Survey Results: Negotiated Procurement Routes on the Rise in UAE Construction Industry
Turner & Townsend, a UK-based consultancy, has reported that there is a noticeable shift towards negotiated procurement routes in the UAE construction industry. According to their latest market intelligence report, 25% of survey respondents indicated negotiated procurement routes as their most common experience.
Clients are increasingly seeking early contractor engagement, often formalized through the use of pre-construction services agreements, particularly on large-scale complex projects. This trend towards negotiated contracts is attributed to the high volumes of new work entering the market, limited contractor availability, and regional competition for resources.
David Griffiths, director of UAE real estate lead at Turner & Townsend, stated, “With the combination of a more regulated real estate market and incentives for longer-term investment driving population growth, it’s difficult to see a significant tail-off in market conditions in the short term. As such, we expect tendering conditions to remain similar for the next 1-2 years.”
Additionally, the survey revealed a decline in the use of design-and-build procurement routes, suggesting a potential shift in project delivery preferences or client demands. Despite the increase in negotiated contracts, single-stage procurement remains the predominant method in the UAE construction industry, driven by competition and efficiency.
Supply chain disruption also emerged as a significant concern, with 88% of respondents reporting disruptions in the supply chain, and 22% describing them as significant. This disruption may be impacting project timelines and costs in the region.
Overall, Turner & Townsend’s report highlights the evolving landscape of the UAE construction industry, with a focus on negotiated contracts and single-stage procurement methods. The market conditions are expected to remain robust in the near future, with continued challenges in contractor availability and supply chain disruptions.
