In construction industry, there may be intermittent shortage of basic materials of construction. For example, the material like steel, cement etc. may not be available at right time. This results in delay in the completion of construction projects. A few contractors may arrange to get the material at premium. This costs the contract heavily and reduces profit margin. Purchasing has to be co-ordinated with the requirements of other departments. It is always convenient to have a separate purchasing department. It must be planned and decided whether to have centralised purchasing at head office or to decentralise purchasing at the various sub-centres or construction sites. Generally, the material like cement and steel, required for the Government works are supplied by the Government.
Suppliers must get a clear understanding of what the purchaser wants. It is necessary to prepare different forms of enquiry. Suppliers must not mistake enquiries and orders.
When quotations or tenders are received the buyer has to prepare a comparative statement, which should show the rates quoted by different suppliers without confusion. Following points are necessary to be taken into consideration while preparing a comparative statement.
- Whether the material mentioned in the quotation is according to the specification or otherwise.
- Where the material is likely to be delivered.
- The time asked for by the supplier for supplying the material.
- Whether or not any discount like cash discount, trade discount, discount for bulk purchase etc. is offered.
- Provision of after-sales-service and technical service, if any required.
- Ability of the supplier in supplying all the required quantity within the specific period needs to be considered in case of the supplies like bricks, sand, aggregate etc.
- Architect or engineers must be consulted before selecting sub-contractors.
- Facilities for loading and unloading of material must be considered while giving final order for supply.
Generally, it is a practice in almost all organisations, including Government departments to select the suppliers on the basis of the lowest quotation. This is not however necessarily a binding. There is a latitude to accept higher quotation if the quality of supplies is not of required standard and that the lowest quoting firm has any lacunae. All contracts of suppliers are written agreements. There should be no loophole in the supply agreements. Any delay in supply increases the cost of construction. There should not be any ambiguity in the meanings of the terms of contract. Bulk suppliers of materials such as aggregate, ready mixed concrete of mortar must be checked on the spot. Low standard materials such as dirty sand, broken and under-burnt brick etc. which do not conform the required specification, should be rejected or retained separately for some other work.
