Understanding Procurement and Contract Management

This document provides an in-depth understanding of procurement and contract management. It covers the principles of procurement, different types of contracts, and relevant legislation. The document also discusses the management of the procurement process and how it should be organized within a business organization.

UNDERSTANDING
PROCUREMENT AND
CONTRACT
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Principles of procurement......................................................................................................3
1.5How the Management of the Procurement Processare Organised..........................................5
1.6 Principles of Relevant Legislation.........................................................................................6
2.1 Different types of contracts...................................................................................................7
2.2 Advantages and disadvantages of different contracts over a range of goods and services316
.....................................................................................................................................................8
2.3 Selection of suitable procurement option............................................................................10
2.4 Selection of suitable contracts.............................................................................................10
TASK 2..........................................................................................................................................10
Procurement of hospitality services.......................................................................................10
Process and stage of procurement of goods and services..........................................................11
Fcators to be considered while choosing the bests succesfful tender..................................12
TASK 3..........................................................................................................................................13
3.1 Scope and specifications to be used in contract tendered....................................................13
3.2 Process used for specification..............................................................................................14
3.3 Input or output specification................................................................................................15
3.4 Scope of standard terms and conditions with advantages and disadvantages.....................16
TASK 4..........................................................................................................................................17
4.1 Elements which make up the cost of goods and services....................................................17
4.2 Factors to be considered behind deciding elements of procurement decision.....................18
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21

INTRODUCTION
Understanding procurement and contract management is one of the most important
paradigm which focuses to bring on rational functional strength for various business decisions
and expansion focus through which wider rational services can be attained within business
world. The report discusses various types of contracts and principles of procurement, cost and
various detailed explanation onto vivid factors of strengthened business factors which built on
wider rational paradigms to bring on higher relative expansion for gaining goodwill of service
among business cale customers. Report discusses the working fundamentals of Hilton hotel who
is working with best paradigms and rational functional roles to keenly bring on expertise and
choose best supplier company based on their relativity of roles. The report explains elements
advantage and disadvantages of inputs and output specification factors which further enable
companies to build synergy along with explanation on how it will best beneficial for company to
seek for further progression and rational functional strengthened to build procurement program
within business scenario (Tas, 2019).
MAIN BODY
TASK 1
1.1 Principles of procurement
Procurement is an agreement that is made between buyer and seller of products or raw material
to purchase it at specific prices for exchange of services. There are various principle of
procurement that needs to be followed by both buyer and seller while exchange goods and
services such as:
Right products: While buyer and seller exchange good and services between each others at
that time seller should ensure that right products are given to buyer so that it needs can be
satisfied in effective manner and firm can easily expand its business operation (Zarei, Carrasco-
Gallego and Ronchi, 2019.). Buyer should also information about specific quality of good that
will be required to sellers so that better procurement can take place between them.
Right price: Before procurement of products and services seller and buyer need to agree on
prices that will buyer pay for specific quantity and quality of goods and services. It can also be
stated that setting of price of products in advanced helps in reducing chance of conflict and
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confusion between seller and buyers of goods and services. Buyer need to inform seller at what
prices it will buy at the same time seller need to aware buyer about specific price range for
particular service.
Transparent: It is one of the essential principle that need to be followed by both buyer and
seller of products is that transparency which means all information, provision regarding
procurement of products and services should be made in advanced and provided to service
provided. Therefore it helps in effective exchange of goods and helps in building strong trust and
belief between buyer and seller of products and services (Akhlaghi, Heaton and Chandani, 2019).
Both buyer and seller need to be transparent about services, products and prices or amount that
will be paid by buyer in exchange of goods and services purchased.
Effective: It state that various activities or function of procurement need to be performed as per
specific plan so that optimum or maximum benefit can be provided to buyer or company that
have purchased good and services for seller. Performance of activities as per need of buyer helps
in effective delivery or procurement of raw material and satisfaction of their needs. Therefore it
is responsibility of buyer to information activities that need to be performed while exchanging
good. While seller should ensure that all function are performed as per specification of buyers for
long term growth and survival of enterprise.
Fair and non discriminative: Both seller and buyer need to provide equal and fair treatment to
each other for effective exchange of services and satisfaction of customers need beyond their
expectancy.
Accountable: Seller should be accountable and responsible for process and outcome on the
other hand buyer should make payment on timely basis so that no delay or conflict can be caused
between them (Campbell, 2019). Both should be accountable and responsible for their
respective responsibilities so that goods can be exchanged effective between them.
It can also be stated that there is difference between procurement and purchase such as business
in order to fulfil needs of various individual procure goods and services at specific rates for
suppliers to make final products. Therefore it involves process of acquiring goods and services
for a company so that particular objectives can be achieved. On the other hand purchased
involves various task such as ordering and arrangement of payments for purchasing daily
products and services of company. It is more focused on price whereas procurement emphasis
more on values of products and services that are exchange between buyer and sellers.
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1.5How the Management of the Procurement Processare Organised
For the overall procurement process within a business organisation to be successful in its
varied functions, the management of the procurement process needs to be effectively organised
within the organisation in order for the procurement operations to be conducted effectively and
productively. For the effective management of the procurement process in business
organisations, the individual operations and functioning or roles of all employees and operational
departments in the business organisation needs to be effectively organised in relation to the
procurement process (Lawal, 2016). The roles of the employees engaging or taking part in the
procurement process needs to be effectively organised based on their functions and operations
towards the procurement process. The various roles of employees organised and managed as part
of the procurement process are as follows:
Specifier: A specifier is an employee within the business organisation that takes part in the
procurement process of the business by identifying and assessing the types of materials or
technologies that are required by the business to be procured from external markets.
Procurement Manager: The procurement manager is the head of the purchasing department
within the business organisation and is responsible for creating accurate and relevant
procurement strategies and identifying deals that are cost effective towards the procurement
process.
Purchasing Agent: Purchasing Agent is an employee within the business organisation who is
responsible for the preparation of all the purchasing orders. This employee compares requisitions
to purchase orders with the intention to assess whether the quantities of products procured are
adequate for the business’s needs or not.
Purchasing Administrative Agent: These employees within the purchasing department of the
business evaluate the various vendors and suppliers of the business organisation in order to
identify which vendor or supplier can the business organisation commence with in relation to
their procurement operations in order for these to be conducted successfully, while maintaining
optimum profitability.
Budget Holder:This are employees within the finance department of the business organisation
and these are responsible for saving as much financial resources as is possible out of the
allocated procurement budget allotted for the procurement operations of the business.
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For the procurement operations of a business organisation to be effectively successful,
the powers of the various employees engaged in the procurement process needs to be effectively
separated from each other while also providing relevant authority to the individuals engaged,
based on their position within the effective hierarchical chain of command of the business
organisation. The management needs to ensure that all powers vested within various employees
taking part in the procurement process are separated from one another in order to perform the
procurement operations successfully (Del Río, 2017). The management also needs to ensure that
there are levels of authority present such as heads of individual departments such as purchasing,
procurement, supply chain, finance etc. in addition these department’s individual employees,
while making sure that all powers between these are separated accordingly. For the overall
procurement operations of a business organisation to be successful and productive, the
management of this should also be organised in such a way that it encourages the operations of
record keeping from all employees taking part in the procurement process. This allows for
dedicated records that can be inferred by the managers, whenever their comes a difficulty or
hurdle in the procurement operations of the business organisation, effectively increasing the
efficiency of the procurement operations of the business.
1.6 Principles of Relevant Legislation
There are several legal requirements and legislations which the business organisation and
its employees have to adhere to and respect in relation to their procurement operations. Major
principles of relevant legislations are as follows:
EU Procurement Process:The EU procurement process law requires that all public bodies open
procurement contract that offer a higher value and opportunities to bids coming from within the
European union. This also requires them to run procurement competition that is fair and
transparent to all in order to select the correct winning bid.
Official Journal of the European Union (OJEU): The OJEU is a dedicated journal that values
all the public sector tenders above a certain financial threshold. This also covers projects and
organisations that gain needed money for tender from the public. It consists of two series L and
C.
Office of Government Commerce (OGC): OGC was a regulating office of UK government that
supported the procurement and acquisition operations of the public sector through process
guidance, policies and negotiations of provision frameworks (Stritch,Bretschneider and Hsueh,
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2018). OGC was created with the intention to taxpayer’s value for money and to optimise the
equity of the taxpayer towards delivery of procured services and goods.
Sale of Goods Act 1979: This is a government mandated regulation that was passed in 1979 and
regulates the sale of all goods and products that are sold or bought within the UK. This act also
regulates the binding contracts between all parties involved in the sale or purchase of goods
within UK. According to this law, goods bought or sold within the UK for a price are required to
determine a level of quality satisfaction for the price at which the consumer buys them at the
time of the purchase.
Supply of Goods and Services Act 1982: This government mandated regulation requires that all
trades provide their services on a standard of workmanship. The act also mandates that if in the
contract, the completion price or date has not been negotiated, then reasonable prices and time
durations are expected in relation to supply of goods and services (Fuentes-Bargues, González-
Cruz and González-Gaya, 2017). This act protects consumers of UK from faulty goods, bad
quality of workmanship etc.
Unfair Contract Terms Act 1977: This is another legally mandated government law that
regulates and restricts the operations of contracts and its terms. This act regulates contracts by
effectively limiting and restricting the extent to which a party can avoid liability during
procurement operations of goods and services, through the use of unfair contract terms such as
exclusion clauses and disclaimers.
2.1 Different types of contracts
A contract is basically the agreement that two or more parties enter into which makes them
legally bound to each other (Lobel and Xiao, 2017). The parties entering into contracts can
legally enforce it into the court if default occurs amongst any of the parties. These can vary into
different types and manner of entering into different types of contracts but the broader categories
of the different types of contracts can be discussed as follows:
Written Contracts: Written contract is the most standard and preferred mode of contract where
all the terms and condition that have been agreed to by different parties are mentioned clearly
and the consent of all the parties to the contract are also clearly stated (Tsao, 2019). The terms of
the written contract are much easier to prove in court if the contract does not gets fulfilled and
therefore they simplify the overall business or trade that is to be conducted between the parties.
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Verbal Contracts: These contracts are those that have no written proof or written terms and
conditions but are made orally by promising each other to complete a set of designed goods and
services specified in the contractual agreements (Wan and Chen, 2018). These types of contracts
are however successful only when the chances of disputes are comparatively much lower and the
degree of uncertainty that whether the other party will perform their duties is comparatively
much lower.
Part Verbal, Part written contracts: There are certain kinds of contracts that are partly verbal
and partly in written. These type of contracts are generally entered into to support any legal
framework that might require filling up of certain forms, or a list of specifications etc. that can
protect the core interest of the contract (Merckx and Chaturvedi, 2020). This increases the
enforceability of the contracts as compared to the completely oral contracts and can assist
immensely in the dispute resolution of the disputes that might arise between the parties.
Standard Contracts: These are those contracts whose terms and conditions have been set and
written down in prior and are some for everyone of that particular category. These types of
contracts involve little or no negotiation as the majority of the discussion points have been fixed
in prior (Zhang, Feng and Zhang, 2018). The standard contracts are commonly used in legal
contracts that are finely printed with all the terms and conditions and only requires certain empty
blanks to be fulfilled.
Period Contracts: Period contracts are specifically designed for independent contractors or hirers
who develop a contract template that sets out the relevant terms and aspects of the business
relationships and involve the selection of the contractor engaging them into work in between
regular time intervals. This is the reason they are referred as the period trade contracts.
2.2 Advantages and disadvantages of different contracts over a range of goods and services316
In the above section different types of contracts were identified and discussed highlighting some
broad categories (Czernek, Czakon and Marszałek, 2017). However, there are certain advantages
and disadvantages that are inherent to the different kinds of contracts based on the type of goods
and services that are offered under different product types. These are:
Written contracts: These types of contracts are usually set out for the exchange of certain
identified materials that are to be brought or sold in fixed i.e. pre determined quantities and the
timeframe as well as the mode o payment etc. all are clearly written and agreed upon. The major
advantage is the benefit of legal enforceability where the party which is at default can be easily
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proved (Stim, 2016). The major disadvantage however is that the legal formalities and
procedures involved in these contracts is too extensive thus making the process lengthy.
Verbal Contracts: Verbal contracts re usually made for goods and services that required on a
daily basis and in comparatively smaller quantities making the total amount that might not be
very significant to the parties (Li, Lian and Pang, 2019). The major advantage of such oral
contracts is that it increases the pace of execution where the seller can sell the goods that they
require on a daily basis and the cash can be generated immediately. The disadvantages however
are more related to the lack of evidence and verifiability of such kind of contracts where there is
no valid proof regarding the terms and conditions that were discussed.
Part Verbal, Part written contracts: Such contracts are entered into against the goods and
services that have been decided to get exchanged and in order to complete all the formalities and
transactions, there are some written documents as well such as e- mails, relevant quotes,
negotiation or discussion notes, list of material required or list of specifications made etc. (Ryan,
2017). The main advantage of such kid of contract is that despite being oral they can be easily
proven in the court n the basis of the evidence that exists of the trade exchange etc. that took
place. The major disadvantage is that these evidences might not be treated as comprehensive
evidences as they are prepared only for part of contract and hence lack the complete terms and
conditions thus providing wider scope of manipulation.
Standard Contracts: These type of contracts are usually for some legal formalities or agreements
where the contract is mostly one sided i.e. the maximum risk lies with the party who is agreeing
to such standard contracts and the one who has prepared them is benefitted by the contracts thus
formulated. The advantage lies mainly with the maker and for the acceptor as well, the reduced
number of formalities and time wastage in discussion or negotiation (Dangi, 2019). However, the
major disadvantage is that the liability of the acceptor is much more and there is no scope of
navigation available that could have made the contract more beneficial to the other party.
Period Contracts: These kind of contracts are usually adopted by the construction or the
manufacturing industry where they regularly enter into period contracts for a specific amount of
time period until the construction work is over. The advantage of this contract is that it helps in
constantly updating the terms and conditions reviewing them regularly and the disadvantage is
that these have to be prepared again and again increasing the documentation work unnecessarily.
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2.3 Selection of suitable procurement option
The procurement option should be selected on the basis of the viability of the availability of
resources that are required and then further the distribution of the goods and service i.e. the
frequency of the distribution, quantity of goods to be distributed etc. also acts as the major
influencing factors that affect the procurement option (Chalkidis, Androutsopoulos and Michos,
2017). The selection of the procurement option is hugely dependent on the type of contract that
exists between the parties i.e. whether it is a fixed price contract, it is cost reimbursable contract
or the time and material based contract. Now for instance if the type of contract is period based
contracts which are the commonly adopted method of contractual agreement in the procurements
industry, then this ultimately leads to the selection of the time and materials contract when the
contract is for a longer time period and the risk will be shared so that no one party incurs the
major losses and has to suffer more in order to gain the profits and complete the work more
effectively.
2.4 Selection of suitable contracts
It can be evidently said that the most suitable type of contract option that can be used to utilise
the procurement services is the period based contracts as these help in regularly reviewing the
change in the price and inflation aspect so that the prices and conditions do not become
redundant amongst the parties (Mik, 2017). For instance, while dealing with the contracts in the
oil industry, we regularly update the terms and conditions as well as the quoted price of the raw
materials and hence they tend to enter into period contracts so that no significant losses are borne
by any one party and the risk is also shared by both the parties.
Therefore, period based contracting is the best option that can be adopted in the procurement
contracts.
TASK 2
Procurement of hospitality services
Hospitality services such as delivery of all essential supplies within well functional
paradigms and well functional determinants is highly important to build on best goodwill among
customers and the procurement of this service for Hilton hotel uses full tendering procedures.
Hilton hotel has been actively building its focus among hospitality services departments and
building strong specification, investments of various capital funds which further enable to gain
higher performance metrics. Procurement of this service is a full tendering procedure for Hilton
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hotel as it look upon to give full tenders to best contractor to provide supplies within all hotel
branches, rooms facilities and to program out higher rational functional strength of quality
paradigms within hospitality services (Mielcarz, Osiichuk, and Owczarkowski, 2018). This is
highly important for Hilton hotel as procurement of best services has been one of the biggest aim
to functional leverage best paradigms with which best hospitality services are given to
customers. Procurement and tendering has been one of the most innovative working force for
royal companies who aim to be focused on gaining services with best quality parameters and
customers oriented services where the cost and technical advancement is highly important to
keenly provide best quested synergy.
The prospective suppliers to tender for the hospiatlitycontract can be identifued by the reltive
exprtise and strong fucntioanl strength within all metrics and the various parameters of focused
synergy through which technical advancemnt can be further porogressed onto.The prospective
suppliers to tender will be choosed with their specific functioanl roles. The reliablity of quality
wity best cost effective servuces , innovtive business exoansion will be one of the most
imporstant metric which will help Hilton hotel to build strong brand and procureent tender of all
necessary supplies.
Process and stage of procurement of goods and services
There are various process and stage in procurement of good and services that need to be
followed by both buyer and seller. Such as:
Identification of specific need: Buyer before procurement of products and services has to
identify its need and requirement so that specific products can be order and various function of
business can be performed (Plantinga, Voordijkand Doree, 2019). All such needs of organisation
are handle and managed by employees and manager that are responsible for arrangement of
sufficient resources for fulfilment of customers requirements.
Purchase request: The company or buyer needs to make purchase request through use of e-
procurement software that is reviewed or evaluated by financial controller and procurement
team. Thus, if they both agree to purchase request them it will turn into purchased order
otherwise it will be reject and send back to employees.
Identification and selection of vendor: Now the company need to find from where the good
and services need to be purchased so that it can get quality products at reasonable rates. There
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are number of vendor in market therefore manager evaluated different vendor on basis of price,
quality and quantity of good and services in which it deals so that best one can be selected. After
selection of vendor manager plan to build strong relationship in order to procure good and
services for longer period of time.
Negotiate price and term: It is stage where procurement team of company negotiate with price
and term and condition for purchasing specific quantities of products. Both buyer and seller
agree to each other to pay specific prices for particular quantity and quality of products and
services.
Purchase order: It is types of contract the specific about price, product quantity and several
term and condition of procurement between buyer and sellers (Sanchez-Graells, 2019).This order
is made by Buyer Company so that sender can know about specific quantities of products that
need to be delivered to buyers in limited time.
Goods are received: At this stage good have been received and procurement team is inspecting
products and receipt in order to ensure that products are delivered as specified in contract.
Three way matching: There are three documents that are matched by procurement team such
as purchase orders, packaging slip and vendor invoices.
Approval of invoice and payment: After matching of various documents payment is arranged
and invoice is approved for effective operation of procurement process of goods and services .
Recordkeeping: At this stage buyer firm maintained records of products and services it have
purchased through bookkeeping and accounting. All such document are saved and record for
further use in future and effective operation of business activities.
Fcators to be considered while choosing the bests succesfful tender
The written contrcats shall be best effectively formulted to develop the tendering
excercise within hospitality service departemt atr Hilton hotel where the fcatoirs to be considered
in evelauting choice iss based on developed fucntioanl strength. The successfull tenders are
highly rational with changing businsess scale services requuiemnts, dynamci functioanl strength
and quick management ethics through whcih larger effectiev expertise can be attained onto
higher yield for longer fucntional strength. The wriiten contract by coampnies who have been
able to persuade best services for hospitality services supllies and to gain higher strenegthend
expertsie will be one of the best ratioanl focus to gain higehr develoepd business fucntioanlity.
The develoepd business framework with quick ratioanl deleivrey of all supllies to attian higher
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strengthful position and metrics for technical advanced working force and atatin larger
determainants.
Cost and technology are also highly impoortant to program out widerv deteraminants for
focusing onto higehr ratioanl roles and, leverage onto wider focus for gaining best technical
advancment within hospitaltiy services. Fcailities mnagment and procurements requiremnts are
one of the most imporatnt role to build on stronger working force at hospitality departremnts by
hilton Hotel who is aiming to be one of the best higher goodwill attained comapny having large
strength within all factors (Wright and Conley, 2018). The tender of suplier comapny who are
active to produce strong innovcative business services available to all functional strengths which
hilton hotel aims to achieve ontgo higher developed paraameters. Role of framework contarcts
and magement in meeting high value procuremnt requiremnts in facilities management can be
understood with the wide ratioanl functioanl standards of cooperate developed relativity it palys
within business arenas. They enable to build stromg business femaework and higher leveraged
focus to atatin larger quality within all determiannts and to keen;y progressivly build best
paarmeters and agin positive outlook of higher profotabiltiy and goodwill among cosnumsers.
The faciities mangeent works as oine of the ost important pradigm through whcih wider quested
synergy of optimism and quality metrics within all hospiatltiy services cna be attained by
comapny to bring on ratioanl new changes, tender supplies based on larger deamnd factors and
to potentailly bring higher keen focus for pertaining best standards. Hilton hotel has been aiming
to bring before best advances and strong higehr yield onto new reaserch pardigms nad to
potentially bring higher keen synergy for ganing larger profits and goodwill within hospitality
industry (Tidd and Thuriaux‐Alemán, 2016).
TASK 3
3.1 Scope and specifications to be used in contract tendered
The scope of specifications which enable in forming contracts tendered for Hilton hotel
to get all luxury beauty supplies within rooms and to get best viable paradigms pertaining onto
higher standards facilities is wide and strengthened on basis to develop rational platforms onto
which top management can develop the further tenders. The benefits of well defined
specifications for procurement of facilities goods and services can be gained on the wider scope
it provides to top management for assessing the various future and current requirements within
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goods and services. A well defined specification for procuring all facilities, goods and services
will aim to bring before higher rational functional paradigms and to keenly progressively work
for determining the details of all terms which will be written in contract. Hilton hotel works
specifically to attain strong working paradigms for gaining strong developed parameters and
draft put all the specifications which will be an important part of procurement of facilities, goods
and services. The specifications are drafted based on the various decisions such as how much
company is planning to invest further in business within the specific line of services and how
customers goodwill can be more developed with effective completion of all functional
requirements (Tas, 2019).
The drafts of all specifications to procure facilities goods and services at Hilton hotel for
which contract and tenders will be further built on by bringing before all relative parameters of
money factors, capital which needs to go in funds and how best technology can be used further in
procedures for higher procedural efficiency. Contract tenders hold the company gaols and
specifications of all details within quality of products factors and how to work on the specific
targets completion. The specifications for tender contracts enable business managers to specify
all details where the bidders can read all further details , companies look upon all tender=
fundamentals and to gain strong paradigms based on complete avenues. Stakeholders
preferences and various meetings to come on a collective decision based on the Hilton hotel
product and services demand and how luxury beauty products served within all rooms to
provide customers best experience enable to develop strong drafts of specifications and business
rationale working paradigms for bringing cost effective products (Stoffel, 2020).
3.2 Process used for specification
The process used for preparation of specification can be analysed with the various factors
where top management of Hilton Hotel plays huge role to built strong communication channels
with the room staff members who are directly linked to utilities providence among consumers.
The finance department plays huge role to decide on how much investments will be linked to
contract of tenders for beauty and luxury supplies for convenience of all customers who come
in for enjoying high developed stay based in their preferences. The specification of all facilities,
goods shall be finalised by looking on the competitive edge benchmarks which Hilton hotel aims
to achieve among goodwill frameworks and what all price parameters should be developed for
the tender bidders. A well defined specification is one of the most important task within
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procurement and tender procedures where it delivers various records and benefits to company
who has been coming together and bidding procedures are effectively done within set paradigms
(Singh and Gaur, 2018). Various benefits of well written specifications which further go in
procurement if goods and services and tender of contracts can be analysed with the high effective
outcome of clarity within performance metrics and to deliver higher growth within all structural
paradigms.
Hilton hotel goodwill and stakeholders working strength is enhanced by writing down
specific measures under which large vision is formulated with the determinants of specification
for contract and tender proceedings. A well structured specification invites various new brands
and supplier companies to come forward for bidding of tenders with best outputs and pricing
strategies to gain stronger supply network and to work with higher efficiency (Niu, Chen and
Zhang, 2017). The specification works as one of the most important formulation for stepping
into the tendering procedures and to work on the various requirements through which services
can be productively delivered with best fundamental aspects. Well defined specification is built
with detailed consultation of shareholders, stakeholders and how various new rational functional
scale products services can be built for higher customer satisfaction. The well defined
specification with high force of innovation enables to cater higher support from best suppliers
and structural determinants enables to bring on wider functional steps to which best tending
procedures can be attained. Top management consultation with all staff members, shareholders
and stakeholders along with finance departments to decide on how much capital shall be further
invested and the wide rational paradigms important to achieve for gaining strong force of
positive development (Krahmann, 016).
3.3 Input or output specification
The specification procedure while tender contracts is highly one of the most important
parameter which usually sets out all requirements in relation to services and how the
performance standards shall be organised to met. All information that facilities management
contractor will need in order to perform services in accordance with the mechanism which is
underpinned by Hilton hotel will enable contractors and bidders to develop their rational bidding.
Input specification is formative step where specification will be set out in detail of the exact
services to be performed by the contractor itself with detailed outline of all functional standards.
Input specification do not give any right for bidders to come up with any new ideas for bidding
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and the proposals are specified based onto various parameters which holds company rights to
put on various frameworks. It is argued that input specification will not allow the contractors
enough freedom to develop new expertise and to offer innovative solutions for clients
performance requirements. Output specification offers various advantages for companies as
there is higher sense of innovation within all paradigms and the contractors are given freedom to
bring before new creative ideas for bidding through which moreover goodwill can be further
developed (Koenig, 2019). The Output specification enables to gain higher level of innovation
among business functioning where company looks onto best contractors who come up with new
ideas and bidding parameters through which higher extended customers requirements can be
further extended to bring on larger innovation.
The company is not entitled to develop any sort of specification for various suppliers and
companies who are coming into bidding procedural steps as the subjective stress is given towards
innovation business framework (Krahmann, 2016). However the cost of choosing output
specification may be higher for company regulations as the tenders look upon choosing higher
costly avenues and pertain to look upon more pragmatic working paradigms for their own
benefits. Hilton hotel needs to choose on best standards of effective services and develop
rational working steps of output specification with rational functional efficiency leverage for
bringing out best tenders of suppliers and companies who can bring before best innovation
paradigms for gaining stronger goodwill customers market. Standard terms and conditions such
as availability, flexibility and equitable working designs shall be used for better fundamental
working avenues and to gain strong working fundamentals for higher innovative services and
strategically bring innovation within all functional roles. The procurement of goods, services
within management plan to bring on specifications shall be developed with strong business
framework analysis and realising the various requirements through which higher innovation can
be built further among all services (Nambisan, Lyytinen, Majchrzak and Song, 2017).
3.4 Scope of standard terms and conditions with advantages and disadvantages
The scope of various standard terms and conditions such as availability, flexibility of
time decisions and various other equitable working parameters such as high quality paradox and
the decisions through which capital shall be developed further hold various advantages can be
analysed within context of Hilton hotel as follows:
Advantages
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 There is advantage of bringing higher advacement of innovtaion and detailed functional
efficnecy where compnay brings forward all details succh as time period deadline, cost details
and how much quality stanadrds are demanaded among business framework through which
detailed pardigms can be leveraged. The terms and conditions enable contractors of biddets to
bring out best posisble way and resources along with ideas to which higher efficiency can be
develoepd further onto more pertaining stanadrds (Koenig, 2019).
 There is advantage of higher professioanlism within bidding procedures when company uses
stanadrd terms and conditions to specify what are the various requiremnts within bidding
procedures while examining higher details onto pertaining potentilaity to bring on larger
working efficinecy for technical advancemnt. Hilton hotle focuses to be more productive and
advanced on its all customers prefrences based on which the specificatioins of contracts are
Disadvantages
 The disadvantage is that there is large intense developed business framework where the structure
of higher terms and conditions specified by company may make varied problems and relative
discomfort for contractors to work on. Disadvantage is also confronted to the fact that many
times it becomes less innovative and creativity is less potential to bring on more advancement
within the procedures of bidding (Kasemsap, 2017).
 The disadvantage of terms and conditions used within working paradox situations that bidding
companies contractors may feel the hindrance of time limits and various other factors which are
prescribed within companies business paradigms to bring on new innovative ideas forward.
Familiarity and flexibility of actions shall be highly innovative to bring on cultural focus within
procedural working formats.
TASK 4
4.1 Elements which make up the cost of goods and services
The various elements which make up the cost of goods and services which are the higher
focus generated and are an important parameters for Hilton hotel to decide its contract details to
built tender working details (HOEKMAN, 2017). The hotel has been programming high focus
onto various factors such as cost of raw materials, labour and the vivid manufacturing along
with transport which will be an integral parameter to program out higher viable position for
various bidding companies to take on the contracts for services. The Hilton hotel is one of the
most high developed goodwill attained hotel in the hospitality industry having wide functional
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parameters and the various determinants to bring on large innovation within all services for
customers services. Profitability and the cost of functional optimisation within all factors are
highly important for procurement decision and to develop larger functional efficiency foe best
technical advancement and to choose best company supplier for gaining on higher rational
functional ethics.
The top management has wide role to calculate cost of goods and services such as
packaging, transport which are not only the valuable procurement elements but are also known
to be most profoundly active to bring on rapid development within all functional paradigms at
Hilton Hotel. Relationship of cost and value is highly important for procurement decisions and to
pertain on profitability uplifting paradigms to bring on stronger rational working paradigms
(Gershon, 2016). Top management within Hilton hotel along with finance department have
active role to bring on best decisions for bringing up the capital which shall be invested further
to give best factors within all decisions through which various new activities can be brought up
There are various parameters such as best finance viability of outcomes with the major focus on
how much inputs by various new companies who are giving their bids forward are giving onto
new services for developing its portfolio onto new heights. The specification of all work
requirements and keen factors such as larger developed business factors which shall be
undergone by company to develop new rational synergy and advancement within all services
shall be kept in mind. The Hilton hotel shall be focusing on key scenarios of working paradigms
and the vivid resources which are an important arenas to bring higher scale services and choose
the bidder , contractor company who is innovative into business procedures. The management
has wider role to look upon present working scenario with all resource available at present and
how various future parameters are focused to build on wider role to keep on developing huge
profitability nad goodwill for longer working hemisphere at business world. The Hilton hotel
aims to be specific for choosing best fundamentals and networking paradigms for developing
longer specified business paradigms to pertain onto higher yielding arenas and further choose the
best supplier contractor (Georgopoulos, Hoekman and Mavroidis, 2017).
4.2 Factors to be considered behind deciding elements of procurement decision.
The various factors which are highly important to be considered behind deciding
elements of procurement decisions which further enable to build on best specification which
shall enable to choose one of the best company contractor or supplier shall be focused on the
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synergy of optimistic developed business framework. Procurement decision is one of the most
important parameter onto which wide rational functionality is focused to bring best cost effective
and highly innovative business decision for gaining stronger results and to pertain onto best
synergy of competitive quality factors within hospitality industry. The procurement decision has
high focus to build strong impactful factors which are highly important for top management to
bring large collective strength within goodwill for larger effective roles to develop onto various
paradigms. There are various factors such as larger cost and time which shall be taken care and
given to contract companies for building the contract supplies bid and various stage to full
tendering exercises which will ensure procurement delivers best value for the company
functional parameters for longer effective performance metrics. Reliability and capacity of
working fundamentals to leverage on best radical services such as various stages onto more
determinants for gaining stronger working strength among management gaols by Hilton hotel is
also one of the most important paradigms to attain larger effective performance metrics. The full
tendering exercise to ensure procurement of all functional parameters delivers best value for
Hilton hotel can be done be developing wider focus on how much cost investment is needed to
be brought in with quality and assurance compliance onto bigger working parameters (Corvaglia
and Li, 2018). The tending procedure of beauty and luxury items of self-care is one of the most
important pertaining paradigm which is highly important for goodwill of Hilton Hotel and the
consumers market share factors where the barn aims to be strongly productive for longer
working hemisphere of time. The Hilton hotel known for world class amenities providence
within all service for consumers to attain longer working paradigms and to rationally bring wider
business frameworks available shall be programmed with high strategic management planning to
focus onto wider criteria of functional efficiency and to build high innovative synergy within the
procurement of goods and services by the tender companies who seek various bidding
opportunities. The wider business factors utilisation and innovative skills enhanced services give
rise to higher capital business investment decisions to look upon potentially building long term
place within competitive hospitality world. The tender proceedings are focused to procure
relative advanced business scale activities by various suppliers and the relative expertise is
looked upon to bring radical progressive working efficiency for technical advancement and
innovative business supplies for longer goodwill attainment. Hilton hotel has been actively
working onto best relative factors and strength full positional services while preparing the
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procurement and the various tender proceeding elements through which wider focus can be
attained (Arve and Martimort, 2016).
CONCLUSION
The report can be concluded with explanation on how Hilton hotel has been
programming it procurement specifications within business goods and services for tendering
procedures and how it focuses to attain the set performance standards by working towards
developing long term functional strength. Report concludes various other factors, elements and
parameters of working efficiency for gaining large specification while choosing the services
procurement contractor and suppliers with higher innovation and technical advancement at all
pertaining synergy factors.
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