Procurement in construction: Knowledge hub

Summary

Procurement is the process of acquiring goods, services, or works from external sources to meet an organisation's needs. It encompasses all activities from identifying a need to supplier relationship management and the final payment. It is more strategic and comprehensive than just purchasing, focusing on value, quality, and long-term benefits.

This knowledge hub brings together key guidance, definitions and innovations related to procurement in construction. Whether you're an architect, engineer, project manager or student, this is your starting point for understanding and applying best practice in procurement.

What is procurement in construction?

There are many different routes by which the design and construction of a building can be procured. The selected route should follow a strategy that fits the long-term objectives of the client's business plan.

Considerations that might influence the selection of a procurement route are likely to include:

• Time / speed / programme.
• Cost / price.
• Quality / performance / indicators.
• Specific project constraints.
• Risk.
• Asset ownership.
• Financing.

The main procurement routes are:

• Traditional contract.
• Single-stage design and build.
• Two-stage design and build.
• Management contract.
• Partnering.

Why does procurement matter in construction?

Procurement is crucial in construction because it ensures projects are completed efficiently, on time, within budget, and to the required quality standards by managing the acquisition of necessary goods and services. A well-defined procurement strategy helps mitigate risks, enhances collaboration, and ultimately contributes to overall project success.

Procurement allocates responsibilities to the different parties involved in the planning, design, construction and operation of built assets. It also determines who is taking the risk for those aspects of the project. If procurement is not properly considered at the outset, it can be difficult to recover the situation later.

Key articles about procurement

Here are some of the key articles about procurement on Designing Buildings:

Procurement fundamentals & definitions

• Difference between procurement and tendering. Full purchasing cycle V specifically the bidding stage.
• Managing the procurement process. Structured frameworks for value and compliance at all stages.
• Procurement Act 2023. A brief run through what the act entails.
• Procurement route. The overall process of buying goods or services and main procurement routes.
• Procurement strategy. Outlines planning for contracts, market approach, and timing throughout a project’s life.
• Procurement terms and definitions. Glossary of terms from the Crown Commercial Service.
• Procurement triangle. The three sided form of time, cost and quality associated with traditional procurement.
• Project benchmarking. Using other projects to compare performance and highlight potential issues.
• What is the most common procurement route? Trends of across project sizes and sectors.
• Risk in building design and construction. Types of risks, and how to deal with them.

Procurement routes and delivery methods

• Procurement route. The main procurement routes and links to more information.
• Best value procurement. Selecting suppliers based on cost, qualitative, technical, and sustainability criteria.
• Construction management. Trade contractors are contracted to the client but managed by a construction manager
• Design and build procurement route. Single contractor route for both design and construction phases.
• Framework contract. Managing repetitive or call-off procurement under a framework agreement.
• Integrated project delivery (IPD). A collaborative alliance of stakeholders sharing risk and reward.
• Negotiation. Techniques that can be used where two or more parties have to reach a common, agreed position.
• Lump sum contract. Contracts with fixed price and stage payment structure common in well-defined projects.
• Management contract. Management contractor coordinates specialist packages, contracted to the client.
• Partnering in construction: Collaborative procurement frameworks and approaches.
• Procurement route options pros and cons. Comparison of various routes.
• Public procurement. Formal procurement procedures in the public sector and whole-life asset management.
• Single stage tender. Traditional tender process used when full project information is available from the start.
• Subcontract procurement. Process where a main contractor engages specialists for parts of the main contract.
• Traditional procurement method. The sequential model with complete design prior inviting tenders.
• Two stage tender. A route where contractors are selected first, then price negotiated after design development.

Tendering, contracts and evaluation

• Appointments. Consultants for the main construction project roles. (see Appointments in construction: Knowledge hub)
• Construction contract. Covers the elements, structure, and types of contracts used across procurement routes.
• Due diligence when selecting contractors or subcontractors. Pointers for correct processing.
• Pre-qualification questionnaire (PQQ). Screening suppliers for financial, technical and compliance criteria.
• Selection criteria. Assessing contractors or suppliers before the selection is made and a contract awarded.
• Maintenance, repair and operations procurement (MRO). Ongoing supporting tasks for operations over time.
• Material procurement. How materials are specified, ordered, invoiced, delivered, and managed on a project.
• Procurement team for design and construction. Team roles in supplier selection and strategy development.
• Ten principles for procuring better outcomes: RIBA published framework for procuring architectural services.
• Tender evaluation: What to consider and following the correct and proper process and criteria.
• Typical tender process for construction projects. Options, processes, approaches, assessment and risks.

Innovation, sustainability and emerging trends

• Category management in construction procurement. Strategic grouping of spend areas for better outcomes.
• Circular procurement. Explores sustainable procurement strategies focused on reuse, recycling, and the circular economy in public contracts en.wikipedia.org.
• E-sourcing. Planning supply channels to optimise total cost, risk, and long -term value beyond purchase price
• Forward Commitment Procurement. Securing future products or services through purchase after development.
• Integrated project insurance (IPI) model. a collaborative alliance of stakeholders sharing risk and reward.
• Private finance initiative (PFI). A form of long-term public-private project financing where a private consortium builds, finances, and often maintains an asset over 25–30years under contract.
• Public private partnerships (PPP). Government and private sector collaboration to deliver policies, services, buildings, or infrastructure, spanning finance, design, construction, operation and maintenance over time.
• Sustainable procurement. Looking at the procurement triangle from the perspective of activities that meet the needs of the present without compromising the ability of future generations to meet their own needs.
• Integrated project team. Collaborative working between all of those involved in the delivery of a project.

All articles about procurement

There are more that 1,000 articles about procurement on Designing Buildings. A full index is available here.

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