Selecting the Right Procurement Route in Construction Projects

Procurementis definedasthe process of acquiringgoods,services, or works from an external source to meet an organisation’s needs. It is a strategic function that includes planning, sourcing, negotiating contracts, purchasing, and managing supplier performance to achieve value for money, quality, and timely delivery (Institute for Supply Management, 2023).

In the construction industry, procurement refers to the process by which clients obtain the resources, contractors, materials, and services required to deliver a construction project. It also determines the contractual relationships, risk allocation, and responsibilities among project participants (CIOB, 2014).

Common Procurement Routes:

a)- Traditional (Design–Bid–Build)

b)- Design and Build (D&B)

c)- Management Contracting

d)- Construction Management

e)- Public-Private Partnership (PPP)

Selecting the right procurement route is one of the most important strategic decisions in any construction project. The procurement route governs how responsibilities, risks, and rewards are distributed among the client, consultants, and contractors, and it has a direct impact on project time frame, cost, quality, and success. The first step in choosing a procurement method is fully understanding the client's objectives. Clients can prioritize early completion, cost certainty, highquality design, or low risk exposure. Some clients prefer higher involvement and control, whereas others prefer a single point of responsibility. These priorities serve as the foundation for procurement decision making.

 Traditional Procurement Method (Design–Bid–Build)

Design–Bid–Build (DBB) deliversthe projectin three sequentialstages: complete the design, tender the works, and then construct. The client first appoints the design team to produce full drawings, specifications, and schedules.

Only after a design freeze does the client invite competitive bids. The successful contractor delivers the works strictly against the issued documents, with the design team retained to administer the contract and certify payments/variations.

This route is familiar to most owners and public bodies because it is straightforward to govern and easy to audit. Its strength is clarity, roles are distinct, pricing is comparable, and changes are managed through formal instructions. Its weakness is inflexibility, because design and construction are separate, any change after tender must pass through a contractual variation process, which can add time and cost.

Projects with stable scope, high documentation quality, and a client who wants tight control over design are the best fit.

Advantages:

• The clear separation of responsibilities between designer and contractor simplifies accountability and contract administration for the client.
• Competitive tendering against a completed design enables like-for-like bid comparison and can help secure favorable pricing.
• A fully developed design at tender provides strong cost certainty at the point of award and reduces ambiguity on scope.

Disadvantages: 

• The sequential nature of the process typically lengthens the overall timeline because construction cannot start until the design is complete.
• Limited contractor input during design reduces opportunities for buildability improvements, program efficiencies, and value engineering.
• Design gaps discovered post-award are resolved through variations, which can trigger delay, disruption, and claims. 
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Design and Build Procurement Method

Design and Build(D&B)assigns single-point responsibility for both design and construction to a single entity (the D&B contractor). The client issues an employer's requirement/brief (which includes a concept or performance specification), and the D&B contractor completes the detailed design while mobilising construction.

Because design and construction are ovelap, site work can begin sooner, and design decisions are made with direct input from the delivery team. This integration eliminates interface risk and conflicts over "who's responsible?" that might arise in separated models.

D&B is suitable for initiatives that require speed, program certainty, and coordinated accountability. It also works effectively when the client wants a performance-based solution (for example, energy targets, throughput, lifetime performance) rather than prescriptive details.

The downside of this approach is that the client must establish functional requirements early on and monitor design quality through detailed technical briefs, review gates, and compliance checks. Advantages: 

• Single-point responsibility for design and construction reduces interface risk and simplifies communication for the client.
• Overlapping design and construction enables an earlier site start and can compress the overall program significantly.
• Contractor-led detailing often improves constructability, logistics planning, and cost control through supplier integration.
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• Disadvantages: 
• Client influence over detailed design is lower after award, so quality must be safeguarded via clear employer’s requirements and staged reviews.
• Proposal comparability at tender can be challenging because solutions may differ in scope, methodology, or specification.
• If the contractor prioritizes the lowest capital cost over long-term value, there is a risk of quality dilution without strong technical standards and acceptance criteria. 
• Management Contracting Procurement Method
• In Management Contracting, the client appoints a management contractor early in the project to manage and coordinate trade contractors who carry out the works. The design progresses in packages, and each package is tendered and let under separate trade contracts with the management contractor. This allows early works packages (e.g., demolition, foundations) to start before the full design is complete, speeding up delivery.
• This route works best for complex or large-scale projects where early site access, flexibility, and specialist trade input are critical. The client retains direct contractual relationships with the management contractor only (not individual trade contractors), but bears most of the cost risk because trade contract prices are not all known at the outset. 

Key Points:

• The client appoints and retains the design team
• The management contractor does not carry out physical construction
• Construction is divided into separate trade packages
• Enables early start on site before design completion
• Cost risk largely remains with the client 
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• Advantages: 

Early appointment of the management contractor enables fast-tracking of construction activities while design packages are still being developed.

Specialist trade contractors are directly involved in design development, improving buildability, and innovation in methods and materials.

The structure allows flexibility to adjust the scope mid-project without halting progress on other packages. 

Disadvantages:

• Final project cost is uncertain at the outset, as many packages are tendered after work has begun.
• The client bears more financial risk for cost escalation in trade packages compared with lump-sum methods.
• Requires strong coordination between design teams, the management contractor, and trades to avoid delays or interface conflicts

Construction Management Procurement Method

Construction Management (CM) is similar to Management Contracting but with a key difference: the client directly contracts with all trade contractors. The construction manager acts as an agent, managing procurement, coordination, and site logistics, but does not carry the cost risk for trade packages.

This gives the client more control over scope, quality, and appointment of trades, but also places greater administrative and contractual responsibility on them.

CM is often chosen for fast-track projects or in markets where the client has the expertise and resources to actively manage multiple contracts. Because work packages are procured as needed, the client can benefit from competitive pricing and flexibility to change scope mid-project.

Advantages: 

Direct contracting with trades can give the client more control over contractor selection, quality standards, and commercial terms.

Fast-tracking is possible by starting early work before the full design is complete.

Competitive procurement of individual packages may deliver better market rates. 

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• Disadvantages:

Requires the client to have significant procurement and contract administration capability.

An increased number of contracts means higher management complexity and risk of disputes between trade contractors.

Limited cost certainty at the start compared to fixed-price lump-sum methods.

Private Financing Procurement Method

Private Financing is commonly delivered as Public–Private Partnerships (PPP) or Private Finance Initiative (PFI) bundles, design, build, finance, and often operate/maintain into a single long-term contract with a private consortium. The public client specifies performance outcomes, and the private partner finances delivery and regains investment over the concession term through availability payments or user-fee revenue.

This route suits capital-intensive infrastructure (roads, hospitals, schools, utilities) where upfront public funding is constrained and where long-term performance incentives can improve reliability. Typical PPP concessions run 20–30 years.

These durations align payments with asset life, link contractor incentives to whole-life performance, and create a framework for structured maintenance rather than short-term fixes.

In the UK, the National Audit Office reported most PFI construction was delivered on time and at expected cost (24% late; 22% over cost), a marked improvement over earlier conventional government projects, where about 70% were delivered late.

The delivery performance reflects how risk transfer and milestone-based payments tighten schedule discipline. Results can vary by sector and contract quality, so accurate preparation and monitoring remain essential.

 Advantages:

This model shifts a significant share of financing and construction risk to the private partner, reducing the public client’s immediate budget exposure.

The integration of design, construction, and long-term O&M aligns incentives toward wholelife value, not just the lowest first cost.

The contract structure rewards predictable delivery and asset availability, which can improve service reliability over the life of the asset. 

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• Disadvantages: 

The contracts are complex and time-consuming to negotiate, increasing transaction costs and lead times before site start.

The total lifecycle cost can exceed direct public procurement if financing terms or risk pricing are unfavorable.

The long concession period can limit flexibility to adapt to changed needs or technologies without formal variations.