LONDON--(BUSINESS WIRE)--SpendEdge, a leading provider of procurement market intelligence solutions, has announced the completion of their latest article on the 4 major types of procurement in the construction industry.
The success of any construction project nowadays depends on the choice of the procurement process. The type of procurement plays a key role in deciding the overall profitability of the construction project. Companies need to compare different types of procurement based on key parameters such as topography logistics, weather, available technology, finance, labor availability, and services before selecting the ideal one. They also need to gain comprehensive insights into the functions involved in the construction project.
At SpendEdge, we understand that gaining detailed insights into the functions undertaken in the construction project is vital for companies to opt for an ideal type of procurement. Therefore, we have listed the most popular types of procurement processes in the construction industry.
Types of Procurement
Traditional procurement
Traditional procurement is one of the most basic types of procurement carried out in the construction industry. Companies have been working with this method for long and have defined parameters to assess the value for money. However, the influence of contractors over the design cost involved is one of the major disadvantages of this type of procurement.
Minimizing the design cost involved is imperative for companies to ensure the profitability of construction projects. Request free platform access to manage multiple spend areas and achieve savings in billions.
Management contracting
Management contracting involves consultants, contractors, and specialized contractors. The contractors take the managerial roles whereas specialized contractors look after the real build aspect in their specialized field. In such projects, finance and operations are carried out by the client mostly. For detailed insights, get in touch with our analysts here!
Design and build (D&B)
The contractor is meant to design and construct the project in this type of procurement. It requires a closer collaboration in the process and risks are allocated to the contractor. The scope of consultants is only limited for the contract management. Similar to management contracting, in this type of procurement, the client takes the responsibility for finance and operations.
To know about different types of procurement, opportunities, and challenges in the construction industry, read the complete article here!
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