FM4.21 Understanding procurement and contract management for facilities management

FM4.21 Understanding procurement and contract management for facilities management

The unit fm4.21 understanding procurement and contract management for facilities management is designed with the principles and critical processes that are included in the acquisition of services and goods within an organisation. This unit also catered for the complete cycle of procurement from the need identification to the selection of suppliers and contract management. The useful procurement certifies that the organisation achieve the appropriate value for money on the other hand maintains compliance and quality with regulations. This unit also focuses on the significance of the Sourcing strategies that include a selection of suppliers and analysis emphasized criteria including cost sustainability and reliability. By recognising these fundamentals of procurement, organisations can operate streamlined, enhance competitiveness and reduce cost overall.

Contract management is another significant element of this unit that emphasises the monitoring, creation and execution of contracts with suppliers. It includes the negotiating conditions and terms. It certifies compliance with the obligations of the contract and change management or dispute management which arise at the time of the life cycle of the contract. Useful contract management reduces the risk and certifies that both parties complete their responsibilities. Moreover, they lead to the successful outcomes of the project. This unit also sheds light on the appropriate practices in the administration of contracts such as regular views of performance, explicit communication and strong documentation. By having great excellence in these practices, the organisation can generate strong and collaborative connections with suppliers and ignore the common pitfalls that are the main reason for cost overruns or delays.

The procurement and contract management integration is significant for the organisational goals achievements. This unit also provides great insight into the alignment of the procurement strategies with the objectives of the business that certify the activities of procurement. Besides support the complete vision and mission of the organisation. It also caters to technology`s role in modern procurement such as the systems of e-procurement which streamline and automate the process. By having command of these technologies, organisations can increase their transparency, accountability and efficiency in their contract management and procurement activities. Ultimately, this unit also provides great equipment to the professionals with the skills and knowledge required for contract and procurement management effectively. It also contributes to the sustainability and success of their organisation.

Unit objectives

The main objective of the unit fm4.21 understanding procurement and contract management for facilities management are demonstrated below:

• To equip the professionals with the skills to select and analyse the suppliers emphasize the criteria like sustainability reliability quality and cost to certify the optimal outcomes of procurement.
• To develop the competencies in executing monitoring and negotiating the contracts to reduce the risk and certify compliance with the obligations of contracts.
• To align the strategies of procurement with the goals of the organisation to support the entire mission and enhance the efficiency of operations.
• To leverage the system of e-procurement and other technologies to streamline and automate the contract management and procurement processes that enhance accountability and transparency.

Learning outcomes

The learning outcomes of the unit fm4.21 understanding procurement and contract management are provided for your better recognition.

LO1: Recognise procurement.

LO2: Recognise multiple categories of contract.

LO3: Recognise the use of terms, specifications and conditions in the services and goods procurement.

LO4: Recognise the costs of procurement.

Assessment criteria

The assessment criteria mainly cater for the learning outcomes of the unit fm4.21 understanding procurement and contract management is demonstrated here:

LO1: Recognise procurement.

• 1.1 Elaborate on the fundamental principles of procurement.
  (Include the responsibilities and rights of the sellers and buyers)
• 1.2 Elaborate the stages and processes of the procurement of services and goods to support the functions of facilities management.
  (Include the agreement requirements that define the specifications, agreement with the adjudication criteria, tenders issue, suppliers sourcing, adjudicating and receiving tenders, negotiating, shortlisting, declining several bids, contracts awarding, provisions monitoring, and contract initiating)
• 1.3 Describe the bid and tendering processes.
  (Include the spend analysis use, market or suppliers analysis, interest expressions, pre-qualification, adjudication criteria, approved list of tenderers, schedules, open days of the supplier, negotiations, presentations, shortlisting, processes of adjudication, e-auctions, invitations to tender, and formal tender opening)
• 1.4 Elaborate on how to select the appropriate services and contract specifications.
  (Include the influencing factors such as the categories of the services or goods that need to be purchased, bespoke or commodities, output or input specification, contract duration and value, buy or lease, call of contract, purchase order, JCT forms 2005, for contract building)
• 1.5 Elaborate on the way through which management of the procurement process must be organised.
  (Include the definition of the role, (budget holder, buyer specifier user) Power separations, authority levels, and record keeping)
• 1.6 Elaborator relevant legislation principles.
  (Include the procurement process of the EU, open competition, OGC “Office of Government Commerce”, OJEU, environmental standards, employment (work rights, directive working time, discrimination), 1979 Sale of Goods Act, supply of Services and Goods Act 1982, and fair act of contract term 1979)

LO2: Recognise multiple categories of contract.

• 2.1 Elaborate on the multiple categories of contracts.
  (Include the purchase order, verbal contracts, call-off contracts (Framework or enabling contracts), and industry-standard forms, for example, PPI/PPP, JCT forms 2005)
• 2.2 Elaborate on the benefits and limitations of the multiple categories of the contract for a range of services and goods.
  (Relate the multiple categories of the contract and explain the previous criteria of the assignment to various categories of services and goods)
• 2.3 Elaborate the way through which the most appropriate option of procurement can be selected that is suitable to the contract type.
  (Support the explanation by utilising examples from their own experience or case studies of the learners)
• 2.4 Elaborate on the way to select the most accurate type of contract that is suitable for the procurement of particular services or goods.
  (Support the explanation by utilising the case study or own experience of the learners)

LO3: Recognise the use of terms, specifications and conditions in the services and goods procurement.

• 3.1 Elaborate the way through which specifications are used and drafted for the services and goods procurement.
• 3.2 Elaborate the advantages of writing well-defined specifications.
• 3.3 Elaborate the way through which standards conditions and terms are utilised in the goods and services procurement.
• 3.4 Elaborate the limitations and benefits of standards conditions and terms.
  (Include the factors including management ease, resolution of dispute, time, availability, flexibility, equitable, familiarity, and precedent)

LO4: Recognise the costs of procurement.

• 4.1 Elaborate the elements that can make up the services and goods cost.
  (Include the labour, raw material, profit, packaging, overheads, manufacture, consumables, sales cost, excise duty, insurance, and transport)
• 4.2 Describe the factors to consider at the time of procurement decision evaluation.
  (Include reliability, time, compliance, cost, quality, reputation, and capacity)

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