Your Simple Guide To Self-Build Procurement Routes

 

There are two main self-build procurement routes; negotiated contract and tendering. In this post we explain what each route involves, and the pros and cons of both.

1.     The First Self-Build Procurement Route – Negotiated contract

The first self-build procurement route is a negotiated contract. This involves a builder at the earliest opportunity and enables them to contribute expertise to the construction methodology as the detailed construction package is developed. He can also provide current market costings during the process.

Once planning permission is granted and the construction package is underway, a preferred contractor is chosen.

As stages of the construction package are completed they can be reviewed with the builder so he can fully familiarise himself with the project and discuss preferred construction methods with the design team.

When the builder provides costs for the work we evaluate these against current market rates. It is in the interest of all parties that the costs are fair and not skewed by misunderstanding.

Once the construction package is complete a final fixed price can be agreed with the builder and a construction contract prepared.

Pros:
  • Engages a preferred builder earlier into the design and costing process
  • Allows time for rigorous value engineering
  • More likely to lead to a collaborative working relationship between all parties
Cons:
  • Less familiar to clients as a procurement process
  • Requires expert impartial costs analysis & negotiation to ensure fair market rates; skills which most self-builders will not have

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2.    The Second Self-Build Procurement Route – Tendering

Tendering requires the preparation of a comprehensive construction and tender pack, extending an invitation to tender to selected builders, circulating tender documents, evaluating tender submissions and making a recommendation for the most appropriate builder to use.

The tendering process can only start once the construction and tendering packs are complete.

Once tender packs are circulated tendering parties make enquires to clarify aspects they may not fully understand. They are normally given between 4 to 6 weeks to submit tenders.

Once tenders are received we evaluate them and provide the client with a advice as to which is the most suitable.

Pros:
  • More conventional approach and more widely understood
  • Maintains a degree of competitiveness for tendering parties
  • May hit the market when a suitable contractor can accommodate the work and be willing to do it at a keen price
Cons:
  • Tender documents need to be watertight to prevent misinterpretation of the requirements
  • Requires analysis of tenders to ensure proper comparison
  • Requires 2 months after issuing the tender pack to get tenders returned and evaluated
  • Tender prices that look too good to be true often are

These clients chose the negotiated contract route over the tendering process

This client chose the negotiated contract route particularly because of the value engineering process which saved them many tens of thousands of pounds when compared with a more conventional tendering process.

Open plan living and dining area showing high ceilings with oak frame beams
Living area showing exposed oak frame beams in drawing

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