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 PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
CLOSING 12.6 Contract Closure
Plan Purchases and Acquisitions
Determine what to purchase or acquire and determining
when and how
•Enterprise
Environmental Factors
•Organizational Process •Procurement
Assets management plan
•Project Scope Statement
•WBS •Make – or – buy •Contract statement of
•WBS Dictionary
analysis work
•Project Management
Plan
Risk register •Expert judgment •Make – or – buy
Risk related contractual decisions
agreements •Contract type
Resource requirements •Requested changes
Project schedule
Activity cost estimates
Cost baseline

INPUTS TOOLS & OUTPUTS

TECHNIQUES
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 PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
CLOSING 12.6 Contract Closure
Plan Contracting
Documenting products, services, and results requirements
and identifying potential sellers

•Procurement
management plan
•Contract statement of
work •Procurement
•Make-or-buy decisions •Standard forms documents
•Project management
plan: •Expert judgment •Evaluation criteria
Risk register
Risk related contractual •Contract statement of
agreements work (updates)
Resource requirements
Project schedule
Activity cost estimates
Cost baseline

INPUTS TOOLS & OUTPUTS

TECHNIQUES
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 documents
IFB : 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 PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
CLOSING 12.6 Contract Closure
Request Seller Responses
Obtaining information, quotations, bids, offers, or
proposals, as appropriate

•Organizational process
assets
•Bidder conferences •Qualified sellers list
•Procurement
management plan •Advertising •Procurement
document package
•Procurement •Develop qualified
documents sellers list •Proposal

INPUTS TOOLS & OUTPUTS

TECHNIQUES
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 PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
CLOSING 12.6 Contract Closure
Select Sellers
Reviewing offers, choosing among potential sellers, and
negotiating a written contract with each seller
•Organizational process
assets •Selected sellers
•Procurement •Weighting system •Contract
management plan •Contract management
•Evaluation criteria •Independent estimates plan
•Procurement •Resources availability
document package •Screening system •Procurement
•Proposals management plan
•Qualified sellers list •Proposal evaluation (updates)
•Project management techniques •Requested changes
plan
Risk register
Risk related
Contractual
agreements

INPUTS TOOLS & OUTPUTS

TECHNIQUES
Project Procurement Management
PM PROCESS PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
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 Change Control
•Contract Management System •Contract Documentation
Plan •Buyer Conducted •Requested Changes
Performance Review •Recommended
•Selected Seller •Inspections and audit Corrective Actions
•Performance Reporting •Organizational Process
•Performance Reports •Payment System Assets (Updates)
•Claims Administration •Procurement
•Approved Change •Record Management management plan
Request System (updates)
•Information Technology
•Work Performance
Information
INPUTS TOOLS & OUTPUTS
TECHNIQUES
Project Procurement Management
PM PROCESS PM PROCESS
GROUP

INITIATING -

PLANNING 12.1 Plan Purchases and Acquisition

12.2 Plan Contracting
EXECUTING 12.3 Request Seller Response
12.4 Select Seller
MONITORING & 12.5 Contract Administration
CONTROLLING
CLOSING 12.6 Contract Closure
Contract Closure
Completing and settling each contract, including the
resolution of any open items, and closing each contract
applicable to the project

•Procurement
Management Plan

•Contract Management •Procurement Audit •Closed Contracts

Plan
•Record Management •Organizational Process
•Contract Documentation System Assets (updates)

•Contract Closure
Procedure

INPUTS TOOLS & OUTPUTS

TECHNIQUES
Thanks