ISQA 439

1
ISQA 439

• Capital Equipment
• Capital Projects
• Service Purchasing

2
Capital Expenditures

• Examples
• Copy Machines
• Company Cars
• Production Machinery
• Important Issues
• Budgetary Concerns
• Financing
• Timing
• Depreciation
• Purchasing Practices

3
Capital Expenditures

• Role of Purchasing
• Time
• Standardization
• Life Cycle Costing
• Productivity
• Warranties
• UCC
• Manufacturer
• Tracking

4
Capital Expenditures

• Supplier Visits
• Negotiation/Bids
• Preparation
• Code Compliance
• Specialized Services/Installers
• Lease/Buy
• Used Equipment

5
Capital Expenditures

• MRO Considerations
• Service Availability
• Service Contracts
• Technical Assistance
• Maintenance Training
• Recommended Spares
• Parts Availability
• Parts Pricing

6
Capital Expenditures

• Engineer to Order
• Specifications
• Measurable Benchmarks
• Acceptance
• Warranty of Fitness for Purpose
• Payment Issues
• Partial/Progress Payments
• Holdbacks

7
Capital Equipment

• Disposal of Old Equipment
• Removal Cost
• Salvage Value
• Disposal Costs
• Environmental Concerns
• Lubricants
• Coolants

8
Capital Projects

• Construction
• New
• Remodel
• Use of Outside Consultants
• Architects
• Structural Engineers
• Specialty Consultants
• Finance
• Marine Surveyors
• Construction Managers
• Environmental

9
Capital Projects

• Qualifying Suppliers
• Past Projects
• Project Visits
• References
• Technical Capabilities
• Supplier Visits
• Sub-Contractors
• Specialty Suppliers
• Minority Participation

10
Capital Projects

• Contracts and Contract Issues
• Firm Fixed Price
• Cost Plus
• Cost Plus, Not to Exceed
• Risk
• Liquidated Damages
• Change Orders
• Project Management
• CPM/PERT Charts
• Owners Representatives

11
Service Contracts

• 2/3 of All Spending at Many Firms is Indirect
• Services Are Often Majority of Indirect
• Janitorial
• Building Maintenance
• Legal
• Architects
• Consultants

12
P B J
13
Service Contracts

• Statements of Work Service Specifications
• Be Sure to Update
• Critical Issue
• Supplier Understands Buyers System
• Third Party Agreements
• 3PL
• 4PL
• Integrated Supply

14
Multi Stage Projects Construction Example

• Land Purchase
• RE Agent
• Appraiser
• Environmental Specialist
• Environmental Impact Statement
• Architect
• Engineers
• Structural
• Mechanical
• Contractors

15
Ambiguous Terms From Actual Contracts

• All reasonable requests of the buyer shall be
  complied with
• Carefully performed
• Good materials
• Good workmanship
• High quality
• In accordance with best commercial practices
• Installed in a neat and workmanlike manner
• Metal parts shall be cleaned before painting
• Where practical