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The 5 Phases of the Vendor Selection Process

The 5 Phases of the Vendor Selection Process
By Keith MathisPM Expert Live

Let’s face it. No matter how hard we try or how much we want it, we can’t do it all. Regardless of the size of your organization, you will eventually come across at least one aspect (usually several) that is not feasible or cost effective to do for yourself. Whether it is buying paper, printer ink, food, or a new MRI machine, you will sooner or later find that you must go in search of a vendor.

Hiring a vendor has several advantages. It can reduce operational costs, enhance working conditions, improve responsiveness, and save significant money.

While outsourcing to a vendor may be necessary, there are also times when it is not wise to do so.

  • If you and the potential vendor do not have the same goals.
  • If you feel like you must micromanage the entire project and process.
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Project Management – Conducting Procurements

Project Management – Conducting Procurements
By Jason Rich, Northwest University

Conducting procurements is where you sign on the dotted line. By now you should have sent out your request of information, proposals and quotes, and are now ready to choose a supplier or vendor. Often times a bidder’s conference may be needed. A bidder’s conference is a meeting with all of the qualified bidders’ to clarify requirements and let the bidders’ ask any questions that they may have before they submit their bids. From there all the bids will be complied and evaluated by you and your team. The evaluation process can be more formal or less so depending on the significance of the procurement. Often the bids or proposals are weighed against specific criteria that have been set by you and the team ahead of time. Once you pick a winner the contract is awarded. Sometimes there may be a formal appeal process that a losing bidder may initiate, this is uncommon in the private sector but may be in place when dealing with government contracts. Read the Complete Article

Planning Procurements in Project Management

Planning Procurements in Project Management
By Jeremy Siegel

The process of planning procurements involves determining the project’s need for materials or services found outside of the organization and documenting those procurements determined to be required. The scope baseline, requirements documentation, and risk register are key inputs for the process. Different tools used include make-or-buy analysis, contract types, and expert judgment. Make-or-buy analysis weighs the pros and cons of making a deliverable internally or buying it externally. Factors such as cost, risk, time, and legal implications should be considered.

The type of contract that governs the procured work should also be decided upon in the planning for procurements phase. Different contracts are appropriate for different situations. For example, if a project’s scope is clearly defined, the buyer might prefer to pay the vendor a fixed price for the work performed because the requirements are known and the cost to the buyer will not increase. Read the Complete Article

How to Develop a Procurement Management Plan for Outsourced Projects

How to Develop a Procurement Management Plan for Outsourced Projects
By Michael D. Taylor

Since those who are assigned to a Procurement Management Team are often nonplused with their role, it is incumbent upon the project manager to facilitate the development of a comprehensive procurement management plan. The plan is to be directed to the PMT, not to the outsourced organizations, and its purpose is to ensure that the PMT understands how it will operate within the project environment, how it will establish subcontracts, and how it will manage and monitor the subcontractors. This plan should include the following aspects:

  • Procurement goals
  • Team roles (RAM)
  • Competitive vs. sole-source rationale
  • List of potential bidders
  • Subcontractor selection method
  • Procurement risk management plan
  • Subcontractor monitoring and control methods

Procurement goals. The specific goals of the eventual subcontract will define not only the objectives of the subcontract around the constraints of time, cost, and scope, but it should include their relative priorities. Read the Complete Article

An Introduction to Procurement Management in Project Management

An Introduction to Procurement Management in Project Management
By Brian EganGlobal 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.

Procurement Steps

  1. 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.

  2. 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).

  3. Distribute bid packages to potential vendors

    Potential vendors can be identified through advertising, the internet, or through an organization’s qualified vendors list.

  4. Bidder’s conferences

    Bidder or vendor conferences are used to efficiently deliver detailed information to potential vendors.

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Contractor/Vendor Selection: Bridging The Communication Gap

Contractor/Vendor Selection: Bridging The Communication Gap (#3 in the series Outsourcing From a Project Manager’s Perspective)
By Susan Peterson

In the continuing series on outsourcing project work this month’s column addresses the challenges related to selecting those individuals and/or organizations that will provide the expertise needed for specific activities. All too often this process is filled with “communication disconnects” in documenting what is needed from contractors/vendors. Whether one uses requests for proposal (RFPs), requests for information (RFIs), or other types of vendor solicitation documents, clear definition is critical. I have participated in the election process in multiple roles including leading the selection process, writing solicitation documents for clients, and responding to client proposals. The following areas are primary considerations to effectively facilitate the project vendor selection and subsequently the contracting process.

Be specific — even if it hurts.

There is no substitute for clarity in specifying what activities need to be performed. Read the Complete Article

Project Managers and Vendors: Creating a Successful Partnership – Part VIII

Project Managers and Vendors: Creating a Successful Partnership – Part VIII (#8 in the series Project Managers and Vendors: Creating a Successful Partnership)
By Linda Miller of Traveling Coaches, Inc.

Project management offices (PMOs) and project managers (PMs) are a necessity in today’s law firms, to ensure that IT projects stay on track. Anyone acting as a PM on a project requiring multiple outside vendors knows that if not managed properly, chaos can reign. Working with your own staff on a project can usually be orchestrated with ease, but throw in a vendor or two (or more) and the project can quickly get out of hand. Creating a successful partnership between vendors and your own project team is a necessity to ensure project success.

Schedule Project Financial Reviews

Develop a financial review meeting schedule with the vendor. The project manager should require the vendor to submit timely information including budgeted versus actual hours used to date and hours (costs) remaining on the project. Read the Complete Article

Project Management – Invitation to Tender

Project Management – Invitation to Tender (#13 in the series Project Management Guide)
By Lasa Information Systems Team

A template for an Invitation to tender document

Background to the Project

Short section, no longer than half a page, setting out an overview of the project, similar to background section in the Project Initiation Document

Supplier response required

This is the key section that sets out what the supplier needs to respond to. It should be laid out in a clear manner that will ensure suppliers approach the ITT in a consistent way, thus facilitating ease of comparison. You may want to consider setting these out in table form, as an appendix.

Scope of the work

This section should be based on the relevant deliverables, laid out as individual bullet points. Should include any associated work such as ongoing support or training of staff. It may also include asking for the experience/views of the supplier on future development options and how this stage of the development might best be used to ensure that future needs can be accommodated. Read the Complete Article

Recommended PM App

Recommended PM App