Procurement Principles in Preconstruction: Maximizing Value and Minimizing Costs

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Developing a well-informed and thorough procurement strategy has become one of our most important priorities, especially in recent years, as supply chain shortages, shipping delays, and material costs have risen. The preconstruction phase is a critically important time to develop a procurement strategy. 

While developers and architects might focus on other priorities like design functionality and project milestones, contractors know what questions to ask during preconstruction, especially when it comes to materials and supplies. Procurement challenges are one of the most common issues that can derail a commercial construction project. Here are a few principles we apply to help create an effective strategy, manage the procurement process, and ensure that the project stays on track: 

1. Develop a strong working relationship with architects, engineers, and suppliers. 

A contractor’s relationship with local designers, engineers, and suppliers is invaluable for a successful project, especially when it comes to procurement. We’ve discovered that developing a collaborative relationship with architects is incredibly helpful for solving procurement challenges before construction begins. Creating strong relationships with trade partners and suppliers is equally important. By engaging our partners early in the preconstruction phase, we can gather valuable input and insights regarding materials, specifications, availability, and lead times. 

2. Customize a procurement strategy around the unique factors of your project and market conditions. 

There are different types of procurement strategies, such as single sourcing, multiple sourcing, and competitive bidding. There are also emerging trends, such as Progressive Design-Build and Integrated Project Delivery, which bring the contractor into the design earlier than in the typical Design-Build model. At Crain, we’ve learned there’s no “one size fits all” approach. Choosing the right procurement strategy for a project depends on a variety of factors, such as the size and complexity of the project, the availability of materials, and the budget.

3. Find creative ways to adapt your plan to navigate supply shortages and long lead times. 

The commercial construction challenges created by COVID-19 still have an impact on our industry. Supply chain issues, material shortages, and shipping delays continue to affect project timelines. By identifying long lead items in advance, contractors can prioritize their procurement, secure the necessary orders, and monitor their progress closely. For example, during a recent project, we conducted early buyouts on supplies during the preconstruction phase. The team also collaborated with subcontractors to find creative solutions when supply chain issues doubled the expected arrival timeline for HVAC units. 

4. Develop a thorough material delivery plan.

The material delivery strategy can play a crucial role in reducing costs during a construction project. Consolidated deliveries and just-in-time deliveries are two options we utilize in many of our urban development projects. Other times, we’re faced with new delivery challenges that require creative solutions. For example, The Prancing Horse Ferrari Dealership in Nashville was constructed while the global shipping crisis was creating a ripple effect across the industry. In order to source materials from around the globe, our team developed multiple contingency plans to ensure furnishings from Italy, specialty glass from Spain, and lighting features from France were all delivered on time. 

5. Anticipate and address unexpected issues with creative thinking and proactive communication.

Effective communication in commercial construction fosters collaborative problem-solving to avoid delays. Throughout the preconstruction phase, our team closely monitors the progress of material procurement and maintains regular communication with suppliers. This allows us to address any potential issues promptly, anticipate lead time changes, and adjust plans accordingly. 

As a contractor, we believe it’s important to be honest about what we can do but also what we cannot do. Rather than overpromising, we want to keep the project owner informed about any changes or expectations that may need to be adjusted. 

Discover the Difference Our Preconstruction Team Can Make

By carefully considering the project’s needs and budget, we identify the best vendors and negotiate favorable contracts. Our approach can help maximize value and minimize costs, ultimately delivering a better project for the client.

At Crain, everything we do is intended to help build structures and relationships that last a lifetime. Our preconstruction team plays a significant role in helping us optimize the procurement process and establish a solid relationship with clients during the very first days of a project. 

Want to learn more about our process or have questions about your next project? Reach out to our team today.

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