Saturday, 8 August 2015

PMP- Chapter 12- Project Procurement Management Notes


  • to purchase or acquire products, services or results needed from outside the proj. team.
  • controlling any contract issued by an outside org.
  • administering contractual obligations
12.1 Plan Procurement Management
  • documenting proj. procurement decisions, specifying the approach, and identifying potential sellers
  • determine whether to acquire outside support, what to acquire, how to acquire, how much is need and when to acquire.
  • inputs:-
    • project management plan
      • project scope statement
      • WBS
      • WBS dictionary
    • requirements documentation(5.2)
    • risk register(11.2)
    • activity resource requirements(6.4)
    • project schedule(6.6)
    • activity cost estimates(7.2)
    • stakeholder register(13.1)
    • EEF
    • OPA
      • fixed price contracts
        • firm fixed price contracts(FFP) - price for goods is set at the outset and not subject to change unless the scope of work changes
        • fixed price incentive fee contracts(FPIF) - with financial incentives tied to achieving agreed upon metrics. with a ceiling is set.
        • fixed price with economic price adjustment contracts(FP-EPA) - period spans a considerable period of years, long term relationships. special provision allowing final adjustments to the contract price due to changed conditions. eg, inflation changes.
      • cost-reimbursable contracts - scope of work cannot precisely defined at start, high risk
        • cost plus fixed fee contracts(CPFF) - fixed fee payment
        • cost plus incentive fee contracts(CPIF) - predetermined incentive fee based upon achieving certain performance obj.
        • cost plus award fee contracts(CPAF) - fee earned based on satisfaction of certain broad subjective performance criteria defined.
      • time and material contracts(T&M) - often used for staff augmentation, acquisition of experts when precise work cannot be quickly prescribed.
  • tools and techniques:-
    • make or buy analysis
      • whether particular work can accomplished by proj. team or purchased outside.
      • budget constraints influence decisions
      • consider direct and indirect cost.
    • expert judgement
    • market research - identify market capabilities
    • meetings
  • outputs:-
    • procurement management plan
    • procurement statement of work
      • describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products, services or results
    • procurement documents
      • solicit proposals from prospective sellers (request for information-RFI, invitation for bid-IFB, request for proposal-RFP, request for quotation-RFQ, tender notice, invitation for negotiation, invitation for seller's initial response.)
    • source selection criteria- criteria developed and used to rate or score seller proposals,can be objective or subjective
    • make or buy decisions
    • change request
    • project docs updates
12.2 Conduct Procurements
  • obtaining seller responses, selecting a seller and awarding a contract
  • weighting system
  • inputs:-
    • procurement management plan
    • procurement documents
    • source selection criteria
    • seller proposals
    • project documents
    • make or buy decisions
    • procurement statement of work
    • OPA
  • tools and techniques:-
    • bidder conferences - contractor/vendor conferences, ensure all prospective sellers have a clear and common understanding of procurement requirements and no bidders receive preferential treatment.
    • proposal evaluation techniques
    • independent estimates- estimate of cost prepared by outside professional estimator
    • expert judgement
    • advertising - government jurisdictions
    • analytical techniques- past performance information
    • procurement negotiations
  • outputs:-
    • selected sellers
    • agreements- a contract is a mutual binding legal agreement that obligates the seller to provide specified product, services or result and obligates to the buyer to compensate the seller.
    • resource calendars
    • change request(4.5)
    • project management plan updates
    • project documents updates
12.3 Control Procurements
  • managing procurement relationships, monitoring contract performance, and making changes and corrections to contracts as appropriate.
  • contract administration as an administrative function separate from proj. procurement administrator maybe on the proj. team.
  • inputs:-
    • project management plan(4.2)
    • procurement documents(12.1)
    • agreements(12.2)
    • approved change request
    • work performance reports(4.4)
    • work performance data(4.3)
  • tools and techniques:-
    • contract change control system
    • procurement performance reviews
    • inspection and audits
    • performance reporting
    • payment systems
    • claims administration
      • requested changes when buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change occurred. claims, disputes or appeals. claims and disputes through negotiation is preferred method.
    • records management system
      • manage contract and procurement documentation and records
  • outputs:-
    • work performance information
    • change requests
    • project management plan updates
      • procurement management plan
      • schedule baseline
      • cost baseline
    • project documents updates
    • OPA
      • correspondence
      • payment schedule and requests
      • seller performance evaluation documentation
12.4 Close Procurements
  • completing each procurement
  • documents agreements and related documentation for future reference
  • finalizing open claims, updating records to reflect final results and archiving such information for future use
  • inputs:-
    • project management plan
    • procurement documents
  • tools and techniques:-
    • procurement audits - identify successes and failures
    • procurement negotiations
    • records management system
  • outputs:-
    • closed procurement- formal written notice by buyer
    • OPA
      • procurement file
      • deliverable acceptance
      • lessons learned documentation


Reference: PMI PMBOK 5th Edition

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