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Poor procurement and project overruns are widespread, says report

More than 90% of construction professionals have worked on a project that overran in terms of time or cost, a Chartered Institute of Building (CIOB) study suggested this week.

Choosing the right procurement method is crucial for the delivery of a project on time, on budget and to a high quality said 87% of construction professionals taking part in the the research.

More than 500 respondents gave their views on the current state of procurement within UK construction.

93% of respondents had been involved in projects that overran in terms of cost. 57% of those who had been involved in over-budget projects believed that the chosen procurement method directly contributed to the cost overruns. Similarly, 94% have been involved on projects that overran in terms of time. Of those, 49% believed that the chosen procurement method directly led to the overruns.

The findings indicate that 77% of respondents believed clients are not sufficiently knowledgeable about procurement in the construction industry, which often leads to poor advice being taken and results in a project coming in over-budget, outside of time-frames, or to a poor standard.

CIOB deputy chief executive Michael Brown said, “Getting clients more bang for their buck should always be at the forefront of the industry’s mind. There is clearly a need to look beyond any immediate gains and towards those longer term benefits that can be achieved from the right type of procurement. If the industry is squeezed to get the cheapest tender then you’ll end up getting what you pay for.

“These are testing times but at such moments it’s a good idea to step back from what’s gone before and find new ways to create greater efficiencies. If we knew what we know now about programmes like Building Schools for the Future (BSF) then we would have approached it differently. The challenge for the industry and clients is, can they adapt quick enough to take advantage of the opportunities out there?”

The findings came soon after government chief construction advisor Paul Morrell’s Innovation and Growth Team report to government, which makes recommendations on procurement and supply chain management.

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