Learning the process – procurement
Procuring labor and materials is one of the most challenging aspects of project management, but in the procurement process are opportunities to mitigate cost and scheduling risks, find the best value for materials and labor, and invest in local communities. We’ve refined our process to take advantage of these opportunities, and we’d like to share the aspects that have the biggest impact on delivering better projects.
At the heart of this procurement process is the design-build delivery format and a guaranteed maximum price (GMP) contract with open book accounting. The GMP is developed as we perform due diligence, research building codes, and involve consultants such as civil and structural engineers. By consolidating every part of the project under a single agreement with a GMP and ourselves as a single point of responsibility, we effectively shift the cost risk in a project from our clients to ourselves. This aligns our interests with the client’s and establishes a strong relationship based on trust, and it also frees our clients to focus on their day jobs rather than managing the details of a project.
This trust opens the door to a value-based selection strategy for subcontractors and suppliers, where instead of selecting the lowest bidder we choose the one who is able to bring the most value to the project. This can be through a combination of cost, expertise, reliability, best fit to the specific project, and most importantly, lower risk.
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