July 2025
Managing megaprojects is becoming more integrated, intentionally looping in functions such as estimating, design, forecasting, risk management and real-time cost and schedule tracking to break down silos that lead to budget overruns and delays. As part of this shift, functions once viewed as purely transactional are now assuming a strategic role. Procurement falls squarely in this category.
It’s in a unique position—sitting at the intersection of resource purchasing, value engineering, sustainability goals, profitability and the external forces (geopolitical conflicts, supply chain volatility) that influence them all.
When you consider that procurement is responsible for 40 to 70 percent of all construction company spending, the need for strategic alignment with cost plans becomes even more clear.
Companies are looking to procurement not only to drive profit but also to maneuver through the internal and external uncertainties that threaten their profitability and overall project success.
They’ve made room for procurement at the planning table. This function is about more than just being cost-conscious; it’s about ensuring that sourcing decisions support the cost plan from the beginning.
This is why alignment matters.
Collaboration in Action: Operational Integration
Think of who typically has a seat at the planning table. Are the right people there?
It’s tough to build accurate plans around project costs and execution when key stakeholders, functions and disciplines aren’t represented. This is when the lion’s share of estimating and procurement decisions are made, and procurement needs to know precisely what it will take to deliver the project successfully.
When cost planners, estimators and procurement coordinate from the beginning, sourcing can be mapped to key project milestones, delays are reduced and more favorable terms can be locked in before prices rise. Integrated delivery models help bring all functions onto the same timeline, ensuring that procurement decisions are guided by real-time data and evolving cost plans, not just upfront estimates. This reinforces procurement as an equal, strategy-based, cost-control partner rather than a support-role buyer executing others’ plans.
Planning for the Unexpected: Risk and Flexibility
This is where procurement proves its strategic value by building in flexibility to adjust to changing conditions without throwing the cost plan off course. That requires anticipating risks—such as potential supply chain issues, material price fluctuations or geopolitical disruptions—early enough to respond effectively. For this, past project data serves as a guide to inform what to plan for and how to do it.
It also takes agility. Proactively using tactics such as supplier diversification, escalation clauses and early contractor engagement helps keep procurement aligned with the cost plan, even as conditions change.
The idea is to feel confident when answering questions such as:
- Do we have a diversified supplier base that allows us to pivot immediately if, for instance, an equipment supplier goes out of business, thereby avoiding schedule delays, rush fees or premium pricing for last-minute replacements?
- Have we accounted for potential pricing increases over time by negotiating fair escalation clauses into our contracts with suppliers and contractors?
- Have we engaged with contractors early to gain real-world insight into risks, constraints and cost drivers that can improve forecasting and strengthen procurement and cost planning?
- Has enough time been built in to secure necessary permits, meet regulatory requirements and comply with environmental guidelines—without putting the schedule or cost plan at risk?
Strategic Sourcing for Long-Term Value: Value Optimization
Getting the best long-term value—rather than focusing solely on initial cost—is a more strategic and forward-thinking approach to procurement. While a lower price might reduce early spend, it often leads to quality issues, change orders and higher costs over the project’s life.
Value optimization aligns procurement with owner priorities, including durable materials, lifecycle performance and sustainability. It also reflects a broader shift: owners increasingly recognize that the cheapest option on paper—especially in lowest-bid scenarios—doesn’t always represent the real cost of delivering and operating a high-performing asset.
Strategic sourcing often works hand in hand with value engineering, exploring and evaluating where cost-saving alternatives can be implemented without compromising quality or performance. This allows procurement teams to make informed trade-offs that support the cost plan while preserving long-term asset value.
So, how is “best value” measured in practice?
• The skill, track record and competence of contractors
• The quality, reliability and sustainability of materials
• The integrity and scope of warranties
• The anticipated lifecycle return on equipment and materials, including operational efficiency and maintenance savings
Ultimately, that’s what defines project success: how the asset performs long after the build is done.
Technology as a Strategic Enabler
Strategy doesn’t put itself into practice—teams do. Aligning procurement with the cost plan takes more than good intentions; it requires data visibility, timely decisions and the ability to act swiftly when conditions change. That’s where technology provides the essential tools teams need to turn strategy into action.
Modern tools are at the heart of a strong procurement function. They simplify key parts of the process—like cost planning, digital sourcing, supplier management and analytics—helping procurement teams to:
- Forecast costs more accurately, evaluate supplier risks earlier and make faster, smarter sourcing decisions—thanks to connected data sources and analytics that highlight cost trends, supplier risk and market shifts as they happen.
- Align purchasing with actual project progress by using real-time field data captured through IoT devices, helping to reduce delays and minimize waste.
- Gain greater control and visibility through digital platforms that streamline the entire procurement lifecycle—from bidding and contracting to payments.
- Evaluate materials by carbon impact, push for supplier transparency, support sustainability goals through smarter sourcing and track emissions data to show compliance with decarbonization efforts.
Shifting Toward Alignment
Aligning procurement strategy with cost planning isn’t just a workflow with checkboxes. It’s a culture shift—toward collaboration, agility, value and long-term thinking. That’s what turns procurement into a true partner in controlling costs and driving profitability.
Contruent helps bring your procurement strategy and cost plan into alignment—empowering your team to plan smarter, act faster and deliver more value across every project. Learn more or request a demo today.