The Types of Procurement in the Construction Industry

PROCUREMENT FREELANCERS

The Types of Procurement in the Construction Industry Presented by James Diaz

PROCUREMENT IS THE PROCESS OF ACQUIRING GOODS AND SERVICES. In the construction management procurement, goods and services are secured with an eye to the reasonable pricing, standard quality, minimising and mitigating risks, proper communication, and

Introduction

meeting clients’ satisfaction. As all the functions cannot be done single-handedly, you need to appoint procurement experts for the same.

The Different Types of Procurement There are different types of procurement in the construction industry depending on the size of the project.

This separates design from the construction process. The contractor is given the duty to coordinate and subcontract the designs to meet the specific requirements. In this approach, the design, cost, and risk allocation are considered to be the greatest challenges.

However, if the company is working with the industry for a long time, it has an edge over the other companies. It has established parameters that are considered whilst assessing the value for money. Conflicts may arise as traditional procurement goes against the supply chain. It also increases risk as both parties may have a different approach in delivering the project.

Traditional procurement

Design and build

The same contractor is given the responsibility to design and construct the project with closer collaboration with sourcing subcontractors. All risk is allocated to the contractor as design and build procurement comes with plenty of variations.

Sometimes, a single design team is given the contract to design until they get the permissions from the planning department.

Then, the team is transferred to the building team, and this process is termed as novation. Sometimes, the prime contracting approach is considered where the main contractor has a strong connection with the supply chain, including coordination between many sub-contractors.

In both of these types, procurement experts assign the duty to one contractor who manages different works. What sets management contracting or construction management apart from prime contracting is that the construction manager shares partial responsibility. The main strength of management contracting is that the contractors can manage their works whilst the owners can still control them.

Construction management mostly works in a large infrastructure project where construction and design run parallel.

Management contracting and construction management

Collaborative working

This usually constitutes a long-term relationship that includes framework agreements, strategic partnering, and large collaboration. Collaborative working involves better managing and re-bidding is avoided. In-depth knowledge of the collaborators is required so that things can be done perfectly. The only disadvantage is that this approach is not suitable for smallsized projects, and is restricted to contractors or industries with massive operational capacity and manpower.

Conclusion

In construction procurement management, goods and services are secured so that the project is completed in a timely and satisfying manner. The management plan is laid out wisely as procurement is a crucial component of supply chain management. Right sourcing subcontractors must be contacted for the smoother operational process. With strategic planning, collaborative approaches, profound skills, and knowledge, a largescale project can be delivered on time.

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