09 procurement management

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09 procurement management

  1. 1. Project Procurement Management
  2. 2. Agenda• Project Procurement Management – Getting Some Help• 4 Processes – Plan Procurements – Conduct Procurements – Administer Procurements – Close Procurements• Exercise & Recap 2
  3. 3. Project Procurement ManagementPROJECT PROCUREMENTMANAGEMENT – GETTINGSOME HELP 3
  4. 4. Overview 4
  5. 5. Buyer & SellerBuyer Seller• The company or • The company or person who buys the person who provides services the services – You – Contractor – Subcontractor – Vendor 5
  6. 6. Price, Fee, and CostPrice Fee CostThe amount the seller The profit. Planned How much an itemcharges the buyer into the price the costs the seller to seller provides the create, develop, or buyer purchase 6
  7. 7. Project Procurement Management4 PROCESSES OF PROJECTPROCUREMENTMANAGEMENT 7
  8. 8. 4 Processes of Project Procurement ManagementInitiating Planning Executing M&C Closing 12.1 Plan 12.2 12.3 12.4 Close Procuremen Conduct Administer Procuremen ts Procuremen Procuremen ts ts ts || || || || Plan out Decide on Keep tabs Confirm that what you’ll the seller on the the work purchase, (or sellers) contract. was done and how you are Make sure right and when going to your and that all you will work with, company is obligations need the and finalize getting what are fulfilled contracts to and sign the you paid for. on be contract. both sides. negotiated for your 8 project.
  9. 9. Project Procurement ManagementPLAN PROCUREMENTS 9
  10. 10. Input, Output, Tools & TechniquesInput Tools & Techniques Output.1 Scope baseline .1 Make-or-buy .1 Procurement.2 Requirements analysis management plan documentation .2 Expert judgment .2 Procurement.3 Teaming .3 Contract types statements of workagreements .3 Make-or-buy.4 Risk register decisions.5 Risk-related .4 Procurementcontract documents decisions .5 Source selection.6 Activity resource criteria requirements .6 Change requests.7 Project schedule.8 Activity costestimates.9 Cost performance baseline.10 EEFs 10.11 OPAs
  11. 11. Make-or-Buy Analysis• Contract the work or do it yourself? 11
  12. 12. Contract• Purpose – To define roles and responsibilities – To make things legally binding – To mitigate or allocate RISK 12
  13. 13. Contract TypesContract Type ExampleFixed Price Fixed Price (FP) The buyer will pay the seller a total of $285,000 for 18 months of technical support services. Fixed price The buyer will pay the seller a total of $285,000 for 18 incentive fee months of technical support services. An additional (FPIF) $2,750 will be awarded each month that the seller provides an average of 10 issues resolved per person per day and an average wait time of under 3 minutes.Cost- Cost plus fixed The buyer will pay for the cost of phone service, rent fee (CPFF) on the facilities, and employees, plus an additionalreimbursa $2,500 per month.ble Cost plus The buyer will pay for the cost of phone service, rent incentive fee on the facilities, and employees. An additional $2,750 (CPIF) will be awarded each month that the seller provides an average of 10 issues resolved per person per day and an average wait time of under 3 minutes. Cost plus The buyer will pay for the cost of phone service, rent award fee on the facilities, and employees. An additional $5,000 (CPAF) will be paid for exceptional performance. Time and The buyer will pay for the cost of phone service and materials rent on the facilities, plus $4,500 per month for (T&M) employees’ time. Costs will not exceed $14,500 per 13
  14. 14. Contract Type & Risk SellerRisk Buyer FP FPIF T&M CPIF CPAF CPFF 14
  15. 15. Purchase Order• The simplest type of fixed price contract• Usually used for simple commodity procurements 15
  16. 16. Procurement DocumentsDocument DescriptionRFI Request for InformationRFP Request for Proposals request a detailed proposal on how the work will be accomplished, who will do it, resumes, company experience, price, etc.IFB Invitation for Bids usually just request a total price to do all the work.RFQ Request for Quotations request a price quote per item, hour, meter, or other unit of measure.NDA Non-disclosure AgreementSOW Contract statement of workPO Purchase Order… 16
  17. 17. Source Selection Criteria• Number of years in business or financial stability• Understanding of need• Price or life cycle cost• Technical ability• Quality of past performance• Ability to complete the work on time• Project management ability 17
  18. 18. Project Procurement ManagementCONDUCTPROCUREMENTS 18
  19. 19. Input, Output, Tools & TechniquesInput Tools & Techniques Output.1 Project .1 Bidder conferences .1 Selected sellersmanagement plan .2 Proposal evaluation .2 Procurement.2 Procurement techniques contractdocuments .3 Independent award.3 Source selection estimates .3 Resource calendarscriteria .4 Expert judgment .4 Change requests.4 Qualified seller list .5 Advertising .5 Project.5 Seller proposals .6 Internet search management plan.6 Project documents .7 Procurement updates.7 Make-or-buy negotiations .6 Project documentdecisions updates.8 Teamingagreements.9 OPAs 19
  20. 20. Bidder Conferences• Or Contractor Conferences, or Vendor Conferences, or Pre-Bid Conferences• Make sure all of the bidders can compete in a fair, unbiased way 20
  21. 21. Project Procurement ManagementADMINISTERPROCUREMENTS 21
  22. 22. Input, Output, Tools & TechniquesInput Tools & Techniques Output.1 Procurement .1 Contract change .1 Procurementdocuments control documentation.2 Project system .2 OPAs updatesmanagement plan .2 Procurement .3 Change requests.3 Contract performance reviews .4 Project.4 Performance .3 Inspections and management planreports audits updates.5 Approved change .4 Performance requests reporting.6 Work performance .5 Payment systems information .6 Claims administration .7 Records management system 22
  23. 23. Purpose• To stay on top of the seller – to keep your project running • Payment System • Records Management System – to find and fix problems • Claims Administration • Performance Reporting • Inspections and Audits • Contract Change Control System 23
  24. 24. Project Procurement ManagementCLOSE PROCUREMENTS 24
  25. 25. Input, Output, Tools & TechniquesInput Tools & Techniques Output.1 Project .1 Procurement audits .1 Closedmanagement plan .2 Negotiated procurements.2 Procurement settlements .2 OPAs updatesdocumentation .3 Records management system 25
  26. 26. Negotiated Settlements• To make sure that all of the terms of the contract have been met and there are no outstanding claims on it 26
  27. 27. Project Procurement ManagementEXERCISE & RECAP 27

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