Supply-only or supply-and-build: choosing how to contract a project
, 2 minute read, by Mashrur Corporation
An owner in Bangladesh usually builds in one of two ways. Either they buy the materials themselves and hire a labour contractor, or they give one contractor the whole job, materials included. Each suits a different kind of owner.
Owner supplies material, contractor supplies labour
The owner buys steel, cement, aggregates and bricks directly and pays a contractor a rate for labour. The owner sees every material price and chooses every brand.
The cost is the owner's time. Someone must order, chase, receive, store and guard the material, and the owner carries the waste. When work stops because steel has not arrived, the labour contractor still expects payment, and there are two parties to argue about whose fault it was.
One contractor for supply and construction
The contractor quotes rates that include material and labour, usually against a bill of quantities. Procurement, storage, waste and coordination become the contractor's problem. The owner deals with one party, one programme and one bill.
The owner gives up direct sight of material prices. That is managed in the contract: name the acceptable brands and grades, require test certificates, and keep the right to inspect material before it is used.
Which suits whom
- Owner-supplied material suits owners with their own purchasing staff, storage space and time on site.
- Supply-and-build suits owners who want a fixed scope and one point of responsibility, and companies building outside their core business.
- A mixed approach is common: the owner supplies steel and cement, the contractor everything else. It works if the split is written down item by item.
What to write into a supply-and-build contract
- The drawings and BOQ the price is based on.
- Approved brands, grades and standards for the main materials.
- Tests required and who pays for them.
- The programme, with milestones.
- How variations are priced.
- Payment stages, retention and the defects period.
- What happens to rates if material prices move sharply.
Checking a contractor before you sign
- Visit a job they have finished and one in progress.
- Ask who will run your site, and meet that person.
- Check where their material comes from and whether they can show certificates.
- Look at how they keep site records: deliveries, pours, test results.
- Speak to a previous client about how the final account was settled.
This is general guidance. Standards, duties and procurement rules change, so confirm current requirements for your project before acting on it.