5 Types of Procurement Methods in Construction Industry

Construction professionals are always focused on what procurement methods are followed and practiced in their industry. In a construction project, mainly five functions are engaged.

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Construction professionals are always focused on what procurement methods are followed and practiced in their industry. In this way analyzing the necessity and attributes of the procurement structure becomes very essential. The goal of the procurement framework is to identify the responsibilities and job tasks of every single member in a marked project.


Generally, five functions are engaged in a construction project. They are as follows: design, build, finance, operation, and management. The scope of each party i.e. the client, contractor, and consultant is defined by the procurement system.  


Types of Procurement methods:


Procurement methods are being performed in the construction industry. The 5 types of procurement method followed in the construction industry are:

  • Traditional Method: In the traditional method of procurement, the contractor’s responsibility is to build the given design provided by the employer. It is limited only to build and not for any design. All the design and management works are carried by the consultant while the finance and operation are seen by the client. This method of procurement recommended for complex and comparatively huge projects. 


  • Design and Build Method: Design and build is where the responsibility is covered by the contractor itself. Management is limited to the consultant. While the finance, as well as the operation part, is taken care of by the client. This method of procurement is increasingly common. 


  • Management Contracting: Unlike the traditional method and D&B method, here specialized contractor becomes a participant, apart from the clients, contractor, and management. Here, the contractor acts as a manager for the project while the specialized contractor takes a project on their specialized field. 


  •  Joint Venture: Joint venture in construction enables them to share the risks and rewards. Here, the parties establish a working environment that is based on teamwork, mutual understanding, and trust. 


  • Private Financing Initiative: In this method, the contractor is single-handedly responsible for the given project. Once the project is completed, the ownership of the project shall be transferred to the client. 

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