cost certainty, time, type of client, and many more other factors.
According to Method of Payment, the agreement of how the owner will pay the contractor for work performed such as a lump-sum or cost-plus payment.
The choice of contract flows from the procurement route chosen for the
References: http://staff.fit.ac.cy/eng.ls/Skevi/ACEC438/ACEC438%20Contract%20types%20presentation.pdf http://www.publicarchitecture.co.uk/knowledge-base/publications/standard_forms%5B1%5D.pdf http://faculty.ksu.edu.sa/algahtani/GE%20404/GE404-Topic_10-contracts.pdf