Procurement Routes in the Construction Industry Assignment

Procurement Routes in the Construction Industry - Assignment Example This process follows a number of steps but depending on the urgency of the required goods or services, some organizations may choose to make their procurement routes less lengthy and less tedious. Conventionally, procurement entails everything that is done within the complete acquisition of goods and services i.e. from preparation and dispensation of a requisition form through to the receipt of goods or services and the approval of the invoice for payment (White, 1996: pp. 242-3). Procurement often follows ten major steps: planning for purchase of goods or services, determination of the specific standards desired in the goods and services, development of finer specifications on the goods and services, doing extensive research on possible suppliers and selecting one supplier, conducting value analysis, determining the financing of the purchase e.g. whether to take a loan or use money in the company's bank account, negotiating the price, making the purchase, administration of the supply contract, controlling inventories and stores to guard against diversion and finally, the eventual disposals if any. Generally, the process is lengthy because of need for quality goods and/or services from competitive suppliers at competitive prices. The rules governing the process need to be followed strictly because the process o procurement has been identified as the key and major gateway for embezzlement and misappropriation of company funds and other corrupt deals. Each industry has its own procurement regulations and the whole process of procurement is structured to fit the nature of the industry's operations. For example, if an industry requires goods and services to be delivered urgently, then the process is likely to be made short. Taking the construction industry as our working example, this paper seeks to highlight the process of procurement in this industry with special emphasis on the particular types of procurement routes in the construction industry. The construction industry deals with the provision of a number of goods and services. It deals with the building of new structures such as schools, churches, factories, apartments, houses, offices, factories, roads and even bridges. Apart from building of the aforementioned structures, the industry also engages in preparation of the building or construction site, modification and annexing of existing structures and the maintenance and repair of the already existing structures. Therefore, the constructors are usually contracted to carry out any of the activities. The contract may involve the design alone, the design and building or even the management of the construction process carried out by other constructors. The way of contracting these constructors to carry out any of the services may be termed as routes of procurement. There are three main routes of procurement: Traditional Procurement also called conventional procurement, Design and Build Procurement and Management Procurement . Traditional Procurement also called conventional procurement is a very common procurement route for most small and medium sized projects such as the construction of a school. The client in this kind of procurement route first contracts consultant(s). The consultant(s) design and lay down all the exact specifications on how the construction is supposed to be carried out. After the consultants have completed their job, the client then proceeds to contract a