Infrastructure projects—procurement
Produced in partnership with Victoria McGie
Infrastructure projects—procurement

The following Construction guidance note Produced in partnership with Victoria McGie provides comprehensive and up to date legal information covering:

  • Infrastructure projects—procurement
  • Factors influencing the procurement method
  • Main methods of procurement
  • Variations to procurement methods

Infrastructure procurement is the method by which the delivery of a facility is organised. This Practice Note focuses on the methods for organising the design, engineering and construction of a facility. For information on funding models, see Practice Note: Funding models for infrastructure. A range of factors will influence the decision of how best to procure an infrastructure facility.

Factors influencing the procurement method

Factors significant when deciding upon the form of procurement for an infrastructure project include:

  1. the type of infrastructure project—eg mining, road, port, energy project

  2. the complexity of the project—does it have process technology or involve multiple facilities?

  3. who the owner is—eg public body using a PFI structure or private company experienced in managing works?

  4. how the project is funded—by public money, debt or private investment? Lenders may require a particular form of procurement

  5. the risk allocation between the parties—is single point responsibility for project risk required?

  6. the price for the project—single point responsibility comes at a premium

  7. the speed with which the owner wants the project commenced and completed—some forms of procurement are quicker to mobilise works than others

  8. the level of control and involvement the owner wishes to have during the construction phase

  9. the market conditions—this may affect the pool of contractors available, the pricing of procurement methods and the terms contractors are willing to