What is Procurement Management?

Project Procurement Management Processes

Project procurement management is vital for successful completion. It has four steps which are planning, conducting, controlling and closing. Each step has inputs and outputs. This article discusses the project procurement management and the importance of it for successful project management.

Project Procurement Management

Procurement is an indispensable process for a project’s life cycle. In order to build up a project, various types of resources, materials and services are required. In the absence of resources, none of the projects can be achieved. Procurement is more than an ordinary process, it is the profession of tendering, finding, purchasing and acquiring materials, goods, and services from a supplier or an outer source. Project procurement management is a practice of collaboration with the outer sources and evaluating the bids to obtain the best-fit materials and services for the project.

Importance of Project Procurement Management

Most of the projects are actualized with a limited budget and time period. A limited budget means limited unit prices for materials, subcontractors, and services. Obtaining resources by focusing on the quality, contract requirements and unit prices are vital for staying inside the baseline budget. Therefore, project procurement management is important for successful project completion.

Concept of Project Procurement Management 

The PMBOK Guide defines the Procurement Management as the processes necessary to purchase or acquire the products, services, or results needed from outside the project team.

Simply put, procurement is a process of selecting vendors, ordering goods and supplies, establishing payment terms, developing and administering the related contracts. Project procurement management relies on outsourcing. Outsourcing is a way of optimizing resources within a project. For example, you need an additional one thousand workers for two weeks to complete the project on time. This is a sudden increase so that rather than hiring and training them, you can find a subcontractor to bring the manpower for two weeks.

Often, this process consists of four specific phases: planning, conducting, controlling, closing.

Project Procurement Management Processes

Project procurement management has four major processes.

Plan Procurements

Planning is the first step in procurement management. It involves to plan and decide which supplies will get from an external source and which will not be. It is a documenting process of goods and services to be purchased. While performing this documentation, project scope and the work schedule should be analyzed, the number of materials, long lead items should be specified. Procurement Management Plan is prepared at this initial step. Planning process creates a framework for all other processes. Stakeholder register, risk register, project schedule, project management plan, and resource requirements are the major inputs of the planning step.

Conduct Procurements

Conduct Procurements is the second process. Responses or bids of the vendors are evaluated according to the criteria determined in the Procurement Management Plan. This process is repeated for various types of materials and services to be procured. Shortlists are created to perform detailed negotiations with the suppliers. Agreements with the contractors are made at this step. A procurement management plan, proposals, organizational process assets are the inputs of the conduct procurements step.

Control Procurements

Control procurements are the third process that includes monitoring the contract performance and making changes and corrections if necessary. Both the buyer and the seller control each other. Control procurements process manages procurement relationships and ensures that the performance of the vendor and seller meets the requirements stipulated in the contract.

This process requires financial management support because it includes monitoring payments made to the vendor. Before the Close Out process, audits, performance reviews, and inspections should be done and corrective actions should be taken in this process. The project management plan, agreements, work performance data, and work performance reports are the inputs of the control procurements step.

Close Procurements

The PMBOK Guide defines the Close procurement process as the process of completing each project procurement that supports the close project or phase process.
According to the definition, closing processes don’t happen at the end of a project. It takes place when the procurements are closed.

In other words, closing procurements and closing project doesn’t necessarily happen at the same time. But in order to close the project, all the procurements must be closed.

When the procurements are closed?

– In the event of contract completion
– In the event of contract termination

The closing process ensures that both sides have met their contractual obligations and resolves any remarkable and incompleted issues. Also, it confirms all work and deliverables produced is satisfactory.

Project management plan and the procurement documents, agreements are the inputs of the close procurements step.

Summary

Effective project procurement management brings the project to a successful conclusion. It is not effective for an organization to procure the resources inside the organization. Using the outer sources professionals and manpower may be cheaper and effective than hiring and training workers for a short period.

Basically, there are four phases in Project Procurement Management. Plan procurement is a documentation process that identifies what to purchase and who are the suppliers. Conduct procurement is an agreement phase with the suppliers by evaluating their bids. Control procurement is the monitoring and controlling phase that involves performance measurement practices. Buyer controls the supplier and the supplier controls the buyer according to the agreements. The last phase is the close procurements phase which supports the project closure. It is a process of completing each procurement.

To get the best procurement management services in Singapore visit Merx Construction Management.

What is Construction Contract Management?

A contract is a promise or set of promises which the law will enforce.

Building contracts relate to the distribution of services or goods as part of an asset's delivery. Traditionally, providers might have been regarded as organizations contracted to provide physical supplies such as goods, materials, plant and so forth, nevertheless, PAS 1192-2 currently defines a supplier as some, a provider of goods or services directly to the company or to a different supplier at a supply chain'.

Construction contracts are generally forms, altered types of bespoke.

Contract management is the process of managing contracts that are made as part of their delivery of a built strength. It includes the development, analysis, and execution of contracts by the parties to those contracts to ensure operational and financial performance is maximized, and risks are minimized.

Contract management can be categorized into three phases:

• Pre-contract stage: Contract negotiation is undertaken and Tenders documents are ready, tenders are sought.
• Contract execution period: Last contract documents are ready for implementation
• Post-award stage: Compliance with terms of this contract.

A contract manager might be identified to manage one, or several contracts, or to work as part of a team of contract managers. On large, complex projects, involving several contracts (such as a construction management project) a consultant might be appointed to perform the role of the contract manager.

The role of contract manager include:

• Assessing the needs of the business or project.
• Assessing the market.
• Risk assessment.
• Determining procurement methods and tender assessment criteria.
• Preparing a contract management strategy.
• Preparing budgets and cost estimates.
• Preparing programmes.
• Selecting the form of contract.
• Preparing tender documents.
• Seeking tenders.
• Negotiating contract conditions.
• Contract engrossment and execution.
• Briefing project teams, contractors and suppliers.
• Being the point of contact for the parties to the contract.
• Relationship management.
• Contract administration.
• Managing variations to the works.
• Supplying information to resolve disputes.
• Preparing information for the completion of contracts.

An effective contract management strategy can bring a number of benefits to this process:

• Expected business benefits and financial returns are more likely to be realized.
• Good working relations can be maintained with contract partners and subcontractors, and so there is a reduced risk of disputes and a higher chance of repeat work.
• There are fewer unforeseen events.
• Contract partners, subcontractors, and suppliers are likely to be more cooperative and responsive.

Contract management can be a complex process, which can be simplified with the use of contract management software. This can be particularly helpful for contract management involving multiple contracts and multiple parties, creating integrated systems for; document management, change control, relationship management, accounting, project management, contract administration, resource allocation and so on. Specialist software is available for different types of contract management, such as large contracts, small contracts, multiple contracts, civil engineering and so on.

To get the best construction contract management services in Singapore visit Merx Construction Management

What is Construction Management?

Construction management (CM) is a long and extremely demanding process. It is the foundation for every building project and the secret to its success. Construction management's intention is to aggressively control and monitor a project's development concerning cost quality and time. It covers a broad spectrum of responsibilities and it spreads to a lot of distinct areas (construction, engineering, law, applications, etc). Merx CM provides a complete suite of professional project management services across the workplace, retail, hospitality and industrial sectors.

Construction manager: Duties and responsibilities

In simple words, building managers are the ones who are responsible for the project to proceed according to the plan. The main mission for building managers is to manage their project in a way that will ensure its completion on the budget and time. Furthermore, they ought to make certain the entire project is complying with codes, all the set building plans, and other regulations. 

A construction manager has different responsibilities during the execution of a building project. These responsibilities can be divided into the following categories:

• Set the budget and conduct cost evaluations.
• Plan the job period schedule.
• Select the construction methods and strategies for their project.
• Keep a good and close relationship with the clients.
• Negotiating contract arrangements with workers and job agents.
• Take care of the employees on site.
• Work together with the project's numerous consultant

The  Key Functions Of Construction Mangement

Every construction project has objectives that will need to be met. It goes without saying that lots of times these goals may overlap. In these scenarios, the role of a construction supervisor is essential. S/he is the person who will need to avoid and to give in regard to the objectives that are given. 

With this in mind, we could outline the key construction management functions to the four: 

• Clearly establishing the objectives and the scope of the project. Planning also a huge number of different parameters like scheduling, establishing performance standards, budgeting, and deciding upon the participants of this project.
• Enhancing resource allocation by ameliorating the procurement procedure and equipment management.
• Executing numerous operation as a result of the effective coordination and monitoring of the whole process (eg. design, contracting, planning, etc).
• Building powerful communication stations to be able to either avoid or solve project conflicts.

Conclusion

Overall, it is clear that construction management can be your ultimate help in starting up your construction or getting renovation for one. But it is equally important to look for the best construction management service provider.