Problems working with the Segal operations in algebraic K-theory of spaces-constructed by F. Waldhausen (1982)-arose from the absence of a nice groupcompletion on the category level. H. Grayson and D. Gillet (1987) introduced a combinatorial model G. for K-theory of exact categories. For dealing with K-theory of spaces we need an extension wG. of their result to the context of categories with cofibrations and weak equivalences. Our main result is that in the presence of a suspension functor-as in the case of retractive spaces-the wG. construction on the category of prespectra is an un-delooped version of the K-theory of the original category. In a sequel to this paper we show that Grayson's formula (1988) for Segal operations works as intended.