- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 12 Jul 2019
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:
- Traditional contract 86%
- Single-stage design and build 41%
- Two-stage design and build 39%
- Management contract 18%
- PFI 10%
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.
 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
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