Last edited 31 Dec 2018

Traditional contract for construction

The 'traditional' procurement route, sometimes referred to as 'design bid build' (or 'bid build' by contractors) remains the most commonly used method of procuring building works.

The client first appoints consultants to design the project in detail and then prepare tender documentation, including drawings, work schedules and bills of quantities. Contractors are then invited to submit tenders for the construction of the project, usually on a single-stage, competitive basis. This may be referred to as a 'traditional contract'. The contractor is not responsible for the design, other than temporary works, although some traditional contracts do provide for the contractor to design specific parts of the works.

Typically, the client retains the design consultants during the construction phase to prepare any additional design information that may be required, to review any designs that might be prepared by the contractor, and to inspect the works. Normally, one consultant (often, but not necessarily, the architect) will be appointed to administer the contract.

Traditional construction contracts are most commonly lump-sum contracts, however, measurement contracts and cost reimbursement contracts can also be used for ‘traditional’ projects where design and construction are separate, sequential activities.

This form of procurement is suitable for both experienced and inexperienced clients. Fully developing the design before tender gives the client certainty about design quality and cost, but it can be slower than other forms of contracting, and as the contractor is appointed only once the design is complete, they are not able to help improve the buildability and packaging of proposals as they develop.

It is considered to be a low risk method of contracting for the client, as the contractor takes the financial risk for construction. However, if design information is incomplete at tender, or if significant variations are required after the contractor has been appointed, the cost to the client can be significant. Because of this, and because of the separation of design and construction, traditional procurement can be seen as adversarial.

The most common forms of traditional contract remain the JCT (Joint Contracts Tribunal) Standard Building Contract, Intermediate Building Contract and Minor Works Building Contract.

When might it be appropriate?

If the employer has had the design prepared
If the design is substantially completed at time of contractor selection
The client wishes to retain control over the design and specification
Cost certainty at start on site is important
The shortest overall programme is not the client’s main priority

What are the advantages of traditional procurement?

Competitive fairness and transparent process.
Design led – can ensure quality
Price certainty before commencement
Well known procedures
Changes are reasonably easy to arrange and value

What are the disadvantages?

Overall project duration may be longer than other procurement routes – sequential process
No input into design and planning by the contractor
Strategy based on price competition – could lead to adversarial relations
Dual point of responsibility – design team for design and contractor for construction
If the design is not complete at the time of tender, cost and time certainty are reduced.