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How do you develop a procurement plan for a construction project?

Writer's picture: BHADANIS Quantity Surveying and Construction Management Training Institute for Civil Engineers & Construction Professionals OnlineBHADANIS Quantity Surveying and Construction Management Training Institute for Civil Engineers & Construction Professionals Online

Developing a procurement plan for a construction project is like setting the groundwork for everything you’ll need to buy, hire, or outsource to get the project done on time and within budget. It’s about planning out what materials, services, and contractors are required, when they’re needed, and how you’re going to acquire them. Let’s dive into this process with a practical example.

Example: Commercial Office Building (G+20 Floors) in Dubai, UAE


Imagine you’re in charge of building a 20-story commercial office building in Dubai. This project will require a range of materials like concrete, steel, glass, HVAC systems, and electrical fittings. You’ll also need to hire contractors for specialized work like glazing, plumbing, and electrical installations. Developing a procurement plan for this project involves several key steps:


1. Identifying Procurement Needs

  • What to Do: Start by breaking down the project into different phases and identifying all the materials, services, and contracts you’ll need for each phase.

  • Example: For the G+20 office building, you list out everything you’ll need, such as concrete for the foundation, steel for the structure, glass for the facade, HVAC systems for climate control, and so on.

  • Action: This list becomes your baseline for planning your procurement activities.


2. Defining the Procurement Schedule


  • What to Do: Once you know what you need, determine when you’ll need each item or service. This involves creating a timeline that aligns with your construction schedule.

  • Example: You’ll need concrete early on for the foundation, steel during the structural phase, and HVAC systems later in the project when the building is being fitted out.

  • Action: Create a schedule that outlines when each material or service should be procured to avoid delays. For example, you might plan to order steel six months before it’s needed to account for manufacturing and shipping times.


3. Selecting Procurement Methods


  • What to Do: Decide how you’re going to procure each item. Will you buy it directly, or will you hire contractors? Will you go for competitive bidding, or will you negotiate directly with a supplier?

  • Example: For your Dubai project, you might choose to tender the steel supply through a competitive bidding process, while selecting a specialized glazing contractor through direct negotiation based on their previous work.

  • Action: This decision-making process should be documented, noting why a particular procurement method was chosen for each item or service.


4. Setting Up Contracts and Agreements


  • What to Do: Draft contracts that clearly define the terms, conditions, and expectations for each supplier or contractor. Make sure these agreements align with your project’s overall goals.

  • Example: For the office building, you’ll draft contracts with the steel supplier that outline delivery schedules, quality standards, and penalties for late delivery. Similarly, contracts with the glazing contractor would specify the scope of work, timelines, and payment terms.

  • Action: Ensure that all contracts are signed and filed properly, with copies accessible to the project management team.


5. Monitoring and Managing Procurement Activities


  • What to Do: Procurement doesn’t end once the contracts are signed. You’ll need to track deliveries, ensure quality, and address any issues that arise during the construction process.

  • Example: As construction progresses, you regularly check in with the steel supplier to ensure that deliveries are on time. If there’s a delay, you immediately work with the supplier to find a solution, such as partial deliveries to keep the project moving.

  • Action: Keep a close eye on your procurement activities to ensure everything stays on track.


Template for Procurement Plan

Here’s a template in tabular format that you can use to develop and manage your procurement plan for the G+20 commercial office building in Dubai:

Procurement ID

Item/Service

Phase

Procurement Method

Supplier/Contractor

Procurement Date

Delivery Date

Contract Terms

Responsible Person

Status

Comments/Notes

1

Concrete for foundation

Foundation Phase

Direct Purchase

XYZ Concrete Co.

01-Nov-2024

15-Nov-2024

Payment upon delivery

Procurement Manager

Completed

Delivered on time, quality approved

2

Structural Steel

Structural Phase

Competitive Bidding

ABC Steel Ltd.

01-Jan-2025

01-Apr-2025

Discount for bulk order

Procurement Manager

In Progress

Delivery scheduled for April

3

Glazing Services

Facade Installation

Direct Negotiation

DEF Glazing Contractors

01-May-2025

01-Aug-2025

Scope of work, fixed-price contract

Project Manager

Scheduled

Contract signed, mobilization starts June 2025

4

HVAC Systems

Interior Fit-out

Vendor Selection

GHI HVAC Suppliers

01-Jun-2025

01-Sep-2025

Warranty and maintenance included

MEP Engineer

Pending

Vendor selection in progress

This table will help you keep track of your procurement activities, ensuring that everything is ordered, delivered, and installed according to your project schedule.

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