Ready-mix concrete (RMC) and Rebar steel are two essential materials procured for construction works. While there are so many other materials required for construction, the reason for isolating and focussing on these two materials is, that they are highly price-sensitive (cement & steel) and are entitled to price variation. In the bid, these are quoted at basic rates and Phoenix will be obligated to pay/deduct the differential pricing (actual rates less quoted basic rates). Given the price sensitivity of these materials and requirement in high volume, Phoenix has decided to tie up with few reputed manufacturers/suppliers by fixing the price periodically so that the GC can procure these materials from these vendors without much of hassle. Given the number of projects that we handle at one point of time, not more than two projects shall be tied with one vendor.
Despite the best efforts, there are always pushbacks from the Contractors why this system is not working and how the vendors are not supplying in time. Care should be taken to ensure absolute clarity of responsibility in the procurement contract with these suppliers. Phoenix's endeavour shall be only to identify the vendors and fix the price, whereas the PO shall be placed by the GC directly as it is part of GC's scope. One way to resolve this is to fix the price with two to three vendors by which the contractor equally have an opportunity to order with other vendor for continuation of progress when an issue props up with one vendor.
Some of the grey areas or potential areas of disconnect is the installation of concrete pumps and pipes, lead period for supply etc. Clarification has been provided to the procurement department that the GC shall be asked to procure a pump and have dedicated pipelines for concrete supply (unless buckets are to be used). The suppliers of RMC shall supply the concrete at a designated point such that the permanent pump and pipeline shall be used to pump the concrete in required place within the Project. The rates agreed with the Supplier shall be offset by the reduction in scope as above.
Rule 7.6
Following best practices shall be adopted in the procurement of RMC (Rule 7.6)
- The Qualifying Criteria for a ready-mix concrete (RMC) Batching Plant must be QCI Certified. If a Plant does not have QCI Certification, then they must advise them to obtain QCI Certification. QA & QC Team shall inspect the proposed new Batching Plant for adherence of all Quality Norms for the end-to-end production process from Receipt of Raw Materials till despatch of RMC. All observations made by QA & QC Team at the proposed new Plant need to be rectified by Vendor and QA & QC Team shall re-inspect the same. Based on QA & QC Team's satisfactory report, the Vendor and the proposed Batching Plant shall be approved by Phoenix Management to supply RMC to Projects.
- Phoenix has standardised the Design Mixes of all grades, which must be followed across projects. Unless there is a specific project requirement due to design or management instruction to change, no changes in the design mixes will be permitted.
- Any deviations from the standardised Design mixes proposed shall be consulted with Director (Procurement) before any procurement action. All-new Design Mixes are subject to satisfactory 28 days cube test results achieving target average compressive strength and must be approved by respective Project's structural consultant.
- The General Contractor / Civil Contractor must establish as part of their preliminaries of the GC, Provision of one (1) pump and permanent pipelines in multiple shafts such that the entire floor area is covered. Any additional requirement will be permitted only on receiving proper justification with additional details as may be required. The onus of providing justification will lie with GC.
- The General Contractor / Civil Contractor need to submit bulk material reconciliation statement for RMC at the beginning of every Quarter, for the previous quarter to Phoenix’s QS Team.
- The GC shall be responsible for smooth handling of the process which shall be overseen by the Construction Manager. Names and contact details to be shared with the Procurement Department.
- If the pump is not available at the site, pump deployment must be notified a minimum of two regular working days in advance.
- Quality checking has to be done as mandated by QAQC with the concerned countersigned.
- Pump placement and pipeline erection have to be handled and monitored by the General Contractor/Civil Contractor.
Rule 7.7
The following process shall be adopted in the procurement of RMC (Rule 7.7)
- The Construction Managers of the respective projects needs to send the rolling forecast of next three months RMC requirement at the end of each month (by 30th). The immediate month's requirement will be split into weekly schedules (or) likely dates on which it would be required at the site. For example,
- on 30th November, they shall send forecast for Dec, Jan and Feb and
- on 31st December, they shall send for Jan (revised), Feb (revised) and March.
- Based on the requirement, by 10th of the following month, the procurement team shall negotiate (based on collective volume from all ongoing projects) and fix the vendors (Minimum two) and rates for the next month, which will be valid from 11 th of the current up to 10 th of next month. For example, For the quantities notified on 30 th November, the vendors and rates shall be notified on 10th December, and the same shall be valid till 10th January next year.
- On 10 th of every month, the Procurement Department shall notify all the GMs and GCs about the list of vendors and price for the forthcoming month. Over period, we should move on to quarterly pricing arrangement.
- The GC/Civil Vendor shall present the list of vendors and the intended quantity off take against step 1 data and notify the Vendors with copy to Procurement Team. This shall be monitored closely.
- On weekly basis, the General Contractor/Civil Contractor place the purchase order and raise the weekly indent request for the required quantity with the selected vendors or their preferred vendors (so long with in the approved rates) with a minimum of 72 hours (3 days) notice. These dates should be broadly in line with the weekly Schedule (or) exact dates shared in Step 1.
-
In cases of inability of all of the preferred vendors to supply Concrete due to plant break downs or short supply of RM, so long there is written confirmation from the vendor about his inability to supply and the required quantum was notified atleast 24 hours in advance, the GC shall be permitted to procure the Concrete from any source without any price approval at the prevailing market rate. This shall be approved by the Procurement department post procurement, without raising a query. However, the GC shall take the responsibility to establish that the price paid is as per prevailing market rates as on that date of procurement. The key is no work should suffer or resources should be idle for want of concrete and the GC/Civil vendor is not able to get the work done due to the preferred vendor non-performance in time.
- In the next month cycle of data, the Contractor (through Construction Manager) shall inform the actual quantity ordered in the previous month against the budgeted quantity and why there is a variance. The variance will be monitored and taken seriously for variations in terms of
(a) Quantity budgeted vs ordered vs received
(b) Date of procurement against the delivery schedule
(c) Lead time given to the vendor
- The reason being, negotiations on rates are done based on the budgeted quantity & Schedule of delivery projected. Any variance in this would upset the vendor and compel him to add contingency in the price for variations in actual procurement.
- Every Friday GC shall intimate the site requirements to be intimated for the following week starting from Monday to Sunday. Any change of plan to be notified three days (72 hours) in advance. Daily reconfirmation required to be done till the process is established.
-
Any non-standard grade of concrete requirement must be notified at least a week in advance.
- Weekly reconfirmation required to be done till the process is in place from sites.
Rule 7.8
Following best practices shall be adopted in the procurement of Rebar (Rule 7.8)
- The rebar shall be procured either directly from "Primary Steel producers" or through their authorised distributors/dealers only. Any deviations shall be consulted with Director (Procurement) before any procurement action, and such materials must pass the quality tests from NABL accredited Labs.
- Only Primary steel shall be used in all Phoenix projects
- Two persons in each site will be responsible for smooth handling of the process nominated by the GM's. Names and contact details to be shared with the Procurement Department.
- Quality checking has to be done as mandated by QAQC with the concerned countersigned.
- The General Contractor / Civil Contractor need to submit bulk material reconciliation statement for REBAR at the beginning of every Quarter, for the previous quarter to Phoenix’s QS Team.
Rule 7.9
The following process shall be adopted in the procurement of Rebar (Rule 7.9)
- The GC office must share with the Construction Managers of the respective projects who shall collate the information and send the moving forecast of next three months REBAR requirement at the end of each month (by 30th) to Procurement Team. The immediate month’s requirement will be split into weekly schedules (or) likely dates on which it would be required at the site. For example,
- on 30th November, they shall send forecast for Dec, Jan and Feb and
- on 31st December, they shall send for Jan (revised), Feb (revised) and March.
- Based on the requirement, by 10th of every month, the procurement team shall negotiate (based on collective volume from all ongoing projects) and fix the vendors and rates for the month, which will be valid from 11th of the current month till 10th of next month. For example,
- For the quantities notified on 30 th November, the vendors and rates shall be notified on 10th December, and the same shall be valid till 10th January next year.
- The General Contractor/Civil Contractor place the purchase order and raise the monthly indent request for the required quantity with the selected vendor with a minimum of 72 hours (3 days) lead time. These dates should be broadly in line with the monthly Schedule (or) exact dates shared in Step 1.
- In the next month cycle of data, the Contractor (through Construction Manager) shall inform the actual quantity ordered in the previous month against the budgeted quantity and why there is a variance. The variance will be monitored and taken seriously for variations in terms of;
(a) Quantity budgeted vs ordered vs received
(b) Date of procurement against the delivery schedule
(c) Lead time given to the vendor
- The reason being, negotiations on rates are done based on the budgeted quantity & Schedule of delivery projected. Any variance in this would upset the vendor and compel him to add contingency in the price for variations in actual procurement.
Back to Top