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Procurement Management ((Cost-reimbursable (Supplier is reimbursed with…
Procurement Management
Decentralized
Advantages:
easier access to people
Loyalty to project
Disadvantages:
Less expertise in procurement
Poor Use of experts
Unavailability of standards
PM in procurement:
particpating and supporting
Ensuring procurement policies
Procurement is ultimate responsible
Contract
Mutual Agreement
Legally bound
Offer and acceptance, consideration,
legal capacity, legal purpose, intention
Fixed Price
Amount to be paid is fixed
Risks of all costs growth rest on supplier
Include incentives for meeting/exceding objectives
Firm Fixed Price: FPF
Fixed Price Incentive Fee: FPIF
(fee for exceeding objectives)
Fixed Price w/ Economic Price Adjustment: FP-EPA
(multi-year subject to annual adjustments)
Cost-reimbursable
Supplier is reimbursed with costs and a profit fee
Risk bears on the buyer
Establish incentives to limit buyers risk exposure
Cost Plus Percentage of Costs: CPPC
costs plus a % of costs fee
Cost Plus Fixed Fee: CPFF
cost plus a fixed fee
Cost Plus Incentive Fee: CPIF
cost plus fee for objectives
Cost Plus Award Fee (CPAF)
reimbursement of cost
award based on subjective criteria
Time and Material
price perday or per item
without establishing the quantity
may have a specific ceiling
Contract incentives
Synchronize buyer's and supplier's objectives
Ceiling price
Target Cost
Sharing ratio
Fixed fee or target fee
Incentive fee
Price
Target Price
Plan Procurement
Make or buy
Make
Capacity available
Costs are important
Strategic obligation
Knowledge exist
Costs can be shared with other
projects
Buy
There is a patent
Many providers
Internal resources are scarce
An existing product enable shorter time to market
Possibility to acquire/transfer some knowledge to internal teams
Product/service expected is well defined
Risk response strategy (transfer for instance)
Statement of Work
Narrative description or
services to be supplied:
Product Specification
Product Quantities
Work required
Delivery Schedule
Standards
Acceptance Criteria
Bid documents
Request for Proposal (RFP)
Good ideia to get price and solution
invitation for Bid (IFB)
price for defined scope
Request for Quote (RFQ)
Price Quote
Request for information (RFI)
information about one product
Indendent Estimates
Market research
Rules
Rules
How to procure
Vendor selection process
Prequalified sellers
Contract types used
Procurement metrics
Criteria used to select suppliers proposals
Criteria used to exclude suppliers
Conduct Procurements
Advertise the procurement process
Hold meetings to clarify questions
Receive proposals, bids or quotation
Rank suppliers and remove suppliers
that do not meet criteria
Participate in negotiations
Award a contract
Bidder conference
Guide potential and clarify questions
Detect inconsistencies
Make sure cuppliers have the same info
Proposal evaluation
Source selection criteria
Screening system
Compare estimate with independent estimate
Selected sellers
Select suppliers for negotiation
based on selection criteria
Sole source: without alternatives
Negotiation
Bargaining
Define contract elements (decrease risk)
Fair and mutually favourable contract
Deal with risks
Letter of intent to declare intention to buy
Awarded contracts
Statement of work
Price
Contract Incentives
Change control terms
Warranty
Contract termination procedure
Force Majeure
Performance bond
Control Procurement
Performance review
Inspections
Procurement audits
Claims administration
Contract early termination
Convenience (unilateral)
Cause or default
Mutual understanding
Control Procurements
Ensuring deliverables have been completed
Accepting contract closure
Managing contract early termination
Negotiating remaining claims otr disputes
Issuing a final performance report
Dealing with outstanding payments
Generating lessons learned
Updating and archiving records