This post was republished to Mentor & Author at 12:47:33 PM 9/27/2015

Can a harmless vendor list harm your project?

Category engineering procurement and construction

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Yes, it can.

Every project has a vendor list. It is also known as approved vendor list or approved bidders list. Below
are some of the ways in which it can play havoc with your project.

The first reason is when the contractor fails to acknowledge the presence of the list. A vendor list could
place a restriction on the choice of vendors. It could allow or prohibit procurement from a certain
country or a vendor. Or it could ask you to buy an approved product available with an international
vendor only. If the contractor fails to locate this list, a project could face losses from the start. The
contractor could have easily avoided these losses.

A project could have various vendor lists. It could have a general vendor list. And the same project could
have discipline-wise vendor list.

General Mechanical Electrical

vendor list vendor list vendor list
Mechanical items
•packages Packages Switchgears
•pipes

Electrical items
•switchgears Pipes Cables
•cables

In this case, there are chances of confusion. The general list could state a cheap vendor. The specific list
could indicate a costly vendor. This could result in a dispute.

Vendor lists are not updated as they should be. When you contact the prospective vendors, you might
get a lot of surprises.

 Name or address change of vendor due to mergers, acquisitions.

  Discontinuation of products.
 Vendors might not be in business.

The contractor would find that some vendors are not present in the list. Subsequently the contractor
would start the process of vendor approval with the client. On an average, a contractor needs to wait
around twenty days for client’s decision. The client could reject the vendor. Another twenty days.

client accepts issue purchase order

collect vendor's track
record and submit to client
client rejects start process again

It is not uncommon for engineering contractors to specify vendor names in drawings, specification and
bill of material. This situation will overrule the approved vendor list.

A contractor needs to be careful about the vendor list. The harmless vendor list.