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Project Procurement Management (Processes (PLANNING (Process: Plan…
Project Procurement Management
Procurement means acquiring goods and/or services from an outside source
Other terms include purchasing and outsourcing
Why Outsource?
To access skills and technologies
To reduce both fixed and recurrent costs
To allow the client organization to focus on its core business
To provide flexibility
To increase accountability
Processes
PLANNING
Process:
Plan procurement management
Outputs: Procurement management plan, procurement statements of work, procurement documents, source selection criteria, make-or-buy decisions, change requests, project documents updates
EXECUTING
Process:
Conduct procurement
Outputs: Selected sellers, agreements, resource calendars, change requests, project management plan updates, project documents updates
MONITORING AND CONTROLLING
Process:
Controlling Procurement
Outputs : Work performance information, change requests, project management plan updates, project documents updates, organisational process assets updates
CLOSING
Process:
Close Procurement
Outputs: Closed procurement, organisational process assets updates
Planning Procurement Management
Identifying which project needs can best be met by using products or services outside the organization
If there is no need to buy any products or services from outside the organization, then there is no need to perform any of the other procurement management processes
Outputs
Procurement Management Plan
Describes how the procurement processes will be managed, from developing documentation for making outside purchases or acquisitions to contract closure
Contract Statement of Work (SOW)
is a description of the work required for the procurement
Procurement Documents
Request for Proposals: Used to solicit proposals from prospective sellers
A proposal is a document prepared by a seller when there are different approaches for meeting buyer needs
Requests for Quotes: Used to solicit quotes or bids from prospective suppliers
A bid, also called a tender or quote (short for quotation), is a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer
Source Selection Criteria
Conducting Procurements
Deciding whom to ask to do the work
Sending appropriate documentation to potential sellers
Obtaining proposals or bids
Selecting a seller
Awarding a contract
Outputs
Seller Selection
Organizations often do an initial evaluation of all proposals and bids and then develop a short list of potential sellers for further evaluation
Sellers on the short list often prepare a best and final offer (BAFO)
Final output is a contract signed by the buyer and the selected seller
Controlling Procurements
Ensures that the seller’s performance meets contractual requirements
It is critical that project managers and team members watch for
constructive change orders
, which are oral or written acts or omissions by someone with actual or apparent authority that can be construed to have the same effect as a written change order
Suggestions for change control in Contracts
Changes to any part of the project need to be reviewed, approved, and documented by the same people in the same way that the original part of the plan was approved
Evaluation of any change should include an impact analysis.
Changes must be documented in writing. Project team members should also document all important meetings and telephone phone calls
Project managers and teams should stay closely involved to make sure the new system will meet business needs and work in an operational environment
Have backup plans
Use tools and techniques, such as a contract change control system, buyer-conducted performance reviews, inspections and audits
Closing Procurements
Involves completing and settling contracts and resolving any open items
The project team should:
Determine if all work was completed correctly and satisfactorily
Update records to reflect final results
Archive information for future use
The contract itself should include requirements for formal acceptance and closure
Tools to assist in Contract Closure
Procurement audits identify lessons learned in the procurement process
Negotiated settlements help close contracts more smoothly
A records management system provides the ability to easily organize, find, and archive procurement-related documents