Construction procurement determines how a project is tendered, contracted, and delivered, and the strategy chosen at the outset has a lasting influence on cost, risk, and programme outcomes throughout the build. Clients undertaking significant developments often work with a specialist consultancy such as Mitchell McDermott to structure their procurement approach before any tender documentation is issued, ensuring that the chosen strategy aligns with the project objectives and the level of risk the client is prepared to carry.
What Procurement Strategy Means in Construction
A procurement strategy is the framework that governs how a construction client selects and appoints the organisations that will design and build a project. It encompasses decisions about how responsibilities are allocated between the client, designer, and contractor, how risk is shared between the parties, and what commercial arrangement will govern payment. Getting the procurement strategy right is important because it shapes the contractual relationships that will determine how problems are resolved if they arise during construction. A procurement strategy that does not match the complexity of the project or the risk appetite of the client can create significant difficulties that are very difficult to remedy once a contract has been signed.
The Main Procurement Routes Explained
The three most common procurement routes in the UK construction market are traditional, design and build, and management contracting. Under a traditional arrangement, the client appoints a designer separately and then tenders the completed design to contractors, retaining control over the design throughout. Design-build transfers both design and construction responsibility to a single contractor, giving the client a single point of accountability and more certainty over the final cost. Management contracting involves appointing a management contractor to coordinate the work of specialist trade contractors, which can work well on fast-track programmes where design and construction need to overlap. Each route carries different implications for cost certainty, design control, and the allocation of risk between client and contractor.
How Procurement Affects Risk Allocation
One of the most important consequences of the chosen procurement route is how risk is distributed between the parties to the contract. Under a lump sum design and build contract, the contractor accepts responsibility for most design and construction risks, giving the client greater cost certainty but less direct influence over design quality. Under a traditional contract with a fully measured bill of quantities, risk is more evenly shared, and the client retains more control over specification. Clients who accept a greater share of the risk in exchange for cost transparency and design control need to be well advised on their contractual obligations, particularly in managing variations and the associated financial implications when changes are required during construction.
What a Procurement Consultant Does
A procurement consultant advises the client on which strategy best suits the specific requirements of their project and then manages the process of bringing the right contractors and consultants to the project under appropriate commercial terms. This includes preparing pre-qualification criteria, shortlisting tenderers, issuing tender documentation, and evaluating submissions on a basis that considers both price and quality. The consultant will also advise on the appropriate standard form of contract and any special conditions that should be included to reflect the particular characteristics of the project. Post-award, the procurement consultant may assist with mobilisation and the establishment of commercial management procedures for the duration of the build.
Choosing the Right Approach for Your Project
The right procurement route depends on a range of factors specific to each project, including the complexity and novelty of the design, the level of cost certainty required, the programme constraints, and the capacity of the client organisation to manage contractors and consultants directly. There is no single approach that works well for every type of project, and a route that delivered excellent results on one scheme may be entirely inappropriate for another. Taking independent procurement advice early allows clients to make this decision based on evidence and experience rather than defaulting to a familiar approach and reduces the risk of committing to a procurement structure that creates problems further down the line.