Selecting the Optimal Procurement Strategy for Construction Projects

This report focuses on identifying the most suitable procurement strategy for a fast-track construction project. It explores various strategies, including design-bid-build, design-build, and construction management, emphasizing the importance of cost-effectiveness and adherence to project schedules. The analysis highlights the design-build strategy as the preferred approach for fast-track projects, where the contractor handles both design and construction. The report also suggests the use of an Admeasurement contract, with options for Bill of Quantities and Schedule of Rates forms, to facilitate payment based on completed activities. It emphasizes the need to manage associated risks related to costs, time, and quality, offering insights into contract management during the development and construction phases. The report provides a detailed overview of the advantages of the design-build method and the flexibility offered by the Admeasurement contract for making project adjustments.

This section is concerned with understanding the preferred procurement strategy that can utilized
to the project under consideration. The type of contract that should be undertaken has been
suggested along with the way contract needs to be managed during the development and
construction.
There can be variety of strategies that can be considered for the construction and, therefore it is
imperative to suggest the one that is cost effective and respects project schedule. Moreover, the
learning curve within the construction projects is generally steep and in such cases management
of cost becomes beneficial.
There are certain risks that need to be addressed while selecting the right procurement strategy
(Sutton, 2013). The risks associated with the costs or the delivery is core to the construction
projects. There are three criteria that are interdependent and are of major concern with the
construction projects, namely, costs, time, and quality.
The three most common procurement strategies for the construction project are design-bid-build,
design-build, and construction management. The design-bid-build helps the sponsors in
achieving cost certainty related to the project design. The process in this strategy is sequential
(Dada, 2013). The design-build strategy is related to the cost and speed. However, the design of
the project is majorly associated with the contractor. In this strategy, the ongoing design can be
matched with the ongoing construction simultaneously. The final strategy, management
construction, provides enough speed for the project. However, one can find minimum certainty
as per the cost is concerned.

The traditional strategy of the design-bid-build strategy is the most common form of method
used in the construction. However, the method is not preferable for the fast-track projects. As the
project under consideration is fast-track, therefore, this method cannot be suggested.
The design-build method is the suitable procurement strategy for the projects that are fast-
tracking (Ramsey et al, 2016). In this form of strategy, the contractor will have the responsibility
of designing as well as constructing. Therefore, the design-build procurement strategy has been
suggested for the project that has been under consideration in this study.
In design-build, the contractor will be contacting consultants or manage activities through in-
house designers. The sub-contractors will be playing major role in this process. This approach
allows the client with one-person contact point. The risk is majorly associated with the contractor
in this strategy.
The type of contract that has been suggested for this project is Admeasurement contract. In this
form of contract, the payment will be paid on monthly basis for the activities that complete
within a month (Haswell and De Silva, 2013). As the design and construction will be an ongoing
process, therefore this contract method is suitable. The reason is that the contract allows the
client to make changes based on the additional payment throughout the project.
The preference would be on clients that which one of the Admeasurement contract forms they
would prefer to choose. The two forms are Bill of Quantities Contract and Schedule of Rates
Contract. In the BQC form, the rates are placed against the activities that will be undertaken
within the month and the payment is released accordingly (Nadeem et al, 2015). There is the
provision of measuring the quantities during the course. In the SRC form, the presence of
inaccurate work quantities can be witnessed along with the upper and lower assumed limits.

References
Dada, M. O. (2013). Client and Contractor Organisations’ Assessment of Design-Bid-Build
Procurement Practice in Nigeria. Civil Engineering Dimension, 15(1), 1-10.
Haswell, C. K., & De Silva, D. S. (2013). Civil engineering contracts: practice and procedure.
Butterworth-Heinemann.
Nadeem, A., Wong, A. K., & Wong, F. K. (2015). Bill of Quantities with 3D Views Using
Building Information Modeling. Arabian Journal for Science and Engineering, 40(9), 2465-
2477.
Ramsey, D., El Asmar, M., & Gibson Jr, G. E. (2016). Quantitative performance assessment of
single-step versus two-step design-build procurement. Journal of Construction Engineering and
Management, 04016033.
Sutton, B. (2013). Procurement and its role in corporate strategy: an overview of the wine and
spirit industry. International Marketing Review.