Construction procurement remains a fast paced and ever-evolving aspect of the construction industry. It is a critical part of the construction lifecycle, and it has a significant impact on the overall success of every building project. Recent supply chain issues instigated by COVID-19, Brexit and general disruption have very much brought construction procurement into the spotlight. Everyone is eager to keep their projects running on-time and within budget despite the significant supply chain challenges. Ensuring that your construction procurement strategy is robust will help you improve your project delivery and minimise the impact of the challenges that your project faces.
As part of the development of your strategy, consideration will be given to the key trends in construction procurement. If you can incorporate the latest techniques into your project, you will be at a significant advantage as they contribute to the establishment of correct construction procurement practices. These practices help to mitigate risk throughout the project lifecycle right through to the eventual handover/completion of the project. In this article, we explore the key trends in construction procurement.
What Is Construction Procurement?
Construction procurement is the purchasing of materials, supplies or services that are required to successfully complete a project. The scope of the process includes all the products and services that are involved in each phase of a build from start to finish.
In order to deliver the highest possible efficiency in each project, the procurement of these items is planned and executed in a strategic way. The drive towards the most efficient process is also balanced with cost-effectiveness, which involves purchasing the required supplies at the optimum time. Purchasing at the optimum time will help to secure the best possible price while also making sure that the supplies are available in time for the relevant stage of the build.
Why Is Construction Procurement Important In 2021?
The importance of construction procurement has never been greater, especially following the supply chain issues that dominated 2020 and continue to impact the construction industry in 2021. COVID-19 in particular continues to disrupt the supply of materials and services, which places timelines and key project milestones at risk of delays. Great construction procurement will help your project to overcome these issues and by maximising delivery and output in order to achieve the best project outcome.
Key Trends In Construction Procurement
Competitive Tendering
Competitive tendering has become even more prevalent as the most popular method of procurement. The competitive tender method was already the most popular procurement method, but it has gained greater prominence during 2021. The process consists of suppliers and contractors submitting a bid for a project or part of a project in response to an invitation to tender. The bid typically includes questions that clarify the requirements and a quotation to complete the work. It can be particularly advantageous for the client as they gain a valuable opportunity to scope the market and secure the best contractor that provides a balance of cost and quality for the project. In almost all cases, the end client will receive quotes that deliver great value as they are all based on a contractor’s most competitive rate.
In order to make the most of the opportunity presented by the competitive tender approach, it is important to have great construction procurement advice from qualified quantity surveyors. At JB Associates, our quantity surveyors can prepare an effective initiation to tender and review each of the submitted bids. While reviewing the submitted bids, we can often spot any errors or price anomalies and liaise with the contractors involved to ensure that the correct final bids are secured for the client.
Client Project Negotiation
Negotiating your project with an existing client or a client that is looking to build a long-term and collaborative relationship is a great way to successfully develop your construction procurement plans. Working closely and collaboratively with an existing client is far more effective than establishing an entirely new client relationship where the negotiations may be more fraught and challenging to bring to a successful conclusion. You have the benefit of knowing the client well, understanding their ways of working and having a clear idea of their expectations.
Client project negotiation can also be more successful when you are negotiating with a client that is looking to build a long-term relationship. In this case, the client will be eager to work with a company that they can trust to deliver, rather than seeking to make short-term savings to the detriment of long-term success.
Digital Procurement
The digitisation of the procurement process has been underway for some time now, but its pace is continuing to accelerate. Clients that adopt digital procurement are able to procure higher quality products and services at significantly lower costs, which reduces their overall operational costs. Implementing digital procurement practices is a proven way to control expenditure and significantly streamline processes.
In order to realise the maximum possible benefits from digital procurement, it is often necessary to redefine what adding value is by recognising the impact that streamlining processes can have. This will help to drive long-term efficiency improvements that can be realised throughout all phases of a build and beyond.
Transforming some or indeed all of your procurement process with technology is easier than you may think. Many of the existing digital procurement tools are web-based applications that can be adopted easily, and, in some cases, they integrate with your existing systems. The available tools can complete many different stages of the procurement process, right from establishing procurement requirements and requesting tender bids through to evaluating tenders and contract management.
Sustainable Sourcing
Sustainability is a key consideration in all aspects of construction, and construction procurement has a notable role to play in ensuring that sustainability is considered, and its practices are followed throughout all stages of a project. When adopted successfully, sustainable sourcing can reduce the overall environmental impact of the build and lead to smarter material choices being made. Smarter materials often reduce the long-term costs of a project and so have a clear cost reduction benefit for the client.
Sustainable sourcing is a great way to improve the lifecycle, environmental and social impact of a building project. Remaining committed to sustainability throughout your procurement process is likely to generate favourable responses from a wide range of project stakeholders that can influence your project, from planning authorities and investors to contractors and suppliers.
The advantages of sustainable sourcing are numerous. Firstly, the project can make long-term efficiency savings by choosing eco-friendly materials and supplies. Secondly, sustainability fosters supply chain innovation, which benefits all parties involved in a project. Thirdly, the harmful effects of pollution, waste and hazardous materials are at the very least reduced and in many cases are eliminated altogether. Finally, the client will benefit from a procurement process that supports their corporate social responsibility (CSR) initiatives.
What Are The Secrets To Success In Construction Procurement?
While there is no single secret to complete success for construction procurement, there are a number of top tips that can help your project progress successfully. Good planning from the outset is a simple yet incredibly effective way to put your procurement plans on the right track and avoid issues in the later stages of the process. Engaging with all stakeholders is another important element of successful construction procurement as with their effective involvement. The best possible decisions can be taken which benefits the entire project.
Finally, establishing a collaborative working arrangement between all parties, including contractors and subcontractors, helps to promote your procurement strategy while also aiding its implementation at every level of the project team. The collaboration will encourage idea sharing, proactive troubleshooting and shared responsibility.
Construction Procurement Specialists In Hampshire & London
The construction procurement specialists at JB Associates can help with your construction project. We provide construction procurement services that help to maximise delivery and output in your project. Whether you require help from our quantity surveyors during the pre-contract phase or assistance at the tendering and cost management stage, the JB Associates team has the right people in place to accelerate your progress and deliver a successful project outcome. We offer impartial and objective advice to help tackle issues, reach resolutions, and drive your project forward. Our valued clients include Telefonica, Kier, Balfour Beatty, Interserve, SSE, CBRE, Ramboll and Pick Everard.
Our team of construction management procurement specialists which includes RICS accredited quantity surveyors could be the perfect choice for your project. Why not contact us for a no-obligation discussion and find out how we can help with the construction procurement for your project? Complete our contact form or call us on: 01590 688 928.
