Introduction Construction projects contain a high level of complicated procurement processes. Not only the revenue or profit is critical in the construction industry, but market intelligence and construction procurement knowledge are also important. The bidding process in the construction industry is illustrated by many different involved parties including the architectural and engineering firms, client, general contractors, material suppliers, specialized contractors, manufacturers, etc. (Halaris, 2001). Preparing proposed documents, appraising bids, and awarding the contract to the winner of the bid are among the major duties of the client (Gokhan et al, 2006). (Gokhan et al, 2006) Fig. 1. Bid proposal preparation process Sub-contracting has comprehensively been used in the construction industry. It allows general contractors to employ the lowest workforce in construction projects and promotes specialization (Maturana, 2005). Many general contractors only play a role as construction management agents in construction projects, for example, they sub-contract a large volume of their work to sub-contractors (Shash, 1998). The characteristic bidding process is showed in Fig. 1. Bidding requirements and procedures vary and have disparate requirements that are created by the owners. There is a challenge of a bidding procedure is the quantity of paper-based forms that need to be filled, revised, and filed. This spends a large amount of time, which the contractor changes very
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)
The information that they provide is scrutinized and their credit is checked to qualify their bid. After the proposals are accepted and the subcontractor is awarded a job, a formal contract needs to be put in place. This contract covers all the project specific information in detail specifying what is expected from the subcontractor, the legal disclosures and liability clauses. A project furnishes mainly three pieces of a contract: the scope of work, project schedule and schedule of values. The scope of work covers the work that is expected to be performed, project schedule specifies the time in which the awarded project needs to be completed and the schedule of values points out the detailed breakdown of the cost the contractor is going to fulfill for the project which is generally derived from the purchase order. Change order is the change which takes place in the scope of work after the contract is put in place, these need to be documented and the increase or decrease in the cost affected by this change need to be compensated by either of the parties. The task of performance evaluation is yet to be performed by me which would be covered in the next phase of the internship when I observe a bid from awarding to
Through tendering it should be conducted systematically and involve a score matrix with standardised to bid/or not bid questions that will assist in determining whether to advances whilst removing personal opinion from the equation. It is vital that the mandatory requirements are reviewed for the bid some of which may include contractors
Clough, Richard H, Glenn A. Sears, S K. Sears, Robert O. Segner, and Jerald L. Rounds. Construction Contracting: A Practical Guide to Company Management. , 2015. Print.
Procurement by public entities is guided by primary law principles of transparency, equal treatment and non-discrimination, procurement laws sets up an extensive legal framework regarding the procurement of work, supply and service contracts. There are two main reasons for the use of specific procedures i.e. why contracting authorities do not just negotiate or simply buy from the closest supplier. First, it provides for more public accountability and therefore less cases of corruption practices. Additionally, tendering procedures aim to ensure the best value for money by making it necessary for suppliers to act highly competitive. As a result, market mechanisms will help in facilitating the best possible practices. In situations where market mechanisms are not effective, tender procedures might lose their effectiveness as well. If for example there is lack of competition due to certain complexities or as a result of lower bidder interest, negotiations with just one or two suppliers may be the most efficient manner to handle the process. Therefore, we discuss the inherent advantages and disadvantages of sealed bidding and contracting by negotiation as procedural frameworks for tendering.
In most of the cases, when it comes to implementing a business idea into reality then hiring a construction contractor becomes an essential need. However, we also cannot hire any commercial builder for the task because this is not an investment that we make every day since it involves a lot of money where we do not want to take any risk. In that case, hiring the best construction agency is very important so that we are going to get a quality and productive result in the end.
In this task area, I mainly interact with subcontractors, use smart bid and work on bid reviews. In the first two weeks I learned to use smart bid and started sending bid invitations to subcontractors and following up on them through phone calls and emails. I gave them an introduction of the project and provided them with the necessary information required to come up with a competent price. In parallel to this, I participated in the bid review meetings which gave me an introduction to the cost control process and the perceptions of different departments within construction such as sales, operations and cost management. This task area is very critical because though we come up with a bid through estimation, it is very essential that the cost is both competent enough to win the project and realistic enough that it can be executed by the operations. In the following weeks, I developed a better rapport and interaction with the subcontractors and started to drive the bid review meetings in addition to participating in them. In the future, I will continue to do the same for different projects and improve my caliber in this
It is essential that project managers have a thorough understanding of procurement concepts, and the contracts that are involved in the practice. This assignment will focus on the types (Fixed Price, Cost Reimbursable, and Time and Material), and subtypes of procurement contracts, and discuss the pros, cons, and the burden of risk of each. At the end of the assessment, (FFP). This a clear understanding of which type of contract is least advantageous choice for the ACME breakroom construction project. Further, the paper will highlight this type of contract is a bad choice, and discuss
In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.
Choosing construction management as a procurement strategy means the client is responsible for leading the
Construction projects are always unique and risks raise from a number of the different sources. Construction projects are inherently complex and dynamic, and involving multiple feedback processes. A lot of participants – individuals and organizations are actively involved in the construction project, and they interests may be positively or negatively affected as a result of the project execution or project completion. Different participants with different experience and skills usually have different expectations and interests. This naturally creates problems and confusion for even the most experienced project managers and contractors.
terms of time can be managed in this scenario, as there is no specific delivery
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
For this assignment the writer is going to discuss the nature and types of construction contracts and will explain the legal responsibilities of the various parties involved in the design and the construction process.
Introduction Construction Management is not a new idea. The function of the Construction Manager is to work on behalf of the owner to complete a project within the plans and specifications provided. In the last few years construction practices have changed dramatically. Technology, materials, government bureaucracy, financing, design, and engineering have all advanced. With the complexity of the construction process increasing, owners demand accountability and accurate guidance during the entire planning and construction process. The importance of project management to construction derives from the nature of how the industry’s business activities are conducted. Project managers in construction are responsible for the overall success of