What are the Different Types of Procurement in the Construction Industry? Read SpendEdge’s Latest Blog for In-depth Insights
LONDON--(BUSINESS WIRE)--Oct 14, 2019--
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.
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The construction industry is fraught with challenges. The type of procurement plan that companies select plays a key role in deciding the overall profitability and success of any construction project. Companies compare different types of procurement based on parameters such as topography, logistics, weather, available technology, finance, labor availability, and services. However, they must be acquainted with the functions such as design, build, management, finance, and operation undertaken in the construction project.
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At SpendEdge, we understand that procurement managers play a major role in successful construction project delivery. Therefore, we have highlighted different types of procurement to help companies choose the appropriate project delivery method and corresponding procurement strategy for the success of their projects.
Types of procurement
In the construction industry, the responsibility of a contractor is mostly limited only to building components. All the design works and contract management are performed by the consultant or an engineer. This is the most basic type of procurement process and has established parameters for assessing the value for money. However, the design costs involved and risks associated are a few of the main disadvantages of this approach.
Want to analyze how traditional procurement can help you allocate resources effectively and identify cost-savings opportunities? Reach out to our experts for specific insights.
In management contracting, consultants and specialized contractors become a participant. The contractor manages the project whereas specialized contractors undertake the real build aspect in their specialized field. In this type of procurement, finance and operations are carried out by the client when there are possibilities to identify projects in packages.
Obtaining detailed market insights is crucial for companies to identify projects in packages. Request a free demo to access our web-based procurement platform for free.
Joint venture or partnering
Often, conflicts between parties lead to major problems in the construction contract’s SLAs. With joint ventures or partnering, companies can easily overcome such barriers. However, they need to establish a working environment based on trust, mutual objectives, teamwork, and sharing risks and rewards. In joint ventures, the success of projects largely depends on a memorandum of understanding between the parties involved.
To know in detail about different types of procurement processes prevalent in the construction industry, request for more information from our experts now!
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