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In this assessment of developing contracts in procurement and supply, a focus on an identified contract in Red Sea Global (RSG) has critically been evaluated.
The explanation focuses on how the terms and conditions assist the organisation in ensuring effective management of risks of poor quality, extension of time, increased costs and unethical practice.
Also, the role of terms and conditions in ensuring the relevant performance measures monitoring and management are put into account. RSG organisation is classified as a highly visionary developer fully owned by Public Investment Fund (PIF) of Saudi Arabia considered.
To achieve the intended aim of this assessment, the focus is on Convertible Construction Contract with the terms and conditions selected being general and used in various construction categories in the organisation.
From the evaluation of the contract terms and conditions, the obtained findings indicate that the contract terms and conditions are detailed and used to guide success of procurement and supply.
The terms and conditions guarantee P&SM success in managing the risks of quality, time, costs overruns and ethics. They are classified to categories of risks management, Force Majeure, Costs management, Indemnity, Insurance and performance.
Also, with PS&M working in collaboration with other different departments in the organisation (HR, Accounts, Finance, Legal and IT), cumulative success is guaranteed. This is through delivery of different projects enhancing well-being of clients, community and environment.
Also, an outline of “battle of the forms” concept has been carried out with a detailed explanation on scope of ensuring all agreements are pursued and integrated in RSG terms and conditions successfully. The best practice of managing the issue has been evident.
There are different gaps identified from the findings and conclusions in this assessment. To manage these gaps, the recommendations are;
- A review of risks management approach integrated to the terms and conditions
- Develop a clear approach for agreement with different suppliers for managing “battle of the forms”
- To use various KPI’s and reports to implement contracts
- To reconstitute how innovation and technologies are included in implementing contracts
- To enhance scope of understanding and awareness regarding the contract terms and conditions
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- Based on the study, Woolworths have to reduce their annual costs, and this may be supported by automation of as many processes as possible and this will also improve their efficiency and effectiveness levels.
- Woolworths also has made significant efforts in categorising its products and managing supply and other risks by having a wide pool of suppliers.
- Further, the introduction of online shopping has greatly boosted their market reach and their competitiveness.
- Woolworths also has to consider grouping all its purchases into categories. This will greatly ease the amounts spent on buying individual items since bulk purchases allow for great discounts due to the economies of scale.
- Further, category management will ensure that the entire supply chain is managed effectively and efficiently with minimal instances of supply chain disruptions.
- Woolworths also must prioritise its stakeholders and acknowledge the role that each stakeholder plays and how this contributes significantly to the overall growth of the firm.
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