In New Zealand construction projects, procurement methods are selected based on the set of criteria that best reflect how the project should be procured. Construction procurement is a complex field today. Procurement methods are important for the smooth functioning of a building project. This article will explore the procurement process and focus on factors affecting the selection of procurement methods in New Zealand construction projects.
What are Procurement methods in construction?
Construction procurement is the process by which companies acquire materials, services, and equipment needed to perform construction work. Construction procurement involves a variety of methods and techniques used to buy construction materials and services. Procurement methods vary greatly depending on the type of construction project, the size and scope of the project, and the geographical location of the project. Procurement methods describe how a contractor or supplier is hired for a construction project. They determine how much money the project will cost, and what materials and equipment will be used. They also determine how long the project takes to finish, and how safe the workers are on the job site.
Factors affecting the selection of procurement methods in New Zealand construction projects
Several important factors affect the selection of procurement methods. These factors are external elements, duration and pace, funds, attributes of the customer, attributes of the construction, the power to customize, and threat.
Duration and Pace:
The most difficult and capital construction projects must be completed within a particular time range. Suppose we need to accomplish a difficult task in a short amount of time. In that case, we should use a procurement approach that allows for quick completion.
The attribute of the construction:
Location (urban or rural), accessibility, safety, and environmental impact are all construction attributes. The construction’s size, complexity, location, and originality should all be examined since they affect time, cost, and risk. For instance, if a firm is rebuilding its office, the construction project must be consistent with the company’s present aims and culture. This may require redesigning the building to meet these criteria.
There are many threats and consequences involved in construction. The risk involved in building things is that the thing you build may not work as you expect. Also, there is the possibility that a contract takes advantage if the client doesn’t know about construction. As a result, we should select a procurement technique that allows us to avoid these consequences.
The client budget limitation in construction is a typical challenge for most small businesses. Over time, the constant increase in construction costs makes it difficult to keep up with the daily expenses and the monthly payroll. In this case, the procurement method makes sure that the construction cost doesn’t exceed from client’s budget.
The expert must examine external elements in the construction procurement process. An external element might be material, like the availability of steel, labor, or concrete, or non-material, like the tendering agreement or other document-based activities. When selecting a procurement technique, economic, commercial, technological, political, social, and legal aspects should be considered.
What are the types of Procurement Methods?
Choosing which method to utilize for a specific project is a tough and demanding process because a client’s objectives and priorities must align with the chosen method for the project to be effectively acquired. The choice of the procurement method should be made as soon as feasible. There are two major types of methods described below.
Traditional procurement methods
This strategy is referred to as “traditional” since it has been in use for a long time and has been the only choice available to most construction industry clients for many years. The employer acknowledges that design work will be conventionally separated from construction; consultants are hired for design and cost management, and the contractor is in charge of carrying out the works. Typically, the contractor is chosen through competitive tendering based on comprehensive information.
Traditional procurement methods are the most often utilized in the construction business, and the majority of firms still employ them.
In the construction industry, regardless of the type of contract, the main aim is to make sure that the construction project is delivered on time, within budget, and according to quality standards. The project manager’s job is to make sure that all the issues in the project are dealt with efficiently and effectively.
Non-Traditional procurement methods
There are non-traditional approaches available to shorten the time required to generate comprehensive specifications and tender papers. These strategies provide for a speedy start to work. The construction executives and suppliers, with whom we work use this procurement method, must consider the risk that an outside contractor will not perform to the required standard and can cause a delay in the completion or cost overruns. They must consider the increased labor and equipment costs, and they must consider the increased liability risk. The contractor might suggest cost-cutting measures and novel building methods. Alternative options enable the contractors to participate in the design stage, which is more advantageous for construction.
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