An Introduction to Procurement Management in Project Management
By Brian Egan – Global Knowledge
Project procurement activities are often managed by specialists. By this I mean that the procurement department takes over responsibility for purchasing and contract management from the project manager. As a result of this separation of responsibilities, the steps and stages of procurement are often poorly understood by PMs.
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- Make purchase decisions – Planning
Purchase decisions follow from project planning and analysis. Project needs are analyzed and compared with available resources and skills. Anything the organization cannot provide must be procured.
Prepare bid documents
These documents include a SOW statement (Scope of Work), general terms and conditions, bid response instructions, and an explanation of how proposals will be evaluated (source selection criteria).
Distribute bid packages to potential vendors
Potential vendors can be identified through advertising, the internet, or through an organization’s qualified vendors list.
Bidder or vendor conferences are used to efficiently deliver detailed information to potential vendors.
Procurement Management in Project Management – Taking Out a Contract (#4 in the series Procurement Management in Project Management)
By Joseph Phillips
Contracts override everything: promises, email, secret handshakes. As long as they don’t include illegal activities, contracts are backed by the U.S. legal system. A contract is what makes the deal a deal.
To get to the contracting activities, you need to create the procurement documents. The initial document is usually the statement of work (SOW), which describes the thing or service you want to buy. The SOW is provided to the vendor with an invitation to bid (IFB), which you probably also know as a request for quote (RFQ). The IFB and the RFQ are basically the same thing and are focused just on price, not ideas.
A request for proposal wants a price, but also suggestions and ideas on how the project work should be done. Proposals are more than just costs—they’re a bit of consulting from the vendor. Read the Complete Article
Procurement Management in Project Management – Source Selection (#2 in the series Procurement Management in Project Management)
By Joseph Phillips
I know lots of people who like to go shopping. One person (who shall remain nameless, but her initials are LISA) plans her vacations based on the shopping malls in the vicinity of her hotel. She buys an extra seat for the flight home, just to carry all of her new shoes and fancy outfits.
As a project manager, you can’t go project shopping just because shoes are on sale. While sales are good, they don’t always help the project to acquire the things it needs to reach project closure.
There’s nothing better than finding a sale on the hardware or software that your project needs, but you and I know that’s just not the way technology and procurement usually works. We have to shop, compare, evaluate, and eventually cough up the cash to get what our projects need. Read the Complete Article