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How far you can go below budget for a material to purchase?

Assigned budgets are often set by cost control department, which are the upper limit of price that buy or contract a subcontractor for a work scope.

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Question added by Amin ALMASRI , Procurement Manager , Dur Hospitality Co.
Date Posted: 2014/05/13
Muhammad Qasim
by Muhammad Qasim , Construction Manager , H.A. J Contracting Company

 

The material is not an item which we select by our own choice but it’s the approved item by Consultant for the upcoming or running Project so the Item price plus its supply, working cost already included before submitting price to gain contract. Now when the company got the contract they can do nothing to change his BoQ for one Item price unless we have supports documents from the Government that we can submit a bill for the variation of prices for some items like , steel, cement etc. Now suppose one item like Granite for interior or exterior finishing we have to submit samples to the Consultant or Client to get approval now that's depend on our good luck if they select an item which is easily available with a lower price to save our money in Item price . But if the select an item with a non-availability in the local market and the item is very costly so we have an option to discuss our problems if the listen ok otherwise we have to search and purchase with the same quality and lower price to save our cost of work from the maximum loss.

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