PROCUREMENT ARRANGEMENTS
A. Selection of Contractor
The Contractor of this project should determine the best ways to utilize its basic factors of production in the safest ways possible. These resources include the construction site’s people, materials, information, and energy needed in the production. The contractor should be the bridge that would link the goals of management and safe operational performance. They should be concerned with the increase in productivity through the proper management of people and choosing the appropriate methods of construction site organization while maintaining a high level of safety (, 1993).
In choosing the best contractor, other qualities that have to be taken into consideration include:
1) They must be able to perform the careful analysis of the construction site’s materials and their requirements as a safety precaution. In this process, they make use of various mathematical methods in its operations research to meet the requirements.
2) They must also have the capability to develop systems of management control in order to aid in the planning of safety precautions and measures in cases of emergency situations. These systems are eventually subjected to improvements for the effective implementation of the safety plans of the construction site.
3) The contractor should have the capability to perform the tedious task of selecting which among the various construction site locations have the best combination of raw construction materials availability and safe environment. This time, engineers make use of computers for simulations and robots for controlling various activities and devices. They also are in charge of the development of systems and programs for safety.
B. Procurement System
Buyers and purchasing agents in this project should be tasked to evaluate construction material suppliers on the basis of price, quality and service support. They would review catalogs as well as the construction industry and company publications in order to help them in their search for the right construction material suppliers. Fortunately for them, a majority of this information can be easily accessed in the Internet (, 1995). They will also do some researching about the reputation and background of the construction material suppliers and may also do some advertisements regarding the foreseen purchase actions in the hope of soliciting bids. At meetings and conferences, they should perform the examination of construction material products as a safety precaution, the evaluation of the productive and distributive capabilities of the construction material suppliers, and the discussion of business considerations that have the possibility of influencing the construction material purchasing decision. As soon as all valuable information about the construction material suppliers is gathered, the placement of construction material orders and contracts are started to be awarded to those construction material suppliers who are able to meet the needs of the purchasers. The typical contracts range for several years and may even have the stipulations of the range of construction material prices, which would allow the purchasers to reorder whenever necessary.
There should be a clear distinction between the work of a buyer and that of a purchasing manager. Purchasing agents and buyers focus mainly on the daily purchasing tasks. They specialize in construction materials. Purchasing agents perform the tracking of the conditions of the construction materials for safety, trends in their prices, as well as the future of the markets. Purchasing managers, on the other hand, are in charge of the more complex and critical construction material purchases and handles a team of purchasing agents.
B. CONTRACTUAL ARRANGEMENTS
Costs of construction of the building could range to hundreds of millions of dollars. It is very obvious that the owner cannot afford the costs without outside assistance such as banks and other financial institutions. Sources of capital to finance the construction of the building will depend on the type of the building. Financing of the construction of the building will depend on what type of business is going to be established. Basic sources of capital can be through equity finance, debt finance or internally generated funds (, 1999).
Cost of construction of the building depends on the nature, size, location and management organization of the project. Project managers and designers such as the architect and engineer should realize that the costs are only estimated values and may vary depending on the changes, schedule adjustments and site conditions.
Capital cost that has to be agreed in the contract for the project includes:
· land acquisition, including assembly, holding and improvement
· planning and feasibility studies
· architectural and engineering design
· construction, including materials, equipment and labor
· field supervision of construction
· construction financing
· insurance and taxes during construction
· inspection and testing
· owner’s general office overhead
Engineers and contractors used different types of cost estimation and should be weighed and compared to determine the most cost-effective estimate.
The foundation of this contract is freedom of contract or the standard of autonomy. This denotes that when monitoring and following the appropriate legal limits, individuals can take part in whatever contractual affairs they prefer. However, they must understand that the moment they have determined to do so, they are bind by this contract. This principle has been used in the legal system for such a considerable amount of time by disputes on contractual relations specifically, the use of fine prints and other stipulations that are not easily recognizable for one of the contracting parties have been contended with.
REFERENCES
Credit:ivythesis.typepad.com
0 comments:
Post a Comment