Procurement Management in Construction Projects

This article discusses procurement management in construction projects, including decision-making, internal stakeholders, tools and techniques, and organizational theories. The SOW of a construction project is used as an example throughout the discussion. The article concludes that understanding procurement management is crucial for the successful completion of a project.

Running head: PROCUREMENT MANAGEMENT
PROCUREMENT MANAGEMENT
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Procurement management is the process of acquiring the goods and services from outside
of the organization (Pal, Wang & Liang,2017). The main objective of the procurement management is
to gather the products of the processes from outside of the organization so that the requirement
of the organization will be fulfilled. The application of the procurement planning has been
analyzed through its application in an construction project.
In order to discuss the various aspects of the project procurement planning of the
construction project the statement of the work of the construction management plan has been
discussed.
Discussion
Statement of work at the construction project management:
Scope of the work: The construction of the building is needed to be done. In order to do
this the proper construction management plan is needed to be developed.
Quality of work: The quality of the work depends on the material supplied for the
construction of the building. In order to maintain the standard of the material certain
observations and the guidelines are maintained.
Contract period: 1 year.
Site inspection report:
 The construction site can be accessed in a proper way through the roads and the streets.
 Local authority is helping the construction team to carry on the project in a proper way.

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 The monitoring of the construction is done in a proper way.
Based on the SOW of this construction project the different aspects of the procurement will
be evaluated which shows the way procurement is covering in the project.
Decisions that leads to procure the service outside the organization:
There are various reasons for the procurement of the service to the outside of the organization.
The evaluation of the materials are done by the third party organization. In order to maintain the
quality and the standard of the building and the construction material, the selection of the right
type of the material is needed (Whyles, van Meerveld &Nauta, 2015). The evaluation of the
quality of the material is done by the third party organization. The selection of the material is
done on the basis of the report provided by the third party organization.
Internal stakeholders identified in the SOW and their responsibilities:
The stakeholders in the project can be of two types- internal stakeholders and the external
stakeholders. The internal stakeholders are directly related to the project. In this case, the
internal stakeholders are the project management team regarding the construction project and the
workers who are working at the construction site. Different persons involved in the project has
the different responsibilities in the project.
Project manager: The project manager is responsible for the accurate compilation of the
project. The main function of the project manager is to make the life cycle of the construction
project and instruct the team members and the workers to do the proper execution of the different
modules of the project.

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Workers: The workers are responsible for the proper execution of the work assigned by
the project managers (Whyles, 2015). The assigning of the work to the different workers are
done by the project managers depending on the accuracy of the workers.
Members of the governing body: The construction is operated by the organization. The
members of the governing body is concerned about the progress of the construction. The
governing body provides the funding to the construction projects.
Tools and the techniques required to identify the things to be procured outside:
There are various types of the tools and the techniques in order to select the resources to
be procured outside the organization. In this case, the resources are needed to be procured
outside the construction project (LOUTH, 2015). . There are certain types of tools and the
techniques such as the expert judgment and the contract analysis to determine the procured
resource (Serpell, 2015). In this case, the use of the expert judgment has been implemented in
order to select the items to be procured outside. The make-o- buy analysis is used to determine if
the resource is available from the internal organization of the construction project or it has to be
bought from the external entity.
Alignment of the procurement with the make-o-buy analysis of the organization:
The make-o-buy analysis of the organization is aligned in a right way with the
procurement management plan of the organization (De Araújo et al.2017). The governing body of
the construction project has determined the internal resources and the external resources those
are needed for the compilation of the project. The procurement management planning is done on
the basis of this identification.

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Deliverables described on the basis of the terms and the accuracy and measurability:
The site report indicates that the deliverables provided by the project management team
of the construction management project is accurate and meets all the requirements for the
accurate compilation of the project (Baily,2017). The requirements described in the deliverables are
measurable and achievable.
The improvement recommended for the SOW:
The SOW of the construction project seems accurate. However, further modifications can
be done for the improvement of the SOW. The site report in the SOW can be more specific and
can contain more detailing about the construction site and the work progress. This will generate
more transparent picture of the possible outcome.
Alignment of the improvement with the scope and the procurement management process in
the PMBOK:
The suggested improvement is supported by the scope and the procurement management
process in the PMBOK. In PMBOK the procurement management has the initial step as the
planning. In this planning phase, the SOW can be made (Mauldin, 2014). The improvisation of
the site report in the SOW will help to develop the transparency in the requirement of the project.
Organizational theories to explain the procurement strategies and the process along with
the outcome of the company:
There are some of the organizational strategies those are helpful for determining g the
procurement in the project of the organization along with the possible outcome (Louth &
Boden, 2014). There are various types of organizational theories like organizational buying

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behavior and the contract type for determining the procurement and the outcome of the project
(Naoum & Egbu,2015). In the construction project the type of the contract plays a significant role in
determining the relation between the governing organization and third party organization to
where the resources are outsourced.
Conclusion
It can be concluded form the discussion that the discussion related to the different aspects
of the procurement management is helpful for the right compilation of the project. The SOW has
been described at the initial point o the discussion so that the evaluation of the different aspects
from the point of procurement management can be done in a right way.

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References
Baily, P. (2017). Procurement. In Contracting for Project Management (pp. 105-116).
Routledge.
De Araújo, M. C. B., Alencar, L. H., & de Miranda Mota, C. M. (2017). Project procurement
management: A structured literature review. International Journal of Project
Management, 35(3), 353-377.
Naoum, S., & Egbu, C. (2015). Critical review of procurement method research in construction
journals. Procedia Economics and Finance, 21, 6-13.
Pal, R., Wang, P., & Liang, X. (2017). The critical factors in managing relationships in
international engineering, procurement, and construction (IEPC) projects of Chinese
organizations. International Journal of Project Management, 35(7), 1225-1237.
Louth, J., & Boden, R. (2014). Winging it? Defence Procurement as Risk Management.
Financial Accountability & Management, 30(3), 303-321.
Serpell, A., Ferrada, X., & Howard, R. (2015). Assessing the Client’s Risk Management
Performance in
Construction Procurement and Contracting:Case Studies.Procedia Engineering. Volume 123,
2015, Pages 510-518
Whyles, G., van Meerveld, H., &Nauta, J. (2015). Forward Commitment Procurement: A
Practical Methodology That Helps To Manage Risk in Procuring Innovative Goods and Services,
Innovation. The European Journal of Social Science Research, 28:3, 293-311.

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Mauldin, R. M. (2014, August 29). Supply chain management strategic planning for procurement
and purchasing professionals [Video file] https://youtu.be/usj_D9s6xXo