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Last edited 17 Sep 2019
Traditional procurement method
Traditional procurement (sometimes referred to as design, bid, build, two-stage tendering, negotiated tendering or the accelerated traditional method) remains the most commonly-used method of procuring building works. It comprises a tripartite arrangement involving a client, consultants and the contractor (who is typically appointed by competitive tendering or sometimes appointed at an early stage by negotiation).
The traditional procurement route involves separating design from construction. The client appoints the consultants who design the project in detail and who are also responsible for cost control. Contractors are then invited to submit tenders for the construction of the project, usually on a single-stage, competitive basis.
Included in the contractor’s responsibilities are workmanship, materials and all work undertaken by suppliers and subcontractors. Although the contractor is not responsible for the design (other than temporary works) some traditional contracts may provide for the contractor to design specific parts of the works (see key criteria below).
Traditional procurement can (to a limited extent) include design and construction running in parallel. This has the benefit of enabling an early start to be made on site although there will be less certainty for the client regarding the costs.
 Traditional procurement involves three types of contract:
- Lump sum (or ‘stipulated sum’) contracts: a single ‘lump sum’ price for all the works is agreed before the works begin. The contractor undertakes to be responsible for executing the work under the contract for an agreed sum of money. This is generally appropriate where the project is well defined, when tenders are sought, and significant changes to requirements are unlikely. It allows the contractor to accurately price the works they are being asked to carry out.
- Measurement contracts (or ‘re-measurement’ or ‘measure and value contracts’) are used where the works can be described in reasonable detail, but the amount cannot. Examples include excavation works and refurbishment projects.
- Cost reimbursement (or ‘cost plus’) contracts can be used where the nature of the works cannot be properly defined at the outset, or a high degree of risk is involved in the work, eg emergency work or after a building failure. They are often used where an immediate start on site is required). The contractor is reimbursed the actual costs they incur in carrying out the works, plus an additional fee that covers management, overheads and profit.
 Key criteria with traditional procurement
- Appointed by clients (or ‘employers’) to provide design and cost advice, consultants retain total control over the design and quality which they deem fit for the project.
- Consultants are responsible for all matters relating to valuations and payment.
- In traditional procurement contracts, the contractor generally has no design duties, but if this is necessary for say, some aspect of a project, the contract should include clear wording to this effect.
- In traditional lump sum contracts, there must be adequate time before tenders are invited to allow for the production of a complete set of drawings and other documents.
- Contractors may submit claims if they do not receive the necessary timely instructions and information from architects on whom they are heavily dependent.
- The traditional method – or adaptations of it – can still be used with approximate quantities, provisional sums or cost reimbursements where the nature or quantity of work cannot be accurately defined.
For further information see Traditional contract for construction.
 Related articles on Designing Buildings Wiki
- Atkins v Secretary of State for Transport.
- Appointing consultants.
- Bill of quantities.
- Construction contract.
- Contract conditions.
- Design quality.
- Notifications during construction works
- Procurement route.
- Temporary works.
- Tender documentation.
- Traditional contract for construction
- Traditional contract: outline work plan.
- Traditional contract - pros and cons.
- Two-stage tender.
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