Developing a system for assessing the costs associated with different procurement routes in the construction industry
Hughes, W., Hillebrandt, P., Greenwood, D. and Kwawu, W. (2003) Developing a system for assessing the costs associated with different procurement routes in the construction industry. In: Uwakweh, B. O. and Minkarah, I. A. (eds.) Construction Innovation and Global Competitiveness, Vols 1 and 2 - the Organization and Management of Construction. Crc Press-Taylor & Francis Group, Boca Raton, pp. 826-840. ISBN 0849314496
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In developing techniques for monitoring the costs associated with different procurement routes, the central task is disentangling the various project costs incurred by organizations taking part in construction projects. While all firms are familiar with the need to analyse their own costs, it is unusual to apply the same kind of analysis to projects. The purpose of this research is to examine the claims that new, ways of working such as strategic alliancing and partnering bring positive business benefits. This requires that costs associated with marketing, estimating, pricing, negotiation of terms, monitoring of performance and enforcement of contract are collected for a cross-section of projects under differing arrangements, and from those in the supply, chain from clients to consultants, contractors, subcontractors and suppliers. Collaboration with industrial partners forms the basis for developing a research instrument, bused on time sheets, which will be relevant for all those taking part in the work. The signs are that costs associated with,with tendering are highly variable, 1-15%, depending upon what precisely, is taken into account. The research to date reveals that there are mechanisms for measuring the costs of transactions and these will generate useful data for subsequent analysis.