Construction Procurement Routes Compared

Construction Procurement Routes Compared
A choice every employer will have to make when considering a construction project is what
procurement route to choose. If you’re a QS, it’s often your job to advise the client on what
route they should take. The preferred decision will differ, depending on the clients
circumstance, aims and objectives. In this video we’re going to compare to 4 most common
procurement routes and explore the pros and cons for each.
So let’s begin - we’ll start with traditional procurement route. Perhaps called traditional due
to it’s usage dating back to Victorian times. Under this method an employer would engage a
contractor to carry out the construction of a project, in accordance with the design produced
by the employer’s professional team. Throughout the construction, the client’s design team
holds responsibility for the design while the contractor holds responsibility for the
construction.
Pros to this route include:

• Client has greater control of design
• There is greater familiarity of this route between construction parties
• If the design is fully scoped before tendering then greater cost certainty is achieved
Cons to this route include:

• Due to the split responsibility of design and construction, disputes can often arise on
where the fault lies for defects
• Time – construction life cycle is elongated as the client has to engage multiple parties
and ideally the design needs to be complete before engaging a contractor
Next we have design and build – there are various forms of design and build contracts.
However, the general concept remains the same, the contractor has both responsibility for
design and construction of works. Under integrated design & build, the contractor undertakes
the design and construction based on a set of requirements from the employer. Under
novated design & build, the employer hires a design team to complete the design before it is
“novated” to the contractor during construction who will assume design responsibility.
• There’s a single point of contact for both the design and construction of a project
enabling greater project efficiency
• Time – the works can start before the design is complete, meaning an earlier start on
site
• Lack of design control for the employer

• Contractors can often compromise on design to bring the cost of a project down
• Greater responsibility Is placed on the employer to be clear with their design
requirements
Moving on we have management contracting. Similarly to traditional route, the design is

carried out by a professional team appointed by the employer. However, under management
contracting the employer also appoints a management contractor to manage the
construction works. The management contractor, does not carry out any of the works
themself. However, they engage a series of subcontractors who they manage and coordinate.
They are paid an agreed fee and reimbursed for the cost incurred to manage the
subcontractors.
• Client can retain control of design while drawing on the experience and expertise of
the management contractor
• The client can move risk of procurement and delivery to the management contractor
• Design and construction can be overlapped allowing earlier start on site
• This method is not suited for inexperienced clients

• Total risk cannot be transferred to the contractor
• There is less cost certainty for the employer
And lastly we have construction management. This is a slight variation to management

contracting. Under this route a construction manager is employed to manage the
construction works. Unlike management contracting, the construction manager is a member
of the client’s team who will advise on the construction as well as manage it. The contractor
and subcontractors are directly employed by the employer, meaning the construction
manager holds no risk for the works above his reasonable skill and care. The construction
manager is paid a fee for their services.
• Client’s involvement is much higher when compared to other routes. This can promote
a better working relationship with the project team
• The Client has a direct contract with the subcontractors, thus improving
subcontractor’s cash flow
• More opportunity for value engineering
• Client must involve themselves into all course of works, they’ll need to manage both
the construction manager and design consultants
• There could be a lack of available specialists in the project team
• Risk to the client is high as they will be in direct contract with subcontractors

Construction Procurement Routes Compared

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Construction Procurement Routes Compared

Pros to this route include:

Cons to this route include:

Pros to this route include:

• Lack of design control for the employer

Moving on we have management contracting. Similarly to traditional route, the design is

Pros to this route include:

Cons to this route include:

• This method is not suited for inexperienced clients

And lastly we have construction management. This is a slight variation to management

Pros to this route include:

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