Project Management
9. Project Procurement Management
Project Procurement Management includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.
A contract is a mutually binding agreement that obligates the seller to provide the specified product, service, or result and obligates the buyer to provide the monetary or other valuable consideration in return.
In centralized contracting, a single contract manager handles multiple projects,
In decentralized contracting a contract Manager is assigned to a project full time and reports to the project manager.
Types of Contracts
· Cost Reimbursable (CR) or Cost Plus
· Time and Material (T & M) Unit Price
· Fixed Price (FP) or Lump Sum
· Cost Plus Incentive fee (CPIF)
$150,00 cost plus 15K incentive 70/30 split buyer to seller
Project actual cost $120,000
Saving by seller = $150K -120K = 30K Seller incentive 30%(30K) = 9K
Total amount received by seller = 120K + 9K + 15 K = 144K
A. Plan Procurement Management
Plan procurement Management is the process of documenting project procurement decision specifying the procurement approach and identifying potential sellers.
a. Input
i. Project Charter
ii. Project Management Plan
a. risk register
b. Stakeholder register
iii. Business Documents
iv. Project Documents
a. Risk Management Plan
b. Work Performance Data
c. Work Performance Reports
v. Enterprise Environmental Factors
vi. Organizational Process Assets
b. Tools
i. Expert Judgement
ii. Data Gathering
iii. Data Analysis
iv. Source Sheet Analysis
v. Meetings
c. Output
i. Procurement Management Plan
ii. Procurement Strategy
iii. Process Statement of Work
iv. Source Selection
v. Marker or Buy Decisions
vi. Independent Customer Estimate
vii. Change Request
viii. Organizational Projects Assets Updates
ix. Project Document Updates
B. Conduct Procurement (Executing)
Process of obtaining seller responses, selecting seller and awarding contract
a. Input
i. Project Charter
ii. Project Management Plan
a. risk register
b. Stakeholder register
iii. Business Documents
iv. Project Documents
v. Seller Proposals
vi. Procurement Documents
vii. Enterprise Environmental Factors
viii. Organizational Process Assets
b. Tools
i. Conduct Procurement
ii. Advertising
iii. Bidder Conference
iv. Data Analysis
v. Inter-personal Skills
vi. Data Gathering
c. Output
i. Selected Seller
ii. Agreements
iii. Change Request
iv. Project Management Plan Updates
v. Organizational Process Assets Updates
C. Control Procurement (Monitor & Control)
Control Procurement is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections to the contract as appropriate.
a. Input
i. Project Charter
ii. Project Management Plan
iii. Work Performance Data
iv. Work Performance Reports
v. Approved Change Request
vi. Procurement Documents
vii. Project Documents
viii. Enterprise Environmental Factors
ix. Organizational Process Assets
b. Tools
i. Expert Judgement
ii. Claims Administration
iii. Data Analysis
iv. Inspections
v. Audits
vi. Conduct Procurement
c. Output
i. Closed Procurement
ii. Work Performance Information
iii. Procurement Documents
iv. Approved Change Request
v. Project Management Plan Updates
vi. Project Documents Updates
vii. Organizational Process Assets Updates
viii. Performance Reports
ix. Enterprise Environmental Factors
x. Organizational Process Assets
