Analysis of Procurement Methods: General Contracting, Design & Build

This report examines three primary procurement methods used in civil engineering projects: general contracting (the traditional method), design and build, and construction management. The analysis delves into the advantages and disadvantages of each method, considering factors such as cost, time, quality control, and risk allocation. The report highlights the benefits and problems associated with each approach, providing a comprehensive overview to aid in informed decision-making for civil engineering projects. It explores the strengths and weaknesses of each method, offering insights into their suitability for different project types and client needs. The report also discusses the implications of each method for various stakeholders involved in a construction project.

INSTITUTION
First Name Last Name
Instructor
Civil Engineering
28 September 2019

Last Name 2
Table of Contents
DECLARATION.........................................................................................................................................3
Executive summary.....................................................................................................................................4
1. Introduction.........................................................................................................................................4
2. Methods of procurement......................................................................................................................4
2.1. Traditional method: General contracting.....................................................................................4
2.1.1. Advantages of General Contracting.........................................................................................5
2.1.2. Disadvantages of General Contracting.....................................................................................5
2.1.3. Benefits of General Contracting...............................................................................................5
2.1.4. Problems of General Contracting.............................................................................................6
2.2. Modern method of procurement: Design and build.........................................................................6
2.2.1. Advantages of design and build method..................................................................................6
2.2.2. Disadvantages of Design and Build method............................................................................7
2.2.3. Benefits of Design and Build method......................................................................................7
2.2.4. Problems of Design and Build method....................................................................................8
2.3.1. Advantages of construction management as a procurement method........................................8
2.3.2. Disadvantages of construction management as a procurement method....................................9
2.3.3. Benefits of construction management to stakeholders.............................................................9
2.3.4. Problems of construction management....................................................................................9
3. Recommendations.............................................................................................................................10
4. Conclusion.........................................................................................................................................10
References.................................................................................................................................................11

Last Name 3
DECLARATION
I, (Name) hereby do declare that this is my original work and has not been presented elsewhere
for the award of a degree or any other purpose whatsoever.
Signed_______________________ Date__________________________
(NAME)

Last Name 4
Construction Management: Analysis of Three Methods of Procurement.
Executive summary
In the civil engineering and property development, there are different routes to procurement.
Choosing your procurement method will be vital to your project's success, so making an
informed choice is the key to making your project profit. You can choose from three main
procurement methods: General Contracting (Traditional Method) Design and Building
Management. The advantages and disadvantages of these methods are detailed in this paper as
well as the common benefits/ problems associated with their adoption considering their unique
features.
1. Introduction
Procurement forms a critical basis when it comes to property development and most of civil
engineering works and projects. It is among the preliminary considerations that are to be decided
between two or more parties involved in a given contract. Before placing a contract with
contractor, careful planning and thinking is key in ensuring safe delivery of the project. Over the
years, new approaches to procurement continue to be developed and adopted to check on
efficiency, costs as well as man power and personnel involved in projects. Classically, two broad
classifications have been identified such as; traditional methods of procurement, and modern
methods of procurement (Bacon 2013). In this paper, one traditional method is considered as
well as two modern methods of procurement. The respective advantages and disadvantages of
each of the methods is as well considered plus the associated benefits to the various stakeholders
when a specific method is adopted.
2. Methods of procurement
2.1. Traditional method: General contracting
General contracting procurement includes differentiation of the construction process from the
design aspects such that the developer delegates a team of designers to complete the design, and
then independently contract with the building contractor for the implementation of the
construction works. In such a case therefore, the designer and the developer are fully responsible
for the design aspects of the project while the building contractor is manages independently the
constructions works. This method in notably popular in the development market as it is

Last Name 5
significantly understood among developers and contractors. The developer has control over the
design.
2.1.1. Advantages of General Contracting.
Quality: given than the developer has control of the design and is involved in contracting out the
build, quality is enhanced (Lim 2016). The development design is made available before offers
on tenders for the build are consulted hence the developer is certain of the quality of design and
the overall project when complete.
Clear vision: the nature of this method of contracting is such that a clear vision of the end
product can be identified from the beginning of the project.
Certainty in costs: tenders are accepted at certain quote hence the cost of the project can be
assessed beforehand (Bacon 2013). This offers some certainty to the client in terms of the costs
hence allowing for completion of the project without any further costs/ expenses being accrued
that ay sometimes lead to stalling of projects when lack of funds hit.
2.1.2. Disadvantages of General Contracting.
Time consuming: design, tender, and build approach is time intensive. Specifically, a lot of time
is involved in design of a project which would otherwise make this choice of contracting over
short deadlines (Bacon 2016).
Expensive: in case of delays, additional costs besides conflicts may arise as the project
implementation schedule keeps on being adjusted to factor in the developing delays. When the
project schedules and plans are frequently changed making clear build decisions become
inhibited and deadlines become undefined.
Inflexibility of costs and materials: this procurement approach basis specific choice, quantity and
costing of materials such that the contractor has very little margin of flexibility in terms of the
choice of materials and costs.
2.1.3. Benefits of General Contracting.
Large network subcontractors: general contracting includes possible pool of subcontractors each
involved in specific aspects of the project (Bacon 2016). This allows timely delivery of the
project as such competent specialties are readily made available. When these subcontractors are
effectively managed by the subcontractor.

Last Name 6
Insurance coverage: You can rest easy when you hire a general contractor knowing that
insurance covers your project. You will not be liable for any accidents or damages that occur on
your construction site with general liability insurance (Lim 2016).
More Affordable. Choosing a general contractor means you're going to save a lot on several
different expensive items. Any general contractor worth your money should have a large supplier
network providing discounted materials. General contractors become preferred sellers when they
develop trustful relationships with suppliers in the industry over the years, allowing them to
provide a lower rate.
Generates Additional Revenue for the Homeowner. At the conclusion of the contracting project,
all the cost savings that occur during the bidding process, any remaining funds in contingency or
general condition accounts will be returned to the homeowner.
2.1.4. Problems of General Contracting.
Safety. Perhaps the biggest challenge for today's GCs is to keep workers safe on the job site.
Secondly, compliance with security. Over the past few years, frequent training and continuous
improvement of safety protocols have proved effective
Labor shortage. The absence of sufficient skilled labor has been a critical issue throughout the
previous couple of years. Regardless of endeavors to tempt new ability, the lack remains.
Adoption of new technology. Building is going fast and high-tech. Building Information
Modeling (BIM) software, mobile field project management apps, and drones documenting
projects from every angle are just a few of the new tech tools on the market. But finding the best
solution and deploying it through a small team or large organization requires both time and
money technical resources and investment (Brook 2017).
2.2. Modern method of procurement: Design and build.
Design and Build is as it is suggested by the name. The contractor now has both the design
element and the construction responsibility (Blaťák 2016). The developer sets out a set of
requirements and the contractor sets out the plans and specifications for how this will be done.
2.2.1. Advantages of design and build method.
Plan and Build is an approach to quick track development and the temporary worker frequently
should manage a fixed expense or an ensured greatest value that offers certainty to the customer.

Last Name 7
There is additionally a solitary purpose of contact – and this makes a smoother line of
correspondence and can stay away from fall outs (Blaťák 2016).
It offers the lowest risk to the customer who is in a position to lay down a set of requirements
and then holds the contractor responsible.
Over-All Project Optimization. When individual project members optimize their own roles, often
at the cost of the general project, design-bid-build can suffer from sub-optimization. The total
cost to a building element owner, such as the steel frame, includes the engineering cost of
determining the required steel sections plus the steel cost (Blaťák 2016).
Reduced Administrative Burden. Design-build can reduce the owner's administrative burden
because there is one application to administer, one award and one contract.
2.2.2. Disadvantages of Design and Build method
Since contractor is interested in cutting expenses on its own, the contractor could compromise
material amount and quality hence impacting on projects delivery to the required standards.
The need to create a profit consequences setting a maximum cost calculated in most cases so that
to undercut rivals – so margins are going to be tight.
It could also give rise to inflexibility. Once started, if you ask for changes in the design, the
contractor can apply huge penalties – both in terms of price and time (Akintoye, Goulding, &
Zawdie 2012).
Payment bonds. A payment bond payable under the terms of the contract is generally required.
However, should the payment bond be in the complete quantity of the design-build agreement or
only in the quantity of the Construction part when the design services and building are procured
under a single agreement? Logically, 100% of the building part would seem to fulfill the statute's
purpose (Blaťák 2016).
2.2.3. Benefits of Design and Build method
Instant communication: being able to communicate instantly speeds up the entire process that
improves the schedule of your project.
Production of customized products: the ability to yield customized products speedily, not your
prototypical replications.
Operating without boundaries: you don't have any physical or geographical boundaries that
interfere with your timeline in this approach.

Last Name 8
2.2.4. Problems of Design and Build method
Need for Earlier Requirements Definition. The owner has to lock in his requirements much
earlier with design-build. With traditional design-bid-build, if the owner is a bit confused about
his functional or aesthetic requirements, after seeing where the designer is heading, he can clarify
them during the design phase. But after-award programmatic changes can be very expensive and
disruptive with design-bid-build (Zhong 2011).
Compliance with Subcontractors. The Fair Practices Subletting and Subcontracting Act requires
bidders to list their bids with their subcontractors. For a design-build bidder, this can be a
problem. The subcontractors cannot accurately estimate costs without detailed design drawings
(Brook 2017).
2.3. Modern method of procurement: Construction management.
With construction management, like conventional technique, the plan and development
components are part. The engineer will delegate a structure group to finish plan, be that as it
may, the designer will at that point select a development chief to deal with the development
stage, either straightforwardly inside the improvement organization or redistribute to an expert
development administrator. This implies during development the development administrator will
assemble littler bundles of development work and agreement with authority providers or sub-
temporary workers to finish that particular work, making conceivably several distinctive
development bundles and agreements (March 2017).
2.3.1. Advantages of construction management as a procurement method.
Costs are the primary advantage to this. By offering each component of construction works
competitively, you know that you get the best price across the board.
The developer will also retain maximum quality control, and changes can be made with minimal
penalty over the other two methods throughout the development process (Akintoye, Goulding, &
Zawdie 2012).
Market insight/ expertise. Professional construction management provides a level of market
insight and expertise that may be integral to the project's completion. To ensure that the project
can move forward without unnecessary delays, software effectively builds on the research
required.
Efficiency. There is no denying that effective management of construction improves a project's
efficiency. By using construction management software (March 2017), keeping track of projects

Last Name 9
and individual assignments is a easy and foolproof way to ensure that all tasks are finished on
time.
2.3.2. Disadvantages of construction management as a procurement method.
Be that as it may, this is the most time and the board extreme procedure. The engineer will have
the additional cost of employing a construction manager and with the potential for a lot of
agreements to be set up, the space for blunder in light of the fact is higher.
Large segments of the total services that are remunerated by the Construction Manager are not
subject to competitive bidding (Akintoye, Goulding, & Zawdie 2012). It is therefore much less
likely that the Owner will be charged for these services with the lowest possible ' market rates. '
The open nature of numerous contractual terms for Construction Management, which expose the
Owner unnecessarily to the risk of unforeseen cost increases. Based on how the Construction
Manager is to be paid, the Construction Manager may have an integrated disincentive to
minimize expenses (Zhong 2011).
2.3.3. Benefits of construction management to stakeholders.
Improved Effectiveness in Delivering Services: similar systems that enabled the team to
effectively finish one project will serve the team many occasions over.
Improved / Increased / Enhanced Customer Satisfaction: Whenever you get a project done on
time and under budget, the client walks away happy. And a happy client is one you’ll see again.
Smart project management provides the tools that enable this client/manager relationship to
continue (March 2017).
More noteworthy Standing and Competitive Edge: This isn't just a decent advantage of venture
the board inside the working environment yet outside of it too; word voyages quick and there is
not at all like better execution than secure your place in the commercial center.
2.3.4. Problems of construction management.
Lack of Risk Management. One of the difficulties in development venture the board is
overseeing hazard, since the undertaking chief is in charge of recognizing potential issues and
discovering approaches to alleviate it.
Stakeholder Indifference. Partner apathy can kill ventures, and the absence of partner investment
is a typical test in development venture the board. At the point when partners are apathetic
regarding the movement at the site, it can result in revise and deferrals.

Last Name 10
3. Recommendations
The type of decision-making involved in the development of property in procurement methods is
complex. It requires timely quality information provided. Therefore, if you have a fixed idea of
the nature of the project from the start and this is likely to go unchanged–then the best approach
should be offered by traditional contracting.
However, if you're doing something a little more experimental, you're more likely to want to
employ a construction manager, especially if you're critical of costs, and you've got the
experience.
If you need a fixed cost, then it may feel more comfortable to design and build, but if you want
quality over value, then you probably want to retain more control over the nature of the materials
and techniques used.
4. Conclusion
Each of these methods has its own unique qualities that fit in specific or varied construction
project set up. However, it should be noted that the cost suited one is weighed in considering of
two basic aspects: quality and costs, other factors such as control, efficiency, and flexibility in
most cases are secondary.

Last Name 11
References
Akintoye, A., Goulding, J., and Zawdie, G., 2012. Construction innovation and process
improvement. Chichester, West Sussex, U.K.: Wiley-Blackwell.
Bacon, M., 2013. Knowledge Management Systems in the Future. Virtual Futures for Design,
Construction & Procurement, 192–209.
Bacon, M., 2016. Construction management owner-contractor contract. Construction Process
Planning and Management, 329–354.
Blaťák, I.J., 2016. Potential of Using Design-Build in Public Procurement. Applied Finance and
Accounting, 2 (2), 77.
Brook, M., 2017. Estimating and tendering for construction work. Abingdon, Oxon: Routledge.
Gould, F.E. and Joyce, N., 2014. Construction project management. Boston: Pearson.
Lim, P., 2016. Contract administration and procurement in the Singapore construction industry.
Hackensack, NJ: World Scientific.
March, C., 2017. Procurement methods and types of contract. Construction Management, 124–133.
Zhong, J.R., 2011. Study on Cost Management under EPC General Contracting Model. Advanced
Materials Research, 181-182, 49–53.