In my previous post, I discussed the importance of selecting the right “Pricing Strategy” for the success of Real Estate and Construction projects. Another equally important topic is “Procurement Strategy”.
Below is a list of the most common ‘Procurement Strategies’ that Quantity Surveyors and Cost Managers come across in their Real Estate and Construction projects: 👇
1. Design-Bid-Build (General Contracting / Traditional)
3. Management Contracting
4. Construction Management
5. Owner Direct Managed / Self-Perform
6. Public Private Partnerships (PPP)
Recommending one Procurement Strategy over another is a KEY decision which can make or break your project. Therefore, you need to consider the following criteria carefully before advising your clients:
1. Speed of project delivery
2. Single point of responsibility
3. Cost certainty
4. Design quality and need to control it
5. Nature, size, and scale of the project
6. Project complexity
7. Flexibility to change
8. Scope certainty
9. Risk appetite of owner
Selecting the wrong “Procurement Strategy” is an expensive error which will lead to Change Orders, cost overruns, schedule delays, claims and ultimately disputes between the project parties.
Therefore, it is very important to invest your time and effort in “Front End Planning” during the Preconstruction Phase. Plan your work and work your plan!