The Core of FF&E and OS&E Procurement – Part 1: Preliminary Budget Creation In this three part series, we wanted to break down FF&E and OS&E procurement down to its core, starting with preliminary budgeting and going all the way to after the installation is complete. The FF&E Process is very involved and the purchasing agent you have by your side makes all the difference. Let’s get started with the first step: putting together a preliminary budget.
Define the Terms First off, what is FF&E versus OS&E? FF&E stands for furniture, fixtures, and equipment, while OS&E stands for operating supplies and equipment. FF&E is anything that is a non-permanent part of the hotel. OS&E is all the little things that often get used and replaced every day.
We like to explain it a little easier by using this visual. If you were to pick up a hotel, remove the roof, turn it upside down and shake it, everything that would fall out is essentially FF&E. Beds, nightstands, lamps, chairs, artwork, curtains, and even TVs fall in this category. Things that are everyday items, things that need replenished, or are depleted over time falls under OS&E. Banquet dishes, towels, sheets, toiletries, coffee, vacuums, and cleaning supplies are considered OS&E.
Creating a Preliminary Budget The involvement of a purchasing agent doesn’t start and stop at simply purchasing the furniture. Even when creating the initial preliminary budget, there are a lot of things to consider. This is when the purchasing agent first steps in. By assessing both the scope of work and project schedule, the purchasing agent can accurately supply a budget with the knowledge of current lead times, freight costs, vendor rates, expedites as necessary, warehousing fees, and more. Using the budget from a recently completed project that is relevant to your specific flag property, the purchasing agent can then add in the current rates for freight and other taxes that won’t go unforeseen. By having a reference point, this gives a reliable preliminary budget and you can continue the process with confidence.
Accurate Budgets Matter Having an accurate budget at the very beginning sets the expectations for the designers and allows them to better design within that range. This greatly reduces the time and money spent redesigning and value engineering later in the process and keeps the project on time and on budget. In part 2, we’ll break down the process of procurement and illustrate the involvement of the purchasing agent with the design team and project manager.