Alternative procurement — which includes project delivery methods such as construction manager/GC (CM/GC), construction management-at-risk (CMAR), progressive design-build, and integrated project delivery (IPD) — is pushing industry stakeholders to emphasize collaboration and high-value preconstruction solutions in their projects. Collaborating and executing projects more effectively is particularly critical in today’s infrastructure space, where many owners face drastic budget shortfalls, risk mitigation concerns, intense schedule pressures, and resource constraints.
In fact, more and more owners and engineering and construction (E&C) companies are adopting an alternative procurement philosophy as an integral part of their business models. And of the companies that do, the ones that experience the highest success levels see it not as an afterthought or an offshoot of their traditional delivery models, but as a key strategic priority for their organizations.
There are three pillars that underpin a successful alternative procurement approach for E&C companies of all sizes and across all verticals. These pillars — people, processes, and infrastructure — apply to companies that are already operating in the alternative procurement space as well as those that are making their first foray into it.
More Project Predictability Please
Historically, project owners employed design-bid-build as the project delivery method of choice. But as project needs and risk exposures changed, owners began looking for alternative delivery methods that essentially allowed projects to be built in a collaborative, virtual environment using building information modeling (BIM) technology during the preconstruction phase. This kind of collaboration with owners ensures there are no surprises in the planning phases and improves processes overall from start to finish.
It takes three things to ensure alternative procurement is successful: people, processes, and infrastructure. Here’s a snapshot of the top alternative procurement best practices and what to think about when beginning the process.
Start by Putting the Right People in Key Roles
Successful organizations always put people first, whether they’re employees, customers, or business partners. This is particularly vital during times of transition, when people are expected to shift how they operate or work. For E&C companies just starting out with alternative procurement, having the right people in the right roles can mean the difference between success and failure.
Establishing a dedicated team is critical — and keep in mind people will need to be retrained on how to approach project delivery. Not surprisingly, it takes time and attention to make sure that team members have the skills they need to deliver under a new model.
To develop a people-first approach to alternative procurement, companies should emphasize three key roles in business development, preconstruction, and operations that are critical to achieving alternative procurement success:
Dedicated Business Development Leader
From the outset, the dedicated business development leader should be an internal champion who educates the organization about alternative procurement methods and pushes for their use. They should work closely with operations and owners to identify potential project candidates, educate the owner on alternative procurement advantages, and make sure team members get the training they need to be able to win work and execute it.
The business development manager should effectively communicate the benefits of alternative procurement across the enterprise while overseeing current and future alternative procurement projects.
Preconstruction Manager
Tasked with managing throughout the design and preconstruction phases, this person should be able to see what’s not there (conceptual design) and understand the advantages of this innovative delivery method. With the right person in this role, the design phase is more efficient, effective, and complete.
Key duties include managing the owner’s expectations, overseeing engineering and design, and managing comprehensive risk mitigation. To ensure projects run smoothly, leadership should designate a single preconstruction manager, as alternative procurement projects can fail when these responsibilities are shared.
Proposal Manager
Organizations that emphasize alternative delivery benefit from having a dedicated proposal manager who also coordinates the development of requests for qualifications (RFQs) and proposals in a timely and efficient manner. The proposal manager must understand the more technical aspects of the proposal itself, such as the document’s formatting, content, messaging, and readability. This person should be able to integrate sales messages into proposals.
Additionally, the proposal manager can serve as a sort of librarian, helping to digitally access past documentation and project data.
To fill the nontraditional roles identified previously, companies should look for individuals who have:
- The right mindset for alternative procurement (e.g., collaborative vs. competitive bid)
- A strong foundation of trust with the entire team, including owners, designers, and contractors
- The ability to focus on solving problems
- Strong communication skills (including listening), so that when problems arise, the team can discuss, assess, and address as quickly as possible
By focusing on the three noted roles and filling them with well-equipped individuals, E&C companies can establish a solid foundation for successful alternative procurement regardless a project’s size and industry segment.
Explore the processes and infrastructure pillars in our next article, “Creating Alternative Procurement Success: Developing Processes & Project Controls“ (coming June 2024).