Procurement Methods in Construction Projects: Design-Bid-Build, Job Order Contracting, Best Value Source Selection

This report evaluates the Design-Bid-Build, Job Order Contracting, and Best Value Source Selection methods of procurement in construction projects, analyzing their influence on stakeholders and recommending the best projects suited for each method.

Running head: Ethics and Professional Practice
Ethics and Professional Practice

Ethics and Professional Practice
Executive Summary
Procurement is the procedure for buying goods and services. The construction and design of the
building can be procured through various modes. The chosen routes should adopt a strategy that
fits into the long-term objects of the business plan of the clients. It includes various factors such
as speed, quality, risk, constraints confronted by the project, cost, ownership of the assets and
financing. There are various methods in the procurement of construction projects such as Design-
Bid-Build, Job Order Contracting (JOC), Best Value Source Selection etc. This report aims at
analyzing the various aspects of the three methods of procurement of the construction projects
including their impacts on the stakeholders that are involved in the project. Lastly, it also
recommends the various kinds of projects that are most appropriately suited to the procurement
methods.

Ethics and Professional Practice
Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Three Procurement Methods in Construction Projects.................................................................................4
Description, Comparison and contrast of the three methods of procurement of the construction projects
.................................................................................................................................................................4
Positive and negative aspects of three different procurement methods for construction projects................8
Advantages and disadvantages of the Design-Bid-Build method of procurement for the construction
project......................................................................................................................................................8
The relationship between parties involved (benefits and problems)........................................................9
The relationship between parties involved (benefits and problems)......................................................10
Advantages and disadvantages of the Best Value Source Selection method of procurement for the
construction project...............................................................................................................................10
The relationship between parties involved (benefits and problems)......................................................11
Recommendations.....................................................................................................................................11
Kinds of projects best suited to the different procurement methods......................................................11
Conclusion.................................................................................................................................................12
Referencing...............................................................................................................................................14

Ethics and Professional Practice
Introduction
The selection of the procurement method is of significant importance for the success of any
construction project. It is a series of risks i.e. for each of the methods has some strengths and
weaknesses in the construction industry. The stakeholders and industry must carefully evaluate
them as well.
There are various types of procurement available for the clients. They can be Design and Build,
Job Order Contracting (JOC), Best Value Source Selection etc. They have their own advantages
and drawbacks. The selection of an absolute method of procurement is difficult as even the most
knowledgeable and experienced client is not aware of the benefits or risks of each method.
It is a succession of evaluated risks. The industry and researchers have focused on diminishing
the risk with the help of innovative methodologies of procurement. The difficulty and the
complexity of the projects are influenced by certain factors such as ground conditions, finance,
availability of labor and service etc. ( Ruparathna and Hewage, 2013).
Therefore, this report aims at evaluating the three methods of procurement in construction
projects along with analyzing their influence on the various stakeholders involved in the project.
It shall also recommend the various projects suited for the above-mentioned procurement
methods.

Ethics and Professional Practice
Three Procurement Methods in Construction Projects
Description, Comparison and contrast of the three methods of procurement of the
construction projects
Particulars Design-Bid-Build Job Order
Contracting (JOC)
Best Value Source
Selection
Description In this type of
construction method,
the contractor takes
the responsibility for
the design and
construction of the
building.
It permits the public
agencies to formulate
job order contracts
with the contractor.
He shall be available
on call for various
projects during the
contract.
In this method, the
contracts are awarded
to the provider who
has the best
combination of
qualifications
regarding
performance and
price.
Comparison A traditional
approach aims to
secure the best price
for a construction
project.
Whereas under this
method, a request for
qualifications is
issued and the
contractors respond
by providing their
Here the values are
examined with the
help of a multiple and
weighted criteria
which is judged by a
panel of evaluators.

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qualifications and
book the prices for
labor and materials to
be supplied as per
JOC (Doloi, 2012).
The design package
is publicized, thereby
inviting bids from the
contractors.
The qualifications of
the contractor are
evaluated by the
agency which selects
the most qualified
contractors for
submission of the
final proposals for
each project.
The panel evaluates
the non-price criteria
and their relative
importance that is
based on the context
of the bid i.e. kind of
project, completion
date and its scale.
On the opening day
of the bid, the
contract is awarded
to the lowest
responsive bidder.
In JOC, the price of
labor, equipment and
material is analyzed
through the price
book that is identified
with the help of
request of
As per Hasnain,
Thaheem and Ullah,
(2017) after the
ascertainment of the
contractor in Best
Value, the panel
evaluates the action

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qualifications.
The overhead cost of
the contractors is
evaluated through the
agreement executed
with the contractor.
plan of the
contractors.
In this process, the
detailed proposal is
put into the contract
along with the quoted
price of the
contractor.
The contractor finally
authorizes it so that
he delivers the
project in the
execution phase.
Contrast In this method, there
is a single point of
responsibility for the
contractor regarding
the design and
construction.
On the other hand, it
is a delivery method
for any kind of task,
which is repetitive in
nature.
The contractor has
the responsibility to
complete the project
on time thereby
eliminating delays
and establishing a

Ethics and Professional Practice
It permits a long
lasting relationship
with specific
contractors as a
variety of job orders
are issued under the
same contract during
its term (Ogunsanmi,
2013).
healthy relationship
with the sub-
contractors.
This method lends
itself more readily for
permitting the
contractors to initiate
their activities on site
prior to the
completion of the
design.
In this method, the
work authorizations
are issued for various
types of works. The
design can be
customized so that
the needs of the
stakeholders can be
met.
The contractor acts in
a dynamic role in the
success of the project
as he is bound by the
duty for the
successful delivery of
the project.
The employer can
engage with the
contractors in the
The employer is not
involved with the
contractors in JOC
The management and
control of the
projects are initiated

Ethics and Professional Practice
designing process so
that they can get a
more practical
solution (Idoro,
2012).
and its scope is
exclusive to the
contractor.
from the planning
phase by the panel of
judges evaluating the
project.
Positive and negative aspects of three different procurement methods for construction
projects
Advantages and disadvantages of the Design-Bid-Build method of procurement for the
construction project
The advantages of the Design-Bid-Build method of procurement for the construction project can
be that they provide a useful procurement route for developers. It allows them to control the
costs of the project. In this, the contractors are made accountable for design and construction of
the project at an agreed price (Morledge and Smith, 2013).
They agree to a specific design with the developer but after the contractor authorizes the
contract, he shall have the whole responsibility of the contract. Another advantage is the
probability of reduced time in construction. If the contractor is accountable for the design, a lot
of time can be saved as the designing and building elements run in a concurrent manner.
The disadvantages can be that if the contractors are granted the liberty to design the base of the
building on a pre-agreed price then even if the costs do not rise, still they are likely to work at the

Ethics and Professional Practice
lowest possible specifications. Moreover, the builders are not architects. So, there are chances
that the designs are not according to the specific skill set (Brook, 2016).
The relationship between parties involved (benefits and problems)
The stakeholders involved in the Design-Bid-Build method are contractors, engineers, owners
and architects. The stakeholders involved in the construction project reveal that the Design-Bid-
Build method has a significant impact on the distribution of risk amongst the parties. It tries to
diminish the risk of the owners by increasing the risk of the other members of the project.
The concept of distribution is also applicable to the allocation of responsibilities as well. The
owner might lose control over the specifications of the design while the entity adopting the
Design-Bid-Build method may gain some power on the decision-making aspect. The key success
factors in this approach are the commitment of the owner to the project and the communication
amongst the stakeholders (Plusquellec, Lehoux and Cimon,2016).
Advantages and disadvantages of the Job Order Contracting (JOC) method of procurement for
the construction project
The advantages of the Job Order Contracting (JOC) method of procurement for the construction
project can be that they can accelerate the timelines of reconstruction. They promote interaction
amongst the owner and participants of the design phase and construction phase. The pricing
criterion adopted in this method is also firm, constant and objective.
The disadvantages can be that there is a lot of investment required for the owners and contractors
who are implementing the Job Order Contracting (JOC). The project development process and
line item estimating methods are a significant investment for a successful JOC program. The

Ethics and Professional Practice
proper training and support are also required to be provided by consultants that require a huge
investment in the beginning.
Some of the owners can confront resistance from the community of contractors in which JOC is
perceived as a diminishing the opportunities of the contracts (Volk, Stengel and Schultmann,
2014).
The relationship between parties involved (benefits and problems)
The stakeholders involved in the Job Order Contracting (JOC) method are the contractors,
clients, the officials pertaining to campus building and campus fire marshals etc. The scope of
JOC is exclusive to the contractor. The contracts of the job order are well defined and the
contractors do not have the repetitive work where quick execution is required. Job order
contracts create a win-win relationship between the owners, contractors, building users and other
stakeholders.
There are shared risk and rewards in Job Order Contracting and cooperation is required amongst
the internal and external participants with a focus upon the results (Cooke and Williams,2013).
Advantages and disadvantages of the Best Value Source Selection method of procurement
for the construction project
The Best Value Source Selection can be used when it is essential to analyze and compare the
factors along with the costs of selecting the most advantageous offer. When the government
demands high technical capabilities and low cost, then the best value approach can be the most
desirous procurement method of construction (Hardin and McCool, 2015).

Ethics and Professional Practice
It is best suited when the requirements of the government are difficult to explain or are
historically troublesome. Therefore, it permits a greater flexibility for comparing the technical
and cost factors for determining the value of the strengths, drawbacks and risks of offers. It also
takes the advantages of the independent judgment and experience of the judging panel.
The major disadvantages can be sometimes the evaluation criterion does not accurately reflect
the requirements of the government. The selection of the wrong criteria can result in monetary
benefit to the offeror, which may not be advantageous to the government. Furthermore, a large
number of criteria dilutes the consideration of those who are important (Walker, 2015).
The relationship between parties involved (benefits and problems)
As per Schultz and Dotson (2015), coordination is required amongst the various team members
in order to ensure consistency in the Best Value Source Selection. The major stakeholders are
government and contractors. In this method, the government considers the award to other than
the lowest priced offeror or other than the offeror of the highest price. It is based on the method
that represents the greatest value to the government.
Recommendations
Kinds of projects best suited to the different procurement methods
Here are some of the recommendations to the potential developer or owner regarding the best
projects suited for the various procurement methods of construction which are mentioned above.
Architectural services and engineering, construction engineering and software cater the best kind
of projects for the Design-Bid-Build method. The projects of civil engineering and construction

Ethics and Professional Practice
are also included in this method. The energy-related systems of the whole building are yet
another kind of projects suited for Design-Bid-Build method (Eastman, 2018).
The kind of projects that are best suited for the Job Order Contract is preventive maintenance
contracts of Intelligent Transportation Systems. Another project best suited for it is the
maintenance of the property and real property maintenance activities of the army. Integrated
delivery of the projects for new construction and job order contracting for renovation and repair
are examples of delivery methods of construction, which enhance the productivity, satisfaction
and quality.
The projects best suited for Best Value Source Selection are the highway construction projects
and all the infrastructure projects owned by the government. The best value procurement
methods are used in conjunction with a customary design-bid-build system for all the
government-owned infrastructure projects. It is gainer interest from agencies of federal and state
(Allen and Lano, 2013).
Disclaimer: There is no conflict of interest in terms of the views expressed.
Conclusion
Hence, to conclude, it can be said that determining the optimum procurement method is a
challenge for the various stakeholders. They consider an array of methods of procurement, which
are at their disposal. In order to assist the public sector clients with the process of decision-
making, the group of various stakeholders is involved in developing an approach for determining
a solution for their needs.

Ethics and Professional Practice
Several techniques have their own merits but they tend to be prescriptive and therefore fail to
recognize the complications, which are associated with the selection process. Many stakeholders
are involved in the decision-making process and the decisions would be dependent upon the
interaction of variables incorporated with a high degree of intuitive judgment and subjectivity.

Ethics and Professional Practice
Referencing
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Cooke, B. and Williams, P.(2013) Construction planning, programming and control. New Jersey
: John Wiley & Sons. pp. 1-10.
Doloi, H.(2012) Empirical analysis of traditional contracting and relationship agreements for
procuring partners in construction projects. Journal of Management in Engineering. 29(3),
pp.224-235.
Eastman, C.M.(2018) Building product models: computer environments, supporting design and
construction. CRC press. pp. 1-10.
Hardin, B. and McCool, D.(2015) BIM and construction management: proven tools, methods,
and workflows. New Jersey: John Wiley & Sons.pp.1-10.
Hasnain, M., Thaheem, M.J. and Ullah, F.(2017) Best Value Contractor Selection in Road
Construction Projects: ANP-Based Decision Support System. International Journal of Civil
Engineering. 16(6), pp. 695-714.
Idoro, G.I.(2012) Influence of project plans on the outcome of construction projects procured by
Design-Build (DB) in Nigeria. Journal of Construction in Developing Countries. 17(2), pp.81-
103.

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Morledge, R. and Smith, A.( 2013) Building procurement. New Jersey: John Wiley & Sons. pp.
1-10.
Ogunsanmi, O.( 2013) Effects of procurement related factors on construction project
performance in Nigeria. Ethiopian Journal of Environmental Studies and Management. 6(2),
pp.215-222.
Plusquellec, T., Lehoux, N. and Cimon, Y.(2016) Design Build In Construction: Performance
and Impact on Stakeholders [online] Available from:
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Ruparathna, R. and Hewage, K.( 2013) Review of contemporary construction procurement
practices. Journal of management in engineering. 31(3), pp.1-10.
Schultz , B. and Dotson, D.(2015) Getting the Best Value in a Source Selection? [online]
Available from: http://www.dtic.mil/dtic/tr/fulltext/u2/1016282.pdf [Accessed 4th October ,
2018].
Volk, R., Stengel, J. and Schultmann, F.(2014) Building Information Modeling (BIM) for
existing buildings—Literature review and future needs. Automation in construction. 38, pp.109-
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Voutchkov, N.( 2012) Desalination engineering: planning and design. McGraw Hill
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