Develop a Problem Solution Plan
The delays in project procurement approval leading to increased cost meted to the contractor is a rampant thing in many projects though a lot of knowledge or skills have been expended in managements of projects. Although, some practitioners have said that this practice cannot be avoided. It is imperative that projects are established with a quest of making profits and maintain national standards guided by the cost, scope and timely factors. This research paper tries to look at likely causes of lengthy procurement approval process and its consequent changes and its solutions.
Meaning of procurement
Procurement is the process which deals with acquisition and use of goods and services. It starts when a company has a need and what its procurement entails. The procurement passes processes of risk management, identifying and synthesizing solutions, award and delivery of the needs. Sometimes risks occur in procurement due to unforeseen circumstances like lengthy approval. A risk in procurement is the likelihood or consequences of the output in the process (Weele, 2010).
Problem Solution Plan Approach and Methodology
The root causes of the problem were identified through various analysis of the gaps or dispute currently experienced in the company. Then the critical solution to be taken to breach the gaps were identified taking in mind the marketing, finance, accounting, legal and ethical issues, and organizational polices of the company.
The information was collected through primary and secondary. Primary sources were collected through observation, and group discussion while secondary through records and third-party research analysis.
Methods of analysis; the problem of procurement approval process and changes were then analyzed through surveys, interviews of stakeholders and checking reports from contractor.
The delay in the procurement was as a result of design errors. The client’s needs and the ability of acquiring inputs in projects implementation is usually affected by the designs. The design used had a lot of errors meaning that it had insufficient likelihood of achieving the intended output. Consequently, there was incorrect use of techniques. Sometimes certain items were omitted by the contractor therefore resulting to more work and changes effected by the manger. Also the design used by the contractor might not have been investigated well leading to delays. Lewis and Roehrich (2009) mentioned causes of design errors as insufficient investigation of project, errors in design, specifications and plan and changes in design.
The problem arose as a result of change in scope. Scope simply means all the output or outcomes that are desired at the final stages of the project. In this case the plans, costs, timeframe and guidelines are formulated based on the scope. In case there are many changes in scope at a time of implementation of the project, the project has to be revised again including the budget, timeframe and baselines. The contractor has to take time in revision of the scope and efforts done by the manager is actually unhelpful and makes the contractor incur more costs which were not initially budgeted. This brings a financial and accounting loss to the company since the contractor will demand more payment as he performed work not authorized in the agreement but dictated by the manger.
The mangers can order the diversion of money to other unplanned activities affecting the contract.. Nevertheless, changes in scope can be resulted by its error definition, risks, and interest change by managers resulting to output changes. This situation may cause disputes among contractors and mangers since the contractor has to incur more expense than it was agreed upon (Caldwell et al, 2009).
Due to lengthy approval process, it was realized that the contract system in the company was not efficient. Every contractor brings out every detail of the contents including term of payments, prices and services standards. The contractor did not specify these details clearly initially hence the emergence of the delay in the procurement approval process. As a result, following the urgency of the project, the manger did not take into consideration this challenge. Slow approval is due to lots of negotiations, conflict resolution because of changes, and revision of agreements with budget and timeframe. In addition the manger, the company had awarded the tender to the unqualified or poor contractor who has no capacity to manage big projects for an the project at hand.
In addition, this project is of complex nature and such projects usually entail long procurement approval processes and in most cases leads to the overrun costs. There are projects which are more complex than others and thus require longer duration of implementation. It requires an elaborate planning for it to be initiated and implemented as stipulated. Such structures needs elaborate planning and timeframes in order to ensure important items have not been left out (Lewis and Roehrich, 2009). This can lead to delay. The manager had then had conflicting interest with contractor resulting to conflict. Since the manager is an overall overseer, he can introduce changes to the plan to be implemented quickly but he contractor has to incur more costs than earlier agreed. The manager should therefore take the interest or situation of the contractor before introducing any change through consultation. This decision by the manger brings out the picture that the manager don’t consults with the board and makes own decisions. The company has to incur more costs as a result and destroying the good reputation of the company (Caldwell et al, 2009).
In order to avert such scenario, a contractor with good design technique of construction of projects should be rewarded with the tender to avoid errors which cause slow approval delaying the project causing unnecessary overrun cost. The design should be able to promote effective communication with the working team, effectively planed, providing duration correction duration through investigation, follow ups or reviews and monitoring. This ensures that all requirements are placed in the design (Lewis and Roehrich, 2009).
In order to avoid changes in scope, it is imperative to acknowledge that there are always changes in projects and this can be important to its success. A scope change plan can be made to be used in the process which involves the relevant parties and able to address their desires. In order to prevent the emergence of disputes between managers and contractor, it is important to make consultation first before any adjustment. If the changes are immense, it is advisable to focus on the intended outcomes.
The management board is recommended that it awards a tender to a qualified contractor in an ethical manner and coming up with clear terms of agreement which is followed till the conclusion of the project. A qualified contractor with a vast knowledge in project construction is deemed to conquer any milestone which might come in place and complete project in time (Caldwell et al, 2009).
In addition, proper planning is required where all stakeholders are involved in designing the scope, challenges and timeframe According Lewis and Roehrich (2009), managing complex projects needs experience, expertise and exposure. Therefore a project requires a scope which is clearly expounded taking into consideration the contractors needs.
Lastly, the board needs to revise their procurement approval items and correct them where necessary. A balance should be considered between an omission and effectiveness- unless the contract or tender is of technical state, or have critical policy issues. Revising the contract reduces the reputation of the board and those who made the requirements of the contract. Also the board should be involved in reviewing the changes and its change requirement taking in mind the reduction of costs and operation of the project reducing disputes.
Purpose of Project
- Analyze the company’s procurement processes laws and policies.
- Formulate a timeline to improve procurement approval process.
- Formulate a plan used by the company in effecting changes.
Vision or outcomes
- Improving procurement processes and standard.
- Initiation of constant and credible training.
- Eliminate use of manual processes.
- Acquire quicker and efficient sourcing processes.
- Improve employee satisfaction in working under procurement department.
- Get rid of redundant operations.
- Enhance contractors’ propitiousness implementing current project.
The benchmarks identified are used to bring out the clear picture of the company in the sections of strategy, the organizations, its processes and use of modern technology.
In strategy area the following should be checked:
- The mission and vision of procurement;
- The role of procurement;
- Procurement influence in planning.
In the organization, the following are examined:
- Delegation, Roles and responsibility;
- Policy processes;
- Skilled expertise;
The processes examined included the following; procurement sourcing, execution and management and management of contracts.
Technology involves examination of budget, electronic sourcing and procurement and management of contracts.
- The board should promote only one kind of procedures.
- The procurement staff should be motivated and focuses on activities which improve the procurement.
- The board should elaborate the mission of the procurement clearly to all stakeholders and affected parties.
- Training should be emphasized especially on skills acquisition in procurement processes.
- Employment of qualified professionals through a competitive job description and interviews.
- Define the roles and responsibility of the manager and contractor including best contractual system.
- Adopt and implement strategies which encourages cost saving.
- Implement a procurement process which maintains the compliance of contract agreement, quality deliverables and timely project implementation.
- Where necessary, revise the process but through consideration of all party interests.
- Increase the training of procurement personnel.
Although, long procurement processes and changes by management affects operation of projects, it is important to know that this vices can be prevented through proper monitoring management and involvement of all stakeholders to ensure success of the project from the initial stages to completion and eliminate any milestone at the course of operation. It entails planning, evaluation, monitoring and dissemination of feedback. The contractor and the manger should be clear on the project’s success factors in order to aid in its design.
- Caldwell, N.D. Roehrich, J.K. and Davies, A.C. (2009). Procuring complex performance in construction: London Heathrow Terminal 5 and a private finance initiative Hospital. Journal of Purchasing and Supply Management15(3):178-186.
- Lewis, M.A. and Roehrich, J.K. (2009). Contracts, relationships and integration: Towards a model of the procurement of complex performance. International Journal of Procurement Management, 2(2):125-142.
- Weele, Arjan J. van (2010). Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice (5th ed. ed.). Andover: Cengage Learning.