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Unit 5: Monitoring supplies of resources to meet project sustainability requirements in construction and the built environment

Following the development and implementation of your acquisition plan, you need to make sure the plan remains on track to deliver the resources in line with time, cost and quality constraints.

The acquisition plan is closely linked to the contract programme, which details each work task or element and its final completion date. Monitoring the acquisition plan is, therefore, vital in ensuring that the contract programme meets its agreed deadlines with the client.

This topic guide will cover: • resource monitoring • acquisition variations.

Monitoring your acquisition plan5.3

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Unit 5: Monitoring supplies of resources to meet project sustainability requirements in construction and the built environment

5.3: Monitoring your acquisition plan

1 Resource monitoringSeveral factors need to be monitored as part of the procurement process in obtaining resources for a construction project. In this section we discuss some of the primary factors that need to be monitored and the actions that may be required if there are variations in any of them from the initial acquisition plan.

Portfolio activity (3.1)You need to show that you can implement systems to monitor and evaluate the acquisition plan for a project you are working on, identifying any problems around meeting supply requirements. Do this by using suppliers’ delivery tickets and your acquisition plan to quickly ascertain where any shortfalls in resources exist, and respond accordingly. By using a software planning program, you can produce resource reports for several different enquiries and search requests.

PriceThe tender price of a resource or the price that was used in the resource estimate (and agreed with the client) cannot be exceeded or it will have an adverse effect on the profitability of the contract. The sample acquisition plan extract shown in Figure 5.3.1 includes the estimate price and the actual purchase price of a resource. You will see that the purchase price is less than the estimate price. As long as this is the case and the purchase price is less than, or equal to, the estimate price there will be no cause for financial concern. The purchase price should always reflect any discounts that are credited against the purchase order.

Project no.: Scheduler’s name: Date prepared:

Resource Supplier no.

Quantity Specification Date required Date ordered/ order number

Estimate cost

Actual cost

Net saving (–)/gain(+)

100 mm Butterley facing bricks

0001 45,000 BS 4507: colour buff red, sand faced

19 October 2014 28 August 2014600/12458

£175/1000 £168/1000 –£315.00

However, variation in prices can be accommodated if savings have been made on other resources. You will see that there is a column in the sample plan that calculates net saving (or gain) on the price. By having this column in place, you can keep track of where you might have money spare. This means that any slight increases in prices can be accommodated within the construction budget if there is money available.

Care must be taken to ensure that the prices quoted include the correct VAT amount and that they can be directly compared with the prices used in the estimate or bill of quantities.

Figure 5.3.1: Extract from a sample acquisition plan template showing net

savings and gains.

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Unit 5: Monitoring supplies of resources to meet project sustainability requirements in construction and the built environment

5.3: Monitoring your acquisition plan

QuantityThe reconciliation of quantities should be undertaken by the accounts department in the organisation. The total quantity delivered and signed for on the delivery tickets that accompany each resource must be totalled. This quantity then needs to be checked against the quantity that was ordered to confirm that it has not been exceeded or fallen short. A simple template like the one shown in Figure 5.3.2 could be produced for this monitoring process. Attaching this to an invoice confirms that payment will be made.

Supplier: Ref. number: Order number:

Site location:

Specification:

Quantity ordered: Cumulative delivery tickets total:

Invoice confirmed for payment:

Name: Date:

Checked by: Name:

Additional comments:

Portfolio activity (3.2)For a project you have worked on, or are currently working on, identify any over or under provision of resources – both in terms of quantity and price. Do this by using a quantity check template like the one shown in Figure 5.3.2.

Quality/specificationAs well as a quantity check, the specification of the delivered product must also be checked to ensure the product is of the right quality and in accordance with the contract documents. This can be done by:

• checking a product’s labelling against the specification • checking the package labelling against the specification • checking the product’s delivery ticket data against the specification.

Any discrepancies should be directed to the resource supplier for confirmation and clarification.

Figure 5.3.2: A quantity check template.

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Unit 5: Monitoring supplies of resources to meet project sustainability requirements in construction and the built environment

5.3: Monitoring your acquisition plan

Schedule of deliveryDelivery dates are best monitored from the site. The site will have been issued with a copy of the resource purchase order and so they will know the date on which the resources are due to be delivered. The purchase order can then be used to monitor delivery dates and make sure that the suppliers deliver on the agreed dates, that any shortfall in provision is caught and, if necessary, that the suppliers are contacted for clarification. The main contract programme will inform the site when the installation phase of resources will start and prompt whether required resources have been delivered in time for this.

2 Acquisition variationsWith any construction project where thousands of resources have been procured and assembled, variations to planned or agreed resources may occur. These variations can stem from a number of different sources, both internal and external to the project.

Internal factorsA number of internal factors can have a marked impact on the delivery of resources and associated costs, including:

• human error in ordering and transcribing quantities and specifications • communication failures with information technology • supplier accounts being frozen due to non-payment • failure to confirm order acknowledgement and receipt • damage of resources on site and delays through reordering and replacement.

A lack of communication is often the cause of both the supplier and contractor thinking that an order has been placed and confirmed, when in fact the order has not been acknowledged or delivery dates confirmed. These errors are due to staff not fully controlling, coordinating and managing the acquisition of the resource.

External factorsYou will have little control over external factors as they are linked to the acquisition of a resource via a third party. Often, a supplier may have acknowledged an order but the manufacturer, the third party, lets everyone down with delays to the order. Some common examples of external factors influencing resource costs and delays are:

• shipping delays, and delays in imported resources clearing customs • strikes and labour disputes at the point of manufacture • traffic delays and congestion, affecting delivery • breakdowns at the resource manufacturing plant • vandalism of the resources and delays to their replacements.

Variations in resource provision due to external factors are always a cause for concern. However, you can put in place contingency measures to accommodate variation with minimal disruption to the main contract programme. Adding ‘float’ to a schedule of activities is one way to add contingency into a plan.

LinkHNC in Construction and the Built Environment: Unit 17 Project management for construction and the built environment, learning outcome 5, assessment criterion 5.1.

Key termFloat – the amount of time within contract programme activities that allows for some movement in the schedule without disrupting the overall critical activities and completion date.

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Unit 5: Monitoring supplies of resources to meet project sustainability requirements in construction and the built environment

5.3: Monitoring your acquisition plan

Portfolio activity (3.3, 3.4)For a project you are currently working on, analyse any variations in the supply requirements. To find out about variations, talk to all parties concerned with resource acquisition. Then analyse the reported variations by asking yourself the following questions.

• What has caused the variation and deviation from the acquisition plan? • Will the variation have an effect on the resource supply requirements in terms of quantity, price

or quality? • What can be done to accommodate the variation? Are there contingency measures that could

be added to the plan? • What do I need to communicate to the construction team?

When you have undertaken this analysis, you need to address any problems with resource provision and variations in supply requirements so that you can minimise disruption to the project programme and meet contract requirements.

Undertake action planning to work out how you can bring back the variations into the agreed acquisition plan and contract requirements. Evidence of your action planning could be in the form of:

• a record of conversations with suppliers • copies of email communications • formal meeting minutes • team meeting minutes • letters • revised contract programmes • revisions to the acquisition plan • any other appropriate organisation documentation.

ChecklistAt the end of this topic guide you should be familiar with:

the primary factors against which you should monitor resources

the internal and external factors that can have an effect on acquisition planning

action planning to revise acquisition plans.

Further reading and resourcesHackett, M., Robinson, I. and Statham, G., The Aqua Group Guide to Procurement, Tendering and Contract Administration (Wiley-Blackwell, 2007) ISBN 9781405131988

AcknowledgementsThe publisher would like to thank the following for their kind permission to reproduce their photographs:

© Rough Guides: Helena Smith (1)

All other images © Pearson Education

Every effort has been made to trace the copyright holders and we apologise in advance for any unintentional omissions. We would be pleased to insert the appropriate acknowledgement in any subsequent edition of this publication.