Procurement Route Options

Purpose

The choice of procurement route is one of the most consequential decisions on any construction project. It determines the allocation of risk between client and contractor, the degree of cost certainty achievable before construction starts, the level of design control retained by the client, the integration of the design and construction teams, and the total programme from brief to completion. Once the route has been acted upon — through appointment of a design team, issue of tender documents, or contractor engagement — it is extremely difficult and expensive to reverse.

The QS’s role at feasibility stage is to prepare a structured procurement strategy and options appraisal, setting out the principal routes available, their advantages and disadvantages relative to the client’s specific priorities for time, cost, quality, risk and performance, and a written recommendation. The governing RICS publication is Developing a Construction Procurement Strategy and Selecting an Appropriate Route (RICS practice information, UK, 2nd edition, August 2024). Tendering and contract selection sit outside this publication and are addressed in separate RICS guidance. For public sector clients, the Procurement Act 2023 (effective February 2025) and sector-specific frameworks such as NHS Procure 23 impose additional statutory and policy obligations.

The client’s decision on procurement route must be recorded in writing. It is not sufficient to discuss options in a meeting and proceed informally. The QS’s written recommendation, and the client’s written acceptance, form part of the project audit trail and will be scrutinised in any subsequent dispute or professional review. Under RICS practice information, the chosen route should also be reviewed at key project milestones (for example, on grant of planning permission or before the construction contract is let) to confirm that the original rationale still holds.

Key Principles

• Principal procurement routes in UK construction (per RICS practice information, August 2024): (1) Traditional (lump sum) — sequential design-bid-build; client retains design risk; high cost certainty at tender. (2) Traditional (remeasurement / measure-and-value) — priced on a schedule of rates or approximate quantities; used where full scope cannot be defined at tender (e.g. civil engineering, refurbishment with unknown extent). (3) Design and Build (including ‘develop and construct’ and novation variants) — single-point responsibility for design and construction; earlier cost certainty; reduced client design control. (4) Construction Management — works let as separate trade packages direct with the client; construction manager engaged as fee-earning professional; client retains risk. (5) Management Contracting — management contractor holds all works-contractor appointments for a fee on top of works cost; design/construction overlap. (6) Partnering — a collaborative overlay (not a route in itself) applied to project or strategic (multi-project) relationships; negotiation replaces competitive tendering. (7) Public Private Partnerships (PPP/PFI) — long-term concession (typically 25–30 years) delivered through a Special Purpose Vehicle, often including life-cycle and soft FM services. Each route distributes risk, design responsibility, cost certainty and programme differently; none is universally ‘best’.
• Primary selection criteria: the RICS model prioritises the interplay of time, cost (price certainty) and performance (quality), assessed against the client’s attitude to risk. Supporting criteria include: design control and the desired level of client involvement; client experience and in-house resource; project size, complexity and ‘novelty’ factor; site characteristics; market conditions, including contractor appetite, specialist availability and inflation; whole-life (capital versus operational) cost; and any statutory, funding or accountability obligations. A best-fit solution should be identified, not the most obvious one.
• Design and Build — fitness for purpose and Employer’s Requirements: a D&B contractor may carry a fitness-for-purpose obligation (a significantly higher duty than the ‘reasonable skill and care’ standard applicable to a designer under a traditional route). Many standard D&B forms expressly exclude fitness-for-purpose, so the contract wording must be checked. The Employer’s Requirements (ERs) document is the load-bearing control — it must be clear, complete and unambiguous, and the contract should state that the ERs prevail over the Contractor’s Proposals in the event of discrepancy. Novation of the design team from client to contractor does not eliminate specification-erosion risk: the design team’s duty of care is transferred, creating a potential conflict of interest. Insurance cover for fitness-for-purpose must be verified (see RICS Risk, liability and insurance).
• Two-stage tendering: a widely-used variant (applicable to both Traditional and D&B) under which a preferred contractor is appointed at Stage 1 on preliminaries, overheads and profit (and sometimes key subcontract rates), allowing early contractor involvement in buildability and programming. At Stage 2 the subcontract and supply-chain packages are priced to agree the lump sum. The QS’s role at Stage 2 is critical: benchmarking returns, challenging unreasonable rates, and independently validating the final sum. Two-stage is appropriate when design is not complete enough for single-stage competition, programme pressure demands early contractor input, or the contractor market is constrained.
• Risk: identification, allocation and pricing. Risks should be categorised (typically strategic — e.g. planning, funding; external — political/economic/legislative change; project — cost or programme overrun; and discovery — ground conditions, asbestos) and allocated to the party best able to manage them. Risks that are transferred to the contractor attract a risk premium, which may be uneconomic relative to the probability and impact of the risk. The procurement route should be selected with a clear awareness of the likelihood and severity of risk events.
• Project Execution Plan (PEP): the PEP is the primary operational document that carries the procurement decision into delivery. It records the chosen route and underlying rationale, the methods for selecting design and construction teams, project control mechanisms, the time schedule, budget, lines of responsibility, handover and evaluation procedures, and identified risks. The PEP is normally prepared by the project manager but should be informed by, and reference, the QS’s procurement recommendation.
• Client statutory duties and accountability: clients have significant statutory responsibilities — notably under the Construction (Design and Management) Regulations 2015 and the Building Safety Act 2022 (and the wider in-scope regime for higher-risk buildings). The QS should make the client aware of these duties and, where appropriate, help ensure they are discharged. Public sector procurement must comply with the Procurement Act 2023 (effective February 2025), including transparency, supplier registration via Find a Tender, contract pipeline publication and the debarment register. Sector schemes such as NHS Procure 23 may also apply. Value management techniques, whole-life cost assessment and sustainability considerations (particularly for public sector works) should inform the procurement strategy.
• Contract form is a downstream decision: NEC4 and JCT 2024 are the two principal standard form families used in England & Wales (JCT dominant on building, NEC prevalent on infrastructure and public sector). The contract form follows procurement-route selection but should be flagged in the recommendation so the client can seek legal advice. The QS’s recommendation should also identify the form family, any proposed bespoke amendments, and recommend legal review where amendments are material.