Procurement Routes in London Residential Construction: Which Approach Is Right for Your Project

Traditional procurement separates the design and construction responsibilities: the client appoints a designer (architect) first, develops the design to a defined stage, then obtains tenders from contractors, and appoints a contractor to build the designed scheme.

**How it works:** 1. Client appoints architect 2. Architect develops design to tender stage (RIBA Stage 4 — technical design) 3. Tender package prepared and sent to selected contractors 4. Contractors price the work and return tenders 5. Client (with architect's advice) selects and appoints contractor 6. Contractor builds the designed scheme — any significant changes are managed as variations

• **Advantages:**
• •**Cost transparency:** The client gets competitive tenders based on detailed drawings, giving a clear view of market pricing
• •**Design control:** The client retains full control of the design through the architect, without the design being commercially influenced by the contractor
• •**Price competition:** Multiple contractors tender on the same drawings, enabling meaningful comparison

• **Disadvantages:**
• •**Buildability risk:** The contractor builds what is drawn — if the design contains errors or is difficult to build efficiently, the cost falls on the client through variations
• •**Longer programme:** Design must be substantially complete before construction can start, extending the overall timeline
• •**Interface risk:** Disagreements between architect and contractor about what the drawings require are common and can be costly
• •**Client management burden:** The client has to manage the relationship between two separate parties — the designer and the builder — and arbitrate when they disagree

**When traditional procurement works best:** Traditional procurement works best where the design is genuinely complex, requires specialist architectural input, and the client wants to retain close control of the design. It is more commonly used on larger or architecturally significant projects — major extensions, new builds, and high-specification refurbishments where design quality is the primary driver.

Design and build procurement integrates design and construction under a single contract with a single party — the design-and-build contractor. The client appoints the contractor, and the contractor is responsible for both designing and building the project.

**How it works:** 1. Client defines what they want (employer's requirements — a brief, sketch design, or performance specification) 2. Design-and-build contractor develops the design and provides a fixed or target price 3. Client accepts the price and appoints the contractor 4. Contractor completes the design and builds the project

• **Variations within design and build:**
• •**Full design and build:** The contractor takes responsibility for all design from the outset, using their own in-house or sub-contracted design team
• •**Develop and construct:** The client appoints an architect to develop the design to an initial stage (planning permission, concept design), then novates (transfers) the architect's appointment to the contractor, who completes the design

• **Advantages:**
• •**Single point of responsibility:** One party is responsible for both design and construction — reducing the interface risk between designer and builder
• •**Earlier starts:** Construction can often start before the design is fully developed, reducing the overall programme
• •**Cost certainty:** A fixed-price design-and-build contract provides good cost certainty from an early stage
• •**Buildability:** The contractor's design team is incentivised to design for efficient construction — reducing the risk of designs that are expensive or difficult to build

• **Disadvantages:**
• •**Reduced design control:** Once the contractor is appointed, the client's ability to influence the design is more limited
• •**Value engineering risk:** Contractors have a commercial incentive to reduce cost, which can affect specification quality if not controlled by the employer's requirements
• •**Employer's requirements:** The quality of the outcome is heavily dependent on the quality of the employer's requirements document — a poorly specified brief leads to a poorly specified building

**When design and build works best:** Design and build is well-suited to straightforward residential projects where the client wants a single point of accountability and good cost certainty — extensions, loft conversions, refurbishments, and garage conversions. It is the model used by most London residential contractors — including RCB Design & Build.

For some projects — typically smaller or more straightforward — clients consider managing the works themselves, either by directly employing individual trades (direct labour) or by appointing a management contractor who manages the trades on the client's behalf without taking financial risk on the construction costs.

**Direct labour:** The client directly employs and coordinates each trade — groundworker, bricklayer, plumber, electrician, plasterer, decorator — paying each separately.

*Advantages:* The client has maximum control and may achieve lower trade rates by cutting out contractor margin.

*Disadvantages:* The client takes full responsibility for coordination, sequencing, programme, quality control, health and safety (including CDM duties as principal contractor), and all the interfaces between trades. This is a full-time job during construction. Errors in coordination, gaps between trades, and programme delays are common when trades are not under a single management umbrella.

*When it works:* Direct labour is most appropriate for very simple, single-trade projects (a bathroom fit-out, a decoration contract) where coordination demands are minimal. For multi-trade projects — extensions, refurbishments, loft conversions — the coordination and CDM demands make it impractical without significant construction management experience.

**Management contracting:** A management contractor manages the trades on behalf of the client, but does not take financial risk on the construction costs — they charge a management fee, and the trade costs flow through to the client. This is rcbGroup's 'Project Management Only' service model.

*Advantages:* The client benefits from professional coordination and management without committing to a fixed-price build contract. Useful where the client has their own supply chain (preferred trades or specialist suppliers) but wants professional management of the programme, quality, and CDM responsibilities.

*When it works:* Management contracting works best for clients who have good market intelligence on trade rates, an established supply chain, and want professional management without the full overhead of a traditional fixed-price contract.

**The CDM dimension:** For projects involving construction work, the client must fulfil their duties under CDM 2015 (Construction Design and Management Regulations). On a traditional or design-and-build project, appointing a principal contractor transfers many of these duties to the contractor. On a direct labour project, the client retains principal contractor duties — including producing a Construction Phase Plan, managing site safety, and notifying the HSE for notifiable projects. Most residential clients are not equipped to fulfil these duties without professional support.