subject: Develop A Procurement Plan [print this page] PROCUREMENT MANAGEMENT includes: PROCUREMENT MANAGEMENT includes:
contract administration and management
change control necessary to administer contracts or purchase orders
administering contracts issued by the buyer
administering contractual obligations placed on the project team by contract
PROCUREMENT MANAGEMENT involves the processes of:
planning procurements
conducting procurements
administering procurements
closing procurements
A CONTRACT is a mutually binding agreement, purchase order, or subcontract that obligates the seller to provide the specified product, service, or result and obligates the buyer to pay for it. It is a legal relationship subject to remedy in the courts, and reflects the simplicity or complexity of the deliverables.
THE PURPOSE OF THE CONTRACT REVIEW AND APPROVAL PROCESS is to ensure the language describes products, services, and results that will satisfy the identified project need. PMP exam content includes the concept of contrac review, and users preparing to take the test and using PMP Exam Prep should be comfortable with this topic.
ACTIVELY MANAGING THE CONTRACT LIFE CYCLE and specific terms and conditions language within the contract helps avoid, or mitigates, some identified project risks.
Project procurement management operates within the buyer-seller relationship. Usually, but not always, the "buyer" is within the project team, and the "seller" is external to the project team. This is an important concept and should be thoroughly understood in terms of project management processes.
Depending on the application, a seller may be a:
contractor
subcontractor
vendor
service provider
supplier
Depending on the buyer's position in the project acquisition cycle, the buyer may be a:
client
customer
prime contractor
contractor
acquiring organization
government agency
service requestor
purchaser
THE PLAN PROCUREMENTS PROCESS documents the purchasing decisions for the project, including specifying the approach for procurement and identifying potential sellers.
THE PLAN PROCUREMENTS PROCESS includes reviewing make-or-buy decision risks, as well as the type of contract planned in order to mitigate risks and transferring them to the seller. It also includes consideration of potential sellers.
THE PLAN PROCUREMENTS PROCESS determines:
what to purchase or acquire
when to purchase it
how it will be purchased
If the buyer wants to exercise some degree of influence or control over contracting decisions, they should consider who is responsible for relevant permits and professional licenses required by legislation, regulation, or organizational project execution policies.
INPUTS TO THE PLAN PROCUREMENTS PROCESS include:
requirements documentation
scope baseline
teaming agreements
activity resource requirements
the project scope baseline
activity resource estimating and cost estimates
cost performance baseline
project schedule
risk register and risk related contract information
