Effective Project Management

Section P Procurement

There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper and the people who consider price only are this man's lawful prey.

John Ruskin, 1850

For process plants approximately 40% of a major project is spent on the procurement of materials and equipment. It is, therefore, an extremely important area where it is possible to make significant savings in both cost and schedule, thus benefiting the overall project.⁵

Some companies have subcontract formulation under procurement and their implementation under construction. Others have all the subcontract functions within the construction department.

1 Getting Organized

1.1

Get the right people: see Section D Mobilization, paragraphs 1.1 to 1.5.

1.2

Establish functional links for:

1. Quality assurance
2. Project audit.

1.3

As already stated, if you have doubts about a particular piece of work, get it checked out by the functional management. You cannot be an expert on every aspect of the work and, in any case, you do not have the time to get involved. If in doubt, get it checked. If in serious doubt, get the functional manager to confirm their approval in writing.

1.4

Prepare procurement procedures and ensure they match contractual requirements. Ensure procedures contain all the necessary safeguards against fraud.

1.4.1

Get owner/client approval to the procedures.

1.4.2

Decide where you want to exercise your prerogative to approve certain ...