- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 08 Feb 2021
Procurement policy in the construction industry
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 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.
- Specific project constraints.
- Economic conditions.
- Other projects.
- 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 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.
- Stripping out waste and reducing costs;
- 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 ‘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 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).
- 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.
- 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.
 Related articles on Designing Buildings Wiki
- Corporate objectives for procurement.
- Design and build procurement route.
- Design build finance and operate.
- Design, build, manage contractor.
- Engineering procurement and construction contract.
- Framework contract.
- Lump sum contract.
- Managing the procurement process.
- OJEU procurement procedures.
- Partnering in construction.
- Public private partnerships PPP.
- Public procurement.
- Single-stage tender.
- Subcontract procurement.
- Tender processes for construction contracts.
- Traditional contract for construction.
- Two-stage tender.
- Typical tender process for construction projects.
Featured articles and news
Report includes sales vs production of compressors by type.
Government announces latest plans for growth.
Will the new requirements - once passed - go far enough?
These post-WWII modular buildings were unpopular, yet ubiquitous.
What's the verdict from the court of public opinion?
Shift to home-based work influences closed plan preferences.
An overview of the current state of the market.
Organisation offers best practices for construction and modification.
Heritage on the edge?
Prioritising tax considerations.
The four D creative process: discover, define, develop and deliver.
National Cyber Security Centre initiative is announced.
Reviewing trends and projections.
Legislation will establish initiatives to move towards net zero.