Procurement Methods in Construction Projects

The report outlines a brief discussion on three distinct methods of procurement in construction projects. Proper comparison and contrasting would be done and proper recommendations would be provided.

Running head: PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Procurement Methods in Construction Projects
Name of the Student
Name of the University
Author’s Note:

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Executive Summary
The main aim of this report is to understand the three distinct procurement methods within
the construction projects. The various processes are properly defined within the procurement
methods and hence the risks like exposure to frauds and collusions are minimized. These
procurement methods are extremely effective for the proper delivery of any construction
project. The report has properly described the three popular procurement methods of design
build, design bid build and general contracting. A proper comparison and contrast of these
three methods are provided in this report and several recommendations are also provided
here.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Characteristics of Three Procurement Methods in Construction Projects.............................3
Comparison and Contrast of the Three Procurement Methods..............................................6
Kinds of Projects Suitable for Three Procurement Methods.................................................9
Recommendations for the Project Owners in Three Procurement Methods..........................9
Conclusion................................................................................................................................10
References................................................................................................................................11

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Introduction
The procurement methods are such procedures, which are utilized by the respective
procuring entities for acquiring works, goods and services. These types of methods could
either be competitive or non competitive (Naoum and Egbu 2016). There is a significant
preference to utilize the competitive methodologies of procurement, since these methods have
the tendency of promoting the effectiveness, efficiency and economy. The selection of the
procurement methods is extremely vital for the proper execution of the construction projects.
There are several significant methods of procurement and several important ingredients are
required for obtaining the advantages and disadvantages. There are various important and
significant procurement methods for all construction projects and hence these are required to
be followed within these projects to make it successful (Masterman and Masterman 2013).
The following report outlines a brief discussion on three distinct methods of procurement.
Proper comparison and contrasting would be done and proper recommendations would be
provided.
Discussion
Characteristics of Three Procurement Methods in Construction Projects
The three important procurement methods within the construction projects are design
build method, design bid build and general contracting.
i) Design Build Method: Design build method is one of the major project delivery
methods that is utilized for construction projects. The project delivery is much easier with
this and the construction or design services could be contracted with the help of one entity
called design build contractor or design builder (Porwal and Hewage 2013). It mainly relies
on the single point of the responsibility contracts and hence is being utilized for the
minimization of risks or threats for the respective project owners and also for the reduction of

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
delivery schedule by the overlapping of design and construction phases in any specific
project.
The major characteristics of the design build procurement method are as follows:
a) Hiring of General Contractor: The first and the foremost characteristic of the
design build procurement method is hiring of the general contractors (Brook 2016). The
respective project owner is responsible for hiring this general contractor as well as the team
of design build.
b) Proper Communication: The second important characteristic of the procurement
method of design build is proper communication. Due to the flow of communication is better;
this particular procurement method delivers error free and proper delivery of projects.
c) Risk Free Method: Another important and significant characteristic of the
procurement method of design build is that it is absolutely risk free and hence is quite popular
for the users (Ruparathna and Hewage 2013). Moreover, even if this type of project
comprises of risks, the risks could be minimized to a greater level without much problems.
ii) Design Bid build Method: The second important procurement method for any
construction project is the design bid build. It is the project delivery methodology, where the
owner or the agency contracts with the different entities for the construction and designing of
several projects. It is the traditional procurement method of project delivery and is completely
different from the design build method (Jato-Espino et al. 2014). Three sequential phases are
present within the procurement method of design bid build, which are the design phase, the
tender or the bidding phase and finally the construction phase. In the first phase of designing,
the project owner retains the architect for the purpose of designing and finally producing the
several bid documents like technical specifications and construction drawings.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
There are some of the major and the most significant characteristics of the design bid
build method and these are given below:
a) Cost Effective: The first and the foremost characteristic of the design bid build
method of procurement is that it is extremely cost effective and hence could be easily
afforded by all users (Hughes, Champion and Murdoch 2015). Even in the smaller
construction projects, this particular procurement method is quite easier to be utilized.
b) Time Management: The next important characteristic of this design bid build
method of procurement for any construction project is that the over time consumption is
extremely less and time management is better here. Due to the lack of time involved, it
becomes easier for the construction projects to take up this method.
c) Highly Efficient and Effective: The third significant characteristic of this particular
method of procurement is that it is extremely effective and efficient and hence could be easily
used for the several construction projects (Ruparathna and Hewage 2015). Moreover, the
overall qualities of the projects are also improvised in this manner.
iii) General Contracting Method: The third important and noteworthy method of
procurement for any specific project is the general contracting. It is the traditional
methodology, by which the respective contractor agrees building the specified design, which
is provided by the employer. The price of the contract is completely on the basis of the bill of
quantities that is provided by the employer (Allen and Iano 2013). These contractors even
price the several works without considering the BOQs or bill of quanities, such as drawings.
However, the re measurement contracts and the cost contracts are not utilized widely in the
constru0ction projects. The contract administrator is responsible for monitoring the project
and delivering the project successfully by a general contracting method.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
There are some of the major and the most significant characteristics of the general
contracting method and these are provided below:
a) Building of Owner’s Design: The first and the foremost characteristic of the
general contracting methodology is the building of the owner’s design. This particular design
is provided by the respective owner of the project (Langford et al. 2014). Hence, the project
owner gets the priority for all construction projects.
b) Regular Monitoring of Project: The second important characteristic or feature of
the methodology of general contracting is the regular and periodical monitoring of projects.
With this regular monitoring of projects, the faults and flaws could be easily identified and
regular follow ups are possible here.
c) Less Complex: This particular procurement methodology is absolutely lack of
complexity and hence is being utilized by types of construction projects (Naoum and Egbu
2015). The project managers do not face any issue while executing such projects.
Comparison and Contrast of the Three Procurement Methods
The comparison and contrast of design build, design bid build and general contracting
are as follows:
Key
Features
Design Build
Method
Design Bid Build Method General Contracting
Method
1. Time
Consumption
Design build
method is complex
is respective to
general contracting
method of
The design bid build method
is extremely complex than
any other procurement
methods within the
construction projects (Shehu
The general contracting
method is considered as
one of the most simple
methods of procurement
for the construction

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
procurement in the
construction
projects.
et al. 2014). There are three
phases in the design bid
build method, which are
design phase, bidding or
tendering phase and
construction phase.
projects.
2. Approach
of the
Procurement
Method
The design build
procurement
method is a modern
approach for the
procurement
purpose in projects.
The design bid build
procurement method is also
a modern approach similar
to design build and is much
popular.
The final or the third
procurement method in
construction projects is
the general contracting
(Rahman 2013). This is a
traditional approach in
project management and
is being used by project
managers significantly.
3. Level of
Efficiency
and
Effectiveness
Design build
procurement
method is much
more efficient and
effective in any
construction project
(Hardin and McCool
2015).
The design bid build
procurement method is
considered as the most
efficient and effective for
any construction project and
is being utilized by the
various project managers.
The general contracting
procurement method for
any construction project
is not much effective
and efficient in
comparison to the other
methods. This is mainly
because it is a traditional
approach.
4. Cost The design build The design bid build The final procurement

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Effectiveness procurement
method is cost
effective and thus
could be afforded
by users in the
construction
projects.
procurement methodology is
also cost effective and thus
can be easily afforded by all
users in the various
construction projects
(Kwakye 2014).
methodology is the
general contracting and
this is the most cost
effective in comparison
to all other construction
projects.
5.
Advantages
i) The first and the
foremost advantage
of the design build
is that the owner
has only one
contract for the
design and
construction phase
(Cheng 2014).
ii) There is always
a better opportunity
for the sharing of
project costs.
iii) Moreover, the
respective project
schedule could be
accelerated.
i) The first and the foremost
advantage of the design bid
build is that the design and
the construction phases do
not overlap with one another
and thus could be easily
utilized.
ii) This procurement method
allows designing and
construction to all the
project owners or managers
and hence is quite effective
than other methods.
iii) The bidding costs are
extremely lower for the
maximum competition
amongst the contractors.
i) The first and the
foremost advantage of
the general contracting
procurement method in
a construction project is
that the complexity is
much lesser as it only
involves a general
contractor and the
project owner.
ii) The project budget
could be properly
controlled in this
particular procurement
method and hence there
is lesser chance of
budget exceeding
(Rahman 2013).

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Kinds of Projects Suitable for Three Procurement Methods
The design build procurement method is suitable for the contractor led constructions
projects. Within the contractor led construction projects, the management is designed and
structured in such a manner that the project owner could work directly with the contractor
and this contractor could coordinate with the sub contractors.
The design bid build procurement method is suitable for the private construction
projects (Allen and Iano 2013). However, all types of projects are benefitted from this
specific method.
The general contracting procurement method is suitable for each and every
construction project. There is no such restriction and hence it is a traditional approach.
Recommendations for the Project Owners in Three Procurement Methods
The few recommendations for the project owners or developers for the design build
procurement method are as follows:
i) The projects should be selected properly and wisely for the design build method.
ii) The next recommendation is that the procurement as well as management of the
design build project should be done adequately.
iii) The proper maintenance of the communications within the design build team and
contracting agencies is the other important recommendation.
The few recommendations for the project owners or developers for the design bid
build procurement method are as follows:
i) A proper plan is required for this type of project to avoid the complexities.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
ii) The tender documents should be properly developed as there is no chance of
changes in the construction phase.
The few recommendations for the project owners or developers for the general
contracting procurement method are as follows:
i) The selection procedure of contractors should be included after the proper
evaluation of various risks within the project.
ii) The second recommendation for the general contracting procurement method is to
ensure that conflicts do not arise within the project at all.
Conclusion
Therefore, from the above discussion, it can be concluded that procurement is the
procedure for finding, agreeing the terms and conditions, acquiring goods and services from
the external sources and finally tendering the bidding processes. This particular procedure is
being utilized for ensuring that the buyer is receiving goods and services at the best possible
costs and having the comparison of aspects like quality, quantity, location and time. Each and
every purchasing decision like the delivery and handling, price fluctuations and marginal
benefits are included here. The several conditions of scarcity are involved in this scenario.
The construction projects have several vital and noteworthy procurement methods, which
helps in making the project successful in respect to other project delivery types. The above
report has properly outlined the comparison and contrasting of three procurement methods in
a construction project. The utilization of all the procurement methods is also provided here.
Moreover, some of the major recommendations are also provided are also given in this report.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
References
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John Wiley & Sons.
Brook, M., 2016. Estimating and tendering for construction work. Routledge.
Cheng, Y.M., 2014. An exploration into cost-influencing factors on construction
projects. International Journal of Project Management, 32(5), pp.850-860.
Hardin, B. and McCool, D., 2015. BIM and construction management: proven tools,
methods, and workflows. John Wiley & Sons.
Hughes, W., Champion, R. and Murdoch, J., 2015. Construction contracts: law and
management. Routledge.
Jato-Espino, D., Castillo-Lopez, E., Rodriguez-Hernandez, J. and Canteras-Jordana, J.C.,
2014. A review of application of multi-criteria decision making methods in
construction. Automation in Construction, 45, pp.151-162.
Kwakye, A.A., 2014. Construction project administration in practice. Routledge.
Langford, D., Fellows, R.F., Hancock, M.R. and Gale, A.W., 2014. Human resources
management in construction. Routledge.
Masterman, J. and Masterman, J.W., 2013. An introduction to building procurement systems.
Routledge.
Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in
construction journals. Procedia Economics and Finance, 21, pp.6-13.

PROCUREMENT METHODS IN CONSTRUCTION PROJECTS
Naoum, S.G. and Egbu, C., 2016. Modern selection criteria for procurement methods in
construction: A state-of-the-art literature review and a survey. International Journal of
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Shehu, Z., Endut, I.R., Akintoye, A. and Holt, G.D., 2014. Cost overrun in the Malaysian
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