Architecture / June 7, 2018 /
The contractor is selected on the basis of competitive tendering on most building contracts. The price which the contractor quotes for the job is heavily influenced by both the amount and intensity of the competition expected. In an open tendering arrangement the level of the competition is at its most intense and contractors must submit highly competitive bids to have any chance of winning the contract. This usually secures a rock bottom price. With selective tendering a limited number of competent contractors are invited to tender for the job, this limited competition arrangement results in a keen price being obtained. In the case of a negotiated tender there is no explicit competition and the parties seek to agree a fair price for the work, implicit competition exists, however, as the employer can break off negotiations. If there is no competition the contractor can, in fact, name his price. The tendering arrangement is, therefore, one of the most cost significant decisions a client will make in the course of a building contract.
This is where the contractor works alongside or within the design team providing a construction management service. The management contractor does not undertake either the design or the direct construction work. The physical construction is carried out by specialist subcontractors, package contractors. There are two main forms of this approach: Management Contracting where the contractor employs the subcontractors and Construction Management where the subcontractors are employed directly by the client and the project is managed by the construction manager - there is no actual main contractor. Management procurement routes are associated with fast moving, complex construction projects. The early appointment of manager within the design team allows the design and construction operations to be fast-tracked while also ensuring that the required quality standards are delivered. These projects, however, tend to be expensive. Figure 1 sets out a summary of the advantages and disadvantage of various procurement approaches which may be of use in meeting project objectives.