Procurement policy in the construction industry - Revision history

Designing Buildings at 10:00, 18 October 2022

2022-10-18T10:00:21Z

← Older revision		Revision as of 10:00, 18 October 2022
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−	[[File:Money-~~g42c1024da 1280~~.jpg]]	+	[[File:Money-g42c1024da_1280.jpg\|link=File:Money-g42c1024da_1280.jpg]]

	= What is procurement? =		= What is procurement? =
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	= What is public procurement policy? =		= What is public procurement policy? =

−	In the UK, value for money is a fundamental component of the procurement policies for public sector buyers~~. In 2010 for example, the government moved to a centralised procurement system where common goods and services were purchased once on behalf of the whole government and not by individual departments~~.	+	In the UK, value for money is a fundamental component of the procurement policies for public sector buyers.

	Central government departments are required to adopt lean sourcing principles that include:		Central government departments are required to adopt lean sourcing principles that include:
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	* Bidders to be excluded where there is a conflict of interest or they have a criminal record;		* Bidders to be excluded where there is a conflict of interest or they have a criminal record;
	* Assessing a bidder on the basis of how they pay their suppliers e.g whether they conform to the government’s standard requirement of prompt payment.		* Assessing a bidder on the basis of how they pay their suppliers e.g whether they conform to the government’s standard requirement of prompt payment.
−	* Public projects or publicly-subsidised projects may be subject to ~~OJEU~~ procurement ~~procedures for~~ as ~~long~~ as ~~the UK~~ is part of the ~~European Union~~.	+
		+	Rules also apply to the way that contracts are advertised, and how they are made accessible to a wide range of potential suppliers (including SME's). The Social Value Act also requires consideration to how the proposed procurement might improve the economic, social and environmental well-being of a relevant area.
		+
		+	The Government Construction Strategy suggests that '… Procurement is best looked at as part of a broader asset life cycle, rather than as a stand-alone process...' and that... Procurement' is therefore part of a system that commences at the inception stage of a project, and is concluded only when the facility has been brought into use with proper arrangements made for asset management'. Whilst the strategy does not itself propose which procurement routes should be adopted, the Common Minimum Standards referred to in the strategy state that '...Procurement routes should be limited to those which support integrated team working (PPP/PFI, Design & Build, the Prime-type Contracting approach and framework arrangements consistent with the Construction Strategy).'
		+
		+	However, PFI has subsequently been discredited, and is no longer permitted on new public projects.

	For more information see: Public procurement.		For more information see: Public procurement.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Corporate objectives for procurement.		* Corporate objectives for procurement.
	* Design and build procurement route.		* Design and build procurement route.
−	* Design build finance and operate.
−	* Design, build, manage contractor.
−	* Engineering procurement and construction contract.
	* Framework contract.		* Framework contract.
−	* Lump sum contract.
	* Managing the procurement process.		* Managing the procurement process.
	* OJEU procurement procedures.		* OJEU procurement procedures.
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	* Public private partnerships PPP.		* Public private partnerships PPP.
	* Public procurement.		* Public procurement.
−	* Single-stage tender.
	* Subcontract procurement.		* Subcontract procurement.
	* Tender processes for construction contracts.		* Tender processes for construction contracts.
−	* Traditional contract for construction.
−	* Two-stage tender.
−	* Typical tender process for construction projects.

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Procurement]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Procurement]]

Designing Buildings at 09:54, 18 October 2022

2022-10-18T09:54:06Z

← Older revision		Revision as of 09:54, 18 October 2022
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−	~~= Introduction =~~	+	[[File:Money-g42c1024da 1280.jpg]]

−	~~Procurement~~ is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing prices, terms and contracts for acquiring goods, services, equipment and so on.	+	= What is procurement? =

−	~~There are many routes by which~~ the ~~design and~~ construction of a ~~building can be procured. Procurement policy determines which~~ of ~~these routes is adopted~~ on ~~a particular project or is the client’s preferred option~~.	+	Procurement is the process of purchasing goods or services. In the construction industry, procurement encompasses a whole range of activities that includes preparing tender documentation, issuing an invitation to tender, assessing bids, establishing and agreeing prices, terms and so on.

−	The selected route should be consistent with the long-term objectives of the client, and may be influenced by a number of factors:	+	= What factors influence procurement policy? =
		+
		+	There are many routes by which the design and construction of a built asset can be procured. A procurement policy may help determine which of these routes is adopted on a particular project. The selected route should be consistent with the long-term objectives of the client, and may be influenced by a number of factors:

	* Speed.		* Speed.
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	* Other projects.		* Other projects.

−	~~In 2012, an RIBA member~~'s ~~survey suggested that~~ procurement routes ~~most-commonly~~ used by ~~respondents were~~:	+	If the client's priorities are speed and cost for example, then their procurement policy might favour the design and build procurement route, whereas if their priority is quality, they might prefer the traditional procurement route.
		+
		+	As well as defining preferred procurement routes, a procurement policy might also set out rules for how the procurement process is managed:
		+
		+	* Setting spending caps for different levels of manager / director.
		+	* Setting out how a long list or short list of prospective suppliers are chosen.
		+	* Defining the criteria that will be used to assess suppliers.
		+	* Defining the weighting applied to selection criteria.
		+	* Prescribing how tenders are opened (financial information may be assessed separately).
		+	* Defining how and who assesses quality matters (such as design proposals).
		+	* Setting out checks that must be done before a supplier is appointed (checking references, credit checks and so on.)
		+
		+	= Which are the most common procurement routes? =
		+
		+	The National Construction Contracts and Law Report 2018, published by NBS, suggested the following mix of procurement routes in the construction industry:

−	* Traditional ~~contract 86~~%	+	* Traditional procurement 46%
−	* ~~Single-stage design~~ and build 41%	+	* Design and build 41%
−	* ~~Two-stage design and build 39~~%	+	* Partnering / alliancing 3%
−	* ~~Management contract 18~~%	+	* Construction management 3%
−	* PFI 10%	+	* Contractor approved without any tender process 2%
		+	* Measured term 1%
		+	* PFI / PPP 1%
		+	* Cost plus 1%
		+	* Management contracting 1%

−	For more information see: ~~Procurement~~ route.	+	For more information see: What is the most common procurement route?

−	= ~~Public~~ procurement policy =	+	= What is public procurement policy? =

	In the UK, value for money is a fundamental component of the procurement policies for public sector buyers. In 2010 for example, the government moved to a centralised procurement system where common goods and services were purchased once on behalf of the whole government and not by individual departments.		In the UK, value for money is a fundamental component of the procurement policies for public sector buyers. In 2010 for example, the government moved to a centralised procurement system where common goods and services were purchased once on behalf of the whole government and not by individual departments.

Designing Buildings: moved Procurement policy to Procurement policy in the construction industry

2021-02-08T07:09:51Z

moved Procurement policy to Procurement policy in the construction industry

← Older revision

Revision as of 07:09, 8 February 2021

Designing Buildings at 07:09, 8 February 2021

2021-02-08T07:09:22Z

← Older revision		Revision as of 07:09, 8 February 2021
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	* Typical tender process for construction projects.		* Typical tender process for construction projects.

−	[[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Procurement]]

Editor at 18:28, 27 July 2020

2020-07-27T18:28:56Z

← Older revision		Revision as of 18:28, 27 July 2020
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	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

		+	* Corporate objectives for procurement.
	* Design and build procurement route.		* Design and build procurement route.
	* Design build finance and operate.		* Design build finance and operate.

Designing Buildings at 09:59, 10 December 2019

2019-12-10T09:59:05Z

← Older revision		Revision as of 09:59, 10 December 2019
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	* Management contract 18%		* Management contract 18%
	* PFI 10%		* PFI 10%
		+
		+	For more information see: Procurement route.

	= Public procurement policy =		= Public procurement policy =

−	In the UK, value for money is a fundamental component to the procurement policies of public sector buyers. In 2010 for example, the government moved to a centralised procurement system where common goods and services ~~are~~ purchased once on behalf of the whole government and not in individual departments.	+	In the UK, value for money is a fundamental component of the procurement policies for public sector buyers. In 2010 for example, the government moved to a centralised procurement system where common goods and services were purchased once on behalf of the whole government and not by individual departments.

−	~~===~~ Central government departments are required to adopt lean sourcing principles that include: ~~===~~	+	Central government departments are required to adopt lean sourcing principles that include:

−	* ~~Adopting a LEAN sourcing approach that strips~~ out waste and ~~reduces~~ costs;	+	* Stripping out waste and reducing costs;
−	* A requirement to carry out significant levels of pre-procurement market engagement with diverse suppliers ~~in order~~ to understand the market, and test and generate ideas for innovation as part of the development of outcome-based specifications;	+	* A requirement to carry out significant levels of pre-procurement market engagement with diverse suppliers to understand the market and test and generate ideas for innovation as part of the development of outcome-based specifications;
−	* Contracts should be broken down into lots where appropriate; requirements below £100K should be rapidly sourced through the ~~new~~ ‘government dynamic market’ place;	+	* Contracts should be broken down into lots where appropriate; requirements below £100K should be rapidly sourced through the ‘government dynamic market’ place;
	* All government procurements are strongly encouraged to use the ‘open procedure’ that uses standard operating procedures;		* All government procurements are strongly encouraged to use the ‘open procedure’ that uses standard operating procedures;
−	* A presumption against the use of the ‘competitive dialogue procedure’ which can slow ~~things~~ down unnecessarily and typically incurs ~~huge~~ costs on both sides, and	+	* A presumption against the use of the ‘competitive dialogue procedure’ which can slow the process down unnecessarily and typically incurs costs on both sides, and
	* All but the most complex procurements are expected to be completed within 120 working days (publication of the advert to the contract award decision date).		* All but the most complex procurements are expected to be completed within 120 working days (publication of the advert to the contract award decision date).
−
−	~~=== Other requirements part of government public procurement policy include: ===~~
−
	* Bidders to be excluded where there is a conflict of interest or they have a criminal record;		* Bidders to be excluded where there is a conflict of interest or they have a criminal record;
−	* Assessing a bidder on the basis of how they pay their suppliers e.g whether they conform to the government’s standard requirement of payment ~~of 95% of invoices within 60 days across two six-monthly reporting periods~~.	+	* Assessing a bidder on the basis of how they pay their suppliers e.g whether they conform to the government’s standard requirement of prompt payment.
−		+	* Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures for as long as the UK is part of the European Union.
−	Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures for as long as the UK is part of the European Union.	+

−	For more information ~~on procurement policy~~ see: ~~Procurement route,~~ Public procurement~~, OJEU, PFI, Private developer scheme and Crown build~~.	+	For more information see: Public procurement.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

−	* Complex project.	+	* Design and build procurement route.
−	* Construction contract	+	* Design build finance and operate.
−	* Design and build procurement route	+
−	* Design build finance and operate	+
	* Design, build, manage contractor.		* Design, build, manage contractor.
−	* Engineering procurement and construction contract	+	* Engineering procurement and construction contract.
−	* Framework contract	+	* Framework contract.
−	* Guaranteed maximum price for construction contracts	+	* Lump sum contract.
−	* Lump sum contract	+	* Managing the procurement process.
−	* Management contractor	+	* OJEU procurement procedures.
−	* Managing the procurement process	+	* Partnering in construction.
−	* OJEU procurement procedures	+	* Procurement.
−	* Partnering in construction	+	* Public private partnerships PPP.
−	* Procurement	+	* Public procurement.
−	* Procurement route options pros and cons	+	* Single-stage tender.
−	* Public private partnerships PPP	+
−	* Public procurement	+
−	* Schedule of rates for construction	+
−	* Single-stage tender	+
	* Subcontract procurement.		* Subcontract procurement.
−	* Tender processes for construction contracts	+	* Tender processes for construction contracts.
−	* Traditional contract for construction	+	* Traditional contract for construction.
−	* Two-stage tender	+	* Two-stage tender.
−	* Typical tender process for construction projects	+	* Typical tender process for construction projects.

	[[Category:Procurement]]		[[Category:Procurement]]

Designing Buildings at 09:54, 10 December 2019

2019-12-10T09:54:13Z

← Older revision		Revision as of 09:54, 10 December 2019
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−	= ~~Outline~~ =	+	= Introduction =

−	Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing to terms and contracts, acquiring goods, services ~~and works, and the methods adopted for appointing~~, ~~managing~~ and ~~completing the project~~.	+	Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing prices, terms and contracts for acquiring goods, services, equipment and so on.

−	There are ~~various~~ routes by which the design and construction of a building can be procured~~, therefore procurement~~ policy ~~is about~~ which of these routes is ~~being~~ adopted on a particular project or is the client’s preferred option~~. The client may be a government department, a local authority, a housing association, a firm or a developer~~.	+	There are many routes by which the design and construction of a building can be procured. Procurement policy determines which of these routes is adopted on a particular project or is the client’s preferred option.

−	The selected route should ~~follow a strategy which fits~~ the long-term objectives of the client~~'s business plan; in most cases~~, ~~it will have been greatly~~ influenced by ~~the conditions~~ of ~~economic scarcity prevailing in all markets.~~	+	The selected route should be consistent with the long-term objectives of the client, and may be influenced by a number of factors:
−		+
−	~~The procurement policy may be tied up with numerous~~ factors ~~including~~:	+

	* Speed.		* Speed.
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	* Specific project constraints.		* Specific project constraints.
	* Risk.		* Risk.
−	* ~~Best value~~	+	* Value.
−	* ~~Asset ownership~~.	+	* Maintenance.
		+	* Ownership.
	* Financing.		* Financing.
		+	* Economic conditions.
		+	* Other projects.

−	In 2012, an RIBA member's survey suggested that procurement routes commonly used by respondents were:	+	In 2012, an RIBA member's survey suggested that procurement routes most-commonly used by respondents were:

	* Traditional contract 86%		* Traditional contract 86%
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	* Management contract 18%		* Management contract 18%
	* PFI 10%		* PFI 10%
−
−	~~The procurement route chosen will depend on the client’s preferences so different clients are likely to favour different procurement routes.~~

	= Public procurement policy =		= Public procurement policy =

Editor at 17:59, 12 July 2019

2019-07-12T17:59:32Z

← Older revision		Revision as of 17:59, 12 July 2019
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	* OJEU procurement procedures		* OJEU procurement procedures
	* Partnering in construction		* Partnering in construction
		+	* Procurement
	* Procurement route options pros and cons		* Procurement route options pros and cons
	* Public private partnerships PPP		* Public private partnerships PPP

Editor at 17:58, 12 July 2019

2019-07-12T17:58:37Z

← Older revision		Revision as of 17:58, 12 July 2019
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		+	= Outline =
		+
	Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing to terms and contracts, acquiring goods, services and works, and the methods adopted for appointing, managing and completing the project.		Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing to terms and contracts, acquiring goods, services and works, and the methods adopted for appointing, managing and completing the project.

Editor: Created page with "Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tend..."

2019-07-12T17:58:14Z

Created page with "Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tend..."

New page

Procurement is the process of purchasing goods or services. In construction, procuring a building project encompasses a whole range of activities – often via a competitive tendering process – that include establishing and agreeing to terms and contracts, acquiring goods, services and works, and the methods adopted for appointing, managing and completing the project.

There are various routes by which the design and construction of a building can be procured, therefore procurement policy is about which of these routes is being adopted on a particular project or is the client’s preferred option. The client may be a government department, a local authority, a housing association, a firm or a developer.

The selected route should follow a strategy which fits the long-term objectives of the client's business plan; in most cases, it will have been greatly influenced by the conditions of economic scarcity prevailing in all markets.

The procurement policy may be tied up with numerous factors including:

* Speed.
* Cost.
* Quality.
* Specific project constraints.
* Risk.
* Best value
* Asset ownership.
* Financing.

In 2012, an RIBA member's survey suggested that procurement routes commonly used by respondents were:

* Traditional contract 86%
* Single-stage design and build 41%
* Two-stage design and build 39%
* Management contract 18%
* PFI 10%

The procurement route chosen will depend on the client’s preferences so different clients are likely to favour different procurement routes.

= Public procurement policy =

In the UK, value for money is a fundamental component to the procurement policies of public sector buyers. In 2010 for example, the government moved to a centralised procurement system where common goods and services are purchased once on behalf of the whole government and not in individual departments.

=== Central government departments are required to adopt lean sourcing principles that include: ===

* Adopting a LEAN sourcing approach that strips out waste and reduces costs;
* A requirement to carry out significant levels of pre-procurement market engagement with diverse suppliers in order to understand the market, and test and generate ideas for innovation as part of the development of outcome-based specifications;
* Contracts should be broken down into lots where appropriate; requirements below £100K should be rapidly sourced through the new ‘government dynamic market’ place;
* All government procurements are strongly encouraged to use the ‘open procedure’ that uses standard operating procedures;
* A presumption against the use of the ‘competitive dialogue procedure’ which can slow things down unnecessarily and typically incurs huge costs on both sides, and
* All but the most complex procurements are expected to be completed within 120 working days (publication of the advert to the contract award decision date).

=== Other requirements part of government public procurement policy include: ===

* Bidders to be excluded where there is a conflict of interest or they have a criminal record;
* Assessing a bidder on the basis of how they pay their suppliers e.g whether they conform to the government’s standard requirement of payment of 95% of invoices within 60 days across two six-monthly reporting periods.

Public projects or publicly-subsidised projects may be subject to OJEU procurement procedures for as long as the UK is part of the European Union.

For more information on procurement policy see: Procurement route, Public procurement, OJEU, PFI, Private developer scheme and Crown build.

= Related articles on Designing Buildings Wiki =

* Complex project.
* Construction contract
* Design and build procurement route
* Design build finance and operate
* Design, build, manage contractor.
* Engineering procurement and construction contract
* Framework contract
* Guaranteed maximum price for construction contracts
* Lump sum contract
* Management contractor
* Managing the procurement process
* OJEU procurement procedures
* Partnering in construction
* Procurement route options pros and cons
* Public private partnerships PPP
* Public procurement
* Schedule of rates for construction
* Single-stage tender
* Subcontract procurement.
* Tender processes for construction contracts
* Traditional contract for construction
* Two-stage tender
* Typical tender process for construction projects

[[Category:Procurement]]