Avoiding Pitfalls: The Role of Procurement in Project Success
- Max Pugh
- Jan 31
- 4 min read
Tips for success
The involvement of a procurement specialist during project development can be critical to success and the avoidance of common pitfalls and project failure. By engaging with procurement from the beginning, contracting authorities can ensure value for money benefits are achieved, risks are adequately mitigated and ensure compliance with procurement legislation. Procurement can assist with leveraging these advantages to drive successful outcomes and achieve organisational goals efficiently.
In this blog we present four examples of how involving a procurement team early in a project can help prevent common issues encountered during a live project.
Pitfall: Lack of a clear scope
A clear scope specifies quality standards, performance indicators and milestones. The scope serves as a crucial guide for the project, presenting a roadmap for contracting authorities and the supply chain alike. Well-defined requirements result in precise budget planning and clarity in the supply chain, improving bid quality.
On the other hand, an ambiguous project scope often leads to imprecise cost estimation and increased risk of scope creep. Because the scope works as a benchmark for supplier selection, a weak or undefined scope can result in misaligned capability expectations and project requirements.
Tip: Early involvement of procurement aids the development of a clear and accurate scope that outlines the exact project requirements, including the minor aspects, to ensure well-defined expectations and facilitate a streamlined procurement process. The active involvement of procurement, project managers and other key stakeholders sharing insights and requirements is instrumental in developing a comprehensive and clear project scope. Ultimately, a well-defined project scope will mitigate uncertainties and facilitate a procurement process that aligns closely with project objectives.
Pitfall: Inadequate risk management
Diligent management of multiple risk factors and proposed mitigations are essential for project success. If a project fails to implement and update comprehensive risk assessment strategies, as well as clear contractual agreements and robust supplier management, risks that could jeopardise successful outcomes are likely to materialise. Failure to effectively manage these risks may result in project disruptions, increased costs or legal disputes.
Early engagement with procurement will ensure that comprehensive risk management strategies are built into the procurement process and embedded in the subsequent contract from the outset. This will eliminate any vulnerabilities that cause unnecessary, increased risk. Procurement can reduce the likelihood of disruptions and unforeseen issues through the adoption of robust evaluation of supplier capabilities and financial stability, establishing clear performance criteria, and including clear and detailed contractual arrangements. This approach enables a predictable and stable project environment and improves service delivery outcomes.
Tip: Regularly review and update risk management plans throughout the project lifecycle to adapt to new challenges and changes in the project environment. This approach ensures proactivity and that potential risks are identified and mitigated early, maintaining project stability and success.
Pitfall: Compliance and regulations risks
The regulatory framework governing public procurement is complex, with non-compliance having the potential to result in legal challenges, award of damages, financial penalties, project delays and severe reputational damage.
Early involvement of procurement during the inception of a project requirement can mitigate the risk of deviating from the regulatory environment that contracting authorities are bound to, ensuring that projects develop in line with the boundaries of the law. It will serve as a safeguard in ensuring that all procurement activities comply with relevant legislation and standards to avoid legal issues and project delays. Procurement can advise on the parameters of regulations and adjust processes to ensure compliance. By staying compliant, contracting authorities protect themselves from legal risks and uphold ethical standards in their procurement activities.
Tip: Regular training and updates on the latest procurement regulations and compliance requirements can help ensure that all team members are aware of their responsibilities and the legal framework. This proactive approach minimises the risk of non-compliance and keeps the project aligned with current standards and best practices.
Pitfall: Losing value for money
Achieving outcomes that represent value for money is a key driver at the heart of any project. If value for money is not prioritised and managed closely a gradual loss of value from the process will arise, which is commonly known as contract value leakage. This can happen at any point during the project lifecycle, from inception to execution, and can lead to an erosion of value for money through financial losses and/or missed opportunities. It can occur through inaccessible documentation, lack of due diligence in the procurement process or inadequate contract management.
The role of procurement in driving value for money through achieving intended value and impact of contracts cannot be overstated. Early involvement of procurement teams to incorporate value for money considerations at all stages of the procurement cycle enables the design of a well-structured competitive procurement process, robust terms and conditions and a contract management plan that constitutes the most efficient way to obtain the best value for money.
Tip: Implement regular audits and performance reviews to ensure that value for money is being achieved throughout the project lifecycle. This continuous monitoring helps identify and address any instances of contract value leakage early, ensuring that the project remains cost-effective and delivers the intended benefits.
When establishing future projects, consider early involvement of a procurement team. The benefits and positive outcomes for any project are driven by proficient strategic planning, adherence to regulatory requirements, and accurate budgeting, all of which procurement can assist with. By integrating procurement expertise from the outset, projects are empowered to meet their goals efficiently and avoid the negative impacts of poor planning.
Max Pugh is a Senior Procurement Consultant at Arup, specialising in providing procurement and commercial advice. He has significant experience in delivering high-value public sector contracts, ensuring effective and efficient procurement processes tailored to the needs of public sector projects.
If you have any questions on this topic, or would like support, please contact your Delivery Associate, or email DeliveryAssociatesNetwork@Arup.com
