Risk management week 5
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Dec 6, 2023
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Develop a list of procurement requirements that this project might include.
Projects are taken on with the intention of producing a unique output. To deliver unique outputs there needs to be some form of resources or inputs into the project. To get these resources project
managers need to procure the necessary materials. The process of procuring resources and materials for a project is broken down into different stages with each stage having specific processes and requirements that must be followed in order to achieve the best possible outcome. These stages include pre-acquisition phase, tender process and contract award, contract and supplier management (Buzzetto et al., 2020). For RPO to be successful in their deliverables to the homeowners there is a list of procurement requirements that needs to be met. These include but are not limited to cement for the slab foundation, roofing materials and supplies, lumber for the deck, soil and plants for the landscaping, pipes, septic tank for the septic system, labor for completing the tasks, permits for construction, truck for transportation of materials and storage facility for materials and supplies, legal services for contracts between RPO construction and the homeowners, heavy duty equipments such as forklifts and cement truck for mixing and pouring the cement.
Identify what items will be purchased and what items may need to be contracted.
Once the procurement list is created the decision has to be made on what items to be purchased and what should be contracted out. This is a very important step in the procurement process which is influenced by various factors such as time, cost, quality, the client’s choices and needs, the project deliverables, the different options available for procurement among others (Bolomope
et al., 2022). Based on these factors the best decision needs to be made to ensure the overall success of the project. Taking various factors into considering RPO construction can now make a
decision on what items to purchase and what items may need to be contracted out. The items to
purchase includes: lumber for the deck and boat house, cement for the slab foundation, roofing materials, plants and soil for the landscaping, pipes and septic tank for the septic system. They would also need to hire labor for the roofing, landscaping, septic system installation and the pouring of concrete. Items that may need to be contracted out include legal services to draw up contracts between RPO construction and the homeowners, storage facilities for the raw materials and supplies, specialized labor such as plumbers, electricians, transportation services for the materials and heavy duty equipment such as forklifts and cement truck for mixing and pouring the cement. In outsourcing various materials and or services project managers can benefit from having external support and specialized expertise in the project. How can a contract strategy be used in this situation?
In taking on projects there are always risks whether it be with contractors, suppliers, the client, employees among others. Contracts are a means of protecting all parties involved by setting clear expectations and responsibilities so that there are no ambiguities (Wilson, 2015). RPO construction can use a contract strategy to ensure that both themselves and the homeowners have
a clear understanding of the project deliverables, expectations, responsibilities, risk and any other
matter that they deemed to be important to note in the contract. A combination of contract strategies can be used to help RPO construction maximize project success and minimize risk. Thus , fixed price contracts can be used for certain parts of the project such as the purchasing of construction materials such as lumber, cement, pipes, soil, plants etc. this way RPO construction
can benefit from a fixed price as detailed in the contract. Time and material contracts can be used
to mitigate risks that might not have been identified. As issues might arise with the septic system
for example that were not foreseen. This contract allows for flexibility and is preferred by contractors as the risk is shifted in the direction of the buyer (Wilson, 2015). Overall, a contract
strategy that is diversified will allow for full transparency, between all parties allowing for clear communication, responsibilities and expectations. “
Again, truly I tell you that if two of you on earth agree about anything they ask for, it will be done for them by my Father in heaven. For where two or three gather in my name, there am I with them (
New International Version
, Matthew 18: 19-20,1973-78/2011), This verse teaches us about agreements made between one another and reaffirm that if us as believers agree and come together to pray and praise God our prayers will be answered. Thus, having a contract is binding and requires two or more people asking and detailing their needs and wants. References
Bolomope, M., Amidu, A.-R., Ajayi, S., & Javed, A. (2022). Decision-making framework for construction clients in selecting appropriate procurement routes. Buildings
, 12
(12), 2192. https://doi.org/10.3390/buildings12122192 Buzzetto, R. R., Bauli, M. R., & Carvalho, M. M. (2020). The key aspects of procurement in project management: Investigating the effects of selection criteria, supplier integration and dynamics of Acquisitions. Production
, 30
, 1–18. https://doi.org/10.1590/0103-
6513.20190112 Wilson, R. (2015). Mastering risk and procurement in Project Management: A guide to planning, controlling, and resolving unexpected problems
. Pearson Education Ltd. New International Version. (2011) New International Version Online
, https://www.New
International Version/. (Original published 1973-78)
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