By W. Hughes
Do fresh strikes within the building in the direction of collaborative operating and different new procurement approaches relatively make reliable company sense? Procurement within the building Industry is the results of examine into this question and it comprises the first rigorous categorizing of the diversities among procurement tools at the moment in use. within the technique of conducting this learn, the crew has produced a complete research of procurement equipment which seems intimately on the relative merits and prices of other methods of operating, with occasionally astonishing effects. As such, it isn't just a important consultant for practitioners at the complexities of the procurement procedure, but additionally an outline of the relevance of financial thought to the development quarter.
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Additional resources for Procurement in the Construction Industry: The Impact and Cost of Alternative Market and Supply Processes (Spon Research)
K) In a situation where there is selection of, say, three to twelve firms to be on a panel of contractors for a period of say, three to five years some firms are concerned that they are in danger of becoming too dependent on one client for their work and that, once the period of the agreement comes to an end, they could suffer a large reduction in turnover if they are not successful in the next round. Other events could cause problems, for example, the client reducing a planned building programme or even going out of business.
Interestingly, Harrison (1987) states that although it is fundamental, obtaining work is not the main objective of the estimating process. Estimating is to do with calculating the probable cost of carrying out work, whereas tendering is a separate process of deciding a price, an important distinction that frequently seems to go unnoticed in many writings on this topic. Harrison also points out that increased accuracy costs more money to achieve, and the cost rises more rapidly than the increase in accuracy.
While offering some promise in the modelling of the way that the procurement and contractor selection variables affect overall costs, they conclude that more data is needed before offering more decisive conclusions. At a workshop involving the industrial partners for this research proposal in July 2000, it was reported that building services contractors had calculated that up to 15% of their turnover could be accounted for by “unnecessary” tendering processes, intriguingly close to the 14% associated with “organizing work” reported by Masden et al.