There are numerous procurement strategies available in building projects to fulfill the needs of clients/developers. Selecting the best method is not only tough, but also difficult since developers' aims must align with the procurement methodology. As a result, the procurement technique must be chosen early and must support the developer's project objectives. Furthermore, the method's merits and drawbacks should be considered. Modern procurement procedures for construction projects are discussed in this study. While the study focuses on the qualities, benefits, and drawbacks of these systems for the client/developer, consultants, builders, subcontractors, and end users, it also demonstrates suitable projects for each method and recommendations to potential developer.
Procurements methods used in construction projects
Construction management (CM)
Construction management is a procurement method where a client appoints an external firm to manage the design as well as construction phases of the project. The CM firm is simply in charge of providing service facilities; however, it cannot implement any permanent duties that are carried by the construction contractor (Davis, Love & Baccarini 2008, p. 14). This approach is characterized by improved overall buildability; flexible; accelerate project time frame; and allows price competition. Besides, when it comes to CM procurement methods, the builder/construction manager is appointed immediately the design phase is completed, which contributes to a number of benefits. For instance, the builder's new responsibility experience in buildability can lead to a cost-effective design, time consideration, and construction processes. Also, the builder can help in identifying long lead items early in the project's cycle (Lam & Chan 1994, p. 161). The CM method utilizes work packages or trade such that contractors are given the opportunity to tender for certain project sections such as the builder appointing the subcontractors. Work packages like demolition are tendered and completed earlier during the design stage are documented and commenced whereas finishing packages are still in the documentation phase. Moreover, the CM method is suitable for high-rise buildings and enclosure rehabilitation projects. Again, CM procurement technique is also appropriate for larger projects where quick completion is required (Davis, Love & Baccarini 2008, p. 14). In particular, the CM procurement technique is suitable for large complex projects like learning institutions, hospitals, commercial and industrial projects. Therefore, a potential client who wants to rehabilitate an old building should use CM procurement method because it supports working based on the budget and desires to complete it quick. It is also suitable since working on a strict budget means developer's consultants have to make accurate estimates of the project during the design stage and offer measures to improve the value while adhering to the budget.
Benefits of construction management procurement
With the CM procurement approach, the client has access to budget information and formal project cost; hence the procedure is very transparent. If the project is completed below the budget, the savings are given to the client. The client that uses the CM method benefits from reduced construction time, which is a result of the fast-tracking concept. Again, the reduction in time is attributed to overlapping design (Lam & Chan 1994, p. 163). Collaboration between different parties especially the design teams and consultants can be beneficial. For instance, contractors' understanding of the market environment and time frame can be useful when it comes to ensuring that the projects are executed efficiently, economically and promptly.
Problems of construction management method
As far as the CM approach is concerned, the client works directly with subcontractors and consultants, which also means that the client has to accept a significant degree of risk. The consultant is basically an agent and cannot provide assurance that the project can be completed within a specified time frame and cost. Due to the fast-tracking concept, there is no assurance of the final cost of the project, which is the major problem of the CM method to the client. When the cost overruns in the last phases of the project, the client has to pay. Since the consultant is an agent, the client has to take the responsibility of substandard work by builders and subcontractor. Another problem associated with CM procurement is altering project team relationship. The builder takes that role of construction manager, team members, and developer. This puts the builder in the same rank as the design team, which creates commercial interest rather than a professional role (Lam & Chan 1994, p. 162).
Design and Construct Procurement techniques
The design and construct method involves the contractor accepting the responsibility for some of the entire design. In addition, express reference must be demonstrated in the contract and the degree of liability of design during the initial phases of the project. Besides, design and construct procurement is characterized by a single company being responsible for the construction and design. In this method, the developer has to rely on consultants' guidance on preparing the requirements, including a provisional sum. However, it is necessary to be careful in prescribing performance criteria to ensure the developer greatly relies on the contractors. Design and construct also entail accelerating the program by overlapping not only the design but also the scope. Again, it is associated with a higher likelihood of changing the scope (Davis, Love & Baccarini 2008, p. 11). Most importantly, the design and construct technique is suitable for simple projects, which do not require technical innovation. Basically, a potential owner/developer with a simple building should use design and construct procurement method because such projects are not highly serviced and do not require technical innovation. Again, potential developers should use this procurement method since onsite work begins immediately and integration of design and construction approaches may lead to effective planning of duties.
Benefits of design and construct procurement method
The design and construct method is beneficial to end-users, builders, and subcontractors since it presents certainty on the contract cost and cost benefits. Furthermore, the incorporation of design and construction techniques gives consultants the freedom to use buying power and market understanding, hence providing a developer with competitive rates (El Wardani, Messner & Horman 2006, p. 231). This method also allows the builders, subcontractors, and consultants to commence onsite work quickly while the integration of design and construction can contribute to effective planning.
Problems of design and construct procurement method
With this method, the input of the builders and subcontractors is limited to using schemes of design provided by the clients to develop detailed and production data. In essence, the developer's consultants require more time to detailed requirements, assess and compare different tenders. Moreover, when using the design and construct approach, the client may experience challenges in developing a satisfactorily detailed brief. In addition, if the project scope is changed, the client can invest a high amount in the project. The client may also experience the problem of comparing different bids because each is unique (Porwal & Hewage, 2013, p. 208).
Documented design procurement method
In a bid to embrace this procurement method, the owner buys the design and the builder develops the design. A documented design approach is also known as construct only, which implies that the builder cannot carry out design roles (Naoum & Egbu 2015, p. 7). The documented design technique is characterized by detailed standard design, which gives skilled and competent builders an opportunity to construe it effectively so as to construct. Additionally, with this procurement technique, the builder and subcontractors do not have to be accountable for design-related risks as well as omissions, rather the owner or developer who buys it (El Wardani, Messner & Horman 2006, p. 234). The procurement approach is suitable for industrial projects, especially those requiring an upfront feasibility study. Similarly, owners who want significant control of the design and want to compare prices should go for this method. A potential developer should use documented design procurement technique to get a comprehensive upfront feasibility study and competent consultants to develop accurate and quality documentation.
Benefits of documented design procurement method
When clients use documented design methods, they have greater control of the design and also a simple approach to compare costs (Ruparathna & Hewage 2015, p. 306). The builder also benefits since there is a low-risk margin, which is attributed to the fact that they are responsible for design-based omission.
Problems of documented design procurement method
The documented design method presents problems to the builders such that they are allowed to design. This nonetheless restricts the builder to take particular design issues under certain cases. Accepted design technique presents problems to the owners as they are accountable for risks and omissions related to the design. Another issue is that the owner requires a considerable upfront investment and the project cannot begin unless the documentation is completed. Builders and subcontractors can face the challenge with the design whereby it is buildable as required.
References
Davis, R.P., Love, P. and Baccarini, D., 2008. Building procurement methods.
El Wardani, M.A., Messner, J.I. and Horman, M.J., 2006. Comparing procurement methods for design-build projects. Journal of construction engineering and management, 132(3), pp.230-238.
Lam, P. and Chan, A.P., 1994. Construction management as a procurement method: A new direction for Asian contractors. CIB REPORT, pp.159-159.
Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in construction journals. Procedia Economics and Finance, 21, pp.6-13.
Porwal, A. and Hewage, K.N., 2013. Building Information Modeling (BIM) partnering framework for public construction projects. Automation in Construction, 31, pp.204-214.
Ruparathna, R. and Hewage, K., 2015. Sustainable procurement in the Canadian construction industry: current practices, drivers and opportunities. Journal of Cleaner Production, 109, pp.305-314.
