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However, too often, projects are still being procured in a way that prices uncertainty rather than certainty – driving up costs, reducing competition and making successful delivery harder before work has even begun.

That was one of the strongest messages to emerge from the latest Constructing Excellence Hampshire discussion, which brought together contractors, consultants, developers, legal advisors and public sector clients to debate the challenge of procurement across the region.

Choosing the wrong procurement route, or choosing the right one too late, can be enough to sink a construction project before it starts.

If the industry is serious about improving productivity and project outcomes, procurement must move beyond the traditional mindset of risk transfer and lowest-cost selection.

The focus should instead be on creating enough certainty before a project reaches the market, selecting the procurement route that best suits the scheme, and fostering an environment where clients, contractors, and consultants are aligned from the outset.

Only then can tenders reflect the true cost of delivery.

Pricing assumptions, not scope

The issue is not a lack of appetite to build, it’s that many projects are reaching the market before crucial decisions have been resolved.

Incomplete design information, unclear risk allocation and lengthy tender periods mean contractors are increasingly asked to price assumptions rather than a defined scope.

A recent Rider Levett Bucknall (RLB) procurement trends report set the tone: too many tenders price intentions and assumptions rather than a resolved project, and contractors are responding by becoming choosier.

Faced with rising costs, constrained resources and greater liability exposure, around 54% of businesses are applying stricter criteria and walking away from projects where risk is poorly understood or disproportionately transferred.

That ultimately reduces competition and can lead to higher prices for clients.

The challenge is compounded by a procurement environment that often seeks certainty from the market before certainty exists within the project itself.

Contractors are being asked to absorb risks that originate in planning, design development, funding approvals, or regulatory processes – areas over which they have little or no control.

The inevitable consequence is that those risks are either priced into bids or result in capable contractors choosing not to participate at all.

Understanding risk, not transferring it

The construction industry has long recognised the benefits of early contractor involvement, which is why two-stage procurement remains the preferred route for many complex projects.

At our recent Constructing Excellence Hampshire roundtable, attendees voiced growing frustration that a process designed to improve collaboration and certainty is becoming slower, more cumbersome and, in some cases, delivering diminishing returns.

Too often, projects enter the market before key decisions have been resolved.

By the time second-stage costs are submitted, budgets may be months out of date, market conditions have shifted and client priorities have changed.

Procurement processes can become stop-start exercises, with schemes repeatedly tested against the market without progressing to a firm commitment.

While early engagement is valuable, contractors cannot continue investing significant time and resource into pre-construction activity indefinitely without confidence that projects will ultimately proceed.

Risks that originate in planning, design development, funding approvals or programme decisions are pushed downstream, despite sitting outside a contractor’s control.

Unsurprisingly, these risks either increase prices or deter bidders altogether.

This points to a wider cultural issue across the sector.

Successful projects are rarely those where risk has been transferred most effectively; they are the ones where risk has been understood, discussed and managed collectively from the outset.

Genuine collaboration requires transparency from all parties and a willingness to confront challenges early rather than relying on contractual mechanisms to resolve them later.

Contractors rarely make money during the pre-construction services stage; their return comes from converting the opportunity into the live project, not the fee.

Where it works well, deliverables and gateways are agreed up front, progress is reviewed fortnightly against a red/green scorecard, and straightforward elements are priced and fixed early to give the client cost certainty.

The deeper problem is that risk is still too often transferred rather than genuinely understood, with contractors asked to absorb risk that sits with decisions made before they were even appointed.

For clients, particularly in the public sector, the picture becomes even more complicated due to governance requirements, fixed capital budgets and increasingly stringent procurement regulations.

Decisions must withstand scrutiny, value must be demonstrable, and expenditure often needs to be defended to multiple stakeholders. In that environment, lowest cost can become the easiest option to justify, even when all parties recognise that value, quality and long-term outcomes should carry greater weight.

Yet procuring on price alone rarely delivers certainty. In many cases, it simply masks unresolved issues that emerge later in the programme through design changes, cost escalation or delays.

Procurement becomes an exercise in trying to close a gap that should have been addressed much earlier.

Collaboration and adaptation

Procurement should not be viewed as an administrative exercise or a contractual necessity, but a strategic decision that shapes project outcomes from day one.

The route chosen influences collaboration, risk allocation, programme certainty, cost predictability and, ultimately, whether a project succeeds.

At a time when the industry faces ongoing economic pressures, increasing regulatory requirements and a finite pool of specialist expertise, clients can no longer afford to treat procurement as a one-size-fits-all process.

The projects most likely to succeed will be those where procurement is tailored to the scheme, risks are openly understood, and contractors are brought into the conversation early enough to help shape solutions rather than simply to price uncertainty.

Those who collaborate early and ensure they adapt their procurement route to the project and the market, rather than defaulting to the norm, stand the best chance of getting their project delivered.

By Ridge and Partners partner Jonathan Solly.

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