Construction Procurement Systems

Procurement describes the merging of activities undertaken by the client to obtain a building. There are many different methods of construction procurement. Basically there are three major types of construction procurement systems. They are as follows;

1. Traditional (Design-bid-build)

2. Design and Build

3. Management Contracting

Apart from them, there is a trend to have new forms of procurement that involve relationship contracting where the emphasis is on a co-operative relationship between the principal and contractor and other stakeholders within a construction project. Those new forms of procurement systems contain partnering such as Public-Private Partnering (PPPs) , Private Finance Initiatives (PFIs) and alliances such as "pure" or "project" alliances and "impure" or "strategic" alliances. The focus on co-operation is to ameliorate the many problems that arise from the often highly competitive and adversarial practices within the construction industry.

Traditional Procurement system (Design- bid- build)

This is the most common method of construction procurement and is well established and recognized. In this procurement arrangement, the architect or engineer acts as the project coordinator. His or her role is to design the works, prepare the specifications and produce construction drawings, administer the contract, tender the works, and manage the works from inception to completion. There are direct contractual links between the architect's client and the main contractor. Any subcontractor will have a direct contractual relationship with the main contractor.

Design and build procurement system

This approach in Custom Home Construction has become more common in recent years in the word. Especialy this method is involve in construction of houses and other small private buildings. The Custom Home Builder will be involved in all phases, early-on in the custom home build to ensure that the to complete an entire package for the . In some cases, the Design and Build (D & B) package can also include finding the site, arranging funding and applying for all necessary statutory consents.

The owner produces a list of requirements for a project, giving an overall view of the project's goals. Several D&B contractors present different ideas about how to accomplish these goals. The owner selects the ideas he likes best and hires the appropriate contractor. Often, it is not just one contractor, but a consortium of several contractors working together. Once a contractor (or a consortium/consortia) has been hired, they begin building the first phase of the project. As they build phase 1, they design phase 2. This is in contrast to a design-bid-build contract, where the project is completely designed by the owner, then bid on, then completed.

Management procurement systems

In this arrangement the client plays an active role in the procurement system by entering into separate contracts with the designer (architect or engineer), the construction manager, and individual trade contractors. The client takes on the contractual role, while the construction or project manager provides the active role of managing the separate trade contracts, and ensuring that they all work smoothly and effectively together.

Management procurement systems are often used to speed up the procurement processes, allow the client greater flexibility in design variation throughout the contract, the ability to appoint individual work contractors, separate contractual responsibility on each individual throughout the contract, and to provide greater client control.