Design-Build Procurement vs. Traditional Approach in Construction

This report provides a comprehensive comparison between the design-build and traditional procurement methods used in the construction industry. It begins by defining procurement and its importance in the construction sector, particularly in New Zealand, where it influences project success and client-company relationships. The report then delves into the specifics of both design-build and traditional procurement. Design-build is characterized by a single entity responsible for both design and construction, offering benefits like streamlined communication and faster project completion. Traditional procurement, on the other hand, involves separate design and construction teams, with the client often having more direct control over the design phase. The report highlights the advantages and disadvantages of each approach, considering factors such as cost, time, and quality. It concludes by emphasizing the importance of selecting the most appropriate procurement method based on project-specific needs and client priorities, with a focus on avoiding potential issues related to cost, quality, and project timelines. The report references several academic sources to support its analysis.

Difference between Design and Build procurement approach and Traditional Approach
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Introduction
Procurement is the formation of business relations on the basis of construction companies
operate as well as customers utilizing their services. It is vital for the construction industry
growth as well as the effective performance of the operating companies. This is because it
determines the procedure of acquiring and purchasing goods and services. In this case,
procurement is an essential tool that enhances the relationships between customers and
companies. At this point, the choice of the procurement methods plays a significant part for
further growth of the construction industry by building the relationship between the customers
and companies and further fostering their interactions (Masterman and Masterman, 2013). It is
important for companies in the construction industry to adapt to the current requirements of
customers wants and expectations.
However, there are several factors that may influence the selection of an appropriate
procurement method. The development of the construction industry relies on these factors
because they have an influence on the methods of procurement utilized by companies and
customers in the New Zealand construction industry (Hughes et al., 2016). Some of the factors
that have an impact on the selection of procurement methods include project characteristics,
ability to make changes, client resources, cost issues, and timing. The internal factors such as the
available human resources, organizational culture, and structure are factors that can the selected
procurement method. Therefore, effective development of the construction company majorly
depends on the efficient use of the procurement methods that improve the performance of firms
operating in the construction industry as well as stimulating the construction industry progress.

New Zealand construction procurement methods overview
In the construction industry, procurement methods are very important because they help
people to determine the acquisition and ordering of properties or elements of the building that is
being constructed. Essentially, procurement methods immensely impact the growth of company-
customer relationships which significantly influence the whole construction industry (Tookey,
2011). In New Zealand, the relationships between the company and the customer are significant
for the stable growth of the construction industry in the country (Babatunde, Opawole and
Ujaddughe, 2010). In such a circumstance, New Zealand construction industry relies on the
construction procurement methods which assist the construction companies and customers to
utilize their services to minimize conflicts and improve the relationship between the construction
industry and its customers.
As a result of the ever-changing business environment, the construction industry
development has increased the problem of the broad execution of proficient procurement
methods. This has made the construction procurement methods in New Zealand to transform
under the influence of such changes in the business environment (Chen et al., 2012). Currently,
procurement methods are playing a crucial role in New Zealand construction industry growth by
determining the relationships between the company and customer as well as providing details to
the contracts constructors. The details make it possible to predict the growth of the construction
industry in New Zealand by identifying the most popular procurement methods in the
construction industry (Chen et al., 2012).
Design and Build procurement methods
Design and build is a method of procurement where one organization performs the
responsibilities and risks for the design and construction phases. This method of procurement

consists of the architect, general contractor and engineer. The architect, engineer and general
contractors merge to provide the client with a single source of contact for the design and
construction of the proposed project (Chen et al., 2012). In this type of procurement method, the
contractor is mandated to prepare project brief, sketch and complete the working drawings to get
approval from relevant authorities for construction, furnishing, project financing as well as
commissioning of necessary accessories and equipment and finally handing the project to the
client (Chan, Scott, and Lam, 2012).
In the Design and Build system, the contractor’ design responsibility is more as
compared to traditional contract because it comprises of a contractor design portion. In this
procurement method, the contractor requires adequate time to prepare the requirement of the
client. Adequate time is needed for them to prepare the proposal as well as estimating the price
of the tender. In this type of procurement, the client has the power to control the element of the
design to suit his or her requirements (Chen et al., 2012). After approval of the contract, total
responsibility is passed to the contractor and client no longer have direct control on the
contractor’s detailed design.
Additionally, the contract documents in Design and Build procurement include contract’s
condition, the requirement of the client, formal agreement, schedule of rates and contractor
proposals. The contractor in this method is responsible for concept design, tendering and
contracting, construction and handover while the client provides project brief, tender document,
and feasibility study (Chen et al., 2012). With regard to costs, design and build procurement
method has fixed costs at the tender stage which are subject to design changes. Design and Build
system has higher contracting system than traditional contracting system because once the tender
is accepted, the price quoted in the tender becomes final in the contract sum. It is not subject to

any alterations unless instructed by the client for the changes. The build and design save a lot of
time as compared to traditional procurement. It is appropriate for private clients who want a
quick return on their investment (Lam, Chan and Chan, 2014).
In addition, its operations are subject to significant scrutiny and managed under strict
framework particularly in government-funded projects. Since the whole construction process is
performed by a single party, the quality of the construction project is slightly affected because it
is suitable for the projects that require early completion (Lam, Chan and Chan, 2014). The use of
Build and Design procurement has numerous benefits in the construction industry. The benefits
include ease of communication between the client and contractor saves time and costs, no claim
for possible delays as a result of insufficient design information and allows the contractor to
include his or her construction capability in the proposed design (Lam, Chan and Chan, 2014).
Traditional procurement systems
It is a method that requires the contractor to work in line with a detailed plan provided by
the client. It is the most commonly utilized method in the construction industry. When traditional
procurement method is selected, the client selects an architect who prepares briefs, a scheme the
outline and working drawings, invites tenders and further manages the project through
instruction issuance (Alhazmi and McCaffer, 2010). More so, the architect also inspects the
project under construction and further prepares payment certificates.
With the approval of the client, the architect selects other consultants such as structural
engineers and quantity surveyor to perform other tasks. Furthermore, in the traditional
procurement system, the design team operates independently from the contractor who executes
the actual construction work in line with the contract team (Lam, Chan and Chan, 2014). With
regard to contracts, the client is in direct contractual connection with consultants on the other

hand while the contractor on the other (Walker and Hampson, 2018). It is advisable to
recommend mutual agreements to safeguard the client interests with respect to anything that
might lie outside the construction contract. In this method, the architect is the lead designer in
coordinating engineers in monitoring and evaluation works. He or she ensures that the design of
the building is in accordance with the requirements of the local authority.
Apart from ensuring compliance, he or she administers the entire projects and further
supervises the work. However, the traditional procurement system is fairly slow as compared to
the design and build method. It takes a longer time to complete the project to ensure that the
project is within the design and budget of the project to meet and satisfy the requirement of the
client (Kumaraswamy and Dissanayaka, 2012). As much as it takes a longer time, it is the best-
considered approach because it allows the client to know the actual costs to construct his or her
project. With regard to quality, the quality of the traditional method is higher than that of the
build and design. This is because the client is in direct control of the design work as opposed to
the design and build where the client has no control over the performance of the contractor. In
the early stages of the traditional procurement system, the client may spend a lot of money to pay
those consultants who assisted in project design. This will guarantee the client to get a good price
to finish his or her project and there are limited chances for the contractor to manipulate prices.
Conclusively, it is evident that the selection of a suitable procurement method is still a
dynamic activity. It is, therefore, the responsibility of each client to select an appropriate
procurement method to use in his or her construction project. Those clients that need faster
project completion may adopt design and build method while those that need quality work may
decide to select the traditional method. It is therefore important to adopt a suitable procurement
method to prevent future problems that may arise from costs, quality and time.

References
Alhazmi, T., & McCaffer, R. (2010). Project procurement system selection model. Journal of
Construction Engineering and management, 126(3), 176-184.
Babatunde, S. O., Opawole, A., & Ujaddughe, I. C. (2010). An appraisal of project procurement
methods in the Nigerian construction industry. Civil Engineering Dimension, 12(1), 1-7.
Chan, A. P., Scott, D., & Lam, E. W. (2012). Framework of success criteria for design/build
projects. Journal of management in engineering, 18(3), 120-128.
Chen, G., Zhang, G., Xie, Y. M., & Jin, X. H. (2012). Overview of alliancing research and
practice in the construction industry. Architectural Engineering and Design
Management, 8(2), 103-119.
Hughes, W., Hillebrandt, P. M., Greenwood, D., & Kwawu, W. (2016). Procurement in the
construction industry: the impact and cost of alternative market and supply processes.
Routledge.
Kumaraswamy, M. M., & Dissanayaka, S. M. (2012). Linking procurement systems to project
priorities. Building Research & Information, 26(4), 223-238.
Lam, E. W., Chan, A. P., & Chan, D. W. (2014). Benchmarking design-build procurement
systems in construction. Benchmarking: An International Journal, 11(3), 287-302.
Masterman, J. W., & Masterman, J. (2013). An introduction to building procurement systems.
Routledge.
Tookey, J. E. (2011). Labour productivity in the New Zealand construction industry: A thorough
investigation. Construction Economics and Building, 11(1), 41-60.

Walker, D., & Hampson, K. (Eds.). (2018). Procurement strategies: A relationship-based
approach. John Wiley & Sons.