SELECTING THE RIGHT ACQUISITION STRATEGY: Understanding Procurement
Selecting the right procurement method is an important task for successful project execution. The method used can have significant impact on the project schedule and customer labor resources. When selections are made with consideration to project complexity, risks and potential cost savings, the likelihood of a project’s success increases.
There are procurement choices for both design and construction processes that are based on the needs and complexity of each project. Description of the various procurement approaches along with the best project fits are described below:
· Designer and Construction Contractor Alternatives. Both design and construction execution can occur through in-house capability, open solicitation to the design/construction community or a short-list solicitation from a list of pre-selected firms on an existing contract.
o In-House capability is when primary designer support is provided by the customer. This alternative is ideal for customer agencies with experienced in-house designers and a moderate existing workload.
o Open solicitation is when a project is solicited to a broad community to determine the best qualified candidate. Open solicitations can range from at-large companies to small business set-asides or a combination of both. This alternative is ideal for projects requiring specialized or complex expertise.
o A short-list solicitation is when a project is solicited to a smaller community, usually from a list of pre-selected firms on an existing 1-4 year contract. This alternative is ideal when shorter procurement timeframes are desired.
Procurement Approach Alternatives. Two of the most common procurement approaches used are Low Price Technically Acceptable (LPTA) and Best Value.
o The low price approach allows an award to be made to the lowest bidding contractor who meets basic technical requirements. This alternative is ideal for less complex projects with budget constraints and typically have shorter procurement timeframes.
o Best Value allows an award to be made to the contractor who provides the best value in both cost and technical expertise. This alternative is ideal for more specialized or complex projects and typically have longer procurement timeframes.
· Design Type. Two common design types are Design-Build and Design-Bid-Build (or full plans and specification) projects.
o The Design-Build process enables the selected construction contractor to have full responsibility for developing the project design. Design development typically takes place through a subcontracting design firm entity under the construction contractor. A performance based scope is provided to the construction contractor to bid from. The performance based scope is usually developed by either the customer or an independent Architectural-Engineering (A-E) firm.
The Design-Build approach increases liability to the contractor and decreases liability from the customer. It also allows for increased synergy and efficiencies between the designer and construction contractor. It is ideal for projects with budget constraints and for agencies with limited capability for internal project oversight. When executed well, the Design-Build approach can also result in shorter procurement and construction timeframes.
o The Design-Bid-Build (full plans and specification) process is when a designer is selected to develop a full plans and specification package. The design package is awarded to a construction contractor to build from.
The Design-Bid-Build approach usually decreases liability from the contractor and increases liability to the customer. More management oversight is usually needed to ensure the right synergy and efficiencies exist between the designer and construction contractor. It is ideal for highly specialized projects or customers with highly prescribed requirements. The Design-Bid-Build approach is typically longer in duration in comparison to Design-Build.
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