A Comparative Analysis of Construction Procurement Methods Report

This report provides a comprehensive analysis of three distinct construction procurement methods: the traditional Design-Bid-Build, Design and Build, and Management Procurement. The paper begins with an executive summary and table of contents, followed by detailed explanations of each method, including their advantages and disadvantages. The Design-Bid-Build method, a conventional approach, is contrasted with the more modern Design and Build and Management Procurement methods. The report explores the roles and responsibilities of various stakeholders, including clients, consultants, builders, subcontractors, and end-users, within each procurement system. It highlights the benefits and drawbacks of each method, considering factors such as cost, time, communication, and quality control. The report offers recommendations on the suitability of each procurement method for different types of construction projects, providing valuable insights for potential owner/developers. The analysis is supported by high-quality references, adhering to the WSU Harvard referencing system, and includes a comparative chart to aid in understanding the contrasts between the three procurement methods. The report aims to provide a clear understanding of procurement methods, which helps in making informed decisions.

Running head: CONSTRUCTION MANAGEMENT
CONSTRUCTION MANAGEMENT
Name of the Student
Name of the university
Author Note

1CONSTRUCTION MANAGEMENT
Executive Summary
The aim of the research paper is to describe and analyze the positive and negative aspects
of three different types of procurement methods which are used in the construction project. The
paper will describe both the conventional types and new procurement methods.

2CONSTRUCTION MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
The Traditional system or the Design – Bid – Build method..........................................................4
Advantages of the method:..........................................................................................................5
Disadvantages of the method:......................................................................................................6
Design and Build.............................................................................................................................6
Advantages of the method:..........................................................................................................8
Disadvantages of the method:......................................................................................................9
Management Procurement...............................................................................................................9
Advantages of the method:........................................................................................................11
Disadvantages of the method:....................................................................................................11
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

3CONSTRUCTION MANAGEMENT
Introduction
Procurement comes from the term procure which means bringing about a change and to
acquire. The procurement method is an overall management structure which will used in the
construction and overall management structures which includes houses, offices, buildings,
shopping complex, roads and various types of bridges, flyovers. The traditional clients who were
involved in the construction project management would contact a designer and draft an architect
for the building project along with few other project engineers from civil engineering projects.
The designer would prepare a design and a drawing which will represent the actual idea of the
building (Franz and Leicht 2016) . After completing the designs the quantity surveyor was
assigned to propose a scheme which will be able to derive the prices for the project and the
material required to build it. Based on the design and the documentations the contractors who are
responsible would prepare their prices and show to the dealers. There are different methods of
procurement which can be used in the industry of construction and development. However
various types of new procurement methods will continue to develop and meet new requirement
methods from diverse clients, contractors, and the professions.
The process of procuring or acquiring something has different types of approaches and methods,
which in the construction sense are helping the contractors to build a building or construct any
structure.
As there are various types of procurement methods found in the construction industry now days.
The focus of the paper will be on the three types of procurement methods which are the
Traditional methods, Design and build methods, and Management Contracting Method.

4CONSTRUCTION MANAGEMENT

5CONSTRUCTION MANAGEMENT
The Traditional system or the Design – Bid – Build method
The traditional system or the design – bid – build method is a much old construction methods
which were used in the traditional days. Within this types of approach the client of the structure
used to go to an architect who is responsible for preparing a brief, an proper outline and drawings
which will be worked on. Furthermore the client after getting the plan of the structure will invite
a tender work to attract administrators of the project who will be preparing the construction
structure (Forcada, Casals and Macarulla 2017). The last stage of this process is that after
completing the work they will be provided with their payments. The major feature of these types
of construction program is that the design is separated from the construction process. In short
summary it can be said that the traditional system design consist of few step by step process
which involves the process of designing steps, bidding for the work and building it. Few of the
features of the traditional system are given below :
 The contractors are appointed in the project by competitive tendering process
 The design of the plan should be designed before th8e tendering procedure and the actual
construction time.
 The client should have a hold and control over the design. They should take the full
responsibility of the structure.
 With the involvement of so many steps the usual duration of the project tends to be very
long. it is only because of the sequential processes which are involved in the functioning
of the project (Naoum and Egbu 2015).
 The client of the structure or of the project is known to appoint a professional consultant
who is responsible for undertaking all the responsibilities. The contractors is known to=

6CONSTRUCTION MANAGEMENT
provide various kinds of advice in terms of the aspects which are associated with the
completion of the project. The person designs the overall process, provides the progress
update and the stages of various types of payments which must be paid by the client of
the project before starting it and paying the full money after the completion of the project.
Fig 1 Represents the Traditional system
Source : (Naoum and Egbu 2016)
Advantages of the method:
 The quality of work is under the control of the client
 The client can get the best price from tendering procedures

7CONSTRUCTION MANAGEMENT
 The client can also request for any variation in the work, at the middle stage.
 The interest of the client is protected by few consultants
Disadvantages of the method:
 It requires much longer period of work starting from inception to completion
 The communication channel among the contractors who are working among the
construction project might not be suitable and incompetent.
 The client might feel it very difficult to coordinate among the members.
After analyzing the traditional procurement method it can be said that it might become a problem
for the client to keep a track of the progress update just because the contract period tends to be
high. It might be problematic for the stakeholders to maintain the contractors and other clients
who are working altogether for the project. They might not be able to coordinate. It will also
benefit the stakeholders and clients to get the best contractors out from the tender which is
advertised.
Design and Build
In this method the contractors is responsible for undertaking both the work of designing
and completing the construction of the project. Therefore the contractor gets a lump sum amount
of money for that. In order to complete the task the contractors are known to design a plan
process to gather any advice from the client in certain levels. The contractor of the project thus
prepares a tender figure and then submits a whole package which is further termed as a proposal
after satisfaction is received from the client. According to the authors Naoum and Egbu ( 2016),

8CONSTRUCTION MANAGEMENT
the Design and build method is likely possible that in the absence of the professional staffs the
client might no longer wish to engage with the external stake holders who might advice him on
the prepared tender. Here the design and build arrangement both are checked and prepared by the
same person instead of using various types of contractors or architects and engineers to perform
the task and design separately. The client will have to identify and choose the contractor who is
responsible for providing an all design and services of construction from implementation to the
completion of the project.
Therefore if the client wants to change any process or thoughts in the plan it will be very
expensive for him as because there will be a change in the whole decision plan that is under
taken by the contractors of the project. According to the author it is much expensive because a
change in the design plan will be affecting the contractor and he might have to change the whole
design build contract rather than just changing the design team cost of the function.

9CONSTRUCTION MANAGEMENT
Fig 2 Represents the Design and Build
Source : (Rahmani, Maqsood and Khalfan 2017)
Advantages of the method:
 There is an ease of communication as because the client will have to work with one
contractor only.

10CONSTRUCTION MANAGEMENT
 There is a huge amount of cost saving and time which is implemented in construction
procedures.
 There are no possible delays due to the lack of information.
Disadvantages of the method:
 The possibilities of the designs are not explored in full details by the contractors of the
practice.
 The quality of the materials which will be provided might be compromised due to less
profit earnings.
 The client might get discouraged by checking various types of variations in the work.
 The client will have to find a contractor with a good reputation in the field of
construction.
Therefore in order to summarize the points it can be said that the process might be a bit
difficult or create problem to the person who is contracted for the task. It is only because the
time is very short over here. The different tenders are working with different types of design
programs of the project function. However it might be beneficial to the client itself just
because he will have to select a single person who will over look the whole matter. It helps in
developing a single point of contract approach between the client and the contractors in t he
project. Also the stakeholders of the design will have to face some risks and problems
regarding the liability and the insurance part of the raw materials.
Management Procurement
This method of procurement is fully based on the client appointing the consultant who is
known for preparing the project drawing and other types of functions in the project. In this

11CONSTRUCTION MANAGEMENT
consequent the contractor is selected based on the process of interview and tender basis.
However the management contractor will not be able to take any construction work of the client.
This will help the management contractor’s independence which will help in building
relationship with the client and the contractor. According to the author the payment is made to
the management contractor on the basis of the price of the package which will be served by the
contractor and the fees which will be charged by the contractor on the basis of the work shown to
the client.
Fig 3 Represents the Management Procurement process
Source : (Ross and Yan 2015)
The basis and success of this type’s of contractor are known to depend on the team which
is proposed by the contractor. A popular thing is much interesting in this types of approach is
that the client can make the changes of the plan accordingly. With the changes of the plan the
extra payment will be provided to the contractor on the last date of work on the project.
According to the authors Ross and Yan (2015) the term management procurement is known to
function and describe a method of organizing and planning the project team aligning with the
operating and construction process. It should also be kept in mind that that there is a free entry

12CONSTRUCTION MANAGEMENT
and exit of the contractor accordi0ng to the capacity and profitability. To be very simple it can be
said that this process of procurement is developed with the professional capacity contractor
which is known to provide both the management expertise as well as the build ability
requirements to the client in exchange with the fees and the profit involved with the contractor.
Few of the advantages and disadvantages of this types of procurement method is described
below.
Advantages of the method:
 It has an independent management function with the client and the contractor of the
project.
 There is a huge amount of reduction in the cost which the client ahs to impose if
followed the other methods. The model is also known to save much of the time of the
client and the contractor of the project of the construction (Phen and Meng 2018).
 This types of approach is best suitable as because it helps in designing a team which will
be able to design and concentrate itself on the task itself.
 Also the author Ogunsanmi (2016) says that there will be no conflict of interest between
the designs and productions given and shared with the client.
Disadvantages of the method:
 It might also lead an addition of the cost which is to be given by the client to the
contractor in the project.
 There also might be erosion in the power and responsibilities of the architect and the
contractor who is responsible for working on the task.

13CONSTRUCTION MANAGEMENT
In order to summarize it can be said that the contractors might have to face various kinds of
barriers as because this is less flexible than the other types of approach in designing the
requirements during the process of construction. Whereas it might also benefit the client as
because he has options to provide any change of the design plan. but the success of the project
depends on the management of the contractor
Recommendations
It can be recommended that the Traditional methods is best suitable for building bungalows and
big houses, the Design and build methods is best suitable for building big architectural structures.
The Management Contracting Method is used for building big factories and manufacturing
plants.
Conclusion
In order to conclude the above research paper it can be said that it has described and analyzed the
positive and negative aspects of three different types of procurement methods which are used in
the construction project. The papers have discussed the Traditional methods, Design and build
methods, and Management Contracting Method in it.

14CONSTRUCTION MANAGEMENT
References
Forcada, N., Gangolells, M., Casals, M. and Macarulla, M., 2017. Factors affecting rework costs
in construction. Journal of Construction Engineering and Management, 143(8), p.04017032.
Franz, B.W. and Leicht, R.M., 2016. An alternative classification of project delivery methods
used in the United States building construction industry. Construction Management and
Economics, 34(3), pp.160-173.
Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in construction
journals. Procedia Economics and Finance, 21, pp.6-13.
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
Managing Projects in Business, 9(2), pp.309-336.
Ogunsanmi, O.E., 2016. Comparisons of procurement characteristics of traditional and labour-
only procurements in housing projects in Nigeria. Covenant Journal of Research in the Built
Environment, 3(2).
Pheng, L.S. and Meng, C.Y., 2018. Managing productivity in construction: JIT operations and
measurements. Routledge.
Rahmani, F., Maqsood, T. and Khalfan, M., 2017. An overview of construction procurement
methods in Australia. Engineering, Construction and Architectural Management, 24(4), pp.593-
609.

15CONSTRUCTION MANAGEMENT
Ross, T.W. and Yan, J., 2015. Comparing public–private partnerships and traditional public
procurement: Efficiency vs. flexibility. Journal of Comparative Policy Analysis: Research and
Practice, 17(5), pp.448-466.
Ruparathna, R. and Hewage, K., 2015. Sustainable procurement in the Canadian construction
industry: current practices, drivers and opportunities. Journal of Cleaner Production, 109,
pp.305-314.
Zuppa, D., Olbina, S. and Issa, R., 2016. Perceptions of trust in the US construction industry.
Engineering, Construction and Architectural Management, 23(2), pp.211-236.