project procurement management

PROJECT

PROCUREMENT

MANAGEMENT

Need to acquire IT product or

service from outside

Requirement Analysis & Identification

Identify Vendor’s Scope of Work

Review Vendor Managemet Plan

Request Seller Response

Seller Selection

Contract Administration

Vendor Monitoring

Requirement Analysis &

Identification

Make or buy analysis

Identify clear scope to be outsource

including product and service

Ensure the integration with other

deliverables of the project

Include the warranty services to mitigate

deliverables risk

Vendor Scope of Work

Product to be provided

Additional Service Training

Consultancy

Warranty

Quality of Product & Service Clear & detail specification

Agreed method of delivery

Agreed time of delivery

Acceptance criteria

Vendor management

Classification

Qualification & Certification

Performance report

Information update :

Product & service

Management changes

Control person

Financial Performance

Hints on Contract Administration

Scope of the service tasks & expected targets to be achieved

Are the contract terms realistically achievable by the vendor ?

Are procedure for the solution of disputes clearly defined ?

Does the procedure for change management clearly defined ?

Are all appropiate penalty clauses in the client contract reflected in

that of the vendor

Does the validity period of the contract reflect the optimum balance

between flexibility and commercial terms ?

Are the procedures for end of contract clearly defined to include :

Assurance that all tasks are completed

Conditions for the conduct of a Post Conduct Review ?

Vendor Monitoring

Objectives :

To ensure vendor is delivering service

To anticipate any potential dispute

Vendor Review Meeting :

Outstanding actions from last meeting

Supplier performance analysis

Changes to schedule

Changes to contact map/escalation procedure

Project Procurement Management

Project procurement management is

processes to purchase or acquire the

products, services, or result needed from

outside the project to perform the work

Project Procurement Management

Project procurement management is

processes to purchase or acquire the

products, services, or result needed from

outside the project to perform the work

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Plan Purchases and Acquisitions

•Enterprise

Environmental Factors

•Organizational Process

Assets

•Project Scope Statement

•WBS

•WBS Dictionary

•Project Management

PlanRisk register

Risk related contractual

agreements

Resource requirements

Project schedule

Activity cost estimates

Cost baseline

•Make – or – buy

analysis

•Expert judgment

•Contract type

•Procurement

management plan

•Contract statement of

work

•Make – or – buy

decisions

•Requested changes

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Determine what to purchase or acquire and determining

when and how

Type of Contract

Fixed price or Lump-Sum

Fixed Firm Price (FFP)

Fixed Price Incentive Fee (FPIP)

Cost Reimbursable

Cost Plus Percentage of Cost (CPPC)

Cost Plus Fixed Fee (CPFF)

Cost Plus Incentive Fee (CPIF)

Time and Material (T&M)

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Plan Contracting

•Procurement

management plan

•Contract statement of

work

•Make-or-buy decisions

•Project management

plan:Risk register

Risk related contractual

agreements

Resource requirements

Project schedule

Activity cost estimates

Cost baseline

•Standard forms

•Expert judgment

•Procurement

documents

•Evaluation criteria

•Contract statement of

work (updates)

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Documenting products, services, and results requirements

and identifying potential sellers

Procurement Document Type

Bid and Quotation

Generally used when the source selection decision will

be price driven

Proposal

Generally used when non financial consideration such

as technical skills or approach are paramount

Common names of procurement documentsIFB : Invitation for Bid

RFP : Request for Proposal

RFQ : Request for Quotation

IFN : Invitation for Negotiation

Evaluation Criteria

Used to rate or score proposals:

Understanding of need

Overall or life cycle cost

Technical capability

Management approach

Technical approach

Financial capacity

Business size and type

References

Intellectual property rights

Proprietary rights

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Request Seller Responses

•Organizational process

assets

•Procurement

management plan

•Procurement

documents

•Bidder conferences

•Advertising

•Develop qualified

sellers list

•Qualified sellers list

•Procurement

document package

•Proposal

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Obtaining information, quotations, bids, offers, or

proposals, as appropriate

Request Seller Responses

Bidder conferences Contractor/vendor/pre-bid conferences

Meeting with prospective interested sellers prior

to bid/proposal preparation to ensure common

understanding of the procurement, e.g.: Technical requirements

Contract requirements

etc

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Select Sellers

•Organizational process

assets

•Procurement

management plan

•Evaluation criteria

•Procurement

document package

•Proposals

•Qualified sellers list

•Project management

planRisk register

Risk related

Contractual

agreements

•Weighting system

•Independent estimates

•Screening system

•Proposal evaluation

techniques

•Selected sellers

•Contract

•Contract management

plan

•Resources availability

•Procurement

management plan

(updates)

•Requested changes

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Reviewing offers, choosing among potential sellers, and

negotiating a written contract with each seller

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Contract Administration

Managing the contract and relationship between

buyer and seller, reviewing dan documenting

how a seller is performing or has performed to

establish required corrective actions dan provide

a basis for future relationship with the seller, and

managing contract-related changes

Contract Administration

•Contract

•Contract Management Plan

•Selected Seller

•Performance Reports

•Approved Change Request

•Work Performance Information

•Contract Change Control System•Buyer Conducted Performance Review•Inspections and audit•Performance Reporting•Payment System•Claims Administration•Record Management System•Information Technology

•Contract Documentation•Requested Changes•Recommended Corrective Actions•Organizational Process Assets (Updates)•Procurement management plan (updates)

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Project Procurement Management

PM PROCESS

GROUP

PM PROCESS

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting

EXECUTING 12.3 Request Seller Response

12.4 Select Seller

MONITORING &

CONTROLLING

12.5 Contract Administration

CLOSING 12.6 Contract Closure

Contract Closure

•Procurement Management Plan

•Contract Management Plan

•Contract Documentation

•Contract Closure Procedure

•Procurement Audit

•Record Management System

•Closed Contracts

•Organizational Process Assets (updates)

INPUTS TOOLS &

TECHNIQUES

OUTPUTS

Completing and settling each contract, including the

resolution of any open items, and closing each contract

applicable to the project

Thanks