Why Smart Engineering & Construction Companies Are Ditching Old Procurement Methods

The ability to control costs, stay agile, and use procurement strategically will separate industry leaders from the rest.

Cost escalation and procurement innovation are reshaping infrastructure development. And the trends show no signs of slowing. The innovations in construction procurement are signals of a deeper industry transformation in how we plan, build, and manage our built assets. Successful engineering and construction companies are ditching their old ways. Procurement is now a strategic function.

Cost Escalation: A Persistent Pressure

Over the past few years, infrastructure projects have faced relentless cost pressures. In 2025, some material prices stabilized. However, tariffs on steel and aluminum, along with ongoing labor shortages, continue to drive up expenses.

Construction activity is recovering, but inflation pressures vary by sector. Wage growth has slowed, yet skilled labor stays scarce.

Owners and developers are reassessing traditional budgeting models. The American Society of Civil Engineers (ASCE) has published strategies to improve escalation forecasting, emphasizing dynamic models that include CPI fluctuations and geopolitical risks.

Understanding Inflation and Escalation Will Make (or Break) Your Career

Procurement Innovation: From Reactive to Strategic

Persistent cost escalation is forcing a strategic pivot: procurement must move beyond a tactical role. In 2025, Forbes identifies five trends that C-suites must prioritize to drive procurement innovation:

• Digital acceleration: Organizations are rapidly adopting cloud-based platforms and AI-driven analytics to streamline sourcing and vendor management.

• Legacy system modernization: Outdated procurement tools are being replaced with agile, integrated solutions that support real-time decision-making.

• Supplier diversification: To mitigate risk, firms are expanding their supplier base and investing in local sourcing strategies.

• Sustainability alignment: ESG criteria are increasingly embedded in procurement decisions, influencing vendor selection and contract terms.

• Collaborative contracting: New models like alliance contracting and progressive design-build are gaining traction, fostering transparency and shared risk.

  
  

These innovations make procurement a strategic advantage. As infrastructure projects become more complex, companies that prioritize modern procurement approaches are better equipped for resilience and can create more value for their organizations.

Successful Project Management Software

Will These Trends Continue?

Yes—but with executive-level caveats.

Cost escalation is likely to remain a defining feature of capital programs. While some materials may see price relief, labor constraints and policy shifts will continue to exert upward pressure. Energy volatility is predicted to be lower, but could introduce new cost variables.

On the other hand, procurement innovation is poised for sustained growth. The convergence of digital tools and performance-based contracting has created a new procurement paradigm. Organizations that embrace these changes will be better positioned to mitigate market uncertainty.

Engineering and construction companies are embedding rare-event risk modeling into procurement planning—think climate resilience, cyber threats, and supply chain shocks.

Tips For Including Rare Event Risks in New Project Development

A Few Examples of Procurement Methods

I have spoken with leaders of a few national engineering and consulting firms about how they are reshaping their procurement activities.

Procurement As A Client Service

I like Kiewit’s saying that “projects don’t go wrong—they start wrong.” They, along with other large firms like Black & Veatch and Jacobs, are getting infrastructure clients involved in procurement at the early stages of planning, more as a service integrated into internal processes. Procurement-as-a-Service (PaaS) is more than a trend.

Leveraging Vendor Relationships

This one is a little bit like Wal-Mart demanding that vendors keep escalation effects low. Most big firms say they are doing it, and all want to do it well. A few are succeeding.

AI and Cybersecurity Tools

Most of the big companies are emphasizing their AI capabilities. That’s true because most of the AI LLM (large language model) tools are really good at searches and trend analysis. Jacobs is really emphasizing the link between AI and cybersecurity. Protecting mid-stream and downstream procurement processes is of growing importance.

Shared-Risk Models

Bechtel and Flour are good examples of innovating with shared-risk contracting models for large projects, especially in nuclear and energy projects. Shared risk models have been fairly common over the past 5 years in alternative project delivery for managing cost uncertainty while accelerating delivery.

Construction Procurement Innovation Continues

In summary, construction procurement is undergoing a transformation that is essential for future infrastructure success. The ability to control costs, stay agile, and use procurement strategically will separate industry leaders from the rest.

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JD Solomon Inc. provides solutions for program development, asset management, and facilitation at the nexus of facilities, infrastructure, and the environment. Visit our Program Development page for more information on business cases, third-party assessments, phasing projects, and related services.

Six Powerful Solutions for Facilitating Technical Sessions

Make your next facilitated session with technical specials a success!

Facilitators need clear communication when presenting to technical specialists. Yet as specialists ourselves, most of us haven't been trained for these high-stakes collaborations. We know our material inside and out, but struggle to make it resonate with subject matter experts who are highly competent and often suspicious of intentions. The Tackle Shop, now at JD Solomon Inc., offers practical tools and guidance to help bridge the communication gap and ensure facilitated sessions are effective.

Types of Facilitated Sessions with Technical Specialists

Here are the 10 types of facilitated technical sessions described in JD Solomon’s book Facilitating with FINESSE: A Practical Guide to Business Solutions:

1. Root Cause Analysis

2. Failure Modes and Effects Analysis (FMEA)

3. Tree Diagrams

4. Block Diagrams

5. Capital Program Prioritization

6. Business Cases

7. Reliability Assessments

8. Risk Management Plans

9. Master Plans

10. Strategic Plans

 

Six Practical Solutions from Communicating with FINESSE

The Tackle Shop provides the FINESSE checklists, third-party reviews, practical guides, and training to prepare and deliver for your next presentation to senior leaders.

1.  The FINESSE Checklist

The FINESSE Checklist helps you prepare presentations by summarizing key information from the FINESSE Fishbone Diagram. It focuses on 3 to 5 main points in each section, making it easier to build your presentation for significant decisions.

2. The FINESSE Accessibility Checklist

This checklist ensures that your presentations and reports are accessible to people with visual and hearing impairments. It highlights key accessibility issues and provides 3 to 5 important aspects to focus on. Making your work accessible benefits those with impairments and enhances understanding for everyone.

3. Third-Party Presentation Reviews

Enhance your confidence by having CWF conduct a third-party review of your presentation. You'll receive helpful feedback to prepare you for presenting to senior management or your board of directors. Fast turnaround times are available with prior notice.

4. Communicating Reliability, Risk, & Resiliency to Decision Makers

A practical guide that bridges the gap between technical experts and senior leaders by showing how to present complex reliability and risk information in clear, compelling ways. The book emphasizes communication strategies, real-world examples, and tools to help professionals gain credibility, foster understanding, and drive better organizational decisions.

5. Facilitating with FINESSE

This practical guide offers a structured approach to leading groups through problem-solving and decision-making, striking a balance between process discipline and people skills. Using the FINESSE framework, the book offers practical techniques, examples, and insights to help facilitators guide teams toward clear, effective, and lasting solutions.

6. Training

Popular half-day and full-day training sessions are provided in effective communication, facilitation, decision-making, and each of the seven bones of FINESSE. The focus is on translating complex technical, financial, and risk information into messages that leaders and stakeholders can easily understand.

JD Solomon's FINESSE Fishbone Diagram

The FINESSE Fishbone Diagram is a powerful tool for addressing communication challenges in major decisions. It breaks down issues into manageable parts and categorizes relevant tips for each section. By identifying where problems arise, you can implement targeted solutions for big business presentations. This diagram serves as a guide for clearer communication, whether you're in a boardroom or discussing complex issues with senior managers.

FINESSE stands for Frame, Illustrate, Noise Reduction, Empathy, Structure, Synergy, and Ethics.

The Mental Model CATER

CATER is a mental model that identifies five practical ways to improve team facilitation:

• C — Communicate in pre-session exchanges. Plan and collect information from participants before the session (interviews, surveys, etc.) so everyone arrives with a comparable context.

• A — Ask powerful questions. Use introductory and clarifying questions that provoke active thought, debate, and useful outcomes. Weak questions do the opposite.

• T — Anticipate trouble. Expect disruption and be prepared to move the group through trouble; great facilitators embrace and plan for it.

• E — Use engaging exercises. Design activities that captivate participants — exercises must reach a level of engagement that drives results.

• R — Manage the rhythm. Monitor and manage tempo: sessions have “ups” and “downs”; skilled facilitators spot subtle tempo/attitude changes and time interventions accordingly.

Practical Solutions for Technical Facilitation

By utilizing the resources available in the Tackle Shop, you can greatly improve your communication for big decisions. The FINESSE Fishbone Diagram and the mental model CATER are approaches that empower you to facilitate with confidence. Ensure your next facilitated session is a success! Facilitate with FINESSE!

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JD Solomon Inc. provides solutions for facilitation, asset management, and program development at the nexus of facilities, infrastructure, and the environment.  Founded by JD Solomon, Communicating with FINESSE is the community of technical professionals dedicated to being highly effective communicators and facilitators.

15 Ways to Improve Reliability and Dependability

Systems thinking is the foundation for improving reliability and dependability, leading to more effective facility and infrastructure performance.

Organizations can systematically enhance reliability and dependability by integrating key approaches into the development, deployment, and maintenance processes of their products and systems. Despite subtle differences in terminology, regular assessments and updates should be conducted to address emerging challenges and technological advancements. This article provides a brief description and demonstration of several key approaches for enhancing reliability and dependability.

Reliability and Dependability Are Often Used Interchangeably

When it comes to choosing the right word to describe a product or service, the terms "reliability" and "dependability" are often used interchangeably. However, there are subtle differences between the two that can impact how they are perceived in practice and by consumers.

A Simple Distinction

I distinguish reliability, availability, and dependability for many general audiences, as exemplified by my wife choosing me as her husband. As a spousal partner, she determined that I was reliable— that is, I had a high probability of meeting her desired functions over her lifetime of living in the southeastern United States as a middle-class family. However, if you asked her how available I am, she would probably say, "Somewhat limited. He seems to require a lot of downtime." Yet if you asked her if I were dependable, her answer would probably be, "Yes, he normally performs quite well when I need him to do so."

Reliability refers to the consistency of performance over time. A reliable product or service can be counted on to perform consistently and without fail. Dependability, on the other hand, refers to the trustworthiness of the product or service. A dependable product or service can be relied upon to perform as promised and meet the consumer's expectations.

While the two terms are similar, they are not interchangeable. When choosing which term to use, it is important to consider the specific context in which it will be used and the message that you want to convey to your audience.

Reliability Defined

Reliability refers to the consistency and accuracy of a system or process to perform its intended function under specific conditions. In other words, a reliable system is one that consistently delivers the expected results without failure or errors.

Reliability is the probability that an item will perform its intended function for a specified interval under stated conditions.

Reliability is often measured in terms of Mean Time Between Failures (MTBF), which is the average time that a system can operate without experiencing failure. A system with a high MTBF is considered more reliable than one with a low MTBF.

Reliability is essential in many industries, including aviation, healthcare, and manufacturing, where system failures can have severe consequences.

Dependability Defined

Dependability refers to the ability of a system or process to perform its intended function under varying conditions, including adverse environments and unexpected events. A dependable system can adapt to changing circumstances and continue to deliver the expected results without compromising safety or quality.

Dependability is the probability that an item will meet its intended function during its mission.

Dependability is often measured in terms of Mean Time To Repair (MTTR), which is the average time it takes for a system to recover from a failure. A system with a low MTTR is considered more dependable than one with a high MTTR.

Dependability is crucial in various industries, including transportation, energy, and telecommunications, where system disruptions can have significant economic and social consequences.

In everyday conversations and professional settings alike, we often hear the words "dependable" and "reliable" used interchangeably. While these adjectives share similarities, implying stability and trustworthiness, they convey subtly distinct qualities when describing people, objects, or services. Understanding these nuances helps us appreciate the traits we value in others and strive for in ourselves.

Why Dependability Matters Most

15 Ways to Improve Reliability and Dependability

Improving reliability and dependability requires a comprehensive approach that addresses various factors throughout the system's lifecycle. Here are key approaches:

1. Robust Design: Start with a well-thought-out and robust design that considers reliability and dependability from the outset of development.

2. Quality Components: Use high-quality components and materials to ensure the reliability of individual parts, reducing the likelihood of premature failures.

3. Rigorous Testing: Implement thorough testing during the development phase to identify and rectify potential issues before the product or system is deployed.

4. Redundancy: Integrate redundancy where critical components have backups, thereby minimizing the impact of failures and enhancing both reliability and dependability.

5. Predictive Maintenance: Implement predictive maintenance practices that leverage data and analytics to anticipate and address potential issues before they lead to failures.

6. Continuous Monitoring: Utilize continuous monitoring and real-time feedback mechanisms to detect anomalies, allowing for prompt interventions and maintenance.

7. Safety Protocols: Implement robust safety protocols and mechanisms to enhance the system's dependability, ensuring it operates safely under various conditions.

8. Security Measures: Implement stringent security measures to protect against cyber threats, unauthorized access, and data breaches, enhancing dependability.

9. Resilience Planning: Develop resilience plans to ensure the system can recover quickly from disruptions, thereby enhancing its overall dependability.

10. User Training: Provide comprehensive user training and clear documentation to enhance user understanding and minimize errors that could affect reliability.

11. Regulatory Compliance: Ensure compliance with relevant regulations and industry standards to meet legal requirements and enhance the system's dependability.

12. Feedback Loops: Establish effective feedback loops from users and maintenance teams to identify and address issues promptly, contributing to ongoing improvements.

13. Adaptability: Design systems to be adaptable to changing conditions or requirements, enhancing both reliability and dependability over time.

14. Lifecycle Management: Implement effective lifecycle management practices, considering maintenance, upgrades, and eventual retirement or replacement to ensure continued reliability.

15. Culture of Dependability: Foster a culture within the organization that prioritizes and values dependability, instilling a mindset of continuous improvement and attention to detail.

Reliability and Dependability In Practice

In New Orleans, for example, critical aspects of regional system reliability and dependability are determining appropriate operating capacities for infrastructure constructed below sea level over more than 100 years. Typically straightforward engineering aspects, such as assigning individual pumping capacities, can be challenging. For scenario analysis, the pumping capacities were grouped into three areas: rated (which includes design or permitted), minimum, and sustainable operating capacities. The system was not particularly reliable or dependable under the “sustained operating capacities” scenario.

I worked intensively at Tampa Bay Water for over a decade, helping the agency launch its asset management program and integrate reliability, risk, and operational resilience. Their system defines what it means to be both complex (consisting of many parts) and complicated (difficult). The system underscores the dynamic nature of reliability (it goes on forever).

A Case Example from Tampa

The City of New Orleans and Tampa Bay Water highlight the differences between an old system and a relatively new one. Context matters in most things, and especially when evaluating reliability and dependability. Context also matters when selecting approaches to improve reliability and dependability.

Improving Reliability and Dependability

Organizations can systematically enhance reliability and dependability by integrating key approaches. Systems thinking is the foundation of effective facility and infrastructure performance. Properly evaluating reliability and dependability helps resolve issues related to risk, safety, quality, compliance, and human performance. Regular assessments and updates should be conducted to address emerging challenges and keep pace with technological advancements. Is your system reliable? Is it dependable?

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Many aspects of this article were taken from the Communicating to Decision Makers, 2^nd Edition.

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JD Solomon is the founder of JD Solomon, Inc., the creator of the FINESSE fishbone diagram®, and the co-creator of the SOAP criticality method^©. He is the author of Communicating Reliability, Risk & Resiliency to Decision Makers: How to Get Your Boss’s Boss to Understand and Facilitating with FINESSE: A Guide to Successful Business Solutions.