The cost implications of different procurement methods will vary which is why it is worth investing some time and consideration into which procurement methods are selected.

• Traditional procurement – this is the most common form of procurement. Within this procurement process, the client will directly employ the necessary resources to develop a scheme. This will include designers, engineers, planner, etc. This process will take the longest as every aspect of the scheme will have to be considered and finalised without any early contractor involvement. This method is also the most expensive in terms of design and procurement. The client boars the cost which will be added to the development of construction costs. For this method to be deployed, the client will have a substantial understanding and knowledge of the project, the risk of any errors and failures will be borne by the client.
• Construction Management – This method has a collaborative approach between the client and contractor. The client will appoint a consultancy company as the principal contractor who will manage the scheme on behalf of the client (employers representative in accordance with NEC). With this method, there is early contractor involvement during the design phase. The client will have a draft design which will be optimised by the contractor. Within this procurement method the design risks are shared between the client and contractor. This method is deployed where the client has some experience and knowledge of the scheme but not to the extent where the contractor can be utilised. This method will not take as long as the traditional method, as the early contractor involvement will save time during the procurement process. Therefore this procurement prices has less cost implications than traditional.
• Design & Build (D&B) – Commonly deployed by clients who have little to no knowledge of the project deliverables. The client will know what they require but may not necessary know how it is to be devised. The client will approach a contractor with a requirement brief. The contractor will then provide a end-to-end solution. Within this method, the contractor will take all the design risk. In terms of procurement, this method will cost the least to the client. The client will simply approve and accept the design offered by the contractor and accept it meets the requirements initially set out.

Although traditional procurement has the highest procurement costs and the longest pre-contract duration, due to the fact that the client is in control of the deliverables and design, they benefit from value engineering. The client will specify construction materials and methods which may have lower production costs or longer sustainability which will ultimately increase value for money. The deliverable costs for this method will be the least.

Opposite to this is the D&B method wherein the contractor will be in charge of value engineering and product selection. In the D&B methods, the contractor will incorporate their design and procurement costs within the cost of the project. Due to the fact the client ma lack knowledge and experience, the contractor will usually charge more. Therefore, the D&B is commonly the most expensive in terms of total project costs.

The construction management method will benefit from both aspects in terms of value engineering and total project costs. Whilst consultants can be expensive, they bring key knowledge and experience to force value engineering from the contractors and govern and manage a budget specified by the client.

The procurement method will be selected based on the clients in-house knowledge, experience and disposition to own risks.

Once a procurement method has been adopted and a subcontractor been selected, it is paramount that the relevant parties understand and approve the terms and conditions set out during the procurement process. There are relevant checks that must be carried out and the relevant parties must sign the agreement. At this point, the procurement team will involve the legal and operations team to confirm feasibility and logic to what has been agreed.

The works package which has been approved would need to be signed by individuals with delegated authority. It is common within organisations to have band brackets to authorise, i.e. the Operations Manager will approve up to £50k, an Account Manager will approve up £500k and the Business Director will approve up to £1m etc. The approval process may take weeks due to the fact the senior management team may not know the details of the project. However they must understand a substantial amount to be able to adopt the risk and opportunities. This is usually conducted at Contractor / Subcontractor / Client level.

In order for a contract to be law binding, it must have the following:

1. An invitation to treat – offer
2. Acceptance of offer
3. Consideration / Compensation – agreed price
4. Execution of signed contract by both parties – terms and conditions

The contract can be signed as a title or a deed. Both have key connotations and responsibilities. A deed will usually be more onerous where the contractor will have all responsibilities to maintain and manage the site during the construction phase. A title on the other hand, will be conceptual and shorter in term.

Although the contract will be time barred i.e. a start date and end date with a planned completion, there will be a defect liability period. During this period the contractor will repair or remedy any defects associated with the scope of works as stipulated in the agreement. Any latent or inherent defects should they be proven will always be the responsibility of the contractor dependant on ownership of associated risks.