Procurement Management in Consultancy Projects

| A Hidden Misalignment in Construction Consultancy — And How to Overcome It | Bridging the Gap Between Commercial Strategy and Project Delivery in Consultancy Services As I continue my journey building DIVAM and actively engaging in business development, proposals, and client delivery, I’ve observed a recurring hidden challenge across the Construction Consultancy services - one that, in my view, deserves more attention. A noticeable disconnect often exists between Contracts, Commercial & Procurement functions and Project Delivery teams, particularly during the transition from proposal stage to execution. During the bidding phase, Rates and Resource allocations are typically negotiated and finalized by Commercial teams. However, when it comes to Client-side interviews and approvals, the expectations around candidate experience, qualifications, and deliverables are often significantly elevated—sometimes beyond what was commercially considered under rates agreed. This misalignment creates practical challenges: 1. Difficulty in sourcing suitable candidates within agreed commercial constraints 2. Delays in mobilization and onboarding 3. Increased pressure on delivery teams to balance quality expectations with limited budgets Another observation relates to fractional resource allocation coming due to % allocation, for example, 1.25 days (25%) or 2.5 days (50%) per week (assuming 5 days / week) or 1.5 days (25%) or 2.5 days (40%) per week (assuming 6 days / week). In practice, such allocations tend to be inefficient, as partial days are rarely productive or optimally utilized in a project environment. Key Question: If rates and resource deployment are commercially agreed upfront, should not the expectations on qualifications, experience, and deliverables be calibrated accordingly? From my experience, a more integrated approach could add value: 1. Align scope, deliverables, and reporting requirements with the level of resource allocation (e.g., 20%, 50%, 100%) 2. Clearly define expectations and competency levels during the proposal stage itself 3. Adopt & Align deployment % based on full-day deployment structures (1, 2, or 3 full days per week) instead of fractional allocations to improve productivity and accountability This is not about assigning responsibility, but about improving alignment across functions to ensure sustainable delivery and realistic expectations. Sharing this as a general observation based on experience in the market—keen to hear how others are addressing similar challenges. #UAEConstruction #ProjectManagement #CostConsulting #CommercialManagement #Procurement #Consultancy #Leadership #ConstructionInsights 

Procurement of Consulting Services: Having been in engineering consulting for almost 4 decades, I note that somehow the procurement process doesn't receive the attention it needs in privatesector. The public sector, on the other hand, mostly follows PPRA guidelines which too have their pitfalls, but let's focus the private sector for the time being. The most notable shortcoming is the training of procurement personnel due to which they apply the same process for procurement of engineering services, procurement of goods and procurement of works. Needless to say, each of these areas has its own peculiarities and the procurement process must be aligned accordingly. One must be fully conscious of the fact that in the procurement of engineering services the most important factors to consider are the qualifications, relevant experience and competence of the competing parties. The procurement process of the leading international agencies, World Bank, ADB, Eximp Bank, Japan, etc. is accordingly tailored. The criteria must remain the same regardless of the size of project. Like other professions, there's quackery in engineering consultancy as well. The procurement process should therefore filter out the so called consultants. One must also realise that the cost of consulting services is always negligible compared to the total project cost. Therefore, the focus of procurement process should be to select the most suited and competent consultants rather than saving a few bucks and compromising the end product.

Procurement in Project Management — Simplified Procurement begins when you decide to buy something from outside instead of making it in-house. This comes from the make-or-buy decision. Once you choose to buy, here’s how the process works: ⸻ 1. Procurement Planning • Procurement Statement of Work (SOW): Defines exactly what you need, how much is required, when it’s needed, and from whom (qualified vendors). • Procurement Strategy: Explains how procurement will happen — methods, delivery, and responsibilities. • Procurement Management Plan: Documents the overall process for managing procurement. At this stage, you also decide the type of contract you’ll use. ⸻ 2. Contract Types The type of contract depends on how clearly the scope is defined: • Firm Fixed Price (FFP): Scope is 100% clear; everything is fixed. • Fixed Price Incentive Fee (FPIF): Encourages vendors to finish earlier or perform better. • Fixed Price with Economic Price Adjustment (FP-EPA): Used in long-term contracts to adjust for inflation or changing costs. • Time & Material (T&M): Flexible, used for rentals, subscriptions, or ongoing services (think Uber or Netflix). • Cost Plus Fixed Fee (CPFF): Scope isn’t fully clear. Example: mechanic or AC technician troubleshooting issues step by step. • Cost Plus Incentive Fee (CPIF): Seller earns extra if they work efficiently or deliver faster. • Cost Plus Award Fee (CPAF): Awarded when the seller does an exceptional job. ⸻ 3. Conducting Procurement • Bidder Conference: Vendors meet to understand requirements and ask questions. • Proposal Submission: Vendors provide their offers. • Negotiations: Project Manager negotiates on scope, quality, schedule, and risk. Money negotiations are handled by the Procurement Manager. • Contract Signing: Once signed, the contract governs the relationship. ⸻ 4. Administering Procurement • Work is performed according to the contract. • Deliverables are inspected. • If accepted, procurement is closed. • If rejected, conflict resolution begins. ⸻ 5. Conflict Resolution Disagreements can happen. Here’s the escalation path: 1. Mutual Agreement (Win-Win). 2. Refer to the Contract. Follow what’s written. 3. Mediation. Involve a neutral third party. 4. Litigation (Court). Last resort — costly, slow, and best avoided. ⸻ ✅ That’s the entire procurement cycle: from deciding to buy → planning → contracts → execution → conflict resolution. Clear, structured, and practical.

𝐌𝐨𝐬𝐭 𝐜𝐨𝐦𝐩𝐥𝐞𝐱 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐝𝐨𝐧’𝐭 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐭𝐞𝐚𝐦𝐬 𝐥𝐚𝐜𝐤 𝐞𝐟𝐟𝐨𝐫𝐭. They struggle because procurement is brought in too late. In complex delivery environments, procurement is not transactional. It directly influences timing, risk, and execution certainty. High performing projects treat procurement as a delivery function, not administration. That shows up through: • Early involvement during design and planning. • Active management of long lead and critical items. • Clear alignment with the master delivery program. When procurement is integrated early, risk becomes visible sooner. Schedules become more predictable. Execution becomes more disciplined. This requires a mindset shift. Procurement does not support delivery. It shapes delivery. In your complex projects, is procurement influencing the delivery strategy or reacting after decisions are already made?

Request for Information or Request for Quotation: The request for information (RFI) or request for quotation (RFQ) process is an essential part of procurement management in order to make informed decisions about potential suppliers. An RFI is used to gather information about potential suppliers and their capabilities, while an RFQ is a concrete request for quotation (a solution proposal and a price). The first step of the RFI is to identify the company's internal requirements. This includes clarifying the required information, such as specific characteristics, quantities and delivery times. An RFI document is then created that clearly defines the background, specific questions and desired response formats. This is followed by the selection of potential suppliers who are able to provide the required products or services. The RFI is sent to the selected suppliers, who then submit their responses. These are carefully analysed to assess suitability and potential for future collaboration. If necessary, further questions are asked or additional information obtained. Based on the responses received, a shortlist is drawn up with the most relevant suppliers who are eligible for further steps. The suppliers are informed of the result of the RFI and receive feedback or an invitation to the next phase. In the case of an RFQ, the company specifies its requirements and documents in detail the desired goods or services, the conditions, delivery deadlines and evaluation criteria for the selection of offers. The RFQ document is then sent to the previously identified potential suppliers, who are invited to submit a quotation. The bids received are evaluated based on the specified criteria. The supplier that best fulfils the requirements is then selected. If necessary, contract terms, prices or delivery details are negotiated. After the final selection, the contract is awarded to the supplier, formalising the business relationship. Finally, an official purchase order or contract is drawn up, setting out all the relevant terms and conditions. This structured and transparent process enables companies to make informed decisions, minimise risks and ensure efficient collaboration with suppliers. Mario Büsch, PURCHNET.de

Why Embedding a Procurement Manager in the PMO/Controls Team Is Key to Bridging the Long-Standing Gap Between Project Teams and Corporate Procurement on Capital Projects In many organizations, procurement is a centralized function managing both day-to-day purchasing and capital project procurement. While this centralization ensures consistency and cost control, it often falls short when it comes to the unique demands of large capital projects. Without a dedicated procurement manager embedded in the project team, the following issues often arise: - Delayed Vendor Mobilization: Onboarding takes time and coordination, without direct support, vendor start dates are often delayed. - Cost Reporting Inaccuracy: PO and CO coding frequently misaligns with project budgets, compromising reporting and forecasting. - Schedule Misalignment: Long-lead items may be delayed when procurement isn’t aligned with the project schedule. - Weak Supplier Relationships: Vendor issues related to performance or payment go unresolved without project-specific procurement involvement. - Audit & Compliance Risks: Documentation gaps between central procurement and project controls increase audit exposure. Central procurement should set policies, vet bidder lists, and review overall procurement performance. Meanwhile, the project team, with an embedded procurement manager, should manage vendor selection and execution to ensure alignment with budget, schedule, and risk objectives. The project procurement manager should understand the day-to-day needs of the project while applying corporate procurement policies, serving as the bridge between the project team and the centralized procurement function. This collaborative approach ensures both corporate consistency and project success. If you are interested in learning more about how the PMO/Procurement function can support your programs, feel free to reach out.   #PMO #ProjectManagement #Procurement #ProjectControls #Governance #CapitalProjects #ConstructionLeadership #ProgramDelivery #DataDriven #AA_PMO