There are three pillars that underpin a successful alternative procurement approach for engineering and construction (E&C) companies. These pillars — people, processes, and infrastructure — apply to companies that are already operating in the alternative procurement space as well as those that are making their first foray into it.

In the previous article, we talked about getting the right people in the appropriate roles. In this article, we’ll talk about the processes and infrastructure pillars.

A company’s approach to alternative procurement requires a more formalized process than for traditional project methods, because it includes many more client-focused elements that must align. To make this happen, companies should ask themselves:

• What’s our plan for pursuing, capturing, and executing this project?
• What resources do we need?
• What steps do we need to take to get the project from concept to completion?
• What are the critical decision-making points along the way?

Alternative procurement is different from other project delivery methods because of the preconstruction phase. During preconstruction, the owner, contractor, and designer work together to address project predictability, high-value solutions, and comprehensive risk mitigation. 

To help minimize risk and maximize success, a company’s alternative procurement approach should, at a minimum, include:

• The company’s step-by-step playbook for each phase of the project, including clear communication standards and practices.
• Well-defined job roles that clarify expectations for each member of the alternative procurement team.
• Emphasis on key areas of importance (e.g., design management, preconstruction, post-construction).
• Confidence that the right people are in the right positions early in the process and that key individuals are introduced to the client.

Establishing project controls that effectively monitor performance, support good decision-making, and measure success is also critical to alternative procurement done right. In fact, project controls can literally make or break any alternatively procured project.

Additionally, project controls are essential to effective owner management during the preconstruction and construction phases. For example, an owner will want clear communication and a reasonable schedule — both of which rely on the contractor being able to adequately explain schedule updates or cost changes. Knowing that owners may have selected progressive design-build over other delivery methods in favor of a quicker schedule or cost savings, good project controls will obviously help the owner and other parties achieve that goal.

When it comes to project controls, it’s all about having transparent systems to monitor performance and measure success. These key performance indicators (KPIs) need to be included early in the preconstruction phase. Establishing a single point of contact to communicate with everyone on the project ensures the entire team is aware of the current status and is working from the most recent documents.

Get the Right Infrastructure in Place

Much work goes into pursuing and winning alternative procurement projects, both of which require different approaches than traditional procurement methods. Beginning with client-driven business development, companies should focus on creating:

• Standard processes for market and client conditioning, including proposal and presentation development, which can be reused for subsequent project pursuits.
• Good collateral and sales tools, as these are critical for successful marketing and helping clients understand the process.
• A digital database of all past projects for easy reference and data analysis, as this keeps companies from having to start from scratch each time they’re asked to submit for a new project.

Training is another important element of alternative procurement. To best position their teams for success, alternative procurement practitioners should be trained in a variety of areas, including presenting, technical writing, and effective leadership. In most cases, companies use a combination of in-house training and education offered by third-party providers. Contractors also need to include regular sessions on how the company approaches and delivers any alternatively procured projects.

As with most any successful initiative, support for alternative procurement starts at the top. This isn’t something companies should enter into without support from all levels of management. Executives will need a clear understanding of the investment in time, money, and energy it takes to be successful with alternative procurement. They should also know that successful business development takes time to build the client relationships necessary to position and win new work.

Paving the Way to Success

Alternative procurement spending is an innovative project delivery method that presents a major opportunity for engineering and construction companies. By focusing on people, processes, and infrastructure, companies stand the best chance of both winning and performing well on any alternatively procured projects, as well as differentiating themselves in this competitive space.

As more companies pivot into alternative procurement, the most successful ones will be those that develop their teams, draw up their plans, and don’t wait to be left behind. Doing so not only serves to impress project owners, but it also minimizes project risk, reduces costs, maximizes value, and lays a clear path to repeatable project success.