The Pros and Cons of Traditional Procurement Explained
Tradition carries with it the security of experience but when does that extra weight become a burden? Well that all depends on your project. When considering if traditional procurement is the right method for you there are a number of factors at play, most notably:
What is traditional procurement?
The traditional procurement method, also referred to as “design bid build”, “bid build” or “general contracting” is, as its name would suggest, the original and most commonly used method. Following this method, the client begins by appointing design consultants to oversee the initial design of the project and develop comprehensive tender documents for contractors including drawings, schedules, specifications and BOQ’s (bills of quantities). Multiple contractors submit tenders for the works and are appointed based on pre-selected criteria of cost, quality or a mixture of both.
The alternative to this is D&B (design and build) or “Turnkey” procurement where one consultant or design team takes responsibility for delivering both the full design and the construction of the project under a single contract. Essentially, it’s all in the name again, as it’s up to one contractor to take responsibility for “turning over the key” to a fully completed project.
The benefits of traditional procurement route
Well-established and widely-used method
Clear separation of roles and responsibilities between client, designers, and contractors
Greater control over design decisions and quality of workmanship
Competitive pricing due to multiple contractors submitting tenders
Easier to manage for straightforward projects with limited scope
Lower risk for the client as any design flaws are identified and rectified before construction begins
Since the traditional procurement route is the oldest and most widely used method, it is familiar to all contractors and is therefore easily recognised and implemented. Appointing and working with one design consultant / design team allows a close one-to-one working relationship to develop between client and design team. This allows the clients’ design needs to be comprehensively understood. At the same time the client retains control and responsibility for the project and as such can strongly influence the functionality and overall quality of the end result. This level of control extends across contractors and suppliers throughout the project.
Since all contractors are given the same specific brief in the tender pack, traditional procurement leads to a greater level of competitive equity during the tendering process. This also allows for a clearer cost comparison between tendering parties and since the prices are based on a specific design there will be greater accuracy as well as price certainty. This leads to a greater understanding of proposals and clearly understood visibility of investment.
Another benefit for the traditional route is the degree of flexibility it affords clients, with any changes or variations relatively easy to arrange and manage, even post tender. These factors all contribute to a finished project built on design collaboration between client and design team where the client has been involved in a lot of the detailed decisions throughout. But as with all things in life, not everything is positive, and so we now move on to the drawbacks.
The downsides of traditional procurement
Can be time-consuming due to the sequential nature of the process
Limited scope for innovation and creativity as the design is finalized before construction begins
Potential for disputes and conflicts between the client, designers, and contractors
May result in higher overall costs due to change orders and variations
Limited collaboration between contractors and designers, which can result in missed opportunities for value engineering and cost savings.
One of the downsides to traditional procurement is that its sequential nature is more time consuming. While a Design & Build route allows for construction planning to begin before the design has been fully completed, the traditional route can eat into schedule while the design and tender packs are prepared and evaluated. Essentially construction planning can’t even begin until after those stages are completed.
There are also multiple parties for the client to manage in the traditional route. Depending on the complexity of the project this can mean a lot of time and energy spent in communication between parties and in a worst-case scenario it can leave the client acting as an arbitrator between contractors or between the design team and contractor. A position no one wants to be in.
Engaging one design team from the outset means an upfront initial investment before the client may fully understand the bigger picture of the feasibility and/or total costs of the project. This can potentially be a large risk depending on the nature of the project. It also means that contractors can’t provide any value engineering or design input on the project until the tender stage and by then their input is reduced to a minimal level.
There can be less certainty as to the final overall cost of the project as there will be multiple separate bills from separate clients, each one impacted by anything from designs not being fully realised from tender issue to delays, changes or disputes.
Making the right choice
A project's success is made up of all the choices taken along the way. As a client, the key to making the right choice on this far-reaching and impactful decision is to match your priorities with your procurement route.
So, when is traditional procurement the right method for your project? If you are planning a detailed, specialist or challenging project and being in control of the design is a top priority. If it’s a project prioritising high quality, and you want to utilise the knowledge of multiple specialists while being able to run a like for like comparison on the proposals, this is likely the best option for you. That is, as long as you have the time in the programme to allow for design before construction and you are prepared to balance the risk between you and the contractors.
If however, you are planning a relatively straightforward project with little possibility of changing the design scope, and splitting of the design and building responsibility is not needed, then maybe Design & Build procurement is the right choice. If you’re looking for one point of contact to take responsibility and control on a project where cost and timing are the top two priorities, then traditional procurement may not be your best option.
If you have an upcoming project and you’re looking to make the right choice, why not get in touch with the team at Built Interiors today to discuss your options?