Running Head: REQUISITION OF MATS 1

Requisition Of Mats
William Taylor Pittman
PJM400-1 Project Procurement and Contract Management
Colorado State University Global Campus
Professor Clara Spenny
May 30, 2014







REQUISITION OF MATS 2

Requisition of Mats
Introduction
Whc Inc. is an oil and natural gas pipeline contractor that specializes in building
pipeline as well as compressor stations. Pipeline is most often laid in undeveloped areas with
unstable or wet ground. In order to move and position equipment next to the pipeline, wooden
timber mats must be laid down where needed to provide extra traction and stability.
Advertisement of need
When purchasing mats, submittals for bid are usually solicited to vendors and the process
is rather standardized because of their extensive use on pipeline projects. Typically a need for
mats is advertised to vendors by means of a requisition for a quote or RFQ. A RFQ for mats
includes the scope with specifications, the delivery location, and the delivery time. In addition to
these parameters requested in the quote, the quality of mats to be purchased must also be
considered to assess their remaining life. In the RFQ, terms and conditions must exist for a buy-
back option. This buy-back option is essential in procurement of mats if they are to be used on a
single project. Buy-back terms become irrelevant when mats are to be used on two or more
projects because after two project uses, they are essentially exhausted and no longer efficient for
use. It I advantageous to procure mats that can be sold back to the vendor in order to avoid EPA
imposed disposal costs.
Objectives for Evaluation
There are many suppliers for industrial type mats creating a very competitive
environment. This results in having the advantage of selecting from a variety of vendors.
Choosing from this list is simplified by your objectives for evaluation as well as the terms and
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conditions applied to the purchase. After submittal of you RFQ to your selected vendors you will
receive submittals or bids for what you are looking to procure. This is when you implement your
objectives for evaluation. The primary concern with analyzing bid is if the proposal is in
compliance with your scope. Many time vendors will often still submit a bid even though they
cannot satisfy your scope. These bids still need to be considered as they can be combined with
other bids to satisfy your need.
One of the biggest objectives for evaluation of bids is in regards to delivery. Matts on a
project are so important that no work on pipeline project can progress without them. This causes
the delivery date to be very important in the mat procurement process. Not only does a vendor
have to satisfy your due by date, they must also be able to deliver your products where you want.
At Whc-Inc., projects are undertaken all over the United States. This results in the location of
delivery to be a big determinate in which vendors to consider. This is because of the associated
shipping costs with industrial mats. Typically, mats used on pipeline projects can range from
five-hundred to a thousand pounds per mat. Thus, the location of the vendor is very important
when considering them as a supplier.
Terms and conditions
After implementation of your evaluative objectives, the terms and conditions then need to
be analyzed. The single most important condition in the agreement between a vendor and
customer for the procurement of mats is the buy-back option. Mats deteriorate from bulldozers
and the environment during their use on projects. Limiting their life to two uses. At the end of
their life, there is an EPA associated disposal cost that is very unsavory. Considering these
factors, it becomes a balancing act when deciding to purchase new or used mats. New mats are
generally purchase when they can be easily transported to a succeeding project. New mats are
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also purchased when there is an anticipated rise in value at the end of their use with the
company. Used mats are purchased when the buy-back rate is low and shipping costs exceeds the
buy-back rate, sometimes making it cost effective to pay the EPA disposal fee.
Price/Quality Evaluation

After analyzing you objectives for evaluation, terms, and conditions, you will have a list
remaining only of vendors that satisfy these. Now that you know what is possible, you then
implement a price/quality evaluation on your complying vendor bids. Price of mats is primarily
driven by two forces: current market conditions and shipping costs. Demand for mats rises and
falls as with any commodity and drives the price for mats. This demand is in a general upward
trend and does not accurately represent individual locations. Because of this, sometimes mats can
be procured inexpensively enough at a further distance from the project site to justify the added
shipping cost.
Quality of the mats as stated earlier, affects their remaining service life. When deciding
whether to purchase used mats or new, the price, transferability to other projects, and market
conditions all must be considered.
Conclusion
The procurement of mats involves many variables and requires organization in deciding
which vendor to select. The purchase price and shipping costs are the main concern with
purchasing mats. In addition to this, the quality or remaining life of the mats is also a big
consideration when procuring mats. With an organized spreadsheet and through process of
elimination, selecting a vendor for industrial mats can be simplified greatly.