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This is why public agencies, place such a premium on specification writing. The academy is stocked full of good material and tools, some of which I am already using on my projects.  The specification may not be better than a standard product that is, readily available. The traditional route of designing the building fully and properly to meet your needs (including budget) before going out to tender for the building of it, will always produce the best most cost effective (not cheapest) solution. Relatively High Costs. Specifications describe in detail the supplies and services the City seeks. The sort of decision making involved in procurement methods in property development are complex. An opportunity exists to procure identical requirements from a number of, The potential exists for equitable competition. Furthermore the contract specifications need to be written in a non-discriminatory manner. A specification has been defined as a statement of the attributes of a product or service or a statement of needs to be satisfied by the suppliers, e.g., 4 feet by 8 feet 2 mm thick mild steel plate (acceptance tolerance of +0.05 mm). The cost of an unit quantity of work is governed by its specifications. Tradogram offiers simple solutions to overcome perceived disadvantages of eprocurement such as a free, no-time-limit account for software trials. 4. There is no best way. be responsible for performance when the buyer specifies performance. Direct procurement results in various additional costs to the firm. Hope that helps. 1. Performance specification is result-and user oriented, leaving the supplier, with the decisions on how to make the most suitable product. Find out how disadvantages of e-procurement can be a thing of the past when you use Tradogram. Quotations. Unqualified architects are acting outside the law (it is illegal to call yourself an architect or offer the services of one, within the construction industry, if you are not registered with ARB), so if you need an architect make sure the person you employ is ARB registered, preferably a chartered member of the RIBA and running an RIBA Chartered Practice. Design and Build is a way to fast track construction and the contractor often should dictate a fixed cost or a guaranteed maximum price that offers certainty to the client. Hi Mike, 2. Specifications can be prepared in a number of ways. If you need a quick build then going through a design, tender, build approach may be too time-consuming. like if i’m a landlord and i got no experience at all, and i’m building a supermarket, shall we go with the management procurement? There are different routes to procurement in property development. ", Terms & Conditions  |  Privacy Policy  |  About  |  Contact Us The developer will appoint a design team to complete design, however, the developer will then appoint a construction manager to manage the construction phase, either directly within the development company or outsource to a specialist construction manager. "There are so many courses, mentorships and masterminds out there which cost an absolute fortune and yet do not provide anywhere near this level of detail or content. This isn’t to say that this is an inflexible approach to design and build. Procurement Chapter 4 - Specifications 4.1 Generally.. Procurement plans can be prepared in many different formats. Repeated problems with procurement lead to long-term issues that seriously affect your company. When this is the case, the procurement plan merges with the procurement … Public procurement can be a long and strenuous process if you DO NOT HAVE the tools you need. And, before I get shouted at, no qualifications at all are needed to offer ‘architectural’ services, my pet cat could legally offer such a service to the public . From supplier onboarding to system costs, learn the e procurement advantages and disadvantages. 1. what are the disadvantages of the management procurement? Requirement specifications provide everything required to design a product, service, tool, infrastructure component, process or procedure. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The contractor now has interest in cutting costs themselves and may compromise quantity and quality of materials. In securing bids from various, suppliers, a buyer must be sure that the suppliers are quoting for exactly the. It demands quality information provided in a timely manner. Procurement is the process of acquiring essential resources such as goods and services to the construction project. With construction management, similar to traditional method, the design and construction elements are split. Introduction. American Military University • DAU ENGINEERIN, University of Southern California • CSCI 578. The reason is that lowest price means the lowest standard. The contractor now has responsibility for both the design element and the build. From the above characteristics, we may conclude some advantages and disadvantages of this type of procurement. This can work well. • Construction procurement mostly refers to the process of competitively:-˜Selecting a Contractor carry out the work on the basis of either specifications and drawings or Bills of Quantities, where the lowest responsive tenderer is awarded the contract (Ramus and Birchall, 1996) PROCUREMENT METHODS Property Like a Pro Academy: Members Login. 1. The procurement plan should cover all the different steps in the process with the expected date of initiation of each milestone. The responsibility of the design of the development will lie with the developer (and designers), where as the contractor will be solely responsible for the construction activities. The developer will also retain maximum control of quality, and changes can be made throughout the development process with minimum penalty compared to the other two methods. Thank you Mike for providing this Academy, its a breath of fresh air! From a cybernetic perspective there is no formal disadvantages when attenuating (reducing) variety. However, on the down side, the (potentially) cheapest and quickest approach to procurement may not always be the best. ", "I already had education and a business partner with a plan but since joining the PLP Academy I have gained so much more knowledge, skills and above all a network of dedicated likeminded people, who I now consider friends and colleagues. Thanks John for the comments, of which I largely agree with. Requirement SpecificationsDocumentation of a business need. The property development process is front loaded – there is a lot of time devoted to the design element. Once begun, the contractor may apply huge penalties if you ask for changes in the design – both in terms of price and time. over the contractors’. Hi Yolanta. Tendering is the process of securing proposals or prices from contractors based on a specific set of drawings and specifications. other than the extra cost for the project manager. Poor procurement can mean you don’t properly analyze a supplier, resulting in lower quality purchases—or purchases that don’t meet your needs. Advantages of procurement planning are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors. Its also referred to as the tender process. The developer provides a set of requirements and the contractor provides the plans and specification for how this will be realised. It throws the responsibility for a satisfactory product back to the seller. Like so many answers to a property development question… It depends. ", "I’ve learnt more in the first 10 days than I have in any other academy/forum I’ve subscribed to. D&B does have its place, perhaps for smaller less complicated developments or home extension projects..? Long-Term Problems. However, if you are undertaking something a little more experimental, then you are more likely want to employ a construction manager, especially if costs are critical to you, and you have the experience. Construction management is very good IF you have the properly qualified chartered professionals in that team, be they engineers or surveyors etc. The seller will. This remains the most popular type of procurement in construction, mostly because the developer retains the control of the design, and its a method which is largely understood by the industry. This means that during construction the construction manager will put together smaller packages of construction work and contract with specialist suppliers or sub-contractors to complete that specific work, creating potentially hundreds of different construction packages and contracts. For now, however, it is useful to note that input specifications tend to be used mainly where there are legislative implications that have to be observed, for example, legionella testing or hazardous waste disposal. It is one of the two possible strategies; the other one being amplifying (increasing) variety. The benefits of a traditional contract are many – which is why it has become the traditional mode for procurement. Reputation and brand image. Course Hero is not sponsored or endorsed by any college or university. The aim and challenge of sustainable procurement is to integrate environmental and social considerations into the procurement process, with the goal of reducing adverse impacts upon health, social conditions and the environment, thereby saving valuable costs for public sector organizations and the community at large. More sub contractors involved. what is the best way for procurement when renovating the existing structure. By joining the Property Like a Pro newsletter, we will send you email newsletters containing property development blog posts, articles, hints, tips and occasional promotions about the Property Like a Pro Academy. Traditional procurement has focused upon value for money considerations. Therefore, if you have a fixed idea of the nature of the project from the start and this is likely to go unchanged – then traditional contracting should offer the best approach. Extra negotiations on every single package that is placed and tendered. There is also a single point of contact – and this creates a smoother line of communication and can avoid fall outs. Ultimately, this offers the lowest risk for the client, who is able to lay out a set of requirements and then hold the contractor responsible for these requirements. Purchasing’s primary role of taking a business requirement – finding a supplier, negotiating a deal and then ordering the item is hinged on that first step – without knowing what’s really needed – costs can be far higher than required and the purchasing process inefficient. All procurement methods can work. Shall the client be a professional and experienced in the field? Why anyone would employ unqualified people to carry out the work of qualified professionals is beyond me , You raise some good points as always John. You can unsubscribe at any time. If you need a fixed cost, then design and build may feel more comfortable but if you want quality over value – then you probably want to retain more control over the nature of the materials and techniques employed. Disadvantages. 2. The concept of dealing with the few chosen suppliers in a manufacturing setting is referred to as direct procurement. The disadvantages of this procurement method revolve largely around time. This preview shows page 1 - 2 out of 2 pages. 1. The criteria for choosing your procurement method will depend on your experience, the experience of the contractor and the type of project you are undertaking. It is about weighing up all the different factors in the decision-making and come to the best fit for your situation. Identify the elements of a procurement specification and principles of specification writing. The cost should be fixed from the start, which offers some certainly for the client – and they retain control of the design throughout. 2. The disadvantages of this procurement method revolve largely around time. Enable suppliers to suggest new improved ways of meeting the requirement. Specification of a work is required to describe the quality and quantity of different materials required for a construction … Project delivery and procurement considerations . Equally, it could cause inflexibility. The choice of your procurement method will be vital to the success of your project, therefore making an informed choice is the key to making a profit from your project. In the current labor-and resource-constrained climate, this can be a significant boon. Procurement in simple terms, just means the method in which the purchase of goods and services is completed, but you will see from this article, that there is no ‘one size fits all’ approach which can be taken, and your approach will depend on your circumstances, business plan and overall objectives. However, this is the most time and management intense process. Advantages and disadvantages of performance specification. Lets dive into the detail and take a look at the main methods of procurement. The important thing to remember is the content. The building designer (not necessarily qualified as an architect or in anything for that matter) is paid to meet the needs of the builder not you the client. 4 . The procurement method must be decided upon at an early stage of a project as this will help the entire development process and create a solid place to start from. There are many. If you need a quick build then going through a design, tender, build approach may be too time-consuming. The property development process is front loaded – there is a lot of time devoted to the design element. Advantages and Disadvantages Of Method Specifications Table 1.1 Source: Strategies for Implementing Performance Specifications, TRB . The development design will be finalised before contractors offer tenders for the build – this means you know what you are getting. preventing delay and waste that would occur with improper materials. I agree with your comments on construction management, critical to have a qualified person appointed. The best quality of stationery items may not be available at all times. Procurement management allows the department leader to identify those employees with the strongest abilities in negotiation, develop those skills further and assign this responsibility to those employees. Disadvantages of Tender System. Disadvantages of co-op purchasing. This method is used when a product or service is proprietary, or when there … The cost may also be higher – as the quantities are dictated in the design and the contractor has little flexibility to manage the price. The general contracting (traditional) procurement method involves separating the design and construction process, the developer will appoint a design team to complete the design, and then separately contract with the building contractor to complete the construction works. Advantages and disadvantages of performance specification - Advantages and disadvantages of performance specification Advantages It throws the, 16 out of 18 people found this document helpful. One pro of managing the procurement process involves developing skills of specific employees to negotiate with vendors for the best prices. Project timescales and lead in times become much more critical. Disadvantages  There are requirements for which it is practically impossible to draw adequate specifications. Of course, you can start the traditional route and then novate the design team to the contractor creating a D&B contract, thereby blending the procurement methods. Start studying Purchasing One. A standard is established for measuring and checking materials as supplied. The main benefit to this is costs. By competitively tendering each element of construction works, you know that you are getting best price across the board. There is risk of price escalation, and negotiations becoming adversarial in the second stage. Preparing formal specifications can take a very long time. The specifications you create for your suppliers will form the foundation of their view of your expectations of them. Moreover, the contractors have a legal duty to provide the employers with a project that is fit for its purpose. Business units may provide high level requirements such as user stories.These are refined with a process of business analysis to be detailed enough to be considered specifications. Procurement in property development is a fairly straight forward concept, but one which needs a bit of thought and planning way ahead of placing a contract with a builder. Notify me of follow-up comments by email. The main reason to take control of the design and contract out the build is to ensure quality. The developer will have the extra expense of hiring a construction manager and with the potential for a large amount of contracts to be put in place, the room for error because larger.  The use of specifications adds to the immediate cost. Even if you offer incomplete plans to the contractors this in turn can lead to delay, additional costs and conflicts if the plans change too many times or are too unclear to make early build decisions. While it’s true in most cases that clarity works for you and ambiguityagainst, it’s always important to remember that a balance must be struck between the two – allowing your supplier the room to apply their own professional expertise to the relationship. So, Proper procurement management leads to achieving project goals and objectives. Procurement includes the following components: Development of procurement strategy with new mechanisms; Preparation of construction contracts  The cost is increased by testing to ensure that the specifications have been met. Property Development Coaching, Courses & Community. There are three main procurement methods you can choose from, which are as follows: Before looking at the advantages and disadvantages of these types of procurement lets define these approaches you can take. Types of Specifications Purpose of giving Specifications. Performance Specification—A type of specification in which the goods and/or services are described in terms of required performance. Compared to conformance specification, performance specification has a number of ADVANTAGES such as; The specifications are easier to draft; The efficacy of specifications does not depend on technical knowledge of the buyer; Supplier can use their creativity to develop the products; Greater share of specification risk is borne by the supplier. Implementation Guidelines . It’s not difficult to recall allegations of child labour in the overseas … Specification Writer’s Guide . Descriptions by brand. Too difficult to answer without knowing your skill set, time availability or motivations. Descriptions should be drafted to address the City's needs, and the costs of procuring, operating and maintaining the supplies and services. There are advantages and disadvantages to both types of specification which are considered in more detail later in another article. The advantages of design and build tend to counter the disadvantages of traditional contracting procurement methods. If the prices are going down in the market, the agreed prices should be paid by the office. There are lot of companies which have decent Procurement Management Software which solves most of your business problems. Mike is a wealth of knowledge and very responsive to questions. 5 Proven Tips for Being a Property Developer, The Ultimate Guide to Stamp Duty Land Tax (SDLT), Property Like a Pro Academy: Members Login. The purpose of a good specification is twofold: 1. 2. You may need more than just a project manager, this will include admin support. Human Systems Integration and Program Protection. Design and Build is pretty much as the name suggests. However, someone will little experience would be better placed to use another procurement method. This method of procurement is best suited to experienced developers who may a have larger in house team or experience dealing with complex projects. We will never share your information with third parties and protect it in accordance with our privacy policy. Each element of construction works is packaged up and tendered so that there are contracts in place between the developer and lots of different contractors and sub-contractors to complete the project. They need to make a profit and have set a maximum price that likely was calculated to undercut competitors – therefore margins will be tight. To accur… Purchasing will assist and advise you in developing your specifications, however, Procurement does not have expertise in every sphere of College of Charleston academic programs and staff activities. This report is an assessment of the procurement strategies and options for selecting the procurement strategies for design and construction of the new proposal at malchester. Will be based on the details and characteristics of the project itself. A good group purchasing organization is an extension of your company It should work to expand your trade base, as well as identify and pre-qualify new sources of supply.

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