Enhancing Procurement Practices: Comprehensive Approach to Acquiring Complex Facilities and Projects - Hardcover

Kovács, Attila

Hardcover

ISBN 10: 1402077408 ISBN 13: 9781402077401

Publisher: Springer, 2004

Synopsis

Enhancing Procurement Practices is organised around four main points:
-overview and analysis of procurement principles,
-practical approach to drafting of solicitation and contract documents,
-conduct of procurement procedures,
-overview of the e-procurement arena.

Although the addressed procurement methods can be used on a wide scale, this book concentrates primarily on such cases when the subject of procurement is complex, or the solicited goods and services are relatively simple but the intended long-term relationship calls for a fairly conscious source selection. Project procurement, the most complicated form of buying civil engineering work, goods, and services, is thoroughly addressed.

Beyond the structured overview and comparative analysis of terminology and principles, the book describes such new concepts as single-source preference for simultaneous procurements, dual-term frame contract for parallel suppliers, and the use of semi-consolidated contract documents. Effective utilisation of theories boils down - among others - to a consistent set of procurement-related terms, proven methodology for drafting comprehensive solicitation documents and contracts, and practical details of communication with offerors.

About this title

About the Author

Author’s Biography

Attila Kovács graduated in 1977, earning an MScEE degree. In the first half of his career he was involved in exporting complex telecommunications systems from Hungary to the Middle East and North Africa. These projects were awarded through competitive tendering procedures, so he gained notable bidding and contracting experiences in the suppliers’ frontline. During this period he regularly wrote technical and marketing articles published in different international periodicals.

After a turn in 1991 he found himself on the opposite side of the table as director of the procurement subsidiary of Matáv Hungarian Telecommunications Co. Ltd., preparing and conducting international competitive tendering procedures for selecting consultants, suppliers of complex telecom and IT systems, building construction contractors, and other undertakers. In this second half of his career he obtained remarkable skills in the procurement arena, including projects procured according to the rules of international financing institutes like the World Bank, EBRD, and EIB. Meanwhile he also contributed to the procurement of several domestic and foreign projects as an advisor. In the last years he was invited as guest lecturer and workshop conductor, both in Hungary and abroad.

Recently he has gotten involved in the regulatory arena, too, as an EU liaison manager."

Excerpt. © Reprinted by permission. All rights reserved.

Author s Comments (Digest from the Preface)

While digging ever deeper in the available literature and refining the everyday procurement practice on the basis of new contractual experiences, I came to the following conclusions:

There is a confusingly large pool of procurement-related expressions. This divergence has further been fostered by some suppliers of e-commerce systems. Without questioning justifiable co-existence of different phrases, in our shrinking and globalising world some efforts could be useful to harmonise and single out the commonly used "procurement dictionary".
Although the procurement arena has been developing to respond to new business challenges, the basic principles and methodologies are expected to remain more or less unchanged. For the sake of clarity, however, it would be advisable to compare the procurement procedures applied by widely known international organisations.
There is a huge selection of project management related literature. Project procurement, however, is rarely addressed. Procurement is usually seen as a facilitating area of project management. For a particular delivery, however, only the procured part of the whole project is meaningful for the contracting parties. This fact justifies a revision of the project procurement methodology, too.
There is a clear gap in the literature for the description of comprehensive procurement approaches. This topic is closely interrelated with compiling the contract from the solicitation documents and the awarded offer.
Available publications rarely address practical details of preparing and conducting source selection procedures. Discussion of issues like how to handle matters from the issuance of the solicitation documents to the offer submission deadline - including the running of the eventual pre-solicitation conference - may also be useful.
Recent developments in the field of e-commerce also deserve attention. Although some mistaken steps and unexpected circumstances have slowed down the extensive spread and roll-out of such systems, the e-world is quite likely to provide us with some long-awaited, fully electronic procurement solutions.

From among the above-mentioned missing links this book intends to address, two topics may require further explanation before delving into the details: project procurement and comprehensiveness of the solicitation documents.

In order to avoid any misunderstanding immediately at the outset, I must state that the book does not propose any substantial change in the procurement-related areas of integral project management. In the default case - when looking at things from inside the procuring entity s project - procurement should remain a facilitating knowledge area of project management, in harmony with the commonly recognised PMBOK of the Project Management Institute [60]. This is the basic situation even if the whole project is outsourced, meaning that realisation of the project is contracted with a supplier or contractor, and the procuring entity s control is exercised by an external consultant under a separate contract.

Nevertheless, for a better distinction I propose observing project procurement management from a narrower angle, too, in parallel with the classical integral view. However much the overall project management requires integration, the contracted supplier is not obliged to consider this aspect. He is interested solely in delivering the contractual scope. Whatever physical preparation, data, or interface is to be provided by the procuring entity in accordance with the responsibility-sharing matrix (RSM) of the contract, from the supplier s point of view it does not matter how such obligations are met. If the procuring entity s overall project management organisation accidentally coincides with the same stipulated in the contract for representing him, it is only a "good to know" kind of fact for the supplier.

As far as the benefits of comprehensive solicitation documents are concerned, I would like to make a few preliminary statements. Regardless of the grade of usefulness of certain procurement principles, methods, and techniques, some of them are extremely well described in regulatory, institutional, and corporate documents. This is the case typically in those macro economic environments where the regulatory framework is elaborated and the business practice is established with a remarkable level of details. In other places procurement approaches are documented in a superficial manner, without giving adequate guidance for their consistent application. I found it worthwhile to make an attempt to bridge this gap between the two ends.

One of the grey or even white holes is the procurement of complex equipment, systems, and facilities under such circumstances when the procuring entity wishes to conduct a sophisticated procedure with comprehensive solicitation documents that are not at hand - in lack of detailed local regulations and preceding business practice. It would be time consuming to start everything from scratch by processing the available documents and literature, therefore a practical skeleton of medium complexity what this book intends to be - may be useful.

By comprehensive solicitation documents I mean a structured set of materials which contain all case-specific requirements, terms, conditions, and procedural rules with the necessary level of detail, as well as a clear reference to the applicable general procurement and contractual regulations. This way a substantial portion of the necessary instruments - lacking in the given market environment - can be supplemented and both the procuring entity and the prospective offerors are aware of the rules of the game. This is particularly useful when the procuring entity wishes to attract new offerors from distant markets, and these potential undertakers can become acquainted quickly with the local environment and conditions by carefully reading the solicitation documents.

Time will tell how this book is received. I would highly appreciate to get any feedback from you, the reader - particularly if you are going to challenge my statements with the aim of jointly enhancing our procurement practices.

September, 2003

Edition details

• Publisher: Springer
• Publication date: 2004
• Language: English
• ISBN 10: 1402077408
• ISBN 13: 9781402077401
• Binding: Hardcover
• Number of pages: 703