Under a competitive contractor selection process, the client will put the works to tender and interested contractors are invited to submit bids. Bidding is pursued either through open or selective tendering. Open tendering allows all interested parties the opportunity to bid for the works. In the selective tendering process, contractors are subject to prequalification. Firms are short-listed on the basis of this prequalification and only a limited number are then invited to bid (Seeley 1984, Willis and Willis 1980).
The system eliminates any human intervention making the process accountable. This system will offer an opportunity to automate the tendering process right from tender preparation, advertising, approval and awarding. It accelerates the time-consuming process. The development of the project will be done using Python Django and MySQL database along with Bootstrap 3 support for GUI. Keywords: Tender, Buyer, Vendor, ORM, MVT II.
Overall project duration may be longer than other procurement methods as the strategy is sequential and construction cannot be commenced prior to the completion of the design. (c) Client’s own property, quality demand high. Sustainable construction. Usually lowest bid win the contract, quality of management is put at risk (d) Risk is more on contractor. It breaks down traditional adversarial barriers.
It also includes the unit price for each item. Where the final price of the project depends on the quantities needed to finish the work. 3- The cost plus contract A contract agreement where the purchaser (the buyer ) pays the full cost of all labor and materials, plus an amount for contractor overhead and profit (which is usually a percentage of the labor and material cost). This type of contract is preferred when there is uncertainty in the scope of work, or when the types of the materials, labor, and equipments are being similarly uncertain in nature. 4- Incentive contracts Incentive contracts feature compensation which depends on the contracting/engineering performance in accord with an agreed target, schedule, quality, and/or budget.
Contract terms & Negotiation process: This is the most important activity in Strategic sourcing. Contract volumes, Payment terms, and cost of the product everything will be discussed and closed. 4. Supplier evaluation: Supplier evaluation is done to monitor the performance, cost reduction, and also to drive continuous improvement. CE3.7 Technical details of the work: Identifying potential
The project team will work with the contracts and purchasing department to define the item types, quantities, services and required delivery dates. The contracts and purchasing department will then solicit bids from various vendors in order to procure the items within the required time frame and at a reasonable cost under the firm fixed price contract once the vendor is selected. This contract will be awarded with one base year and three option
The Procurement Process can be divided into the following steps: 1. Identify a Need for Product or Service The procurement process begins with identifying or anticipating a material, product or service needed by a user in the organisation, which will become the buyer. In the case of smaller organisations or if the purchase requisition requests an item which is a very small rand amount, the purchase order system may allow the user to purchase the item with no huge sourcing process or approval required. The approval might happen through a system such as an e-procurement system, online catalogue, or with a purchasing card. In cases when the rand amount exceeds the users’ permission to generate a purchase order, the purchase must then go through
There are several functions and purposes of cost accounting. Although the income statement and the statement of cost of goods manufactured are valuable in guiding business decisions, they do not supply enough information to achieve the greatest efficiency and profit under competitive conditions. The figures represent total costs, or as my lecturer likes to call it, “too broad” to permit more than general conclusions. Alert management, interested in showing a larger profit, will ask itself vital questions that these totals cannot answer. The answers to such questions require detailed data based on computations that will pinpoint unit costs of products and processes.
Procurement is, arguably, the single most important issue that endangers the relationship between client and the contractor which in turn brews mistrust among all the participants of the construction Industry. Falling workloads and increasing competitive environment in both public and private sector compels contractors and subcontractors to bid in the tender process less scrupulously which are detrimental to the Industry. Competitive bidding and pricing does not always engender best value. All the parties involved tries to follow their own self interest which leads to delay in the schedule and lack of quality specifications. Ineffective management and lack of effective and open communication leads to mistrust among participants.
The decision on the acquisition of materials may also be required in the early stages of planning and scheduling. For example, activities may be included in the project schedule to represent the purchase of major items such as a lift to the building. Availability of materials can greatly affect the schedule in projects with a fast track or very tight time schedule: sufficient time to obtain the necessary materials must be allowed. In some cases, more expensive supplier or the sender can use to save time. Materials management is also an issue at the organizational level if central purchasing and inventory control are used for standard items.