Construction of a Pre-Engineered Building (PEB)

Introduction 

Procurement is one of the most important procedures that implementers of a construction plan must partake. Procuring is a process in itself, and involves first establishing the needs of the project and assigning various people, time and financial resources to the project at hand (Nicholas & Steyn, 2017). A procurer must be able to develop a cohesive, interactive and communicative interaction between the management and other internal stakeholders. Also, procurement involves selecting the necessary procedures and approaches that the procurement team will employ in assessing the scope and redefining processes. Further, the procurer and the management enter into a legally binding contract which will stipulate the cost, scope and schedules as well as the risks and possible disputes that may arise (De Araújo, Alencar & de Miranda Mota, 2017). In effect, procurement is one of the most critical implementation stages of a pre-engineered construction plan. This paper will shed light on the necessary procedures involved in implementing a procurement plan for a pre-engineered building (PEB).

Plan Procurement Management 

Project procurement management is based, chiefly, on establishing a cordial relationship between suppliers and renders of goods and services and an organization procuring such commodities. In essence, the goal interrelates with the central project management (Sanghera, 2018). Thus, plan procurement management is a vital part of project management and occurs after the construction plan is in shape as determined by the management team including architectures and engineers. Plan procurement management usually takes four important forms: defining a strategy, selecting resources, administration of procedures and processes and closure of procurements.

Planning 

Planning entails the construction of the chief procurement strategy that the management adopts in procuring. Major decisions must be made during strategizing which include the source items, that is, whether the administration will purchase them internally or externally. De Araújo, Alencar & de Miranda Mota (2017) argue that the determination made regarding the source of items significantly affects budgeting of the project. Planning also entails developing sample documents as well selection criteria with which the management selects potential vendors. The method of selection is a decision that depends on the scope of the project and its schedule as well as the requirements. Also, the risks that may arise in the execution of the plan are critical to consider.

Selection 

The selection process follows right after finishing the plan which stipulates the criteria with which the management will assess and determine the most appropriate supplier (Sanghera, 2018). At this point, the administration develops a framework that compares and contrasts vendors advantages, drawbacks and their promising returns. There exist standard tools that procurers use to select the most appropriate procurements. They include (but are not limited to) video conferences in which bidders understand the project requirements and interact with the management. The procurement team must adopt a resource calendar and avail it to the potential vendors. The calendar highlights the time, place and mode of delivery of resources. It is worth understanding that planners may review and adjust the original plan with the resultant schedule for consistency and efficiency. Upon receiving proposals, the project management team conduct a critical evaluation, and if they receive no satisfactory bid, they may seek an alternative way of soliciting new beads such as online ads.

Administration 

The third significant step is administration, which entails the assembly of necessary tools with which the management fosters its interactions with vendors. The team adopts a centralized system that will monitor and control contract changes and this in effect enable them to establish whether there is a need for recognizing potential changes. Also, administration entails physical inspections of procurement operations and conducting internal audits to ensure compliance (Nicholas & Steyn, 2017). Further, the management reviews such activities to generate formal performance reports which create room for real-time feedback. The administration process is critical to the achievement of the entire plan and usually involves the application of project management software or supply chain.

Closing 

The closure of procurement is not merely the completion of the procurement contracts. It entails a critical assessment of the process with the identification of weaknesses and the successful procedures as well as documenting a summary of the project for future reference. Reviewing the success of a plan may take the form of employing simple matrix and performance indicators. Recording, on the other hand, is a unique role that falls on the hands of other teams within the management. The closing also necessitates settling any disputes arising between the administration and vendors (Sanghera, 2018). It is crucial to note potential issues and the mediation parameters adopted for future use. Further, the information documented during closure of procurements is paramount in developing future strategic plans.

Conduct Procurements 

Varajão, Colomo-Palacios & Silva (2017) describes conduct procurements as the process of getting vendor responses regarding a bidding invitation, selecting the most appropriate seller and awarding them a procurement contract. The process facilitates the alignment of expectations between internal and external stakeholders through agreements. Conduct procurements entail three significant items: inputs, tools and techniques, and outputs.

Inputs 

The procurement team has a mandate of defining all necessary resources and documentation during the selection processes. Inputs include items such as procurement management plan, documents, criteria used to select sellers and their proposals. The management plan entails the requirements of a building under construction ranging from costs, scope and the timeframe (Stritch, Bretschneider & Hsueh, 2018). Documentations are also vital as they stipulate the qualifications and compliance of the potential vendors. Procurement documents also facilitate evidencing and referencing purposes in the future. The selection criteria, as described in the selection subsection of plan procurement management, entails factors that the procuring team will employ in choosing the best bidder. Lastly, inputs involve the vendor's proposal received after issuing notices to the general public.

Tools and Techniques 

The procurement management team must assemble the necessary equipment and approaches essential for the implementation of the management plan. Such tools will facilitate the accomplishment of the entire process of gathering information to determining the best bidder suited for the plan as per the requirements. These tools include bidder conference, where the management team will meet with the potential vendors to educate them on the needs of the plan and the expected outcomes. Also, the management will require proposal evaluation techniques with which go a long way to assessing the various proposals received from suppliers. The team will also need professional services from experts who will shed light on the processes, aftermaths and potential risks involved in making procurement decisions. Expert judgement will facilitate a quicker and more effective implementation of the plan while minimizing risks such as defaults arising in procurements. Advertising tools will also play a significant role in communicating notices of acquisitions to suppliers. Other vital techniques that the management can employ include analytical tools and procurement negotiations.

Outputs 

The management will require to assess the viability of a construction plan hence devise a performance indicators system. The system takes the form of a predetermined set of outputs. Such outputs include selected sellers who are in effect the result of a selection process using the set criteria (Stritch, Bretschneider & Hsueh, 2018). Another significant outcome is agreements verbally or in writing, the latter of which necessities documentations for future use. The management and the vendors will also devise, and an agreement on a resource calendar of the construction.

Further, vendors may request changes in the project plan or the resource's calendar which may have a significant effect on the project’s aspects such as timeframes, costs and scope. Such changes will be regarded as the output during the closure. Also, the management should classify the project management plan and documents updates as outcomes.

Control Procurements 

Control procurements are essential in determining how various processes of procurement interrelate with each other (Whitaker, 2017). It also enables the management to monitor the multiple stages of performances as stipulated by the procurement contract. In effect, control procurements ensure that performances of vendors meet the predetermined objectives of procurement which are exclusively indicated in the agreement. A buyer-seller approach is adopted when institutionalizing control procurements. In effect, the buyer is the management team in charge of the building construction while the seller is the vendor supplying and delivering the goods and services need for contractions. The buyer must pay consideration for the commodities provided. The seller, on the other hand, has the mandate to deliver goods and services required and under the stipulated timeframe and calendar (Whitaker, 2017). Project management needs that buyer-seller relationship remains cordial with each party providing their end of the bargain promptly. The two are all bound by the procurement contract and must act in accordance with its terms (Jelodar, Yiu & Wilkinson, 2016).

Since control procurements entail monitoring payments and delivery of goods and services, it is widely perceived to involve the financial management component (Whitaker, 2017). Such agreements on payments on the end of the buyer, in this case, the construction team, must be prompt and timely. In case of delays, the action of the seller must be in line with the requirements made in the contract. Consequently, should the suppliers default supplies or delay delivering commodities as and when agreed, the action taken by the buyer must be relevant to and in line with the stipulations of the legally binding agreement. In essence, control procurements inhibit the collisions and conflicts that may exist during the implementation of the project.

Further, control procurements allow for a change or modification of the contractual agreements prior the closure of the contract. However, such changes must have no significant bearing on the contractual obligations and must involve mutual consent by the party’s privy to the contract. Changes that will affect the project’s outcome considerably must be recorded and stored for future reference.

Close Procurements 

While the processes and procedures of developing and implementing a construction plan are of significance, it is the end result of these undertakings that actualizes the plan. In eventuality, project management requires the finalizing of various activities and processes (Varajão, Colomo-Palacios & Silva, 2017). However, it is crucial to partake several activities before the completion of a project. Close procurements are the final phase of the construction life cycle. For closure to take place, the management and the suppliers must be satisfied that all desired outcomes have been actualized. Also, each party must ensure that they have executed their end of the bargain as stated in the contract.

Project management takes emphasis on this process as it sets clear the agreements settled before the commencement of the project and any underlying concern from either party. The buyer is under the obligation of providing the seller with a written notice indicating the completion of the contract. Usually, the procurement administrator has the power to authorize such notices sent alongside a formal letter stipulating terms and conditions of the contract. The official completion of the construction of the building will be marked by signing of the closure document by both parties, that is, the vendor and the construction management team. Non-closure or any defaults of closing the business improperly will attract consequences as stipulated in the contract. Thus, the management must ensure that after the completion of the contract, the suppliers are provided with the notices of closure of the contract and sign them. The signed documents indicating a mutual agreement to close the contract must be documented for future purposes.

Conclusion 

Buying products and acquiring services for the construction of a pre-engineered building is a critical process in the implementation of a project plan. There exists various parameters and factors that buyers must consider when purchasing commodities. Procurement encompasses a series of planning procedures as well as interactions between the buyer and the seller. The management must develop an effective procurement plan which highlights all required goods and services for the completion of the building construction. The plan’s objectives must be consistent with the master strategy of the construction. Further, there must be a legally binding agreement between the buyer and the seller. The contract stipulates all roles and obligations of the parties and the reputations of failing to administer such duties. Both parties must be vigilant when defining the terms and the conditions of the contract as it also stipulates the circumstances that may lead to a premature cancellation of the contract. It also gives guidelines regarding the closure of the contract.

There are bound to be some conflicts arising from both parties during the execution of their respective obligations. Several measures can be adopted to minimize such occurrences. First, the construction management team should employ information technology solutions such as invoices control software. Invoices are vital operational documents in procurement and are also principal amongst the transactional evidences. There exists a number of software solutions that the management can employ to run their invoices and keep track of their movements and payments. Second, the bidding process should be run properly and effectively. Research shows that a poorly run bidding process brings rise to several hindrances to effective implementation of the project requirements. Proper bidding entails reviewing the construction’s procurement requirements and the documentation of the buying decision process.

References

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Jelodar, M. B., Yiu, T. W., & Wilkinson, S. (2016). A conceptualisation of relationship quality in construction procurement.  International Journal of Project Management ,  34 (6), 997- 1011.

Nicholas, J. M., & Steyn, H. (2017).  Project management for engineering, business, and technology . Routledge.

PMBOK 5th Edition. (2015).  Project Management Knowledge . Retrieved 13 December 2018, from https://project-management-knowledge.com/pmbok-5th-edition/ 

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Stritch, J. M., Bretschneider, S., & Hsueh, L. (2018, July). Value Complexity, Structure, and Technology in Public Procurement Process Performance. In  Academy of Management Proceedings  (Vol. 2018, No. 1, p. 12639). Briarcliff Manor, NY 10510: Academy of Management.

Varajão, J., Colomo-Palacios, R., & Silva, H. (2017). ISO 21500: 2012 and PMBoK 5 processes in information systems project management.  Computer Standards & Interfaces ,  50 , 216- 222.

Whitaker, S. (2016). Procurement Management. In  Pass the PMP® Exam  (pp. 405-444). Apress, Berkeley, CA.