12.1 Plan procurement management
Inputs
Project management plan
Requirements documentation
Risk Register
Activity resource requirements
Output of 6.4 – Estimate activity resources of time management KA
Project schedule
Activity cost estimates
Stakeholder register
Enterprise Environmental Factors
Please refer to the common ITTOs
Organizational Process Assets
The important organizational process assets referred to here involves contract types which are:
- Fixed price contracts that can be of type FFP (Firm Fixed Price), FPIF (Fixed Price Incentive Fee) and FPEPA (Fixed Price with Economic Price Adjustment).
- Cost reimbursable contracts that can be of type Cost Plus Fixed Fee (CPFF), Cost Plus Incentive Fee (CPIF), and Cost Plus Award Fee (CPAF).
- Time & Material contracts in which the vendor charges the customer for the length of time that the human resources and material resources are deployed for the project.
Tools and Techniques
Make-or-Buy analysis
A make-or-buy analysis is a general management technique used to determine whether particular work can best be accomplished by the project team or should be purchased from outside sources.
Market research
Market research includes examination of industry and specific vendor capabilities. Procurement teams may leverage information gained at conferences, online reviews and a variety of sources to identify market capabilities.
Expert judgment
Meetings
Please refer to the common ITTO section
Output
Procurement management plan
The procurement management plan is a component of the project management plan that describes how a project team will acquire goods and services from outside the performing organization.
Procurement statement of work
The statement of work (SOW) for each procurement is developed from the project scope baseline and defines
only that portion of the project scope that is to be included within the related contract. The procurement SOW
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describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products, services, or results.
Procurement documents
Procurement documents are used to solicit proposals from prospective sellers. Terms such as bid, tender, or quotation are generally used when the seller selection decision will be based on price (as when buying commercial or standard items), while a term such as proposal is generally used when other considerations, such as technical capability or technical approach are paramount. Common terms are in use for different types of procurement documents and may include request for information (RFI), invitation for bid (IFB), request for proposal (RFP), request for quotation (RFQ), tender notice, invitation for negotiation, and invitation for seller’s initial response.
Source selection criteria
Source selection criteria are often included as a part of the procurement documents. Such criteria are developed and used to rate or score seller proposals, and can be objective or subjective.
Make-or-Buy decisions
A make-or-buy analysis results in a decision of whether particular work can best be accomplished by the project team or needs to be purchased from outside sources.
Change requests
Project document updates
12.2 Conduct procurements
Input
Procurement management plan
Procurement documents
Source selection criteria
Seller proposals
Project documents
Make or buy decisions
Procurement statement of work
Organizational Process Assets
Please refer to the previous section and common ITTO section.
Tools and Techniques
Bidder conferences
Bidder conferences (sometimes called contractor conferences, vendor conferences, and pre-bid conferences)
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are meetings between the buyer and all prospective sellers prior to submittal of a bid or proposal. They are used to ensure that all prospective sellers have a clear and common understanding of the procurement requirements, and that no bidders receive preferential treatment.
Proposal evaluation techniques
On complex procurements, where source selection will be made based on seller responses to previously defined weighted criteria, a formal evaluation review process will be defined by the buyer’s procurement policies.
Independent estimates
For many procurement items, the procuring organization may elect to either prepare its own independent estimate, or have an estimate of costs prepared by an outside professional estimator, to serve as a benchmark on proposed responses.
Expert judgment
Advertising
Analytical techniques
Procurement negotiations
Procurement negotiations clarify the structure, requirements, and other terms of the purchases so that mutual agreement can be reached prior to signing the contract.
Output
Selected sellers
The selected sellers are those who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when an award is made.
Agreements
A procurement agreement includes terms and conditions, and may incorporate other items that the buyer specifies regarding what the seller is to perform or provide. It is the project management team’s responsibility to make certain that all agreements meet the specific needs of the project while adhering to organizational procurement policies.
Resource calendars
Resource calendars document the time periods that each project team member is available to work on the project.
Change requests
Project management plan updates
12.3 Control procurements
Input
Project management plan
Procurement documents
Agreements
Approved change requests
Work performance reports
Work performance data
Please refer to the previous section and common ITTO section.
Tools and Techniques
Contract change control system
A contract change control system defines the process by which the procurement can be modified. It includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary for authorizing changes.
Procurement performance reviews
A procurement performance review is a structured review of the seller’s progress to deliver project scope and quality, within cost and on schedule, as compared to the contract. It can include a review of seller-prepared documentation and buyer inspections, as well as quality audits conducted during seller’s execution of the work.
Inspections and audits
Performance reporting
Work performance data and reports supplied by sellers are evaluated against the agreement requirements.
Payment systems
Payments to the seller are typically processed by the accounts payable system of the buyer after certification of satisfactory work by an authorized person on the project team.
Claims administration
Contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred. These contested changes are variously called claims, disputes, or appeals. Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract.
Records management system
A records management system is used by the project manager to manage contract and procurement documentation and records. It consists of a specific set of processes, related control functions, and automation tools that are consolidated and combined as part of the project management information system
Output
Work performance information
Change requests
Project management plan updates
Project documents updates
Organizational process assets updates
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