Understand Construction Procurement & Contract Practice

Analyze procurement options in construction and how risks are allocated to capable organizations. Review the four basic routes: traditional (design-build), design and build, construction management, and management contracting.

Explore the traditional route, or design bid build, where an architect acts as principal agent, guiding consultants to prepare contract documents and tender, with the contractor chosen by lowest bid.

Explore design and build procurement, where a single contractor designs and constructs under a lump-sum contract, enabling concurrent design and construction with cost certainty.

Examine the epc turnkey route as an engineering procurement and construction approach akin to design and build, with the contractor handling design, construction, commissioning, and handover.

Explore the management contracting route, with early appointment of a management contractor who advises on design programming, creates work packages, and lets competitive tenders for subcontractors.

The construction management route appoints a client-led manager to coordinate design and multiple specialist subcontractors, offering short communications and faster decisions while transferring risk and leaving total cost uncertain.

Explore how risk is distributed across traditional, design and build, and management contracting routes, showing who bears time, variations, design, and price risks.

Explore the novation route in design and build procurement, transferring the design team from client to the winning contractor to ensure continuity, professional indemnity insurance, and liability alignment.

Explore the two forms of novation in construction procurement, showing how design consultants’ contracts transfer from client to the winning design-build contractor, and the implications for contract continuity and liability.

Explore the two-stage tendering method that divides procurement into a pre-qualification stage and a second-stage negotiation, selecting contractors on competency and price, with early design input.

Examine the advantages of two stage tendering over single stage tendering, including early subcontractor involvement, design development during construction, provisional sums, and potential conversion to a guaranteed maximum price.

Leverage framework agreements and prime contracting to build a pool of capable contractors, who compete for projects and are monitored by key performance indicators and performance metrics.

Explore design and manage procurement, where a single management consultant coordinates design teams and subcontracted work packages, acting as surrogate client to deliver complex projects on schedule and within cost.

Understand private public partnerships as concession-based procurement where private consortia finance, design, build, and operate public services for 20–30 years.

Explore types of PPPs, including BT, BLT, build-own-operate-transfer, and design-build-finance-operate/maintain (DBFOM/DBFM), and learn how ownership transfers to public or private sector at contract end.

Explore how cost certainty, technical complexity, project quality, time constraints, and risk allocation shape the selection of a procurement route in construction projects.

Analyze the appropriateness of procurement routes for construction projects, comparing traditional, design and construct, management contracting, and framework agreements, with regard to early completion, cost certainty, risk, and complexity.

Understand construction procurement payment methods, including interim payments linked to milestones, and distinguish price-based lump sums from cost-based reimbursements, highlighting risk, cost certainty, and final accounting.

Explore price based payment methods in construction procurement, including lump sum with fixed price or incentives, activity based and measurement methods, with examples like windows and gypsum board.

Examine cost based payment methods in construction, including target costing with gain sharing and cost reimbursable methods such as cost plus fixed fees, award fees, and incentives.

Examine the risk distribution of payment methods between clients and contractors. Compare price based, cost reimbursable, target cost, and lump sum methods and their impact on cost increases.

Assess how client needs drive procurement strategies and routes for construction, including traditional design-bid-build, design-build, construction management, and partnering or public–private partnership, with risk allocation considerations.