COBRA AUBEA 2015

Sydney, Australia
8 10 July 2015

RICS COBRA AUBEA 2015

The Construction, Building and Real Estate Research Conference
of the Royal Institution of Chartered Surveyors
The Australasian Universities Building Educators Association
Conference

Held in Sydney, Australia in association with AUBEA, the University

of Technology Sydney and University of Western Sydney

8 -10 July 2015

RICS 2015

ISBN: 978-1-78321-071-8

Royal Institution of Chartered Surveyors

Parliament Square
London
SW1P 3AD
United Kingdom

www.rics.org/cobra

The papers in this proceeding are intended for knowledge sharing, stimulate debate, and
research findings only. This publication does not necessarily represent the views of RICS,
AUBEA, UTS or UWS.

A THEORETICAL FRAMEWORK
PROCUREMENT ROUTES

FOR

SELECTING

BUILDING

Samuel Appiah1, Andrew Knight2, Chris Coffey3, and Roy Morledge4

1- 4

School of Architecture, Design and the Built Environment, Nottingham Trent University, Burton
Street, Nottingham, NG1 4BU, UK

ABSTRACT
There has been an increase in procurement options in the UK and each of the available
options has its own intrinsic strengths and weaknesses. Failure to select an appropriate
option can impact negatively on the achievement of the project objectives. It has been
recognised that the way in which many clients and their advisors select a procurement
route for their projects can be unstructured, ill-timed and subjective. A theoretical
framework aimed at the development of an electronic system for guiding clients in the
selection of an appropriate building procurement option is presented. An exploratory
research approach using a qualitative survey was adopted for the study. A total of 28
semi-structured interviews were conducted with industry professionals, academics and
procurement experts to enable the exploration of procurement selection practices
commonly adopted in the UK. All the interviews were audio-recorded and transcribed
verbatim. The data were then analysed using content analysis. The findings confirm
the need for a holistic approach in choosing a procurement route. They also establish
the basis for the theoretical framework upon which an electronic system will be
developed and can then be tested. The framework will enable a systematic appraisal of
all the available procurement options before making a final choice.

Keywords: construction clients, decision making, procurement, selection, techniques.

INTRODUCTION
Selecting an inappropriate procurement approach is often regarded as one of the
primary causes of project failure in the construction industry (Morledge, 2006). There
has been an increase in procurement options in the UK over the past few decades and
each of the available options has its own strengths and weaknesses, which make it
more appropriate under certain specific circumstances. Selecting a wrong procurement
route can therefore have a significant effect on the project outcome.
To assist with the procurement decision-making process, several techniques have been
developed by researchers in the past. However, Hardcastle & Tookey (1998) reveal
that the function of procurement together with the selection of optimum procurement
systems remains contentious and fraught with difficulty for both clients and
contractors within the industry. Similarly, Cox and Townsend (1998: 32) declare that
'there has been no theoretical framework on which to derive either an ideal or
optimum approach to procurement, only a reactive evolution of modulus operandi.
Moreover, Murdoch & Hughes (2008) have indicated that current literature provides
little guidance in choosing from among all the procurement variables and combining
1
2

samuel.appiah@ntu.ac.uk; 3chris.coffey@ntu.ac.uk; 4roy.morledge@ntu.ac.uk

andrew.knight@ntu.ac.uk

them in the best way for a given project. This paper therefore examines how UK
clients and their advisors select procurement options for their building projects and
provides a theoretical framework aimed at the development of an electronic system for
guiding the procurement selection process.

LITERATURE REVIEW
Selecting an appropriate Procurement Route
The proliferation of procurement methods in the industry tends to create significant
problems of understanding the circumstances suitable for each approach. However, to
adopt a single procurement approach for all projects is to ignore the differing inherent
characteristics that exist in clients, projects and consultants (Hibberd, 1991). A
procurement route has been defined as an organisational structure that assigns specific
responsibilities and authorities to individuals and organisations, and defines the
relationship between the various elements of construction projects (Oyegoke et al.,
2009). The selection of a procurement approach is therefore more than simply
deciding on how the various parties involved in a project will be appointed. It affects
the allocation of risk, the design strategy, as well as, the way in which the client and
the various design consultants, contractors and suppliers work together as a team.
Morledge and Smith (2013) indicate that procurement selection, particularly those
involving multiple stakeholders, is a difficult and complicated process dependent upon
the interaction of many variables and incorporating a high degree of subjectivity and
in many cases intuitive judgement. This situation has led to a demand for systematic
and objective methods for selecting appropriate procurement routes.
Existing Procurement Selection Models, Tools and Techniques
Among the available procurement selection models, one of the earliest is the National
Economic Development Office's (NEDO, 1985) procurement path decision chart. This
chart relates the characteristics of four procurement routes to a list of nine client's
priorities framed as questions. The NEDO chart was later modified by Skitmore &
Marsden (1988) using utility factors to relate the procurement routes to the selection
criteria. Bennett and Grice (1990) then developed the utility model further, by
combining information from NEDO's (1985) decision chart and Skitmore and
Marsden's (1988) model.
Alhazmi and McCaffer (2000) propose a model, which integrates the techniques of the
analytical hierarchy process and Parkers judging alternative technique of value
engineering into a multi-screening system. Similarly, Al-Tabtabi (2002) provides a
model using an analytical hierarchy process. Morledge and Smith (2013) present a
checklist to assist with the decision process. However, it has been argued that the
available models are deficient, as they ignore an array of factors, are limited in the
options available for consideration, and are not user-friendly (Alhazmi and McCaffer,
2000; Love et al., 2008).
RESEARCH METHOD
It was identified through literature review that very little research has been carried out
in the UK construction industry to examine the procurement selection process. An
exploratory research approach using qualitative survey was therefore adopted in order
to gain an in-depth understanding of the way clients and their advisors select a

procurement route for their building projects. By adopting this approach, the aim was
to achieve more depth rather than a broad understanding of superficial issues.
The research was conducted with semi-structured interviews. Purposive sampling
strategy was employed to select 6 building projects from different parts of UK,
including Residential, Educational, Leisure, Commercial, Retail, and Industrial
projects. Two criteria were used in selecting the projects. First, the project has to be
recently completed, or at the end of the design stage, in order to ensure participants
can have a clear recollection of their experience. Secondly, the project should be
professionally managed with all the key professionals (Architect, Civil/Structural
Engineer, and Quantity Surveyor) involved. A total of 18 professionals (up to four
participants per project) who could comment on the procurement decision were
interviewed. In addition, 10 procurement experts were interviewed. All the interviews
were audio-recorded and transcribed verbatim.
DISCUSSION OF RESEARCH FINDINGS
The interview data were analysed using qualitative content analysis. This involved
reading all the data repeatedly to achieve immersion and obtain a sense of the whole, a
detailed review to derive codes and categories or themes, and organising the relevant
data under the emergent themes (Hsieh & Shannon, 2005). Three main themes
emerged from the data, including procurement routes in current use, factors
influencing procurement selection, and procurement selection process. A selection of
the issues identified under these themes are now discussed.
Timing of the Procurement Decision
Most of the participants agreed that the procurement decision should be made at the
early stages of the project life. Lathams Report (1994) points out that the basic
decision on the procurement route should precede the preparation of the outline
(project) brief, since it necessarily affects who shall assist with the design brief as
well. However, a few participants expressed an opposing view that choosing the
procurement route too early could be counterproductive. One of them stated that:
you need to get to the end of stage C at least before you can start thinking about the
best way to procure it... I dont think theres any point in thinking about how to
procure something or deciding how youre going to procure something before you
know what it is you are procuring
This view is very important because if a client is constructing a prefabricated building,
the procurement approach will be completely different to the approach for procuring a
building made of glass or brickwork.
Client Experience
It was observed that the way in which clients approach the procurement decision
varies significantly depending on their level of experience in dealing with the
construction industry. On one hand, you have the highly experienced and confident
clients who have their own internal procurement systems that align with their
processes, forms, organisational culture, etc. On the other hand, there are the
inexperienced clients who are totally reliant on external advisors. This is consistent
with Mastermans (1994) observation that inexperienced and partially experienced
clients involve more interested parties in their procurement selection processes. In

2008, it was revealed that at any one time about 95% of the industrys customers are
one-off or occasional clients. By their nature, they have little or no experience of
working with the construction industry, (House of Commons Business and Enterprise
Committee, 2008:20). This suggests that majority of building clients in the UK depend
on professional consultants and other external advisors in making their procurement
decisions.
Procurement Choice by Client Advisors
It was observed that the professional advisors base their procurement decisions on
experience, intuition, and an appraisal of available procurement options. The
experienced consultants tend to advise their clients based on intuition and experience
on past projects. For instance, one experienced architect stated that:
a lot of it is based on experience and instinct, weve done a lot of projects, not just
hundreds but weve been going for 15 years and projects are projects they dont vary
much.
In addition, it was noted that although the practitioners know about the available
procurement routes, they only use a few of them and therefore lack working
knowledge in many procurement options. Typical participant comments relating to
this observation include:
well we are familiar with them but we never use them you know things like
management contracts, negotiated contracts you know theres various arent there.
But we only ever use traditional or D&B.
In an ideal world wed always propose a traditional route, you know for control and
quality reasons
These two comments seem to explain a key finding by the RICS Contract in Use
Survey (2010) that approximately 90 percent of surveyed projects by number were
delivered using traditional and design & build routes. Moreover, a recent NBS
Contracts and Law survey (2013) involving over 1000 participants reveals that 83 per
cent of the respondents most frequently use either traditional or design and build.
The above comments also highlight a potential issue of bias with procurement
selection in practice. Architects are more likely to advise their clients to adopt
traditional for quality and control reasons, whilst quantity surveyors are likely to
choose design and build, unless there is a very compelling reason not to do so. For
instance, two quantity surveyors commented as:
I would say that [design and build] would be the preferred procurement option in this
office. It is the one that we feel most comfortable with and the one that we think gives
the best value to the client.
generally, I would say my preferred method of procurement is design and build but
taken to a stage or design that is quite well defined and specified.
Where the client is very reliant on the professional advisors, the decision could easily
be swayed by the lead advisors favourite procurement route. Kahneman et al, (2011)
highlights various cognitive biases that could distort key decisions, including selfinterest bias and confirmation bias. Self-interest bias can be errors driven by the selfinterest of the recommending individual, whilst confirmation bias happens when the
decision maker looks for information that supports their existing beliefs, and reject
data that go against what they believe. As procurement choice can have a significant

effect on the level of success achieved by the project, it is very important to ensure
that the decision is devoid of any form of psychological bias.
Procurement Selection Criteria
Some commentators on procurement seem to place a lot of emphasis on basing
procurement choice on time, cost and quality (Aqua Group, 2007). The Aqua Group
(2007:21) maintains that irrespective of however complex modern construction
projects may be, they are all based on the comparatively simple principles cost,
quality and time, known as the procurement triangle. However, the findings of this
study suggest that basing procurement selection on these factors alone could result in
flawed decisions. In contrast to the procurement triangle model, many of the expert
participants believe procurement selection involves several factors. The decision
process is similar to the business strategy approach, as indicated by this participant:
The overall approach, to me, is a business strategy approach. So you explore the
environment, which is talking to the client, looking at the project particulars,
environmental issues, stakeholders In terms of the client, what I try to do is to
understand why he wants this particular built asset.
Another participant argued that:

I think you've got to look at what your client's business? What is the core business?
And what does the construction do to support that core business?
Holistic Approach to Procurement Selection
In line with the business strategy process, it is suggested that procurement selection
should be based on a systematic and holistic approach in order to ensure all the
relevant factors that are most important to the client have been identified and
considered in the decision. As indicated by Morledge and Smith (2013), procurement
selection is a difficult and complicated process dependent upon the interaction of
many variables. Client advisors therefore need to adopt a holistic approach to reduce
the risk of choosing inappropriate procurement routes.
A THEORETICAL FRAMEWORK FOR PROCUREMENT SELECTION
Although several procurement selection models have been developed in the UK, no
evidence of a commonly accepted decision-making tool was observed during the
interviews. The main reason for the lack of use is because they tend to be prescriptive
and fail to recognise the complexity associated with the selection process (Love et al.,
2008). A theoretical framework based on a holistic approach is proposed in figure 1 to
encourage a shift in the current thinking around procurement selection. It combines
both qualitative and quantitative assessments with comparative evaluation in a
systematic process to ensure a greater degree of reliability and consistency is achieved
in the procurement decision process.

Stage A : Information Gathering and Analysis

Clients details
Project objectives
Stakeholder requirements
Other relevant information

Client requirements
Project information
External Environment

Prioritised Selection Criteria

Stage B : Qualitative Assessment

Assessment questions based on:
Project Factors
Primary Factors
Organisational Factors
External Factors

Available procurement routes

Variants

Choice of two preferred proc. routes based on critical success factors?

Yes

No
Stage C: Quantitative Assessment
Weighted Score Model:

Pre-set scores obtained from Delphi Expert Panel Survey

Scores assigned by Decision Makers See table 1

Stage D : Comparative Evaluation of Two Options

Procurement Route 1

Procurement Route 2

Key attributes
Advantages & Disadvantages
When to use
Compensatory actions

Key attributes
Advantages & Disadvantages
When to use
Compensatory actions

Stage E : Final Choice

Final Choice and Reporting

Lessons and benefits to inform future projects

Figure 1: Proposed Framework for Selecting Procurement Routes

The framework consists of 5 stages. Stage A involves identifying and understanding

the project details, client requirements, constraints and key stakeholders. This is
followed by preparing a list of procurement selection criteria. At stage B, a list of
structured questions is used to enable the assessment of the selection criteria against
the available procurement options. Depending on the client requirements and project
constraints, it may be possible to select two most suitable options after this evaluation.
The next stage is the quantitative assessment, which involves the use of weighted
score model to assess the procurement options, as illustrated in table 1 below.
Criterion

Weighting (W)

Rapid Response
Time Certainty
Price
Minimal risk
Minimal client resource
Total Score

2
1
3
2
4

Traditional
W STLS
23=6
13=3
32=6
23=6
4 4 = 16
37

Procurement Options
D&B
Management
W SDB
W SMGT
22=4
24=8
13=3
14=4
33=9
32=6
24=8
24=8
41=4
41=4
28

30

Table 1: Weighted Score Model adapted from Griffith and Headley (1997)

At stage D, a comparative evaluation of the two most suitable options is made by

reviewing the advantages, disadvantages and key attributes of each option to enable
the final choice at stage E. This framework is currently being used to develop an
electronic system for procurement selection.

CONCLUSION
Findings from the study have enabled the development of a theoretical framework for
guiding procurement selection. The framework could encourage a shift in the current
thinking around building procurement selection by proposing the use of a holistic
approach in the decision process. Drawing from the principles of business strategy
formulation, the framework combines both qualitative and quantitative assessments
with comparative evaluation in a systematic process to ensure a greater degree of
reliability and consistency is achieved.
The proposed framework will enable users to have an appraisal of all the available
procurement options whilst encouraging them to set down the justification for the
decisions made. It will also improve communication between the procurement
advisors and their clients. An electronic system is currently being developed to
implement and test the framework.
Using an electronic system for procurement selection will lead to time and cost
savings by automating the process and reducing the clerical work involved. Moreover,
decision makers will develop a better understanding of the decision process as the
system will enable them to conduct sensitivity analysis and see the overall picture.

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