PROCUREMENT METHOD AND RISKS

The procurement strategy needs to identify how and when suppliers are brought onto the project. There are numerous procurement methods that have developed over time for use by construction owners as shown below:

• own forces-owner manages, design and constructs project with own forces. Owner has total control and accepts all risks;
• design-bid-build-owner manages project, contracts out design to engineering consultants and construction to contractors. Maintains overall project control and transfers detailed engineering design/ construction tasks and risks to contractors;
• CMAR (construction manager at risk)-owner retains a CMAR contractor in final design, who participate   in design review, estimating and value engineering and at some agreed point guarantees a fee to manage and carry out construction-owner transfers a share of control of scope through design to the CMAR contractor and all of the control and risk of the management and execution of construction;
• D/B (design/build)-consutlant contractor completes design through preliminary engineering (approximately 30%). Owner retains D/B contractor to complete design and construction-owner retains control of scope through concept design (30%) after which control and risk of design and construction is transferred to D/B contractor;
• design/build/operate/maintain-as for D/B plus contractor is responsible for the operations and maintenance of  the facility for a specified period-owner transfers control and risk of operations and maintenance to the contractor;
• turnkey-owner prepare performance specifications that is bid on by turnkey contractor, who also may participate in financing the project-owner controls scope of performance specification after which control and risk of conceptual/detail design and construction transfers to turnkey contractor.