Construction project procurement routes: an in‐depth critique

TLDR

The UK construction industry provides the contextual backdrop for this study. The paper examines categories of building project procurement routes across organisational, contractual, financial, and technical dimensions. The authors review literature and analyse RICS Contracts in Use survey data (1985‑2004) to assess the share and value of contracts across procurement routes and contract conditions in the UK. The analysis finds that traditional procurement routes dominate the UK market, with contract conditions tailored to each route to enhance performance, reduce risk, and improve compensation, offering stakeholders a framework to differentiate routes and inform private and public procurement strategies.

Abstract

Purpose The purpose of this paper is to examine different categories of building project procurement routes based on organisational, contractual, financial and technical issues. Design/methodology/approach The paper is based on review of literature and conditions of contracts. The UK construction industry serves as a general frame of reference. The Royal Institution of Chartered Surveyors survey of Contracts in Use from 1985 to 2004 is used to probe the share and value of contracts along different procurement routes and across different conditions of contracts in the UK. The logic is that the value and the share of contracts will indicate the behaviour of different procurement routes in the UK construction market while the in‐depth analysis of conditions of contracts will show the gaps and relationships between the general definition/categorisation and contractual context (conditions of contracts) of each of the procurement routes. Findings The preliminary result of the analysis shows that traditional routes remain the main type of procurement route for the construction project industry sector, within which different management and incentivisation systems are applied for greater efficiency. The conditions of contracts in the UK support this assertion by aligning different procurement routes to different conditions of contracts and additionally specifying different forms of agreements, special provisions and incentivisation in order to increase performance, reduce risks and improve compensation methods. Research limitations/implications The study can serve as a learning opportunity for construction project stakeholders internationally, and clients in particular, to differentiate between procurement routes, management‐oriented systems, relational contracting and incentivisation. Originality/value The research provides an original assessment of construction procurement which can be used as intervening tool in different levels of private and public procurement strategies.