Processes of Project Procurement Management & Procurement Management Plan
Introduction
Project procurement management entails the processes that are needed during the acquisition of goods and services from outside entities that outsource to the organization. The processes of project procurement and management are described with respect to inputs, which are the supporting documents and plans; tools and techniques, which involve the various mechanisms that are applied to the various inputs; and the outputs, which include items such as products and their documentation (Project management Institute, 2008). This paper presents an analysis of the six distinctive processes of project procurement management and procurement management plan. The six steps discussed in this paper are procurement planning, solicitation planning, solicitation, source selection, contract administration and finally contract close out. There is interaction within each of the above processes and also with outside knowledge bases in order to ensure effective implementation of the project procurement management and project procurement plan.
The first step is procurement planning, which involves the identification of the project needs that can be realized outsourcing services and products outside the organizational boundaries. Basically, it entails appropriate decision making on whether to undertake procurement, how the procurement is to be done, specific products and services to be procured, the amount and the timing of the procurement. It is also important to put into consideration the possibility of other prospective subcontracts, especially in cases whereby the buyer wants to exercise some sort of control in the decisions involving subcontracting. Some of the inputs at this stage include the scope statement, the description of the product, the conditions of the market, the underlying assumptions and any constraints (Bernate, 2009). The tools and techniques that can be deployed at this stage include expert judgment and the selection of the contract type. Outputs at this process can be in form of procurement management plan and other statements of work.
Solicitation planning is the second phase of procurement management and usually involves the preparation of the necessary documents that are required to facilitate the gathering of information from the potential sellers concerning how the project requirements will be achieved. Some of the inputs at this phase include the planning outputs from the procurement planning phase. The tools and techniques that can be applied at this phase can include expert judgment and standard forms. The various outputs of this process are the procurement documents, the established evaluation criteria and an update on the statements of work. It is important for the outputs to be clear and precise in order to facilitate the effectiveness of the process (Fleming, 2003).
Solicitation is the third process in project procurement and management, and usually involves the use of the outputs from the solicitation planning in order to gather data from the potential sellers with respect to how the bidders will meet the requirements of the project. It is important to note that most of the efforts at this stage are from the sellers, and the project incurs minimal cost towards the activities in this phase. Some of the inputs at the solicitation stage include the procurement documents and qualified seller lists. Tools and techniques that can be deployed at this phase include advertising and bidder conferences. Outputs are usually in the form of proposals (Project management Institute, 2008).
Source selection is the fourth step in the project procurement and management and usually entails the receipt of the bids. It also entails the evaluation of the applications with respect to the evaluation criteria in order to choose the outsourcer. Variables such as price, technical approaches are taken into consideration and evaluated separately. Inputs at the source selection phase include the proposals, the criteria for evaluation and the various organizational policies. Tools and techniques that can be deployed during source selection include contract negotiation, screening and the weighting system, and use of other independent estimates. The outputs at this stage could be the actual contracts (Project management Institute, 2008).
The fifth stage is contract administration, which refers to the process of making sure that the provider meets the requirements in accordance with the contractual agreements. Most contracts are legally bound, implying that the project team must have some relevant knowledge on the legal implications of the various activities undertaken during contract administration. Principally, contract administration includes the deployment of suitable project management practices to the relationships bound by the contract, and the assessment of the outputs of the contract into the general project management process. Some of the inputs of this phase are the contract, change requests and the results of the work. Tools and techniques that can be deployed include the payment system, reporting on performance. Outputs include correspondence and contact changes (Project management Institute, 2008).
Contract close out is the sixth and the last phase of project procurement and management, which involves the verification of the product and the official administrative closure of the project. Product verification involves ensuring that the project was done as required in a satisfactory manner, while administrative closure involves the updating of the relevant records to depict the outcomes of the project for use in future. The contract documentation is a key input in this phase, while the procurement audits are the significant tools and technique that can be deployed at this phase. Outputs include the contract file and official acceptance and closure
References
Bernate, G. (2009). A Comparison of PMI's PMBOK Versions 4 & 3. PM World Today , 11 (5),
1-17.
Fleming, Q. W. (2003). Project Procurement Management,Contracting,Subcontracting,Teaming.
California: FMC Press.
Project management Institute. (2008). A Guide to the Project Management Body of Knowledge.
South State Road, Upper Darby, PA: Project Management Institute.
