If you were to ask any CFO or Controller which department should be responsible for all Procurement for the company, they would naturally respond with the Finance Department. On the other hand, if you were to ask any project controls professional about procurement, they would naturally respond with the Project Team, they should own procurement. 

So, who’s right?

For any organization, their corporate data is one of the most important assets they possess. The information they gather on a daily basis forms the core of who they are, where they’ve been and where they’re going. The monumental technology changes going on in the world today have made ‘Data’ the central element that determines success or failure for most any company.

On any day of any major construction project, a ton of information is being collected about that project. Including: costs, hours, activities and progress; along with a variety of documents, photos, invoices and receipts.  Feeding all this data to the project managers is critical to enable them to bring the project to a successful completion on time and on budget.

The thing is, all this data that’s collected needs to be both accurate and complete, otherwise it’s not much use to anyone. Not only that, but it also has to be timely – meaning that, giving project managers data that several weeks old doesn’t really help much. It needs to be current, like from today, otherwise you’re managing the past, which is not only ineffective, but frustrating.

Construction costs in the US have been escalating for months now, and it’s so far the contractors who are carrying the weight of absorbing these price increases. This, according to a recent study by the Associated General Contractors, who went on to point out that recent tariffs on non-US foreign materials have further intensified the issue.

The Pain of Higher Construction Costs 

Everyone wants to run a ‘Lean’ operation. But how do you do that when there’s so much work to do, projects to stay on top of, reports to run, etc.?  The behavioral challenge most organizations suffer from when it comes to running lean, is what I call the “More means More” syndrome.  Put simply, this means: as you grow and get more work, you just add more people to do that work. More work, therefore more people, right? Well, hang on a second. 

You thought you had your project all wrapped up when, SURPRISE, vendor invoices just keep coming in.  Whoops, things didn’t go as well as you thought. The costs on your project keep soaring, and you have to keep updating your project reports to your superiors.

Why Vendor Invoices Keep Coming In

This happens because vendors rarely invoice you at the time they completed the work, or delivered the materials.  The problem is, if you wait until vendors invoice you to show the cost on your project, then you’re in for a lot of surprises.

Cash moves at a different pace than activities. Maybe that seems obvious, or maybe you’re not sure what I’m talking about; but it’s an important distinction to understand in construction project management.

Project Management = More Than You Think

Construction contractors are increasingly adopting technology to track their daily costs and activities from the jobsite. Some will refer to this as tracking their daily LEM – which stands for Labor, Equipment and Materials – however others may call it Field Data Capture; and some may call it the Daily Field Report, or Site Superintendent Report. Although we’ve adopted an industry term, “Construction Cost Tracking” as a general name to describe the activity and process, we tend to use “LEM” as the term that describes the final document(s) that contain all the jobsite data that gets tracked.

If you’re familiar with 4castplus at all, you’ll know that the system enables contractors to track much more than labor, equipment and materials. There’s clearly much more going on than that – so a “LEM” is just a term used that encapsulates the broad variety of everything that gets tracked. Other data that gets captured in the LEM includes: labor expenses like subsistence and meals; along with 3^rd party vendor expenses; material field receipts; daily log and the weather. Field personnel can also input production quantities as progressed items that are completed. It also allows field personnel to upload any number of documents into organized document repository categories. There’s additionally a very powerful Vendor LEM option to track the costs and expenses from subcontractors.

Analyzing Vendor Bids

The final stage of any Request for Quote (RFQ) or Request for Proposal (RFP), is the process of awarding the contract to the successful bidder. A key part of this stage is when the buyers collect all the information together to compare the various bids, along with the technical & commercial details of each.  This can be a challenging and time-consuming process if your buyer team doesn’t have the right tools to help perform that task.

What is a Commercial Bid Analysis?

The purpose of the Competitive, or Commercial Bid Analysis (CBA) undertaken by the procurement team is as follows:

If you’re like most companies that run construction projects, you know that getting accurate and real-time cost data from the jobsite can present many challenges. 

In today’s highly competitive environment, a construction cost tracking software solution is a must for projects to run on schedule, on budget and efficiently. Beyond inaccurate and incomplete data and managing way too many spreadsheets, there are many other signs that your organization is in need of construction cost tracking software. Click the button below to get your free guide to the top signs and how 4castplus can help.