Okay, in this module, we're going to discuss the procurement stage of a construction project, and the typical involvement of a cost manager or a cost estimator. Firstly, what does the word procurement mean? Procurement is the action of obtaining or acquiring something. Purchasing plays a role in the procurement process, but is not the same and should not get confused. Procurement is concerned with acquiring, procuring, all of the goods, services, and work that is vital to the construction process and overall project. Procurement is essentially the overarching or umbrella term within which purchasing can be found. If you are the cost manager, you always play an important role in the procurement process. You will need to guide the project team in all of the five procurement points to decide. Often, the cost person will lead the procurement process in it's entirety. We're now going to delve a bit deeper into procurement and I'm going to discuss the four main parts that I see important in the construction process. Important to ensure budget, schedule and overall project success. We're going to discuss the pre bid estimate, bid documentation, bid return and leveling, and the contract awards. The pre bid estimate really comes in just before the procurement stage begins. We would normally construct the pre bid estimate a few weeks or even months before the project goes out to bid. It is often used to help determine the funding value for the project, funds to pay for the construction project. To update the estimate to the latest stage of design, typically it would now be at DD or post DD. Gain a clear understanding of what construction values the bid returns will be. And take us to the procurement stage following the designs spectrum we discussed earlier. Usually, the previous estimate should be a further update to an existing estimate. But it can be reformatted, ready to be used as a pricing document, which will come later in the next part. During putting together the pre bid estimate, to gain actual pricing on certain scope items, it is at this stage that you as a cost manager, you'll make contact with suppliers, subcontractors, to gain latest market pricing. By this, we mean pick up the phone and emailing, supplies and subcontractors in getting it from the horse's mouth. The very latest pricing and rates that you use within the estimate is really, really important at its current and its market rates. RS means another pricing tool which can be very useful, but prices can change by the day, by the week, by the month, and even by the year. All of which the pricing tool you normally use can not keep up with this. So, lessons learned, procurement is the action of acquisition. The pre bid estimate sets the baseline. It's important you establish relationships with suppliers and organizing the budget ready for the leveling stage. Now we're going to discuss the bid documentation stage. As with much of cost management, it is vital to plan well. Be organized and ensure clarity and understanding is in place for users of your documents. Be at the early stage concept estimate right through to the final cost report, close out the project. In this segment, we're going to discuss the actual bid documentation stage. In order to go out to bid and gain a strong number of returns, it's important that time is put into the bid documentation pack to make sure the bidders firstly have all the correct information they need to bid and to ensure they fully understand the project and the client requirements. So, the typical bid documentation checklist includes, an RFP, request for proposal, a pricing document, a drawing register, your design pack. In that design pack, you have typically the architectural pack, the engineering pack, the structural pack, possibly a civil pack, and a geotechnical pack. Other packages within your contract documentation will be further project details and contract requirements. So,let's just talk a bit more about the packs within your procurement package. So the RFP, the request for proposal, is the formal document which outlines the project to the bidder as well as the overall documents within the pack. It's your master document that has everything in there including submission deadlines. Some RFPs also enclose either a construction schedule or a timeline. The RFP will outline important dates that the bidder will need to adhere to in order to be accepted as a serious bidder on the project. The pricing document. This is basically your estimate with quantities and pricing removed. It can be formatted in several ways, but typically it mirrors your pre bid estimate to help with the bid leveling process. The purpose of this document is for the bidder to record their pricing to carry out the work. The pricing document must read well and with all the bid documents in the pack. The drawing register, this is a highly important drawing list that confirms every drawing that should be included within the design pack. It's just as important as your design pack. Without this drawing register, the user cannot refer to the full list and take off all the design documents to make sure they have the full pack. Then, this leads to the design pack. It's the full set of drawings by architectural and engineering sets. The engineering set often is referred to the MEP set, a mechanical, electrical and plumbing. It can also extend out to the structural, civil and geotechnical designs. And I will say this all applies to the particular project you're working on. You may only have architectural mechanical, electrical and plumbing, or you might have every single one there, architectural right through to geotechnical. So, you also have further project details and contract requirements. Typically, within the bid pack there will be further document which outline the project and submission requirements such as, site visits, contracts that are likely to be used and insurances. Lastly, it is normally advised to go out to at least three to five bidders. Three is sufficient in order to receive the most accurate market pricing and to be able to perform a fair leveling process to help make the right bid award decision. So, lessons learned. Proper organization is paramount. Ensure the drawing pack and register are accurate, and read well together. Analyze all the special details and contract requirements.
