Choosing the Right Construction Procurement Routes in the UK: Design and Build, Cost Plus or Traditional

In the world of construction, selecting the right procurement route is crucial for a project’s success. The choice between Design and Build, Cost Plus, and Traditional procurement methods can significantly impact a project’s outcome. In the UK construction industry, understanding the differences and weighing the benefits and downsides of these procurement routes is vital for professionals, especially Quantity Surveyors. This article aims to elucidate these three prominent construction procurement routes in the UK and help construction experts make informed decisions.

1. Design and Build Procurement

Design and Build procurement is a popular choice in the UK construction market. In this approach, a single entity, typically the contractor, takes responsibility for both the design and construction phases. Here are some key features and considerations:

Benefits:

• Single Point of Responsibility: Design and Build offers a streamlined process as a single entity handles both design and construction. This reduces communication and coordination challenges, making it efficient.
• Cost Certainty: With a fixed-price contract, clients can have a clearer idea of project costs from the outset, which can be reassuring for budget-conscious clients.
• Time Efficiency: The overlapping of design and construction phases can accelerate project delivery, saving time.

Downsides:

• Limited Client Input: Clients may have less influence on design aspects since the contractor has more control over this phase.
• Potential for Reduced Quality: In the pursuit of cost and time efficiency, quality can sometimes be compromised.
• Change Orders: Any design changes during construction can lead to costly change orders, affecting the budget.

2. Cost Plus Procurement

Cost Plus procurement is a method where the client agrees to pay the contractor for the actual costs of the project plus an agreed-upon fee or percentage. This approach is more common in situations where project requirements are not well defined from the start.

Benefits:

• Flexibility: Cost Plus contracts are adaptable, making them suitable for projects with evolving requirements.
• Transparency: Clients have a clear view of project costs, as they directly bear the expenses.
• Collaboration: It encourages close collaboration between the client and contractor, potentially leading to innovative solutions.

Downsides:

• Uncertain Costs: Clients may face cost overruns, as the final project cost isn’t known until the end.
• Risk Allocation: Clients bear the risk of cost overruns, which can be a concern if the project budget is tight.
• Potential for Disputes: Disagreements over what costs are justifiable can lead to disputes between the client and contractor.

3. Traditional Procurement

Traditional procurement, also known as Design-Bid-Build, is a more conventional method in the UK construction industry. It involves three separate entities: the client, the designer (architect or engineer), and the contractor. The project proceeds in a linear sequence: first, the design is completed, then the project is tendered, and finally, construction begins.

Benefits:

• Clear Separation of Roles: Traditional procurement maintains distinct roles for designers and contractors, reducing conflicts of interest.
• Competitive Tenders: The bidding process encourages competitive pricing, potentially benefiting the client.
• Well-Defined Scope: The detailed design phase ensures a clearly defined scope of work, reducing scope changes during construction.

Downsides:

• Prolonged Schedule: Traditional procurement often results in a longer project duration due to the sequential nature of the process.
• Limited Collaboration: The distinct phases can limit collaboration between designers and contractors, potentially hindering innovative solutions.
• Change Orders: Any design changes after the construction phase begins can lead to additional costs and delays.

Selecting the Right Procurement Route

The choice of a procurement route should be guided by project-specific factors, client preferences, and the project’s nature. Here are some considerations to help Quantity Surveyors and construction professionals make the right decision:

1. Project Complexity:
   • For simple, straightforward projects, Design and Build might be the most efficient choice.
   • Complex, innovative projects may benefit from the flexibility offered by Cost Plus procurement.
2. Client Involvement:
   • Clients seeking more involvement in the design process might prefer the Traditional route.
   • Clients looking for a more hands-off approach may opt for Design and Build.
3. Budget Constraints:
   • Projects with tight budgets may find comfort in Design and Build’s cost certainty.
   • Clients with financial flexibility might consider Cost Plus for greater adaptability.
4. Risk Tolerance:
   • Clients averse to cost overruns and potential disputes may lean towards Traditional procurement.
   • Risk-tolerant clients may embrace Cost Plus for its flexibility and collaborative nature.

Conclusion

Selecting the right procurement route is a critical decision in the UK construction industry. Design and Build, Cost Plus, and Traditional procurement routes each come with their unique benefits and downsides. Quantity Surveyors and construction professionals play a pivotal role in guiding clients to choose the most suitable route for their projects.

Ultimately, the key is to assess the project’s specific requirements, client preferences, and the risk tolerance, and then match these with the strengths and weaknesses of the available procurement options. Whether aiming for efficiency, flexibility, cost certainty, or well-defined scopes, the UK construction industry offers a variety of procurement routes to meet a wide range of project needs. Making informed decisions regarding these procurement routes is essential for a successful construction project in the UK.