Project Procurement Management Lecture Notes PDF

Course Title PROJECT MANAGEMENT Course Code 0404438 Course Leader: Prof. Alex Opoku (PhD, MSc, BSc (Hons), PGCHE, FHEA, MCIOB, FRICS) Professor of Sustainable Built Environment Course Learning Outcomes covered: 1....

Course Title PROJECT MANAGEMENT Course Code 0404438 Course Leader: Prof. Alex Opoku (PhD, MSc, BSc (Hons), PGCHE, FHEA, MCIOB, FRICS) Professor of Sustainable Built Environment Course Learning Outcomes covered: 1. Understand what a Project is, what Project Management is, and the role and responsibilities of the Project Manager within the construction team. 2. Understand how Project Managers manage projects by integrating scope, time, cost, quality, human resources, communications, risk and procurement of a project. 3. Learned to apply methods for estimating time and cost and managing quality in a construction context. 4. Learned theories of leadership, communication, motivation, conflict management within teams. 5. Understand Procurement and Risk management and how they are related. Lecture overview Project Procurement Management  Defining Procurement Procurement is not just about purchasing Procurement is: “the framework through which construction is brought about, acquired or obtained” “acquisition of goods and/or services at the best possible total cost of ownership in the right quantity and quality, at the right time, in the right place…” Tendering Procedures How the Contractor/Supplier is appointed Tendering  A tender is a submission made by a prospective supplier in response to an invitation to tender (ITT) issued by a client  It makes an offer for the supply of goods or services  An invitation to tender may follow the completion of a pre-qualification questionnaire (PQQ) in response to an advert posted by the client and perhaps a pre-tender interview  The purpose of a PQQ and pre-tender interview is to enable the client to produce a shortlist of suppliers that are likely to be most appropriate for their particular project who will then be invited to tender  It helps reduce inefficiency and wasted effort in the tender process The Tendering Process Produce tender documents; Invite firms to tender; Receive tenders; Evaluate tenders; Appoint contractor Tendering Methods Open Tendering; Selective tendering:  Single stage  Two stages Negotiated/Nomination Serial Tendering 1. Open Tendering No restriction on who can submit a tender; ‘Free trade’; Advert in trade press or local/national papers; Invite firms to bid 2. Selective Tendering Small number of firms selected to submit tenders; Usually 5 to 8 tenderers; Selection of firms to be included on the tender list is a key issue. 2a. Single Stage Selective Tendering Both selection of contractor and contract sum done at the same time; Tender documents sent to selected list of tenderers; Tenders received and evaluated; Successful contractor selected and appointed. 2b. Two Stage Selective Tendering Selection of the contractor is separate from agreeing the contract sum; Firms bid on their pricing structure and other criteria; Evaluation predicts which should produce the best value for money Two Stage Selective Tendering Process Stage One - Select the Contractor Tender List of 5-8 tenderers invited; Tender documents prepared; Tenderers advised of the process and their involvement in the second stage. Stage Two - Determine the Contract Sum Design finalised; Documents produced (could be BoQ); Documents priced based on first stage prices; Negotiation until agreement on contract sum is reached (or on its calculation); Contract signed. 3. Negotiated Tendering One contractor is used; Prices are negotiated; Based on competitive price for similar work; Agreed estimated cost plus percentage for overheads and profit; Actual cost of the work plus percentage for overheads and profit. When is negotiation used? Preference/business relationship; Continuation of contract; Specialist expertise or equipment; Tendering climate; Quick start. 4. Serial Tendering Phases; First phase in competition; Details of subsequent phases given; Remaining phases negotiated; Original tender documents used, plus inflation; Suitable for repetitive work.