There are two main approaches to building development and construction that exist during the fundraising portion of the process: design and construct and traditional tenders. Both have good and bad aspects, but which one is better for your proposal? We look at both approaches to understand each in more detail.
Design & Construct
Often used for large scale domestic and commercial buildings, and infrastructure projects, the design and construct process is where a consultant prepares a preliminary design and then a contractor completes the design and constructs the project. It’s designed to reduce the principal’s risk, although increases the contractor’s risk as a result.
The advantages are mostly in favour of the principal, as the contractor becomes the single point of responsibility during design and construction. The contractor is required to fulfil the design as closely to the brief as possible, without too much variation. It’s also a faster process overall.
Having said that, principals often find themselves with less control over the final design, so slight variations are common and the contract may also be worth more because of the increased contractor risks involved.
Tendering is the process where principals seek competitive offers for the supply of work, services or goods from a wide pool of potential contractors. It allows the purchaser to control the contract terms, regulate the conduct of those participating and round up a wide variety of offers that look similar, making it easier to assess each.
It’s popular with governments, as it promotes competition and helps to ensure the best value for money, while remaining fair, consistent and transparent throughout the process – all key when you’re working with public funds, as well as ensuring a certain level of fairness for contractors.
This process has been around for quite some time, and often companies are reluctant to change their processes. Once the price is agreed, it is fixed. This can mean it forces contractors to work for unrealistic wages and maintain standards that aren’t possible, although quite often things run over in time and cost, forcing the principal to pay more.