Procurement Methods and Strategies in Construction - Traditional Bid-Build Method, Design and Build Method

 

Procurement Methods and Strategies in Construction

In construction, selecting the appropriate procurement method is critical for aligning project objectives, managing risks, and achieving efficient delivery. Let’s explore some commonly used procurement strategies, their characteristics, processes, risk-sharing frameworks, advantages, and disadvantages.

---

1. Traditional Bid-Build Method

• Characteristics:

  • The design is fully completed before tendering and construction.
  • The client directly engages the designer and contractor under separate contracts.
  • The client plays a key role in coordinating design and construction phases.

• Process:

  1. The client appoints a designer to complete the design.
  2. A tendering process selects a contractor based on the finalized design.
  3. The contractor executes the project per the design.

• Risk Sharing:

  • The client assumes risks related to design errors.
  • The contractor bears construction execution risks, including cost overruns and delays.

• Advantages:

  • Clear allocation of roles and responsibilities.
  • Competitive bidding ensures cost control.
  • Design quality is prioritized before construction begins.

• Disadvantages:

  • Time-consuming process due to the sequential nature.
  • Limited collaboration between designer and contractor.
  • The client bears significant risks for design-related errors.

---

2. Design and Build Method

• Characteristics:

  • The contractor is responsible for both design and construction.
  • Overlapping design and construction phases can save time.

• Process:

  1. The client provides output specifications.
  2. The contractor develops the design and executes construction.

• Risk Sharing:

  • The contractor assumes all risks for design and construction.
  • The client’s role is limited to defining project requirements.

• Advantages:

  • Accelerates project delivery as design and construction run in parallel.
  • A single point of accountability for both design and construction.
  • Reduces disputes over the design-construction interface.

• Disadvantages:

  • Limited client control over the design process.
  • Potential compromise on design quality to reduce costs.
  • Higher initial costs to engage experienced design-build contractors.

---

 

Pooja Mattapalli