There are many who would argue that direct procurement is procurement. Yet I typically define direct procurement, in the broadest sense, as referring to the sourcing, buying and management of ingredients, materials, parts, components, assemblies, packaging and related items, and services associated with “spend” that is accounted for under costs of goods sold (COGS) from an accounting perspective.
Spend Matters welcomes this guest article by Diarmuid O’Donoghue of GEP.
Before any project is kicked off, an owner is faced with many difficult decisions. Most importantly, they must decide what kind of contract to enter into with the contractor. Fixed-price and time and material (T&M) agreements have both their strengths and weaknesses, but it’s hard to outline the best fit until you dig a little deeper. Understanding some of these strengths and weaknesses will help you choose the correct solution and deliver a successful project.