--- title: "Procurement management processes in construction" subject: "Project Engineering" chapter: 4 key: "semester_7/project_engineering:project-procurement-management-processes" source: https://www.bctengineer.com/q/semester_7/project_engineering/project-procurement-management-processes site: BCT Engineering --- # Procurement management processes in construction Project Engineering · Chapter 4: Project Implementation and Controlling - Asked in: 2078 Bhadra, 6 marks - Video: [What is Procurement? Procurement Process Explained in 12 minutes](https://www.youtube.com/watch?v=ZCIJQJRw6xw) — Leaders Talk - ThinkEduca - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/project_engineering/project-procurement-management-processes - Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-4 ## Question What do you mean by Project Procurement Management? Explain the different processes adopted for procurement in a construction project. ## Short answer Project procurement management is the set of processes to purchase or acquire goods, works and services from outside the project team. The processes are plan procurement, prepare bidding documents, conduct procurement, award contract, administer procurement, and close procurement with final inspection and handover. Methods include open competitive bidding, limited bidding, sealed quotation, direct purchase, user group and force account. ## Answer **Project procurement management** is the set of processes used to purchase or acquire the goods, works and services needed from outside the project team, such as materials, equipment, consultants and contractors. It covers planning what to buy, selecting suppliers, awarding and administering contracts, and closing them. #### Processes 1. **Plan procurement:** decide what to procure, how and when, and the type of contract (make-or-buy, division into packages, budget and estimate). 2. **Prepare documents:** prepare the bidding documents (instructions to bidders, conditions of contract, specifications, drawings, BOQ) and the terms of reference for consultants. 3. **Conduct procurement (invite and select):** invite bids by public notice, hold a pre-bid meeting, receive and open the bids, evaluate them (technical and financial), and select the best bidder. 4. **Contract award:** negotiate if needed, issue the letter of acceptance, take the performance security and sign the contract. 5. **Administer procurement:** monitor performance, measure progress, and handle variations, payments, claims and disputes. 6. **Close procurement:** final inspection, handover, final payment, release of security and filing of records. #### Methods used in construction in Nepal Under the Public Procurement Act, 2063 and its Regulations: | Method | Use | |---|---| | Open competitive bidding (NCB/ICB) | Large works; any qualified bidder can take part (prequalification may be used for complex works) | | Limited bidding | Special works where only a few qualified firms or suppliers exist | | Sealed quotation | Small-value works and goods | | Direct purchase | Very small value or a single source | | User group / community participation | Small local works by the community | | Force account (amanat) | Work done by the agency's own staff | Contract types: unit rate, lump sum, cost-plus, design and build (EPC), and BOT for large infrastructure. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Project procurement management is: A. Purchasing or acquiring goods, works and services from outside the project team B. Only buying cement C. Hiring internal staff D. Auditing accounts Answer: A. It covers planning, selecting suppliers, awarding, administering and closing contracts for external goods, works and services. (Key point: Definition) 2. Which is the correct order of procurement processes? A. Close, plan, award, administer B. Plan, prepare documents, conduct (invite and select), award, administer, close C. Award, plan, close, prepare D. Administer, conduct, plan, close Answer: B. Procurement runs from planning through documents, bidding and selection, award, administration to closure. (Key point: Process order) 3. Which method is used for large works where any qualified bidder can take part? A. Direct purchase B. Force account C. Open competitive bidding (NCB/ICB) D. Quotation Answer: C. Large works use open competitive bidding; quotation is for small works, direct purchase for very small or single-source. (Key point: Method for large works) 4. What is done at contract award? A. Final inspection and handover B. Letter of acceptance, performance security and signing the contract C. Preparing the BOQ D. Make-or-buy decision Answer: B. After evaluation, negotiation if needed, the letter of acceptance is issued, security taken and the contract signed. (Key point: Contract award) ## Related in Project Engineering - [Risk in construction projects and its management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-more-chance-construction) — Project Engineering, chapter 5 - [Internal risk of Nepalese construction project](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-internal-construction-nepalese-company) — Project Engineering, chapter 5 - [Types of projects; effect of project management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-types-effect-of-management) — Project Engineering, chapter 1 - [Project vs traditional management; external environment](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-vs-traditional-mgmt-external-env) — Project Engineering, chapter 1 - [Project management and its functions](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-management-and-functions) — Project Engineering, chapter 1 - [Risk management and its steps](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-management-define-steps) — Project Engineering, chapter 5, asked 2× ## Related in other subjects - [Project procurement management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-procurement-management) — ICT Project Management, chapter 13 - [Procurement management process flow](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aprocurement-process-flow) — ICT Project Management, chapter 13 - [Project driven processes with diagram](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-driven-processes) — ICT Project Management, chapter 6 - [Value engineering in material procurement](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-engineering-procurement) — Construction Management, chapter 3, asked 3×