Introduction
Construction Procurement Costs can be effectively managed within integrated planning, procurement, and project delivery environment. Often owners focus only on initial purchase cost when they make decisions on repair, renovation, maintenance, or new build planning, design, procurement & construction.
The above, when combined with the owner’s level of leadership and competency, internal collaboration and skill levels of procurement and facilities management teams, and the selected construction delivery method ultimately determine construction success or failure.
Success or failure of a construction procurement and the final outcome is measured by cost, time, quality, and the overall satisfaction of participants.
80%-90% of all construction projects are over-budget, late, poor quality, or result in one or more parties being dissatisfied. In any other sector, this level of performance would be considered unacceptable. In the facilities management, architecture, engineering, construction sector, it is a way of life.
Solving the Construction Procurement Puzzle
All the tools and support services are readily available to enable the consistent delivery of quality repair, renovation, maintenance, and new builds on-time, and on-budget and to everyone’s satisfaction. Implementation, however, requires changing from traditional methods and the associated support and understanding of senior management.
basis of initial purchase cost (Woodward, 1997). The initial capital cost is only the portion of
an assets life cycle, that need to be considered while making the right choice.
Requirements for Measurable Improvement
Procurement process in any organization has a major role which
demands heavy purchasing, management of logistics & requires managing waste at every stage.
- Procurement must be knowledgeable about construction requirements and fundamental processes and fulfill its major role in associated management of logistics and managing waste and every phase of construction
- Collaborative and integrated construction planning, procurement, and construction delivery methodology
- Common data environment inclusive of a locally researched, detailed unit price book
- Multi-party, long term, mutually beneficial contracts with an integral Execution Guide / Operations Manual.
- Mandatory initial and ongoing training
- Quantitative metrics / key performance indicators (KPIs)