1.0 Introduction
To select a suitable procurement strategy for a construction project, there are some issues which need to consider. From all of those issues, there are 3 big issues that mainly affect the selection decision which are time, cost and quality. There is several type of procurement strategy available in market that commonly used for construction project and each of the common method will be analyze and compare to find the most appropriate method for this project. The choice of procurement strategy is very important to the success of a construction project. Therefore, the characteristic of each strategy have to analyze and also its relative advantages and disadvantages. A recommendation of most appropriate procurement strategy will be made after analyzed the all factor that affect the procurement selection.
2.0 Report
Background of project
Project type : Office and Store
Client : Robert Gordon University
Source of fund : Public Funding
Time length : 12 months
Time for construction : 8 months
Time for full design,
BQ and tendering : 7 months
For this office and store project, there are numbers of procurement strategy which is commonly used and suitable for it. The types of procurement strategies are as below :
1. Traditional Lump Sum Contracts
For this type of contract, contractor and design team are two separated body which respond directly to the client. Client hires the design team and select the most suitable a main contractor to carry out the whole project. Normally, for this type of contract, all the drawing and document had completed before the selection of contractor.
Advantages :
• Price certainty
• Good quality of work
• Changes can be evaluated
Disadvantages :
•...
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...R. RAMEEZDEEN (2006) A multiple decisive factor model for construction procurement system selection [online] London : Royal Institute of Chartered Surveyors. Available from :
http://www.rics.org/NR/rdonlyres/69EBAB3D-7830-4FC8-B1E7-75AE6CC7BAC6/0/COB06Ratnasabapathy_Rameezdeen.pdf [ Accessed 18 April 2008]
THE SCOTTISH GOVERNMENT (2005) Construction work procurement guidance, [online] Scotland : The Scottish Government . Available from :
http://www.scotland.gov.uk/Publications/2005/11/28100404/04095#1a [ Accessed 19 April 2008]
6.0 Bibliography
S.KENNEDY & A. AKINTOYE (1995) Quantity Surveyors’ role in design and build procurement method, [online] London : Royal Institute of Chartered Surveyors. Available from :
ttp://www.rics.org/NR/rdonlyres/F9C84EA0-C08A-40BE-8273-A433160D62FB/0/quantity_surveyors_role_in_design_19950901.pdf [ Accessed 18 April 2008]
Description: Ministry of Health Service (MHS) did fair and open competitive selection process which was the best example of procurement management in my opinion. For better procurement, MHS involved the private sector in order to reduce public-sector costs and risk. From this infrastructure project, I understood the “Finance – Design – Build – Operate – Maintain” model required to practice procurement services. To fulfill the objectives, project team considered traditional procurement and three public-private partnership procurement options.
As a project manager, one must understand the procurement concepts, regardless of whether you are a buyer or a seller. Needless to say, procurement management helps identify a suitable supplier or contractor to procure goods or services. In most cases, a procurement contract is created. A procurement contract is an agreement in which the buyer agrees to acquire goods or services from a seller in exchange for consideration. A contract is a legally binding agreement between two or more parties. Usually, one party is known as a buyer and the other as the seller. This binding agreement is the key to the buyer and seller relationship and this provides the framework for how they will transact with each other. These contracts are mostly
Procurement in construction industry defined as the process that are used to deliver a construction projects. There are several types of procurement options that are available for the clients to choose from. In before the client to choose which procurement that suit the best for his project, it is recommend to considering of what procurement does the client wants. Mainly, there is THREE essential factors that are to be consider whether or not they need it for their procurement. These three are:
In construction industry there are numbers of standard construction form, models, templates are available, and choosing a particular contract is depending on type of procurement strategy that been selected by the clients and other parties. Generally the all contractors are containing the appliances for determine and conveying the situation while the contractor in a position to entitled for additional payments more than the real value of the project work.
According to Boards of Quantity Surveyors Malaysia (BQSM), currently, there are 345 registered quantity surveyor (QS) consultancy firms in Malaysia (BQSM, 2014). In order to remain competitive in the challenging construction industry, QS firms have to adopt the best strategy that suite them. Without proper planning, insufficient projects and remuneration will bring about bad cash flow and become eliminated eventually. Firm size is definitely affecting the choice of strategy used (Abidin, Nor’aini Yusof, & Adros, 2010). These firms may have different strategic orientation and affects the strategic planning process. Planning process will then bring impacts towards the firm’s decision in policy formulation and management style. Four types of categories are used to differentiate between these firms, which are the “Prospector”, “Defender”, “Analyser” and “Reactor” type. “Prospector” firms tend to be entrepreneurial, innovative and new opportunity oriented while “Defender” firms tend to defend the existing market. “Analyser” firms are the hybrid of “Prospector” and “Defender” types and may have relatively more stable and dynamic environment. The last type is the “Reactor” firm that have short term planning and changes continuously according to the latest needs (Hassan, 2010).
Vrijhoef, R. and Koskela, L. (2004) ‘The four roles of supply chain management in construction’, European Journal of Purchasing & Supply Management, 6(3-4), pp. 169-178 ScienceDirect [Online]. Available at: http://www.sciencedirect.com/ (Accessed: 6 February 2010).
Turnkey contract is normally for build from large scale developments to middle and single structures. Term and qualification for tenderers win the bidding will be evaluates based on their experience on the related project and expertise in designing building. In some cases, it may be appropriate to the tender be present to gi...
ICE - Conditions of Contract for civil engineering works published by the Institute of Civil Engineers and Federation of Civil Engineering Contractors.
The procurement process usually requires crucial planning based on the complexity and size of the specific procurement. The process involves generating and reviewing requirements and specifications for procurement. Generating and reviewing these requirements and specifications is geared towards ensuring effective planning. The most appropriate process for generating and reviewing procurement specifications would include defining the outcome, defining specifications, identifying risks, researching the procurement market, and preparing a business case (“Guidance on the Mandatory Procurement Procedures”, 2005).
Risk management is a process used in all industries to reduce the risk. The Risk management tool usage changes from sector to sector and hence each sector has developed their own risk management tools and methodologies to mitigate the risk. But the concept remains the same behind all the tools (Ropel, 2011). The main steps for risk management irrespective of the sector are:
This paper examines the legal aspects of procurement management and specifically how procurement management can be used as an effective tool for the overall management of a project. This paper focuses on the basics of common contract laws, the basics of agency law, the Uniform Commercial Code (UCC), and some aspects of that pertain to the Federal Acquisition Regulations (FAR). A summation of the company’s position in relation to a given supplier (provided the company decides not to procure all of the material in a contract) will be examined along with how that position is strengthened by understanding the legal aspects of procurement management. Finally, the paper will analyze how the project manager is supported by the contracting management function.
This paper explores what it takes to be a construction manager and the responsibilities of being a construction manager and the skills that a construction manager should have. It also explores what good construction managers do to have success on their construction projects and the steps that a construction manager must follow to end a project and meet their deadlines at the same
Procurement is a subject that has a wide variety of branch. Many areas need the knowledge of procurement in order to practice effectively or attain their maximum profit levels. Procurement helps in determining when and how one should conduct certain transactions in the business. Procurement principle s help to guide healthy relationship with other subjects and avoid many business mistakes that have a high probability of happening. Some of the main principles that procurements deal with include; f value for money, ethics, competition, transparency, and accountability. This principles help procurement to be effective thus help in making important decisions in organizations.
Procurement management- Resources are always limited. Thus, outsourcing is inevitable in this project. The managers will oversee the procurement process (Stellman & Greene, 2008 p.
In general, there are different types of procurement type for various situations due to no one method can be suitable under the all different construction project. In this case, there are four procurement paths, which are traditional, design and build, management and design and manage, will be advised to use. However, each method has different aspects of advantages and disadvantages.