Procurement in Construction

Topics: Construction, Project management, Project manager Pages: 7 (2268 words) Published: June 13, 2013
P * Procurement Definition:
A basic definition for the procurement is “the way the building is realised” and “involves assembling and organising the skills and services of a team of construction professionals”. (the Construction Round Table, 1995). More precisely, the construction industry describes procurement as “a system that establishes the roles and relationships which make up a project organisation”; hence the overall organisation and communication structure for the management, administration and control of a project is established by the procurement system. (D.C.H Coles, 2010) * Procurement Systems essentiality:

Choosing the most suitable procurement method for the specified construction project is a long term hard decision; it is a crucial task “it is one of the most crucial decisions on any building project” (Gillespie, 1994). Choosing the appropriate procurement system is the determinate for a successful project (Building Procurement, 2006) this statement is supported by the investigation done on 25 National Audit Office (NAO) reports, were it was concluded that choosing the wrong procurement method is a major risk source (covering 29% of the risk source percentage) for public sector project failure. Furthermore, an American study concluded the total project cost can decrease about 5% by choosing the correct procurement methodology. “Failure to choose the appropriate procurement approach is recognised as the primary one source for project failure" (Building Procurement, 2006)

* Role of the Project Manager
“The presence within the client company of a Senior Executive willing and able to act as a single point of contact throughout the building process, gives the client a distinct advantage” (Construction Round Table, 1995)

Within the last fifteen years, the role of the Project Manager has developed in the construction industry, what is mentioned above proves that having someone to manage and supervise the project is the key for a successful project. The client can appoint a project manager from his company “in-house” or an external consultant appointment. Overview for the Project Manager’s duties:

A project manager can be appointed by the client (especially if it was an inexperienced client in the construction industry where the majority of clients in the UK fall into this category), in order to help him build up his business needs case for the project development, find alternatives and options that are more suitable in order to achieve his business needs, work out the investment appraisals and risk assessments, choose the most suitable procurement method for the project, select the project team, establish and supervise the performance. An important task the project manager must perform before adopting the procurement method is to approach the client, and understand specifically what does he requires and what the outcomes from the new construction building are, more specifically the objectives and the products of the building. After performing this action the project manager will look at all the alternatives if there are any. Comparing the past with nowadays, when the architect and the engineer had the major role in the project during the past, if the client requests a new building to be constructed they will support his case while the project manager will look at all the alternatives that might be better for the client and his business, the alternatives might include: * Building an extension to the client’s existing building or carrying out alterations and refurbishments to it. * Moving the building to a position that might be more suitable to the business of the company. After understanding the needs of the client and finding all the alternatives, it is the project manager’s task then to choose the most appropriate procurement method for the project. As mentioned earlier, choosing the most suitable procurement method for the project is one of the most crucial decisions on any building...

References: * D.C.J COLES. (2010). Criteria of Procurement Selection. Project Managers (Construction Management), the entire Lecture.
* Business Round Table. (1995). the Construction Round Table. Thinking about Building.
* Gillespie, B (1994)
* Roy Morlegde, Adrian Smith, Dean T. Kashiwagi. (2006). Chapter 2; Procurement Strategy: a literature review. In: Building Procurement. Oxford: Blackwell Publishing Ltd.. p6-p22.
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