SABRA, ar.sabra@ghantootgroup.

ae
ROAD #4 Phone: +971 2 6414151
Abdul Rahman GHANTOOT BUILDING Fax: +971 2 6412010
ar.sabra@me.com
CONTRACTS MANAGER FIRST FLOOR Mobile: +971 50 6414151
www.ghantootgroup.com

P PROJECT PROCUREMENT STRATEGY

A. DEFINITION:

“Procurement is the acquisition of goods, services, or works from an external source. It is

favorable that the goods, services or works are appropriate and that they are procured
at the best possible cost to meet the needs of the purchaser in terms of quality and
quantity, time, and location”

In September 1983, Harvard Business Review published a ground-breaking article by

Peter Kraljic on purchasing strategy that is widely named today as the beginning of the
transformation of the function from "Purchasing", to something that is viewed as highly
tactical to Procurement or Supply Management, something that is viewed as very
strategic to the business.

1990s - Procurement starts to become more integrated into the overall corporate
strategy and a broad-based transformation of the business function is ignited, fueled
strongly by the development of supply management software solutions which help
automate the source-to-settle process.

2000s - The leader of the procurement function within many enterprises is established with
a C-Level title - the Chief Procurement Officer (sometimes called the Head of
Procurement).
Websites, publications, and events, and that are dedicated solely to the advancement
of Chief Procurement Officers and the procurement function arise.

2010s - The elevation of the function continues as Chief Procurement Officers are
recognized as important business leaders and begin to take on broader operation
responsibility.

B. PROCUREMENT IN PRESENT BUSINESS / CONSTRUCTION MANAGEMENT

In July 2011, Ardent Partners published a research report that presented a

comprehensive, industry-wide view into what is happening in the world of procurement
today by drawing on the experience, performance, and perspective of nearly 250 Chief
Procurement Officers and other procurement executives. The report includes the main
procurement performance and operational benchmarks that procurement leaders use
to gauge the success of their organizations. This report found that the average
procurement department manages 60.6% of total enterprise spend. This measure
commonly called "spend under management" refers to the percentage of total
enterprise spend (which includes all direct, indirect, and services spend) that a
procurement organization manages or influences. The average procurement
department also achieved an annual savings of 6.7% in the last reporting cycle; sourced
52.6% of its addressable spend, and has a contract compliance rate of 62.6%.

1. Reference: Weele, Arjan J. van (2010). Purchasing and Supply Chain Management: Analysis, Strategy,
Planning and Practice (5th ed. Ed.). Andover: Cengage Learning. ISBN 978-1-4080-1896-5.
2. WIKIPEDIA
 PROJECT PROCUREMENT PROCESS / CYCLE
1- Procurement log (FP1)
2- Significant Packages
3- Long lead Packages
4- Procurement Strategy
5- Main Resources
6- Schedule of Works
7- Budget / cost of Works
8- Tender Files (FP2)
9- Contract Documents
10- Execution Plan
Planning Dept.
Procurement Dept.
Planning Dept.
P.M. & Procurement Manager
Procurement Dept.
Planning Dept.
Tender Department
Tender Department
Tender Department
P.M.

PREPARATION
APPROVAL
1- Vendor List
2- Potential Vendor out of List
3- List at Tender Stage

GETTING
MANAGEMENT SELECTION OF Reviewed by GM
APPROVAL & VENDORS
FINALIZATION

1. Identify Package Scope

2. Prepare related Documents
3. Review the Scope with PM /
Engineering / MEP
4. Identify the Type of Contract
Supply/ Sub-Contract/
ALANYSES OF
REQUEST FOR Maintenance/ Design / etc…
QUOTATIONS / 5. Identify Period of Works related
NOT QUOTATIONS /
TECH. & to schedule of Works of Project.
PROPOSAL
COMMERCIAL
6. Identify the exclusion of the
Scope.
7. Special Terms and conditions of
the Package.
8. Prepare & issue the inquiries as
per form hereinafter.

1. Collection of Quotations / review the Conditions / B.O.Q / exclusions

2. Any discrepancy to be addressed immediately by official letter
3. All information to be represented in a comparison sheet (Form hereinafter) 14 Days for Vendors clarification
4. Recommendation of Procurement manager after a negotiation process (RFI) addressed to the concern
with nearest two contractors / suppliers divisions to reply.

CONTRACTS DEPARTMENT

1. Reference: Weele, Arjan J. van (2010). Purchasing and Supply Chain Management: Analysis, Strategy,
Planning and Practice (5th ed. Ed.). Andover: Cengage Learning. ISBN 978-1-4080-1896-5.
2. WIKIPEDIA