Construction sector urged to prioritise strategic procurement decisions to improve project outcomes

The construction sector has spent years championing collaboration, early contractor involvement and better risk management, yet many schemes are still being brought to market before the basics have been properly settled. In practice, that means contractors are often asked to price uncertainty rather than a clearly defined project, a habit that can inflate bids, narrow competition and make delivery harder from the outset.

That warning emerged strongly from a recent Constructing ...

Excellence Hampshire discussion, where contractors, consultants, developers, legal advisers and public sector clients examined why procurement continues to frustrate even well-intentioned projects. The broad conclusion was blunt: getting the procurement route wrong, or deciding on it too late, can undermine a scheme long before work begins.

The underlying problem is not a shortage of ambition to build. It is that too many projects reach the market with incomplete design information, unresolved risks and procurement timetables that force bidders to guess at outcomes. Rider Levett Bucknall’s recent procurement trends research suggests contractors are becoming more selective in response, with many unwilling to pursue work where risk has been poorly defined or pushed too far down the chain. That may protect margins for individual firms, but it also reduces competition and can leave clients paying more.

This reflects a persistent flaw in the sector’s approach to risk. Contractors are frequently asked to absorb uncertainties rooted in planning, design development, funding approvals or regulatory conditions, even where they have little control over them. The result is predictable: those risks are either loaded into tender prices or they deter capable firms from bidding at all.

The discussion in Hampshire also highlighted a growing frustration with two-stage procurement. For complex projects, it remains widely regarded as one of the more sensible routes because it allows early involvement and more informed decision-making. But practitioners say it is increasingly being stretched beyond its useful purpose. Projects can drift through repeated market testing without reaching commitment, while budgets and assumptions become stale by the time second-stage prices are agreed.

Research supports that concern. A study published in the International Journal of Construction Management found that early participation, continuous engagement and open dialogue between clients, contractors and consultants led to more robust risk management. But it also showed that cost variations still affected many projects, regardless of the procurement route, underlining the limits of process alone when decisions remain unresolved for too long.

Other academic work has been equally clear that conventional design-bid-build approaches often foster adversarial behaviour and poor outcomes, even though collaborative methods are not a cure-all. An exploratory study on collaborative procurement noted that the construction industry has increasingly recognised the appeal of working more openly, but also that the practical barriers are often underestimated. Clear leadership, agreed operating rules and reliable information-sharing systems all matter if collaboration is to be more than a slogan.

That point was echoed in a separate discussion of collaborative delivery models, which argued that projects perform best when the rules of engagement are established early and when teams have a proper mechanism for sharing accurate information. In other words, collaboration cannot be added later as a remedy for a procurement structure that was flawed from the start.

Integrated delivery models are often presented as part of the answer. A Norwegian case study on integrated project delivery found that stronger trust and shared ownership improved buildability and reduced surprises during construction. Likewise, progressive design-build arrangements have gained attention for bringing designers and contractors together earlier. But these models bring their own difficulties, particularly for public sector clients who must satisfy governance, value-for-money and procurement rules while still preserving flexibility and genuine engagement.

That tension matters. Public clients often have to justify every decision through multiple layers of scrutiny, which can make the lowest price appear the safest choice even when it is not the best route to certainty or long-term value. Yet price-led procurement can simply defer the problem, only for it to reappear later through variation, delay or redesign.

The broader message from the Hampshire roundtable was that procurement should be treated as a strategic decision, not an administrative formality. It shapes the quality of collaboration, the distribution of risk, the credibility of the programme and the eventual cost of delivery. In a market defined by tighter budgets, more regulation and limited specialist capacity, the sector can no longer afford to default to whatever route is most familiar.

The projects most likely to succeed will be those where clients choose the procurement path to suit the scheme, not the other way round. That means resolving key issues earlier, pricing what is actually known and bringing the right people into the conversation soon enough to shape the answer, rather than merely to quote for the uncertainty.

Source: Noah Wire Services