What Is Construction Procurement?
Construction procurement is the process by which an employer secures the services of a contractor to deliver a building project. It covers everything from how the design is developed and who is responsible for it, through to how the works are tendered, how the contract is structured and how risk is allocated between the parties. Getting the procurement route right is one of the most important decisions an employer, architect or developer will make, because it shapes the entire project from inception to completion.
In the UK, there are several well-established procurement methods, each with distinct advantages and trade-offs. The choice of route affects programme, cost certainty, quality control, design responsibility and the level of risk the employer retains. There is no single best method. The right approach depends on the nature of the project, the employer’s priorities and the level of involvement they wish to have in the design and construction process.
This guide explains the four main procurement routes used in UK construction: traditional, design and build, management contracting and construction management. We examine how each method works in practice, where it is best suited and how it affects estimating, tendering and cost control. Whether you are an architect advising a client, a developer appraising a new scheme or a contractor preparing to tender, understanding these routes is essential to making informed decisions and delivering successful projects.
Traditional Procurement (Single-Stage and Two-Stage)
Traditional procurement, sometimes called the lump sum or design-bid-build route, is the most established method in UK construction. The defining feature is the separation of design and construction into two distinct phases. The employer appoints a design team, typically led by an architect and supported by engineers and a quantity surveyor, to develop the full design before the project is tendered to contractors. The contractor is appointed solely to build what has been designed, with no design responsibility beyond temporary works and any performance-specified elements.
In a single-stage traditional tender, the design is completed to a high level of detail and a bill of quantities or specification is prepared. Contractors price the work competitively, and the employer selects the preferred bidder based on price, programme and qualifications. The contract is usually a lump sum, and interim payments are made against measured valuations of work completed on site.
Two-stage traditional procurement follows the same principle but introduces the contractor earlier in the process. At the first stage, contractors compete on a limited scope of information, typically preliminaries and overheads, plus a set of rates. The preferred contractor is then appointed to work alongside the design team during the second stage, contributing buildability advice and pricing individual work packages as the design is finalised. This approach combines early contractor involvement with the employer’s design control.
Key Point: Traditional procurement gives the employer the greatest control over design quality and specification. It is best suited to projects where the design needs to be fully resolved before construction begins, such as heritage buildings, bespoke residential schemes or projects with complex planning conditions.
The main advantage of the traditional route is cost certainty. Because the design is substantially complete before tenders are invited, contractors are pricing against comprehensive information, which leads to more accurate and comparable bids. The employer’s quantity surveyor can benchmark prices and manage costs throughout the project using the bill of quantities as a reference point. The clear separation of roles also means that the employer retains direct contractual relationships with the design team, giving them control over design decisions and quality standards.
The principal disadvantage is programme length. Because design must be substantially complete before tendering, the overall project duration is typically longer than design and build. There is also a risk of adversarial relationships between the design team and contractor, particularly where design information is incomplete or ambiguous, leading to variations and disputes on site. Accurate cost planning from the outset is essential to avoid budget surprises at tender stage.
Design and Build
Design and build procurement places responsibility for both design and construction with a single contractor. The employer prepares a set of employer’s requirements, which defines the project brief, functional standards, site constraints and any key design parameters. Contractors then respond with their own proposals, setting out how they would design and deliver the project, along with a lump sum price. Once appointed, the design and build contractor takes on the obligation to complete the design and construct the works in accordance with the employer’s requirements.
This route has become increasingly popular in the UK, particularly for commercial developments, housing schemes and developer-led projects where programme speed and single-point responsibility are priorities. The employer deals with one organisation for both design and construction, which simplifies the contractual structure and provides a clear line of accountability if problems arise.
The employer’s requirements document is the cornerstone of a successful design and build project. It must be sufficiently detailed to define the employer’s expectations without being so prescriptive that it removes the contractor’s ability to develop efficient design solutions. Striking this balance requires careful thought from the employer’s professional team, particularly the architect and quantity surveyor. A poorly drafted brief can lead to a project that meets the minimum specification but falls short of the employer’s aspirations for quality and design.
Tip: If you are an employer considering design and build, invest time in developing a thorough employer’s requirements document. The more clearly you define your expectations for quality, performance and aesthetics, the less room there is for the contractor to value-engineer the design in ways you did not anticipate.
The advantages of design and build include a shorter overall programme, because design and construction can overlap. The lump sum price provides budget certainty, and the transfer of design risk to the contractor reduces the employer’s exposure to cost increases caused by design development or coordination issues. The contractor also has the incentive to find efficient construction methods, which can deliver cost savings.
The trade-off is reduced design control. Once the contractor is appointed, the employer has limited ability to influence detailed design decisions without triggering variations and additional cost. This can be a concern on projects where architectural quality, material specification or aesthetic standards are paramount. The employer should also be aware that the contractor’s design team works for the contractor, not the employer, so there can be a tension between design quality and commercial efficiency.
Management Contracting
Management contracting sits between traditional procurement and construction management. The employer appoints a management contractor early in the project, usually during the design phase. The management contractor does not carry out any of the physical construction work directly. Instead, they manage and coordinate the project, letting individual work packages to specialist subcontractors through competitive tender. The works contractors have a direct contract with the management contractor, not with the employer.
This route is well suited to large, complex projects where an early start on site is needed before the design is fully complete. Because work packages are tendered sequentially as the design develops, construction can begin on enabling works and substructure while upper floors and finishes are still being designed. This overlapping of design and construction phases can significantly reduce the overall programme compared to the traditional route.
The management contractor is typically paid a fee, calculated as a percentage of the total construction cost, plus the actual cost of the works packages. This means the employer does not receive a firm price for the project at the outset. The total cost only becomes clear as each work package is tendered and let. This lack of early cost certainty is the main disadvantage of the route. However, because each work package is competitively tendered, the employer benefits from market-tested prices for every element of the work.
Key Point: Management contracting requires a high level of trust between the employer and the management contractor. It works best when the management contractor is appointed on the basis of their track record, management capability and fee, rather than on a competitive lump sum price for the works.
The employer retains their own design team throughout the project, maintaining control over design quality and specification. The management contractor contributes buildability advice and programme input, helping the design team produce practical, buildable solutions. This collaborative approach can improve the quality of the finished building, particularly on technically demanding projects such as hospitals, laboratories or high-specification commercial offices.
The risks for the employer are the lack of a guaranteed maximum price and the reliance on the management contractor’s ability to coordinate multiple works packages effectively. If packages overrun or if there are interface problems between trades, the employer bears the additional cost. Robust commercial estimating and cost monitoring are essential to keep the project within budget.
Construction Management
Construction management is similar to management contracting in many respects, but with one critical difference: the trade contractors have a direct contract with the employer, not with the construction manager. The construction manager acts as the employer’s agent, coordinating and supervising the work of the trade contractors on the employer’s behalf. The construction manager is paid a fee for their services but does not take on contractual liability for the performance of the trade contractors.
This route is typically used on very large, fast-track projects where the employer has the expertise and resources to manage the additional contractual complexity. It is common in the commercial office, retail and infrastructure sectors, where experienced developers and their professional teams are comfortable managing multiple direct trade contracts simultaneously.
The advantages of construction management mirror those of management contracting: an early start on site, overlapping design and construction, competitive tendering of individual packages and the employer’s retention of design control. Because the employer contracts directly with each trade contractor, they also have greater transparency over costs and a direct contractual relationship with every party carrying out work on site.
The disadvantages are the higher level of risk retained by the employer and the administrative burden of managing numerous direct contracts. If a trade contractor defaults or causes delay, the employer must pursue remedies directly rather than relying on a main contractor to manage the problem. The employer also carries the risk of cost increases arising from design changes, programme delays and interface issues between trades. This route demands a sophisticated employer with a strong professional team, including experienced quantity surveyors and project managers.
Tip: Construction management is not recommended for inexperienced employers or projects with a tight fixed budget. It offers maximum flexibility and transparency but requires the employer to accept a higher level of financial and programme risk than other procurement routes.
How to Choose the Right Procurement Route
Selecting the right procurement method requires a careful assessment of the employer’s priorities, the nature of the project and the level of risk the employer is prepared to accept. There is no universal answer, but there are key factors that should guide the decision.
Cost certainty: If the employer needs a firm price before committing to the project, traditional procurement or design and build are the strongest options. Both provide a lump sum contract price, although design and build achieves this earlier in the programme because the contractor prices the work based on the employer’s requirements rather than a fully developed design.
Programme speed: If time is the overriding priority, design and build, management contracting or construction management allow design and construction to overlap, reducing the overall programme. Traditional procurement requires the design to be substantially complete before construction begins, which extends the timeline.
Design quality and control: Employers who place a high value on design quality and wish to retain control over specification and detailing should consider the traditional route or construction management, where the design team works for the employer throughout the project. Design and build transfers design responsibility to the contractor, which can compromise detailed design quality if the employer’s requirements are not sufficiently robust.
Risk allocation: Traditional procurement and design and build provide clearer risk allocation. In traditional, the employer carries design risk and the contractor carries construction risk. In design and build, the contractor carries both. Management routes leave significantly more risk with the employer, particularly around cost and programme.
Project complexity: Complex projects with specialist requirements, such as healthcare facilities, listed buildings or projects with significant services installations, often benefit from the traditional route or management contracting, where the employer’s design team can develop detailed, coordinated designs before or alongside construction.
An experienced architect or quantity surveyor can advise on the most appropriate procurement route for a given project. Our procurement services team can also help employers evaluate their options and develop a strategy that balances cost, time, quality and risk.
How Procurement Affects Your Estimate
The choice of procurement route has a direct and significant impact on how a project is estimated, tendered and priced. Understanding this relationship is essential for anyone involved in preparing or reviewing construction cost information.
In traditional procurement, the estimate is built up from a detailed bill of quantities or measured specification. Every element of the work is quantified and priced individually, producing a comprehensive cost breakdown that can be used for tender comparison, interim valuations and final account preparation. This method produces the most detailed and transparent cost information, but it requires the design to be substantially complete before the estimate can be finalised.
In design and build, the estimate is typically prepared as a lump sum based on the employer’s requirements. The level of detail depends on how prescriptive the brief is. A well-developed brief allows for a more accurate estimate, while a loose brief introduces a wider range of pricing assumptions and contingencies. Contractors tendering for design and build work must also price the design element, which adds a layer of risk and cost that does not exist in the traditional route.
Management routes require estimates to be prepared for individual work packages as the design develops. This sequential approach means that the overall project cost is built up incrementally, with each package tendered against the latest design information. While this can produce competitive prices for each element, it makes it more difficult to fix a total budget at the outset. Early-stage cost planning is critical to establish a realistic budget and monitor costs as packages are let.
Key Point: Regardless of the procurement route, the quality of the estimate depends on the quality of the information available. Incomplete drawings, vague specifications and unresolved design details introduce uncertainty and risk into the pricing. Investing in thorough design development and professional estimating support pays dividends in more accurate tenders and fewer surprises on site.
For contractors, the procurement route also determines how tender pricing is approached. A traditional bill of quantities requires line-by-line pricing against measured items, while a design and build tender requires a more holistic approach, pricing against a brief and developing proposals that demonstrate value. Understanding the expectations of each route allows contractors to present their most competitive and compelling submissions.
Getting Professional Support
Choosing the right procurement route and preparing accurate cost information are two of the most consequential decisions in any construction project. They determine how much the project will cost, how long it will take and how effectively risk is managed between the parties. These are not decisions to be taken lightly or based on habit.
At First4Estimating, we work with architects, developers, contractors and construction professionals across the UK to provide detailed, reliable estimates tailored to the specific procurement route being used. Whether you need a full bill of quantities for a traditional tender, a lump sum estimate for a design and build submission, or package-by-package cost plans for a management contract, our qualified Quantity Surveyors can deliver the cost information you need to make informed decisions.
Our procurement services support employers and their advisers in evaluating procurement options, preparing tender documentation and managing the cost and commercial aspects of the project from inception through to completion. We also provide commercial estimating services for contractors tendering across all procurement routes, helping you present accurate, competitive and professionally documented submissions.
If you are planning a project and need advice on which procurement route is right for your circumstances, or if you need professional estimating support for an upcoming tender, get in touch with our team. We are here to help you navigate the complexities of construction procurement and deliver your project with confidence.