Project procurement activities can vary depending on the project objectives and goals. Many of the procurement activities that must be undertaken occur prior to, during and at the conclusion of the project. The various activities will include monitoring the delivery and quality of the supplies or services against the project requirements and recording and reporting according to the organisational needs and the terms and conditions contract.
By the end of this topic, you will understand:
- Ways to ensure supplies are in accordance with terms and conditions
- How to complete procurement activities and maintain records and information.
Managing the contracts of the supplier of goods and services, wholesalers, or independent contractors is a vital aspect of procurement activities. There are various ways of ensuring that the project procurement is meeting the needs of the project, and this includes the monitoring of the contractual documentation.
This includes managing the various aspects of legally binding contracts. Contracts that are legally binding usually contain the following four essential elements:
- An offer to provide the goods or services
- An acceptance of the terms and conditions to provide the specific goods or services
- An intention to create a legal relationship through a goods or services contract, or project terms and conditions contract
- The cost of service or goods provision
A well-written terms and conditions document will provide the specific details of the goods or services that are to be provided for the project, along with the standard of quality that is to be provided. The procurement officer or project officer with responsibility for procurement activities must ensure and confirm that the quality and suitability of the supplies are meeting the requirements of the project.
Case Study
The Keenan Brothers small construction company has introduced both quality standards and sustainability requirements as part of their procurement process and goods and services contract. This includes sourcing competitive and sustainable materials and goods and the process of receiving materials, goods and services. They have successfully sourced a new Australian supplier of sustainable Australian pine wood flooring for their current project. The project officer responsible for procurement confirms with the construction project manager that the flooring received for the building project meets the needs of the project. They check that it is of the required quality and quantity and delivered in accordance with, and as specified in, the terms and conditions contract.
Using various details from the terms and conditions or goods and services contract, a template may be developed to ensure the supplies are provided in accordance with the terms and conditions. Details may include:
- How and when goods or services will be received
- How the goods and services will be reconciled with relevant documents such as delivery slips and quality inspection reports
- The person(s) responsible.
The following is an example provided for the Keenan Brothers to ensure the supplies are in accordance with terms and conditions:
Project name: Jimmy's Warehouse, Smytheville NSW
Program of works: 500 square metres of sustainable pine timber flooring to be provided
| Supplier | Product quality | Quantity | Delivery | Price | OHS | Name of person/date received & checked |
|---|---|---|---|---|---|---|
| Aussie pine |
Sustainable pine flooring Pre-sawn ready to install and stain durable |
500 square metres | Week 4 of project 7 Aug on-site | Agreed fixed price including delivery on-site | Delivery driver to have construction card to deliver on-site and this will be checked prior to entering site |
Construction card of driver checked and documented 7 Aug by on-site OHS manager. Delivered 7 Aug- checked by project construction manager and builder. Quantity and quality checked and correct using quality delivery checklist. Signed delivery docket to procurement. |
Think
What parts of the terms and conditions contract or goods and services contract conditions would you use as part of a template to ensure supplies are in accordance with terms and conditions?
Further Reading
- Read the following article by Bennett Conlin on contract management: ‘The Fundamentals of Contract Management’
- Read the following article by Tom Watson that provides an IT example of managing a contract: ‘The 2020 Guide to Managed Services Agreements for Managed IT Services Providers’
- Read the following audit from the Australian National Audit Office: ‘Western Sydney Airport Procurement Activities’
Project procurement activities vary according to the type, size and duration of the project.
Some examples of different procurement activities may include:
- Audit of environmentally sustainable supply practices
- Collaborating with agencies and alliances
- Conducting transfer and disposal actions
- Confirming details and obtaining additional information about quotes
- Formally receipting goods and services
- Identifying WHS issues
- Liaising with client, contractors, subcontractors and other stakeholders
- Maintaining registers and lists
- Obtaining approvals
- Obtaining quotes from potential suppliers
- Planning, specifying and conducting test and acceptance procedures
- Processing payment documentation
- Providing formal notice of delivery of goods and services
- Providing quotes to potential clients.
All of the procurement activities that need to be undertaken as part of the project will involve different types of information, records and information.
All of this must be recorded and maintained according to reporting, privacy and confidentiality, legal and audit requirements.
Documents must be securely stored to ensure that they meet the requirements of the privacy legislation as outlined in the Privacy Act 1988 (Cwth).
One way to ensure that the various procurement activities are undertaken according to the requirements of the project objectives, and the terms and conditions, is to develop a procurement activities management plan. This plan will assist in identifying and maintaining the various tasks and documents required.
The following is an example of a procurement activities plan, using the Customer Service Management software procurement requirements from the Topic 1:
The plan allows you to keep track of the various procurement activities and highlights any actions to be undertaken and records or documentation that is required to be developed or updated.
The various project contracts and service agreements with suppliers and other records and information of the project should be kept by the relevant department or project sponsor. A robust project procurement records management system needs to be followed according to the organisational requirements and may include the following stages of records management:
Further Reading
Reading the following article by Management Square on keeping project records: ‘How Should you Keep Project Records?’
Read the following information by Knowledge Hut to learn more about project procurement records: ‘Procurement Documents’
Watch
Quiz
