Managing Procurement and Contracts in Facilities Management

Managing Procurement
and Contracts in
Facilities Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Explanation of basic principles of procurement....................................................................2
1.2 Reviewing the process and stages of the procurement of goods and services.......................3
1.3 Reviewing compliance with relevant legislation...................................................................5
1.4 Reviewing effectiveness of tendering and bid processes.......................................................6
TASK 2............................................................................................................................................8
2.1 Analysis and comparison of different types of contracts.......................................................8
2.2 Selection of the most appropriate procurement option that suits the contract type...............9
2.3 Selection of most appropriate contract type that suits the procurement of a particular good
or service....................................................................................................................................10
2.4 Reviewing contract management procedures and identification of improvements.............11
2.5 Evaluation of start up and close down process and procedures of contract.........................13
TASK 3..........................................................................................................................................14
3.1 Development and use of specifications for procurement of goods and services.................14
3.2 Comparison and contrasting of the principles type of specifications..................................15
3.3 Evaluation of the standard terms and conditions that are used in the procurement of goods
and services................................................................................................................................16
TASK 4..........................................................................................................................................18
4.1 Analysis of the elements which may make up the cost of goods and services....................18
4.2 Analysis the factors which should be taken into account when making a procurement
decision......................................................................................................................................19
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21

INTRODUCTION
Facilities management can be defined as a professional management discipline which is
mainly focused with effective and efficient delivery of support services for the organisations.
The individuals who are responsible for the same play vital role in the attainment of long term
business goals and execute the strategic plans which were formulated earlier by top level
executives. Main purpose of it is to effectively manage the operations of a company by ensuring
health, well being etc. There are several things such as contract and procurement which are
managed by it. Procurement is the procedure in which individuals find and agree of the terms
and acquire services and goods from outsider resources (Cavka, Staub-French and Poirier, 2017).
It is mainly related to the formulation of purchasing decisions under terms of scarcity. Facilities
management assure that these two main elements are managed properly so that functionality,
safety, efficiency and comfort of build environment could be maintained by integrating process,
people, technology and place. It contributes in the bottom line of the organisation so that most
valuable assets of an organisation could be maintained. Some of them are building, human
capital, property, equipments, inventory, productivity etc. It directly impacts upon operational
efficiencies and leverage technological solutions by making sure that all the major resources of
the company are managed systematically. With the help of it, business entities can manage risk
to facilities and personnel by mitigating environmental impacts upon operational processes. It is
more relevant than ever because of the continuous growth in the industry which is developing
rapidly. The several social trends which are affected by facility management are employee
engagement, health, wellness and well being, automation, sustainability and environmental
impact etc.
Present report is based upon managing procurement and contract in facilities
management for which the selected organisation is Serco. It is one of the largest British
companies which are providing public services. It is mainly established in Hook, Hampshire,
United Kingdom. It provides different types of support facilities to the organisations. These are
transport, defence, health, immigration, justice etc. This assignment covers various topics such as
principles of procurement, various types of contract, specifications etc. Apart from this, detailed
analysis of cost is also covered in this report.
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TASK 1
1.1 Explanation of basic principles of procurement
Procurement: It can be defined as a procedure which is required to be focused by
facilities manager to agree on the terms and conditions to acquire desired services and goods
with the help of bidding or tendering processes. It is basically is a mode of formulating buying
decisions under specific terms of scarcity. As Serco is involves in delivering procedures of
support services therefore it is very important for the organisation to make sure that al the
principles of procurement are focused by it. With the help of it the entity will be able to meet its
long term business goals appropriately. If the management fails to pay attention towards them
then it may result in the loosing the tender or bid (Principles of procurement, 2020). There are
several principles which are required to be focused by facilities manager of Serco which are
described below:
 Integrity: It is the first and main principle of procurement which is based upon
reliability. It states that all the stakeholders including bidders should be able to trust the
details which are delivered by procuring enterprise whether it is in formal or informal
manner. While taking part in a bid it will be very important for Serco to determine that it
is qualified to work on the project or not.
 Competition: According to this principle, the process of procurement should not be
manipulated for the benefit of individuals or an organisation. There are various parties
which are planning to bid upon a contract therefore it will be very important for Semco to
remain competitive among all of them to win the bid. With the help of it success in the
business could be acquired by an organisation.
 Openness: It demonstrates that the list of procurement requirements should be open to
the individuals and organisations who have qualified the bid. It should also be open to the
public so that people can have access to information pertaining the procurement
requirements. If Semco has planned to take part in a bid then it has the right to get
detailed information about the procurement and all of them should be disclosed to it. If it
is not able to get it then it may ask the governmental body who is handling the bid for the
details.
 Transparency: It is very important for public procurement practitioners to bring
transparency in their bid so that the legal authorities could be satisfied and bid could be
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won. In order to work on a desired project it will be very important for Serco to share
transparent information with the legal authorities so that solicitation process could be
passed successfully.
 Economy: It guides all the parties which are associated with public procurement process
or responsible for facilitating the bidding of services and goods with the help of public
resources are required to make sure that they avoid waste, abuse and fraud of such funds.
While planning to take part in the procurement process it will be very important for Serco
to assure that it will not waste the funds provided for working on the project.
 Accountability: This principle states that all the internal as well as external parties which
are involved in the procurement process are responsible for their decisions and actions
taken by them in respect to public procurement. While working on a contract it will be
very important for the facilities managers of Serco to make sure that they take
responsibility of all the actions which were taken by them to acquire the bid.
 Fairness: For all the public procurement companies it is very important to treat all the
bidders equally and ignore discrimination. For the purpose of bringing fairness in the
projects the public bodies can take unbiased decisions and actions. Consider all the
options on the basis of their attractiveness and compliance of rules and regulations. Under
this principle Serco can challenge the procurement process if it feels that it is treated
unfairly.
While planning for bidding it is very important for organisations such as Serco to pay
attention towards all the above described principles so that it can get the desired project.
1.2 Reviewing the process and stages of the procurement of goods and services
While buying goods and services all the organisations are required to follow specific
procedures so that they can reach to their goals successfully. Serco is one of the supporting
services delivering companies which are established in United Kingdom. In order to satisfy its
clients it is very important for the entity to procure good and services (Stages of procurement
process, 2020). For this purpose facilities managers are responsible to make sure that specific
steps are followed by them to reach the desired objectives. Description of all of them is as
follows:
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Illustration 1: Procurement process, 2020
(Source: Procurement process, 2020)
Identification of required goods and services: It is the first stage which is focused by
facilities manager of Serco while purchasing goods and services. Here, management analyse the
business procedures and determine the items which are required by it to deliver best facilities to
its clients. In order to accomplish the future goals it is very important for the entity identify
accurate requirement of goods which are needed to execute planned operations so that customers
could be satisfied.
Exploration and selection of vendors: When the management of Serco will be able to
identify the need of goods and services then they will be required to explore different vendors in
the market. It will be beneficial to select one of them who can deliver required products on low
price with higher quality. At this stage the management is required to be attentive so that they
can analyse the number of suppliers available in the market.
Submitting purchase request: After exploring and selecting the vendors the facilities
manager in Serco submit purchase request for the desired goods and services. While placing an
order it is very important for the management to interact with finance department as the funds
will be allocated for it from this division. The approval and allotment of resources will depend
upon value of order if it will be essential to be submitted then funds will be allotted without any
critical inspection.
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