Assignment on Estimating Tendering and Procurement

Running Head: ESTIMATING, TENDERING AND PROCUREMENT
ESTIMATING, TENDERING AND PROCUREMENT
Name of the Student
Name of the University
Author Note

ESTIMATING, TENDERING AND PROCUREMENT1
Executive Summary
The main purpose of this report is to develop a strategic approach for the procurement
process. The study has been supported by understand the tendering and estimation process of
building construction. It is recommended that, the client should use cost reimbursement
strategy for completing the project. This strategy is best for purchase of materials because,
generally the cost of materials is unknown during the contract. Therefore, this method will be
best for the unknown cost that can incurred during the project.

ESTIMATING, TENDERING AND PROCUREMENT2
Table of Contents
Introduction................................................................................................................................3
Discussions.................................................................................................................................3
A strategic approach to procurement.....................................................................................3
Alternative Routes of Procurement........................................................................................6
Advance Procurement Practices...........................................................................................11
Factors that can influence the development of procurement strategy..................................12
Benefits of adopting alternative procurement strategy........................................................15
Examples..............................................................................................................................16
Conclusion................................................................................................................................17
References................................................................................................................................18

ESTIMATING, TENDERING AND PROCUREMENT3
Introduction
The paper will focus on the role of client in the procurement process. The suitable
practice for the construction work has been discussed in the report. The overall evaluation of
various factors that could influence the procurement process has been discussed in the paper.
The last part of the paper has explained about the benefits of alternative methods of
procurement.
Discussions
A strategic approach to procurement
The new project planning of constructing a new building will focus on minimising the
errors in the project. The procurement process will be done on the basis of following strategy:
 University spend- The University is having a total budget of £10 million to spend in
the new building. Cost will be associated for purchasing or acquiring the physical
equipments. This includes, lightning facilities, dais floors, 200 number of fixed seats,
computerised facilities and other operators (Obrien 2019). Cost of operating the
building services will be related to utility cost, direct labor operator costs and other
maintenance cost of the building. Personal cost expenses related to labor training for
maintenance purpose.
 University needs- University is planning to construct a new building in the University
campus. The following will be the category positioning matrix for the building
constructions. The positioning of the commodities will be done in this matrix:

ESTIMATING, TENDERING AND PROCUREMENT4
Leverage Items
 Raw materials from suppliers
 Paints
 Installations
 Inner Floor
 LCD boards
Strategic Items
 Nails
 Stairs
 Timber
 Doors
 Environmental work
Non-critical Items
 Sanitary work
 Demolition and site clearance.
 Maintenance
 Floor coverings
 Rental equipment
Bottleneck Items
 Wooden furniture
 Tiles and fittings
 Special formwork
The procurement of strategic items will be a high-value materials. The time horizon of
this material will be long-term. For the procurement of these materials, the purchaser-supplier
relationship must be stronger. These are certain requirements that will be needed in building
constructions.
Profit
Impact
Supply Risk

ESTIMATING, TENDERING AND PROCUREMENT5
1. Market Conditions- There are certain environmental factors that may affect the
building constructions. Some of these factors are:
(a) Political factors- Political factors like documentation, permissions from the Vice
Chancellor of the University, changes in legislation during the work phase or after
completion of the work may affect the building.
(b) Economic factors- The labors may charge high demand and cost of supplies may
increase.
(c) Social factors- The theme of building may affect the cultural provisions of some
students.
2. Objectives- To estimate the cost involved in the construction work and accurately
analyse the cost information (Ferrario et al. 2017). The client want to finish the work
within £10 million by choosing the best procurement route. To complete the building
within the schedule and renovate the building in a best possible way.
Role of client in Procurement process
The client is responsible for designing, managing and providing financial services to
the procurement process. Clients provide all the required information during the tendering
process. They provide the required resources to the consultants and then help the consultants
to reach to the main contractors for making procurement process. The client’s decision of
building design will build a proper route to the procurement process. It mainly contains;
identification of the requirements of client, tender evaluation, tender selection and
implementation of the project (Saad 2017). Client provides sufficient information to the
tenders that avoid misunderstandings during the procurement process. Client appoints the
consultants to prepare an efficient design and then compile the design & tender document to
complete the project. Then, the contractor will estimate the cost of the project & accordingly