Modern Construction Procurement Models

Modern Construction Procurement Models

Public Private Partnerships (PPP)

Most famous procurement model is PPP. Here Government will provide a land. Government takes one part of constructions and Private sector takes one part of constructions. Otherwise government will provide money with the certain agreement. Private sector will be do the construction and public sector do the design. Finally they will share the finance.

Modern Construction Procurement Models - Public Private Partnerships (PPP)
Modern Construction Procurement Models – Public Private Partnerships (PPP)
Private Finance Initiative (PFI)

This can be seen as a sub-sector of Public Private Partnership (PPP). When government doesn’t have money, they decide to all private sector to invest in behalf of government. Government has done the payment plans, various methods to reimburse the particular invested money for a private sector organizations. Government will provide all the facilities or might be land. That is why it says procurement mechanism initiated by the public sector. Whatever the procurement system they have adapted, they have to face these issues. Government can’t to join to carry out the contract, but they will pay. Here public sector can transfer the risk to the private sector. The demand for implementation of infrastructure will rise. faster completion. But, During the concession period, the requirement of the public sector may be expensive and difficult to accommodate.


Government has established this system. If private sector have money and they know projects are available to carry out under government. Then discuss with the government and give a personal proposal. Finally it has to go on procedure guideline of a procurement procedure.   They will discuss the financial method and procurement method, Estimated cost and Bills of Quantities (BOQ). These all the things are prepared by private sector, But the amount is feasible. Government says that they can approve it.  It is a very similar mechanism. This mechanism can be gone through any procurement path. Contractor will adopt everything (law, financial cost, interests). Here Law financial risk to the contractor. The government will provide Financial assurances the stake holders. Project cost becomes high due to nature of the mechanism and payments will be late.

Swiss Challenge

The government has established This model. . This is further developed model to the unsolicited. Once some contractor has given comprehensive proposal, then government will tell we need your acceptance, objects based on your design to invite other contractors. We are calling counter proposal.  Other contractors have to get an objects from the original proposal. Based on that original proposal, invite other proposals. Then government takes other proposals and evaluate. If one of other proposals might be very good against original proposal, they will discuss and award to the one of other proposals. It is not to original one. But they will share the compensation to original proposal, because they have used it.

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