5 Types of Construction Procurement Methods and How to Choose

Construction projects rarely fail because of poor engineering. Many fail because the wrong construction procurement methods were chosen at the very beginning. Industry studies show that procurement decisions influence more than 70% of final project cost and delivery outcomes, according to global infrastructure insights from the World Bank. In Nigeria, procurement challenges are even more pronounced. Inflation, exchange rate pressure, approval delays, and fragmented responsibilities continue to push projects off track, as reflected in sector data published by the National Bureau of Statistics. When procurement is poorly aligned with project risk and complexity, delays, disputes, and cost overruns become almost unavoidable.

Across many developments, the same pain points repeat themselves. Lowest-price tendering sacrifices buildability and long-term value. Traditional contracts transfer excessive risk to one party, creating claims and stalled progress. Late contractor involvement leads to designs that look good on paper but fail on site. Funding structures clash with rigid procurement timelines, while unclear roles create approval bottlenecks. These issues rarely appear suddenly. They are usually locked in from the moment the procurement route is selected.

This guide on types of construction procurement methods breaks down those early decisions clearly and practically. It explains when each method works, where it fails, and how to match procurement strategy to project goals, risk profile, and market conditions. Drawing from our experience delivering complex projects in volatile environments, the page shows how disciplined procurement planning creates predictability, protects value, and reduces conflict. Our approach positions procurement not as a formality, but as a strategic tool for delivering certainty, quality, and long-term performance.

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5 Types of Construction Procurement Methods

#1. Traditional Procurement (Design–Bid–Build)

Traditional procurement separates responsibility into clear stages, which makes it suitable for projects where regulatory compliance and documentation discipline are critical. Nigerian public-sector projects often rely on this structure because it aligns with audit requirements and competitive tendering rules enforced by bodies such as the Bureau of Public Procurement (BPP).

Design is fully completed before contractors are invited to tender, which allows accurate comparison of bids. However, this rigidity creates exposure when inflation, foreign exchange shifts, or scope changes occur after contract award. Once construction begins, variations become expensive and slow to approve.

This method works best when:

• Project scope is stable and unlikely to change
• Funding is fully secured before construction
• Approval timelines are predictable

Risk allocation remains fragmented, which means disputes often arise when delays occur between design responsibility and construction execution.

#2. Design and Build Procurement

Design and Build consolidates responsibility under one contract, which significantly reduces coordination gaps between consultants and contractors. This integration supports earlier cost certainty, a major advantage in Nigeria’s volatile pricing environment.

Early contractor input improves buildability and reduces redesign during construction. This method also shortens delivery timelines since design and construction can overlap. Regulatory approvals still apply, but coordination becomes easier when one entity manages submissions and execution.

Design and Build performs strongly when:

• Speed to market matters
• Budget predictability is a priority
• Client prefers single-point accountability

Professional oversight remains essential, often supported by independent consultants to protect quality and compliance with standards from bodies such as the Council for the Regulation of Engineering in Nigeria (COREN).

#3. Management Contracting

Management contracting prioritises flexibility and early mobilisation. Construction activities can begin while later design packages are still being developed, which helps large projects respond faster to time pressure.

The management contractor does not carry out the physical work but coordinates multiple trade contractors, managing sequencing, quality, and interfaces. Cost control relies heavily on disciplined forecasting and transparent reporting, since final cost emerges progressively rather than upfront.

This method suits projects where:

• Complexity requires phased decision-making
• An early start is commercially critical
• Client accepts shared cost risk

Strong governance structures and experienced cost managers are necessary to prevent scope drift and budget escalation, especially under inflationary conditions.

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#4. Construction Management Procurement

Construction Management separates coordination from construction execution. The client appoints a construction manager to plan, schedule, and supervise multiple trade contractors, while the client holds direct contracts with those trade contractors.

This structure gives the client full cost transparency. Each work package is priced independently, which helps identify savings early and reduces padding that often appears in lump-sum contracts. Design development can continue while early trade packages start on site, improving time efficiency.

Strong governance is essential. Decision delays from the client side can quickly disrupt progress since authority is shared. This method performs best when the client has experienced advisers and clear reporting systems.

Construction Management is commonly used on:

• High-value commercial developments
• Hospitals, universities, and institutional projects
• Projects requiring strict quality and sequencing control

Oversight often aligns with standards expected by regulators such as the Bureau of Public Procurement, especially on publicly funded developments.

#5. Public–Private Partnership (PPP) / EPC Variants

PPP and EPC-style procurement shifts focus from short-term construction cost to long-term performance and risk transfer. Private partners often finance, design, build, and sometimes operate the asset over an agreed concession period.

EPC contracts place delivery, cost, and performance risk largely on the contractor. This structure suits infrastructure projects where predictability and lifecycle efficiency matter more than lowest upfront price.

PPP models are widely used for:

• Power plants and transmission infrastructure
• Transport corridors and terminals
• Industrial and energy facilities

In Nigeria, PPP projects are regulated through frameworks overseen by the Infrastructure Concession Regulatory Commission, which ensures risk allocation, concession terms, and public interest protections are properly defined.

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How to Choose the Best Type of Construction Procurement Method

Choosing the right construction procurement method is one of the most important decisions in any project. It affects cost certainty, delivery speed, risk exposure, and overall project success. In Nigeria’s volatile environment, the wrong choice can turn a good project into a difficult one.

Start With Your Project Priorities

Every project has a dominant priority. Some projects must finish fast, while others must control cost tightly or manage complex risks. Projects with strict timelines often benefit from integrated procurement methods, while projects with fixed budgets may require clearer separation of roles and pricing.

Clear answers to these questions help narrow options:
Project urgency, funding structure, quality expectations, and long-term operational goals.

Assess Risk Appetite and Capacity

Procurement methods distribute risk differently. Some place most risks on the contractor, while others keep risks with the client. Public sector projects often retain more risk due to approvals and funding processes, while private developments may prefer transferring risk to a single accountable party.

Projects with foreign exchange exposure, long approval timelines, or infrastructure dependencies require procurement models that anticipate uncertainty rather than react to it.

Consider Project Complexity and Scale

Simple buildings with stable designs perform well under traditional procurement. Large or technically complex projects benefit from early contractor involvement and flexible coordination. Infrastructure and industrial projects often require EPC or PPP structures to manage financing, delivery, and performance together.

Evaluate Client Experience and Control Needs

Experienced clients with strong internal teams can manage flexible models like construction management. Less experienced clients often perform better with single-point responsibility models that reduce coordination burden and decision pressure.

Align Procurement With Market Conditions

Nigeria’s market realities matter. Inflation, exchange rate movement, and supply chain disruptions influence procurement outcomes. Methods that allow early cost certainty, phased procurement, and local sourcing offer better protection in unstable conditions.

Think Beyond Construction Completion

Projects do not end at handover. Long-term performance, maintenance, and operational efficiency should influence procurement choice, especially for commercial, industrial, and infrastructure assets.

Work With a Strategic Construction Partner

The best procurement decisions are made early and with expert guidance. Dutum supports clients in selecting procurement models that fit project goals, manage risk realistically, and deliver predictable outcomes in complex environments.

The right procurement method does not chase the lowest price. It protects value, time, and certainty.

Comparison of the 5 Construction Procurement Methods

Procurement Method	Design Responsibility	Cost Certainty	Speed of Delivery	Risk Allocation	Best Suited For
Traditional Procurement (Design–Bid–Build)	Client-appointed consultants	High at the tender stage	Slow	Mostly on the client	Public sector projects, clearly defined scopes, and regulatory-heavy developments
Design and Build	Single contractor	Early and relatively high	Fast	Largely on the contractor	Private developments, commercial buildings, and time-sensitive projects
Management Contracting	Client with consultants	Medium	Medium to fast	Shared	Large, complex projects needing an early start and flexibility
Construction Management	Client with a construction manager	Medium to high (transparent)	Fast	Mostly on client	Institutional projects, experienced clients, quality-driven developments
PPP / EPC Variants	Private partner / EPC contractor	High over the lifecycle	Medium	High on contractor/private partner	Infrastructure, power, transport, industrial facilities

Frequently Asked Questions