Procurement priorities

The procurement of new or upgraded warehousing or depot facilities can involve huge expenditure and tight deadlines, so getting it right is essential.

Delivering a successful project on time, on budget and to the right specification is all about pre-project preparation, and this is the same for choosing the contract. It may seem obvious, but the type of contract must reflect the type of works, yet this is where it usually goes wrong.

Consider the actual warehouse. What the manager wants is not a building, but a working facility. The days when depots were just large sheds are over: the hearts of warehouses now are the computerised mechanical systems, so this, rather than the building around them, should be the starting point for the procurement. The building is just a weatherproof envelope to protect the systems, and the procurement of it should be subsidiary to the equipment.

Start with the contract for the equipment. Obviously it’s not as simple as ordering office supplies. You need terms that cover issues such as specification, commissioning and performance – as well as all the usual ones like payment and delivery.

The best starting point would be one of the model forms for the purchase of mechanical and electrical equipment, for example those published by the Institutions of Mechanical and Electrical Engineers.

If you start with one of these contracts, you can put in the specification of the equipment, the timescales, your performance requirements and agreed costs.

Then procure the actual building through a sub-contract. Construction in the UK has laws and industry practices that apply to no other sector, making the procurement of buildings a risky business.

If it’s the responsibility of the M E contractor through a suitable sub-contract, it will work better: the builder will have to work around the M E requirements, and the M E contractor will be able to control delivering the building on schedule.

copy; D Rolfe 2009

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