What is the most common procurement route?

[edit] Introduction

Procurement is the process of purchasing goods or services. There are many different routes by which the design and construction of a building can be procured. The selected route should follow a strategy which fits the long-term objectives of the purchaser.

For more information see: Procurement route.

[edit] The history of procurement routes

Historically, most construction projects were procured using a traditional form of contract. The 'traditional' route (sometimes referred to as design-bid-build) is procured in a single-stage, based on a fully designed (or almost fully designed) project where the design is developed in detail by a consultant team working for the client and a contractor is then appointed under a lump-sum construction contract to build the design. The contractor generally has no, or little, responsibility for any design other than temporary works. The consultant team, or part of it, is generally retained during construction to inspect the contractors work and verify that it complies with the design intent.

For more information, see Traditional contract.

The RICS conducted a survey of Contracts in Use from 1985 to 2004, throughout which, the traditional route was the most popular, although declining from 92.6% to 76.7% during that period, with design and build becoming more popular. Ref https://www.researchgate.net/publication/240260943_Construction_project_procurement_routes_An_in-depth_critique

In 2012, an RIBA member's survey suggested that procurement routes most commonly used by respondents were:

However, there has been an increasing trend for contractors to take a more significant role in setting up projects, making appointments and managing the entire project process. This began with the introduction of design and build, which became popular in the 1980s.

Design and build is a procurement route in which the main contractor is appointed to design and construct the works. Design and build can be attractive to clients as it gives a single point of responsibility for delivering the project. Design and build projects can follow either a single-stage or two-stage tender process.

For more information, see Design and build.

Other procurement routes also emerged, such as construction management and management contracting, in which the contractor takes varying degrees of responsibility for the project, and in some instances, they appoint other contractors to undertake the actual construction works, whilst they themselves take on a purely management role.

Private Finance Initiative (PFI) became popular in the 1990’s. This is a form of design build finance and operate project, involving a partnership between the private and public sector. However, following a series of scandals apparently showing poor value for money, PFI fell out of favour, from 2018 onward.

Framework agreements have become popular, despite suggestions by the The Civil Engineering Contractors Association (CECA) that they fail to deliver the work contractors expect and put them to unnecessary effort. Clients that are continuously commissioning construction work believe they can reduce timescales, learning curves and other risks by inviting generic tenders for different types of contracts to be carried out over a period of time on a call off basis as and when required.

For more information see: Framework agreement.

[file:///C:/Users/grego/Downloads/Procurement-in-the-Construction-Industry-December-2010%20(1).pdf A report exploring procurement in the construction industry], published by The Chartered Institute of Building (CIOB) in 2010, suggested that whilst the traditional route was the most common form or procurement for projects up to £5m, design and build was more popular for projects between £5m and £50m, and partnering was most popular for projects over £50m.

Partnering (sometimes referred to as alliancing) is a broad term used to describe a collaborative management approach that encourages openness and trust between parties to a contract. The parties become dependent on one another for success and this requires a change in culture, attitude and procedures throughout the supply chain. It is most commonly used on large, long-term or high-risk contracts. Partnering became popular largely as a result of Sir Michael Latham’s report, ‘Constructing the Team’ in 1994 which criticised the adversarial approach inherent in traditional construction contracts.

More recently, The National Construction Contracts and Law Report 2018, published by NBS, suggested the following mix of procurement routes in the construction industry:

Traditional procurement 46%
Design and build 41%
Partnering / alliancing 3%
Construction management 3%
Contractor approved without any tender process 2%
Measured term 1%
PFI / PPP 1%
Cost plus 1%
Management contracting 1%

[edit] What is the most popular procurement route now?

Procurement trends survey, getting closer to your supply chain, published by Ryder Levett Bucknall (RLB) in March 2022, suggested that design and build is the most commonly-used procurement route (although its popularity has declined since 2019), followed by the traditional procurement route (with or without quantities), then bespoke / other routes and construction management (CM) / management contracting (MC).

	Design and Build	Traditional without Quants	Traditional with Quants	CM / MC	Bespoke / Other
2019 Survey	66%	22%	8%	2%	2%
2021 Survey	56%	25%	12%	5%	2%
2022 Survey	54%	32%	11%	1%	3%

[Table published courtesy of RLB]

The trends are interesting but to a certain extent, it depends on who you ask (private sector / public sector, clients, contractors, architects, project managers etc), and what sorts of projects are involved.