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Procurement route decision making

Procurement route decision making. What decisions need to be made in relation to procurement?. Identify Clients Objectives. Select Procurement Route. Select Tendering System. Select Form of Contract. Procurement route process. Implement. HOW DO WE MAKE A DECISION?. Feedback.

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Procurement route decision making

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  1. Procurement route decision making

  2. What decisions need to be made in relation to procurement?

  3. Identify Clients Objectives Select Procurement Route Select Tendering System Select Form of Contract Procurement route process Implement

  4. HOW DO WE MAKE A DECISION?

  5. Feedback Define The Problem Implementation Identify the options Making the Decision Evaluate the options Making the Decision

  6. Procurement Route Decision Making Models/Theories • There are several tools or models available to support the decision making process. Among these are: • Peter R Hibberd • Surinder Singh • Roy Morledge • Love et al. • Chan et al.

  7. Peter R Hibberd: Key Factors in Procurement • Classification is difficult-blurred edges, different perceptions • Identifying precise requirements is difficult and it may change. • Little firm evidence of strengths and weaknesses of each route. • Direct comparison of solutions is difficult. • Beware inappropriate human relationships and ineffective management. • Client involvement may be key issue. • Lack of feedback.

  8. Key factors • Type of Client • Design Input • Management Team • Availability of resources • Level of risk • Legal Requirements

  9. Other factors • Size of project. • Continuity of Project. • Previous problems. • Time available until completion. • Need to Change Design. • Phasing requirement.

  10. Surinder Singh (1991)Love et al. (1998) • Multi attribute utility technique. • Utility (weighting) factors for projects attributes. • For each procurement route • Based on expert opinion in survey • Clients priority rating factors for projects' attributes • Tabular analysis.

  11. Roy Morledge • Factual criteria- contracts in use. • Contractual relationships • Sequential relationships of design/ construction. • Apportionment of risk • Evaluative data-clients view about relative success: • Success of building in terms • Of intended use. • Value for money. • Quality – were specified standards achieved? • Were Key dates achieved. • Seek to establish relationships' between the two – e.g. between risk and satisfaction achieved.

  12. Matters which might influence choice • The nature of the project • The scope of the works • Measure of control by the client • Accountability • Appointment of a contractor

  13. Matters which might influence choice • Certainty of final cost • Start and completion times • Restrictions • Changes during construction • Assessment of risks • Building relationships with the supply chain

  14. Procurement Path Decision Chart – Love et al. (1998) • Love et al. (1998) Selecting a suitable procurement method for a building project

  15. Blackboard – full papers are available on Blackboard under "Module Content” • The coming slides involve tables to illustrate the models by Love et al (1998) and Chan et al. (2001). To see the tables in a clearer form and for more details about the models, please refer to the full papers (available in PDF format) on Blackboard.

  16. Procurement Path Decision Chart - Love et al. (1998)Mean utility factors of criteria for procurement methods

  17. Procurement Path Decision Chart - Love et al. (1998) - Example

  18. Procurement Selection Model – Chan et al. (2001) • Chan et al (2001) Application of Delphi method in selection of procurement systems for construction projects

  19. Procurement Selection Model – Chan et al. (2001) • The selection model can be applied by following the following procedures (Chan and Yung, 2000). 1. The user reads all the priority questions and enters the relative importance of each criterion in the table on a scale of 1 to 5, 1 being the least important, and 5 being the most important. The prioritization exercise enables the users to specify their requirements according to the project needs and circumstantial factors. 2. Each priority rating is taken in turn and multi- plied by each of the utility factors, the results being entered into the appropriate columns. These are compared for all the criteria. 3. The totals of each of the result columns, under each procurement path, are calculated, and ranked in descending order. The most appropriate procedure should have the highest total result.

  20. Procurement Selection Model – Chan et al. (2001)

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