Managing Projects
Assignment 1
Project Procurement
Management
Moiz Ahmed Rana
12443115
What is
Project
Procuremen
t
Manageme
nt?
The PMBOK defines project procurement management
as
the processes necessary to purchase or acquire the
products, services, or results needed from outside
the project team
Component
s of
Procuremen
t Process
Plan purchases and acquisitions
Plan contracting
Request seller responses
Select sellers
Contract administration
Contract closure
Identifying what to purchase and acquire
Determining when and how to acquire
Plan
Purchases &
Acquisitions
Includes reviewing of risks in make or buy decisions
Project schedule is a key input to create plan
purchases and acquisitions process
Includes consideration of potential sellers
Plan
Contracting
Documentation of products, services and results
requirements
Includes descriptions for procurement items
Documents help in getting response from prospective
sellers
Request
Seller
Responses
Process of obtaining bids, information, offers or
proposals by seller
Meetings or conferences are held with the bidders
Bidders can be sought through advertising
Bidders present their prices, history of relevant work
The stage in which sellers are selected through
evaluation
Select
Sellers
Certain factors are considered while choosing the
seller such as:
Prior performance
Cost/Price
Experience in the requirement
Capability and capacity
After a seller is selected, a contract is made between
the buyer and seller
Contract secures the rights of both parties
Contract
Administrati
on
Used for review or documentation of sellers
performance based on the contract
Documentation can be used for future relationships
with seller
Types of contract are fixed fee, time and material,
unit price, cost plus (anything) and incentive fee
contract.
Supports the project closure process
Contract
Closure
Verifies that all works and deliverables were
acceptable
Payments must be cleared before contract closure
Procurement audits are carried out
Plan purchases
and acquisition
Case Study
(Installation
of electrical
equipment
on the
construction
site)
Determine the electrical equipment and materials needed
in the project
Plan when they are required on the site and their
installation dates
Plan
Contracting
Descriptions and numbers of the required materials are
determined
For example the number of receptacles, their types and
standards are determined
Request Seller
Responses
The request for bids are advertised for example through
newspapers
Meetings are held with the bidders
Select Sellers
After evaluation, a seller is selected a seller is selected
which has a lower bid and is reputed
Contract
Administration
Contract
Closure
A contract is made between the contractor and the seller
After the job is done and the payment is made, the
necessary inspection is carried out and the contract is
closed
Carr, Peter. "Week 8: Project Procurement Management".Project
Leadership. N.p., 2011. Web. 27 Apr. 2016.
<https://projectleadershipwaterloo.wordpress.com/2011/12/05/wee
k-8-project-procurement-management/>
Ghosh, Arindam. "Understanding Project Procurement
Management: ASP Alliance".Aspalliance.com. N.p., 2016. Web. 27
Apr. 2016.
<http://aspalliance.com/1149_Understanding_Project_Procurement_
Management.2>
References
"What Is Procurement & How To Plan Project
Purchases?".Mymanagementguide.com. N.p., 2013. Web. 27 Apr.
2016. <http://www.mymanagementguide.com/what-isprocurement-and-how-to-plan-project-purchases/>
"Real World Project Management: Procurement
Management".Project Smart. N.p., 2016. Web. 30 Apr. 2016. <
https://www.projectsmart.co.uk/real-world-project-management-p
rocurement-management.php
>
"Supplier Selection Guidline". 1.6 (2016): n. pag. Print.
<http://www.spb.sa.gov.au/sites/default/files/Supplier%20Selection
%20Guideline%20v%201.6%20April%202016_2.pdf>
