Procurement ManagementThe processes required to acquire goods and services, to attain project scope, from outside the performing organization Show
Plan Procurement's ManagementThe process of documenting project purchasing decisions, specifying the approach, and identifying potential sellers INPUTS1. Project management plan The project management plan describes the need, justification, requirements, and current boundaries for the project. (Scope statement - WBS -WBS dictionary) 2. Requirements documentation Requirements with contractual and legal implications that may include health, safety, security, performance, environmental, insurance, intellectual property rights, equal employment opportunity and Licenses, and permits . 3. Risk register The risk register provides an understanding of risks uncovered to date. 4. Activity resource requirements Activity resource requirements contain information on specific needs such as people, equipment, or location. 5. Project schedule Project schedule contains information on required timelines or mandated deliverable dates. 6. Activity cost estimates Cost estimates developed by the procuring activity are used to evaluate the reasonableness of the bids or proposals received from potential sellers. 7. Stakeholder register Stakeholder register provides details on the project participants and their interests in the project. 8. Enterprise environmental factors These factors are company culture and existing systems that your project will have to deal with or can use. ü Marketplace conditions. ü - Products, services, and results that are available in the marketplace. ü - Suppliers, including past performance or reputation. ü - Typical terms and conditions for products, services, and results or for the specific industry. ü - Unique local requirements. 9. Organizational process assets - Formal procurement policies, procedures, and guidelines. - Most organizations have formal procurement policies and buying organizations. - Management systems that are considered in developing the procurement management plan and selecting the contract types to be used. - An established multi-tier supplier system of pre-qualified sellers based on prior experience. Fixed Price (FP, or Lump Sum, Firm Fixed Price)
- Contract = $250M.1. Fixed Price Incentive Fee (FPIF)
Contract = $110 M. An additional $10,000 or percentage/month early the project is finished will be paid to the seller. 2 . Fixed Price Award Fee (FPAF)
3. Fixed Price Economic Price Adjustment (FPEPA)
A similar type of contract is called fixed price with prospective price re determination. Contract = $110 M, but a price increase will be allowed in year two based on the U.S. Consumer Price Index report for year one. Contract = the contract price is $110 M but a price increase will be allowed in year two to account for increases in specific material costs. Purchase Order (PO)
This type of contract is normally unilateral (signed by one party) instead of bilateral (signed by both parties).
- Contract to purchase 30 M.L. of wood at $9 per meterTime and Material (T&M) or Unit Price
- Contract = $100 /hour + expenses or materials at cost.- Contract = $100 /hour + materials at $5/L.M of wood. Cost Reimbursable (CR)
Cost Contract :
- Contract = Cost. (without profit).1. Cost Plus Percentage of Costs (CPPC) OR Cost Plus Fee (CPF)
- Contract = Cost + 10% of costs as fee. 2. Cost Plus Fixed Fee (CPFF)
- Contract = Cost + $100,000 .3. Cost Plus Award Fee (CPAF)
Maximum award available is $50,000- Contract = Cost + an award fee (to be determined) for each deliverable completed at least 7 days early. 4. Cost Plus Incentive Fee (CPIF)
- Contract = Cost estimated + $100,000 (target fee)
TOOLS AND TECHNIQUES1. Make-or-buy analysis
What is the process of documenting procurement decisions specifying the approach and identifying potential sellers?Plan procurement is a process of documenting project purchasing decisions, specifying the approach, and identifying potential sellers.
What are the 4 main processes of project procurement management?There are four key processes involved in product procurement management:. Planning procurement. Planning procurement involves a series of steps that help determine which resources an organization needs for project completion and the extent of its budget. ... . Conducting procurement. ... . Controlling procurement. ... . Closing procurement.. What is the procurement process that involves obtaining seller responses selecting a seller and awarding a contract called?Conducting procurements involves obtaining seller responses, selecting sellers and awarding contracts.
Which procurement document is generally used to develop lists of qualified vendors or sellers?Request for Proposal (RFP)
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