3 Which procurement method?

Key
1 Appraisal and strategic briefing by consultants and contractor
2 Outline and detailed proposals
3 Appointment of contractor and agreement on trade or works appointments
4 Final proposals and production information (continuing process)
5 Mobilisation
6 Production information and coordination of works packages
7 Tender action and adjustments (continuing process)
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8 Construction to practical completion

9 Administration of the contract after completion and assisting building used with initial occupation and review of
project performance in use

Contractual relationships
The pattern of contractual and functional relationships shifts or changes according
to the procurement method adopted.
Figure 3·4: Contractual relationships: traditional procurement
Collateral agreement / warranty

Client

Collateral
agreement/
Contract for warranty
services

Client selected Client selected

sub-contractors suppliers
Building
contract

Consultants

Contractor

Domestic
sub-contractors
suppliers

In the traditional approach, the client is in direct contractual relationship with the
consultants on the one hand and the contractor on the other. Any contractual

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 Which procurement method? 3

links for sub-contracts or sales contracts will be between the contractor and the
firms in question. The consultants have no contractual link with the contractor, but
the Architect or another consultant may be named in the building contract as the
‘contract administrator’. Where the client selects any sub-contractor’s or suppliers, it
may be advisable to recommend collateral agreements to protect the client’s interests,
particularly in respect of matters which might lie outside the contractor’s responsibilities.
Figure 3·5: Contractual relationships: design and build procurement
Licensed copy from CIS: college1, , 02/01/2013, Uncontrolled Copy.

Contract Consultants
Contract for
services

Contract for
services

Design
Agent
and build
contract

Consultants

Sub-contractors
Contractor
suppliers
(consultant switch)

Contract for services

Consultants

With design and build, it is likely that in the absence of in-house professional staff,
the client will wish to engage outside consultants to advise on the preparation of
requirements and to evaluate and select tenders, etc. Often one or more of these
consultants will switch from being appointed by the client to being appointed by
the contractor at the time the contractor is engaged. The main contractual link is
between the client and the contractor and even the client’s agent or representative
has only a limited role. The contractor might also have a contractual link with his
own design consultants, and with sub-contractors and suppliers. As the contractor is
wholly responsible for their performance, both in terms of design and construction,
there might be less need for collateral agreements between them and the client.

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 3 Which procurement method?

Figure 3·6: Contractual relationships: management procurement –

management contracting

Collateral agreements

Client
Licensed copy from CIS: college1, , 02/01/2013, Uncontrolled Copy.

Contract for
services

Works
contractors
Management
contract

Works
contract
Consultants

Management
contractor

Nominated/
Sub-contractors
domestic suppliers

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 Which procurement method? 3

Figure 3·7: Contractual relationships: management procurement –

construction management

Trade contracts

Client
Licensed copy from CIS: college1, , 02/01/2013, Uncontrolled Copy.

Contract for
services

Trade
contractors
Contract for
services

Consultants

Construction
manager

Named/domestic
Sub-contractors
suppliers

The contractual relationship in a management contract is between the client and

the management contractor, with all works contractors in direct relationship with
the latter. It may also be desirable to establish a contractual relationship between
the client and each works contractor by means of a collateral agreement. In
construction management the contractual relationship is between the client and the
construction manager, with all trades contractors in direct relationship with the former.
Assessing the risks
In every building contract there is some degree of risk. People may be injured or
property damaged. This category of risk, often referred to as pure and particular risk,
is usually covered by the appropriate insurance. Contract conditions often make it

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