Procurement Pathways: Pros & Cons

1. Quotation

This procurement process is one of the most common ways to procure the materials and resources required to complete smaller and less complex projects. It is a fixed price offer that a vendor gives for the supply of goods or services. This process is streamlined and straightforward as the vendor and supplier are connected directly. Quotation typically deals with specialists for each requirement, and there is no third party involved in the process. 

Pros and Cons of a Quotation Process: 

Pros: 

You can expect quick input from the market as multiple quotes (or rates) are provided by different competing companies. This also helps determine the market value of your project.

Also, there is generally clear and concise communication of the project’s exact requirements. Finally, as fewer professionals are involved, the decision-making process is quicker, which delivers a faster project completion timeline. 

Cons: 

As with any process, the ‘Quotation’ process can also have its downsides. 

A lack of commercial experience and knowledge in construction could mean you request the wrong specifications on a project. In this case the quotes that you receive from the market are ‘as requested’, but you could end up with the wrong product that doesn’t suit your needs properly. You also need to be able to ensure that all quotes are for exactly the same thing and you are truly comparing ‘apples for apples’ 

2. Tender

Another popular procurement strategy is ‘Tendering’. The school or commercial institution advertises its specific requirements as an open request to the market for prospective suppliers to offer their services in the form of bidding. The submissions are then compared, and the client chooses from all the prospective sellers based on budget, availability, and quality of their services. 

Pros and Cons of a ‘Tender’ Process: 

Pros

The major pro of this procurement process is that it assesses the market value and gives you a good opportunity for quality, ensuring a better result with the project and reduces the risks of using a contractor who overcharges or is underqualified. 

Once the winning tender is chosen, you have a single point of contact, and as a sole contractor is responsible, there is less chance of conflict and decisions can be made quickly. This helps to ensure an early project start and give you a fixed cost commitment as the successful tenderer is responsible for cost overruns etc. The competitive selection of the service provider also ensures a good level of accountability.

Cons:

However, this procurement strategy also has its disadvantages. As this process involves more professionals and external parties to come to a decision, the overall project time frame is often longer. It also limits the participation of the suppliers when it comes to decisions in technical specifications and the overall design of the project. Often the design is first tendered out to architects, and then the construction is tendered out to builders. This can lead to a disconnect between the architect’s idea and the actual buildability of the project. Including a builder right from the start can ensure that any design is definitely within budget and able to be built.

3. Single Select

Single Select is the process of selecting a trustworthy second party for completing the procurement process on behalf of the first party. In this process, pre-approved contractors who have a good history of fair business dealings and possess a good reputation in the market are approached and contracted for the project. 

Pros and Cons of a ‘Single Select’ Process: 

Pros:

The main advantage of this type of procurement plan is that you can quickly select and rely on a tried and tested supplier to complete your project requirements to your satisfaction. 

This approach entails collaborating with pre-approved contractors. Additionally, this method benefits from a trusted ‘Design & Construct’ resource and offers better risk management of the project undertaken.

Cons:   

The most significant disadvantage of this approach is that there is high dependence on one contractor, so all the risk associated with the project is placed on that one particular entity. 

You must also have clear expectations of what the finished project will look like before it starts. If you aren’t on the same page as the contractor when you begin, they may proceed as they think best, and you could end up dissatisfied due to misalignment in the expected outcome.

4. D&C (Design & Construct) Partner

Sometimes also referred to as ‘Design and Build’, Design and Construct is a procurement path where a single entity coordinates the project, from the initial design concept right through to the last temporary fence panel being taken away.

Design and Construct is especially beneficial for specialist trades, such as shade and shelter construction, as it engages the most experienced people in the design process ensuring the outcome hits both your budget and aesthetic.

With a trusted and experienced Design and Construct partner, this procurement path is the easiest way to balance the often conflicting aspects of a project: time, cost, and quality.

Pros and Cons of a ‘D&C’ Process: 

Pros:

Compared to other procurement pathways, Design and Construct offers a very streamlined process from start to finish. The ideal D&C partner will work with you on each step to deliver your ideal project. The right partner will have experience in the niche industry and have access to reliable contractors with expertise in this type of construction. Another benefit of having experience in this niche industry is the cost savings through economies of scale  – your D&C partner will have access to the best value materials and resources.

Cons:

The main disadvantage of this process is the trust and risk of relying entirely on one service provider. Before engaging a Design and Construct partner, you need to be clear on the outcome you want to achieve and carefully make an informed decision to ensure the proper delivery of services. This includes ensuring that your chosen D&C partner has the qualifications, licences and insurance required for the type of project and specific site conditions.

5. Architect / Builder / Consultant / Project Manager / Subcontractor

This procurement method involves appointing professionals at each step of the project for their specific contributions and requirements on the project. The client awards each contract to the respective supplier, and they use their expertise to complete the project. This procurement method relies on multiple third parties and, whilst time-consuming, can offer a fantastic outcome if done right. 

Pros and Cons of “Architect / Builder / Consultant / Project Manager / Subcontractor” Process: 

Pros:

The main advantage of this procurement method is that each of these suppliers can be an expert in their niche. If done correctly and successfully, the result is always of exceptional quality and workmanship.

Another pro could be that you don’t put all your eggs in one basket – you have more than one contractor on the job, so more than one set of eyes on the project. 

Cons:

The three main downsides to this type of procurement are the time and cost wasted throughout.

The wasted time usually comes at each ‘handover’ point – at each step of the way, you need to procure the next contractor/supplier. This involves new contracts and inclusions/exclusions to be agreed to. So the wasted money is often in fees for each contractor/supplier – plus the extended timelines, which also increase the project’s cost.

Lastly, communication can break down. There are many people involved in each step of the process, from consultant to architect to project manager to  subcontractor. As a result, the line of communication can easily be confused and result in unnecessary frustrations.