Best CE7013 Estimating Tendering and Procurement Sample

1. Introduction

Tendering, estimation and procurement strategies greatly influence the business practices and client management process of different organizations. Tendering is associated with various opportunities and sets of values in a project based on the estimation of cost and budget.

In addition, procurement provides risk management, business offers, and value for money, and meeting all expectations of both the parties. The study is going to focus on different procurement services in a strategic manner, best alternative procurement types for the proposed project, as mentioned in the given scenarios.

The aim of the study is to develop the most effective procurement strategy approach for meeting all the standards of the proposed project.

2.  Procurement strategic approach in project

Procurement selection

Total Quality Management Procurement (TQM) will be taken to accomplish the project of Kingston University London for managing all sorts of internal transaction in a better way. Along with this, ordering and receiving of goods become easy by assuring this kind of service during project procession.

Total cost of the project will be £10 million and the project will be accomplished in duration of two years. On the other hand, TQM has been selected for long term success of the above mentioned project and customer satisfaction level can also be improved.

Along with this, product service and culture of manufacturing process will also be emerged by using this tactics of business development. In addition, mutual respect among all project team members will be improved by TQM for maintaining continuous flow of the work.

Moreover, communication with external stakeholders can also be evoked with the help of this practice under any consequence.Best CE7013 Estimating Tendering and Procurement Sample 1

Figure 1: Stages of developing procurement strategy

(Source: Windups and Adeniran, 2017)

  • Evaluation of the organization spends: The initial stages of development, the most effective procurement strategy is the analysis of the organizational spend and budget of Kingston University London. Understanding of the different organizational spend and offend the budget by the organization can be useful for the consulting organization to focus on the major consequences and aspect of the project.
  • In addition, obtaining the data from different sources about the location and external environment of the construction area is also necessary to make the outlines of the procurement plan (Windups and Adeniran, 2017).http://Best CE7013 Estimating Tendering and Procurement Sample
  • Analysis of the need: The next stage of developing the procurement strategy after the evaluation of the organizational budget is the analysis of the need. As per the scenario of Kingston University, London, the major needs of the project are the standard auditorium for the conferences and presentation purpose with all the facilities.
  • In addition, the major need of the proposed project is 200 seats, air-conditioned multimedia theatre, high specification technology and excellent visibility. According to the view of Olanrewaju et al, (2016), analysis of various needs of the proposed project is very necessary to prepare the budget and time plan for the project completion.
  • Accesses of the market conditions: Another major stage for the development of the most effective procurement strategic approaches is the most effective way is the access to the market condition. Accessing and analyzing the market conditions in order to examine the cost of all the raw materials and global sourcing is necessary for the cost estimation of the tender and proposed project (Ro sander and Kaefer’s, 2019).http://Best CE7013 Estimating Tendering and Procurement Sample
  • In addition, the evaluation of the cost and doing market research in a proper way can help the organization to understand the major upcoming issues and circumstances of the project. It can also enhance the functional areas of the project development and contribute to the success of the project.
  • The setting of objectives: Setting objectives is a very significant role in the process of developing the proper procurement plan. According to the view of Loose more, (2016), the objectives of the procurement plan must be based on the identified need of the proposed project.
  • Identification of the procurement policies: The next major steps of developing the strategic procurement plan for the project of Kingston University London, is the identification of the major procurement policies. According to the view of Lender ink et al, (2016), the policies must be based on the strengths, weakness, opportunities and major threats of the proposed project.
  • Implementation of the procurement software: One of the most significant stages and procedures of the development of the strategic procurement plan is the implementation of the procurement software. As per the view of Jejomar et al, (2016), procurement software must be selected based on the identified need of the proposed plan. The major procurement software for the construction of the auditorium in Kingston University London is the PENTA Construction Management Software, 4CASTPLUS and FLUOR.
  • Execution and management of the strategy: The final stage of development of the most effective procurement strategy for the construction of auditoriums in the main campus of Kingston University London is the execution and management of the strategy. According to the view of Ajayi et al, (2017), execution and management procedure to the procurement plan influenced the functional areas of the proposed plan in the most effective way.

2.1. The important role of client

The following are the most important role of the client in the process of developing effective procurement strategic approaches for project completion;

  • Time and resource of the project: The client of the project greatly influenced the timeframes and resources of the project. The timelines of the project completion must be developed based on the deadlines given by the client.
  • The budget of the strategy: One of the major roles of the client in the process of developing a procurement strategy can be reflected in the budget plan of the project. The budget of each functional area must be developed based on the description provided by the client (Osman et al, 2017).http://Best CE7013 Estimating Tendering and Procurement Sample
  • Standard of the project: Client also played a great role in the process project completion and standard of the procurement strategy.

2.2 Cost Plan

No Category Cost
1.

1.1

1.2

1.3

Initiation of project

Division of tasks

Requirement Gathering

Proposal for architecture

£2 million
2.

2.1

2.2

2.3

2.4

Project plan

Design for exterior

Design for interior

Building work

Equipment gathering

£5 million
3.

3.1

3.2

3.3

3.4

Project Execution

Employees training

Project data plan

Communication process

Meetings with stakeholders

£2 million
4.

4.1

4.2

4.3

Monitoring and Control

Unit testing

Testing for acceptance

Data documentation

£1 million
Total Cost £10 million

Table 1: Cost Plan of ProjectBest CE7013 Estimating Tendering and Procurement Sample 2

Figure 2: Pictorial representation of cost plan

It is clear from the cost plan of the project that maximum money will be executed in planning section and both the initial and execution step will be accomplished by same monetary amount. Lack of money will be required for monitoring and controlling of the manufacturing process with documentation and data plan.

3. Critical analysis for the alternative procurement types for the proposed project

Consideration of the alternative procurement plan for the auditorium construction project can help to shift to different suitable approaches in the time of need. In addition, this helps to understand the possible options to complete the project in the most effective way.

According to the view of the Kowa and Zumba, (2019), consideration of the multiple alternative approaches in a project initiation process can help to develop the authentic backup plan for the time of emergency. In the proposed project of Kingston University London, the alternative procurement approaches are the following:

3.1. Cost reduction procurement strategy

Cost reduction procurement strategy can be one of the most effective alternatives for the success of the proposed project of construction of the auditorium in the University main campus of Kingston University London.

As per the view of Pawar et al, (2017), the procurement strategy of cost reduction mainly focused on the different strategies of reducing the operation and construction cost of the project. However, in the strategy, various procedures of cost reduction and through improving and changing the work process are included. The following are the major component of cost reduction:

  • Negotiation with different suppliers: Negotiating with a different supplier of the raw materials can help to understand the market condition and the estimated cost of the raw materials for the construction process.
  • In addition, the process of negotiating with different suppliers can be useful to reduce the operational cost of the construction project of Kingston University London (Eriksson and Lind, 2016).http://Best CE7013 Estimating Tendering and Procurement Sample
  • Increase of the streamline of the supplier: One of the major components of the cost reduction procurement strategy is the increase of the streamline of the supplier. According to the view of Staples and Dalrymple, (2016), increasing the streamline and lifecycle management of the supplier can greatly enhance the process of cost reduction. However, it can help the construction organization to earn good profits from the proposed project within a given budget of £10 million.
  • Data exchange with a trading partner: The exchange of data with the trading partner is one of the important techniques that can be implemented in the strategy of cost reduction procurement types. According to the view of Saran et al, (2016), this can help the construction company to save the waste of money in the data process. In addition, the exchange of data and information about the project estimated and actual cost can help to understand the cash flow process and project progress.
  • Leverage of the supply chain: Leveraging the supply chain process and networks can greatly contribute to the process of reducing the cost of the project. According to the view of Howell et al, (2018), big data analysis can boost and enhance the performance of the supply networks and can help to manage the project in the estimated cost in an effective way. On the other hand, the process of actors performing in the big data analysis process can help the organization to complete all the tasks at the right time.

3.2. Risk Management strategy

Another most appropriate procurement strategy that can be used in the proposed project of Kingston University London is the Risk Management Strategy. This strategy can be used as the most effective alternative in the project to control the emergency and major issues. The following are the five major steps of the risk management procurement strategy:

  • Identification of the possible risk of the project: The initial stages of the risk management procurement strategy is the identification of the major risk in the project. According to the view of Eadie and Pereira, (2017), the risk of the project can be categorized in different groups such as social risk, financial risk and technical risk. Social risk refers to the impact of the university student and the risk associated with the student of Kingston University London during the construction process. In addition, finance risk is associated with the estimated cost and budget of the proposed project. However, the technical risk is generally associated with technical and architectural errors in the construction process of the proposed project.Best CE7013 Estimating Tendering and Procurement Sample 3

Figure 3: Steps of risk management

(Source: Windups and Adeniran, 2017)

  • Analysis of the cause and effect of the risk: Analysis of cause and effect of all the risk is one of the most important components of the risk management procurement strategy. According to the perspective of Shen et al, (2017), evaluation of the cause of different risks in the proposed project is helping to identify the most effective solution process. This can help the construction manager to estimate the cost of fixing the major risk of the project in order to minimize the impact. However, the analysis of the effect of certain risk is necessary to evaluate the possible circumstances in the functional areas and help to mitigate in the most effective way.
  • Mitigation strategy of the risk: One of the major function and stages of the risk management procurement approaches is the mitigation strategy. According to the perspective of Davis et al, (2017), mitigation strategy in the construction project must be based on the objectives and safety of the associated people.

4. Advance procurement practices

Advanced procurement practice is vital for manufacturing process as it helps to modify the strategic function of an industry for assuring greater profitability. Along with this, streamline flow of construction can also be controlled by this kind of procurement to improve strategic function of work procedure.

In case of Kingston University London project, development of tactical plan has been ensured to reduce the cost of raw materials and better sources of supply can also be ensured.

On the other hand, innovation perspectives of this construction project will also be fulfilled by using this strategic approach. Henceforth, official management procurement plan helps to evoke administration process of building construction by identifying better sources of supply chain.Best CE7013 Estimating Tendering and Procurement Sample 4

Figure 4: Advance procurement practices

(Source: Shen et al, 2017)

  • Consideration of effective strategy statement: Consideration of the effective strategy statement is one of the major advance practices of the procurement strategy. Consideration of effective strategy helps to understand the basic need and rationale of the proposed project. According to the view of Wong et al, (2016) statement of the basic need of the project can help the entire internal, external stakeholder to understand their function and roles in a proper way. However, the consideration of the effective strategy statement can greatly contribute to the development of the project in the most effective way.
  • Establishment of governing Supply Chain: Proposal of governing council will be implemented as advanced procurement practice to modify supply strategy of the raw products required for project. On the other hand, recognition of potential suppliers becomes easy by incorporating this practice of procurement. As per the view of Shen et al, (2017), effective forum of cross functional communication can be evoked by using this strategy in case of construction project of Kingston University London. Along with this, project manager can able to assure clear insight of project by following this tactics of procurement for acquiring marginal benefits with a removal of business barriers.
  • Engagement of collaborative strategic sourcing: Activity of customers and solicit feedback can be acquired by this collaborative practice and development of quality assurance becomes easy. As per the opinion of Adeniran and Windup, (2017), collaborative strategic sourcing helps to monitor accounting and financial field to increase responsiveness of individual project participant.
  • Focus on total cost of Ownership: Total Cost of Ownership (TCO) is a proficient advanced procurement plan that helps to understand the total cost of a project. On the other hand, significant spend areas can also be measured by this process for improving quality of service. Based on the view of the Jejomar et al, (2016), a clear balance between products and service can be ensured monitored for generating value to a construction project. Along with this, supply chain process of a project can also be evaluated through TCO for assuring a throughout investigation on translated and reduced price.
  • Use of effective procurement software: The most significant advanced procurement practices for the development of the proposed project are the use of effective procurement software. As per the view of Nguyen et al, (2019), the most important software that can be used by the construction company in the project are the 4CASTPLUS, PENTA Construction Management Software, and FLUOR. This software can greatly help in the construction project to manage the different functional areas in the most effective ways.

5. Evaluation of influence factors

The following are the major factors that can influence the development process of an effective procurement strategy:

Uncertainty of the external environment: The most common factors that influenced the development of procurement strategy is the uncertainty of the external environment. External environments such as the climatic condition, availability of resources and market instability can greatly influence the process (Kemiri et al, 2017).http://Best CE7013 Estimating Tendering and Procurement Sample

In the development of the procurement strategy of the construction project, climatic conditions played a great role. However, resources availability and market instability can greatly influence the estimation cost and plan cost of the project to a great extent.

Relationships of the supply chain: Supply chain relationship is one of the major factors that influenced the process of developing strategic procurement approaches for the construction works.

According to the view of Esfahan and Yaghoobi, (2017), the relationships of supply chain management systems have the capability to put influence in the functional areas of procurement development. Supply chain relationships determined in the cost of raw materials and the operational cost of the project.

Quality and flexibility of the proposed project: Quality and flexibility of the objectives and needs of the proposed project are one of the major factors that influence the functional areas of procurement strategy development process. Based on the view of Fung et al, (2017), desire quality of the organization and parties from the proposed project put impact in the process of initiating the technology and approaches for the project.

On the other hand, the flexibility of the project expectation and standard influence the selection process of the alternative approaches for project initiations. However, the development of timeframe and the estimated cost of the project can be greatly influenced by the quality and flexibility of the project.

Construction technology: The last important factor that can impact the process of developing an effective procurement development plan for the construction project of Kingston University London is the technology of construction.

According to the view of Fung and Yeung, (2017), the appropriate construction technology must be selected based on the considered objectives and needs of the project. Use of the most effective construction technology can be used fully to ensure the success of the project.

Process of implementing the influence factors

The factors that can influence the process of developing the most effective procurement strategy approaches for the proposed project are the external environment, SCM, quality & flexibility and construction technology. According to the view of Kemiri et al, (2017), consideration of the external environmental factors in the procurement development process is important to examine the upcoming issues and challenges of the project.

However, in order to implement the most effective Supply networks for managing the sequences construction works is the market study and maintenance of the streamlines with all the supplier’s Control over the streamlines of suppliers can be helpful for initiating the project in the most appropriate time to meet the given deadlines.

In order to implement the flexibility and good quality in construction, proper analysis and evaluation of the organizational structure must be focused by the construction company to enhance their works. Analysis of the flexibility and expected quality of the proposed project is helpful to operate the task of each stage. However, the proper technology can be implemented by focusing on the major innovative construction technology.

Use of innovative construction technology can help in the process of cost reduction and time reduction of the project. In addition, the use of effective technology can be helpful for meeting all the expectations of the project in authentic ways.Best CE7013 Estimating Tendering and Procurement Sample 5

Figure 5: Factors influencing the procurement strategy

(Source: Kemiri et al, 2017)

6. Potential benefits of the alternative approaches

Two different kinds of alternative procurement approaches such as cost reduction procurement strategy and risk management strategy have been taken for auditorium construction process for Kingston University London. All the benefits of alternative procurement management approaches are enlisted below to understand their viability for future construction process of this world-class university.

Benefits from cost reduction procurement strategy

Procurement approach of cost reduction is a potential one to deliver a definite margin of cost for a project and along with this quality of industry has also be evoked. As per the view of Adeniyi and Ebonie (2017), lower price is a proficient one to moderate economy of an organization in a positive way.

On the other hand, more employment and industrialization have been facilitated by cost reduction procurement strategy with higher gaining of tax revenues. Apart from this, standard of living and customers’ trust has also been increased via cost reduction approach that can help to maintain profitability of the project correctly.

Shortage of resources can be diminished through cost reduction approach and a minimum export price can help to enhance productivity in a sustainable manner.

As per the opinion of Zo et al. (2018), cost reduction emphasizes long term benefits for any project and resource control can also be ensured. On the other hand, cost reduction strategy of procurement can help to maintain the correct contract process with all suppliers along with legal authentication.

Apart from this, business streamline flow has also been moderated for positive purpose with the help of cost reduction strategy. Moreover, leverages of supply chain have also been maintained in a better way via cost reduction approach. Not only this, but the data exchange aspect has also been developed correctly.

Benefits from risk management strategy

Risk management strategy of procurement has delivered a number of benefits to any project as detection and solution of any kind of risk are necessary for a better work function. As pointed out by Yoon and Moon (2019), real risks of a project can be determined by risk management scheme and all the non-apparent risks can be identified properly.

Along with this, risk management scheme is a helpful one to provide a better insight and support for all board members. Therefore, organizational restructure completely depends on correct commitment of risk management on a daily basis.

Apart from this, class-action of a project has also enhanced in a proper manner with the help of risk management procurement strategy. Henceforth, manifestation of risk for a project can be adjusted correctly with the help of risk management strategy and credit has also been supplied for risk avoiding purpose (Stewart and Coin, 2018).http://Best CE7013 Estimating Tendering and Procurement Sample

Moreover, systematic breakdown of a project can be controlled by introducing risk management system in a regular manner. On the other hand, business liabilities have also been reduced for ensuring better profitability under any consequences.

Risk management of a project is prone to deliver regulatory issue for setting future framework in a broader manner. As per the view of Koroleva et al. (2017), both the insurance and indemnity issue of a project can be handled properly with the help of risk management procurement strategy.

On the other hand, structure of an organization can be focused in a better way with the help of risk management strategy and more attractive investment can also be assured.

7. Examples of alternative approaches benefits

Example 1

Cross rail project of UK is a lavish one for global arena as this has helped to connect two major areas of this country in a better way. In this project, cost reduction approaches have been implemented to add better viable option of this construction.

As per the opinion of Jackson et al. (2018), cost is a vital aspect for any project and moderation of this can help to enhance acceptability of any project. Therefore, steering committee of the above-mentioned project has reduced the cost of their process for assuring better facility from supply chain management and logistics perspectives.

In addition, labor welfare strategy has also been moderated in a proper manner to control the whole construction process in positive direction (Crossrail.co.uk, 2020). Moreover, cost reduction aspect has delivered a number of facilities to induce productivity and profitability rate of this construction project in a sustainable way.

Example 2 

Flood Alleviation scheme project of UK is a kind of disaster management scheme in which risk management strategy has been applied from the previous period. As pointed out by Hubbard (2020), safeties from hazards are required to manage the changing order of any project in a crucial manner. On the other hand, risk management procurement strategy has been applied to draw attention of all managers for easy working function.

Apart from this, monetary and physical risks were controlled by the steering committee of this above-mentioned project (Leeds.govt.uk, 2020). In addition, workforce of this project has been moderated correctly through this kind of policy and public safety has also be assured in a proper manner.

8. Recommendation

  • Used of the proper tactical plan: Tactical plan is the policies of the company that consists of a short period plans and decisions by the department of officials from the company.it contains certain key elements. Hence, the employees of the company should understand the objectives to achieve and fulfil strategic decisions.
  • Preparation of estimated cost and timeframe based on objectives: In order to prepare timeframe management, it is initiated to understand the requirement of the plan. Attention should have to be given on the important tasks and activities and all estimates have to be completed within a certain time limit. Then the costs have to be added and it is noteworthy to add all the applicable prices such as labor, parts of materials, fees, transportation and many more. Preparation should have to be based on the objectives that are required to meet objectives.
  • Focused on the deliverables: Deliverable means by focusing on a particular cycle to get something done. Internal deliverables and external deliverables. Should be assessed to fulfil its target. It can even consist of smaller deliverables. Focusing on deliverables is mandatory to get the final outcome of procurement. Few examples of deliverables are work statement, scope statement, governance plan and breakdown structure of work. Hence, deliverables must focus on the problems that are internal part of the project to deal with it.
  • Used of effect procurement software (PENTA Construction Management Software, 4CASTPLUS and FLUOR): Penta software would solve the issues and overcomes the construction-related problems. They are the best software that aids construction, service and engineering-related problems. 4Castplus has to be made to control the cost of project management and handle the problems of procurement. Fluor helps to reduce the costs of the project and the overall schedule of the project.it is also used for maintenance. All the software are used on a regular basis to solve all the problems and oversees various things and it will be highly helpful for individual contractors to improve efficiency in such procurement.
  • Implementation of proper metrics to evaluate project progress: Proper metrics should be implemented for the success of the project and procurement. Metrics would help to control the project cost. It will also help managers of the project to access the status of the project, and it thus this will improve the work quality to identify the urgent trends of the industry.

9. Conclusion

Based on the above analysis and discussion of the development of effective procurement approaches, it can be concluded that the use of Total Quality Management Procurement approach can help to meet all the expectations. The major focused areas of the project are the development of strategic procurement approaches, alternative approaches, advanced procurement practices, major factors, potential benefits and recommendation for the proposed project.

Alternative approaches had discussed the two most effective alternatives for the proposed project as a backup plan for controlling the emergency issues of the project. However, advanced procurement practices have been discussed based on the best and most effective components that enhance the functional areas.

However, the major factors that have the capability to influence the functional areas based have been discussed in order to understand the major component of the project. In addition, the benefits and recommendations in the study have been discussed based on the objectives and consequences of the proposed project.

 

 

 

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Websites

Crossrail.co.uk, 2020. AboutUs, Available at: www.crossrail.co.uk. [Accessed on: 10.03.2020]

Leeds.govt.uk, 2020. AboutUs, Available at: www.leeds.govt.uk. [Accessed on: 10.03.2020

 

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