Mitigating Procurement Risks in Construction
A I • Aug 15,2024
Challenge:
A German construction company faced potential risks when procuring materials for a project in Saudi Arabia. Although they had identified a local supplier, the procurement managers were concerned about hidden risks in the contract.
Solution:
The construction firm utilized BestAgreement.ai, an AI-powered contract review tool, to ensure a favorable agreement. The platform’s Red Flag feature analyzed the contract, identifying several unfavorable terms.
Outcome:
The constructor proactively approached the supplier to renegotiate the contract.
By highlighting the identified red flags, the company secured a revised agreement that aligned with their interests and mitigated potential risks.
Watch how Builder Mitigates Contractual Risks with bestAgreement.ai
Detailed Case:
A German construction firm was tasked with sourcing materials for a new project in Saudi Arabia. After identifying a Saudi-based company as a potential supplier, they received a draft contract outlining the terms of the agreement.
Despite the seemingly straightforward contract, the builder’s procurement team used BestAgreement.ai to uncover potential risks. The platform’s RedFlag feature, powered by advanced AI algorithms, meticulously scans contracts to identify potential issues that could negatively impact the client.
BestAgreement.ai’s RedFlag identified risky contract terms exposing the building company to potential delays and financial losses (unclear delivery dates, excessive penalties, and unbalanced payments).
The construction firm’s procurement team approached the Saudi Arabian supplier to renegotiate the contract. They presented the identified red flags as potential risks hindering the project’s success and jeopardizing both parties’ interests. After constructive discussions, both parties reached a mutually agreeable revised contract that addressed the initial red flags.
Reference:
1. Mitigating Procurement Risks in Construction
Industry: Construction
Vendor: bestAgreement.ai
Client: Construction Company
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