What Is The Procurement Process In Construction?
Have you ever wondered about the work that goes into securing the required materials and labor to get a construction project over the line? That’s the procurement process.
The way a job owner carries out the procurement phase could be a crucial determining factor in how the construction venture will turn out and the bidding process.
Many factors can impact the outcome, from selecting the right contractor to staying within financial boundaries, so the procurement process in construction needs to be handled with extreme care.
Continue reading further through this article to explore the role procurement plays in construction in detail.
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What Is The Procurement Process?
The procurement process is the approach used by an individual or organization to obtain materials to carry out a construction project. It involves sourcing high-quality materials, the right amount of labor, and staying within a timeline while working within a set budget.
Types Of Procurement Methods In Construction
There are a range of different procurement methods for construction projects an organization can adopt. It’s important to note that each job comes with its own complexities and requires a separate approach from the other.
Let’s take a look at some of the procurement strategies.
Design-Bid-Build – The owner finds an architectural designer to create construction blueprints, the project is opened up to the public for bidding, and a contractor is selected based on the owner’s preferences (open tendering).
Design-Build – A contractor is hired to look after every aspect of the project and complete it, including designing and building it, as it says in the name. The contract can either be made on a single-stage or two-stage tender, depending on the preferences of the job owner. Once the contractor is chosen, there will be negotiations about the price and how the job will be done, and then the contract can be signed, and the work can begin.
Management Contracts – The job owner hires a construction management service to employ a group of contractors to carry out the work on their behalf and ensure it’s carried out accordingly.
Private Financing Initiative (PFI) – A contractor is selected based on their financial resources, design, and building skills to develop the project and rent it to the job owner for a certain amount of time before they take full ownership of it.
What Role Does The Procurement Manager Play?
Now you know the procurement types; the next is to understand the role of the procurement manager.
The procurement manager oversees everything regarding the management of the project, like how the resources are used, the strategy is executed, and the flow is right.
See below for some of their responsibilities.
- Project planning
- Controls the procurement process cycle
- Manages the budget
- Selects the suppliers
- Oversees the quality and quantities of materials
- Negotiates contracts
- Communicates with stakeholders
Why Procurement Is Important In Construction
Every successful construction project comes with a great procurement strategy. Without one, the job is doomed for failure, and even at that, the project manager needs to be highly skilled in their field and know what they’re doing so the process runs smoothly without any slip-ups.
Here’s why the procurement procedure is important.
- Helps controlling finances
- Facilitates bidding in construction
- Assists in future planning
- Avoids any potential risks
- Brings stakeholders together without leaving any room for confusion
- Allows for materials to arrive on time without delays
- Leaves everyone accountable for their work
A Final Note
The procurement process is an integral part of a construction project’s success. Having an established plan managed and mapped out by a professional who knows what they’re doing can only be a positive, regardless of the job size.
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