ABSTRACT

The purpose is to identify how clients award work, and how consultants and contractors obtain work, and to explore the costs associated with different procurement approaches and contractual and non-contractual arrangements for collaboration. There are three types of cost involved: pre-tendering (marketing, forming alliances, establishing reputations), tendering (estimating, bidding, negotiating) and post-tendering (monitoring performance, enforcement of contractual obligations, dispute resolution). As well as the costs incurred in selling goods and services, costs are also incurred at each stage by the buyer of goods and services. Together, these involve substantial resources which are typically dealt with as overheads, rather than individually costed. This project is the first attempt, in any industrial sector, to generate empirical data about the costs associated with finding and getting work, and the financial consequences of different approaches. The specific objectives of this research project were defined as: x Identify how clients award work and how consultants and contractors obtain

work. x Identify the commercial characteristics of procurement options. x Examine any previous theoretical and/or empirical work in this field. x Explore the structure and magnitude of the costs of the commercial process. x Develop a mechanism for measuring the true costs of the commercial process. x Use this new data and understanding to quantify the relationship between forms

of procurement, types of project and the costs of the commercial process. x Demonstrate how performance improvement (in terms of approaches to

tendering) can be measured in practice. x Contribute to an understanding of the most advantageous approaches to

forming construction project teams.