The document outlines a project procurement plan, including details on creating a master procurement plan for multi-year projects. The master plan would include descriptions of goods needed, estimated costs, procurement types, and contract types for each year. An annual procurement plan would then be formulated from the master plan, including more specific timelines, decision criteria, vendor management processes, and performance metrics to track procurement activities.

1. Project Procurement Plan

2. Starting the procurement…
• Project team has to prepare the Procurement
Plan
• It can be Master Plan
• It can be Annual plan

3. • Master plan for projects running for more
than one year
• Master plan is usually prepared for the life of
the period
• Annual plan is formulated on the basis of
master Plan

4. Master Plan example
Product Specificatio
n
Estimated
cost
Procuremen
t type
Type of
contract
Year 1 Transport
vehicle
Able to carry
10,000 kg
load ,fuel
efficient,
four wheel,
45,00,000 RFQ Fixed
price/single
contract
Year 2
Year 3
Year 4
Year 5

5. Content of Master plan
• Description of Goods: type quantity and
estimated cost
• Procurement type
• Type of contract
• Time schedule of procurement ( only annual
detail optional)

6. Procurement types
• International competitive bidding
• National competitive bidding(above Rs 10
lakh)
• Quotation(shopping method) (upto 10 Lakh)
• Direct purchase(upto 1.5 lakh)

7. Types of Contract
• Single contract vs Package contract
• Fixed cost contract
• Turnkey contract
• Time and material contract
• Cost reimbursible contract
• Multi arrear contract

8. • Turnkey contract : the contract covers all the
activities to bring the final output of the
contract in a running condition

9. Time and material contract
• Time-and-materials contracts provide for acquiring
supplies or services on the basis of direct labor hours
at a set rate.
• The rate includes wages, overhead, general and
administrative expenses, cost for materials and
profit.
• Time and materials contracts are used when it has
been impossible presenting an accurate estimate or
where the schedule cannot be defined.

10. Cost reimbursible contract
• A cost-reimbursable contract is a variant of a
contract that involves making a payment from
the buyer to the seller in reimbursement for
the seller’s actual costs
• Those categories are direct costs and indirect
costs.

11. What is reimbursed to a supplier
• Direct costs are defined as the costs that have
been incurred only for the purpose of the
project eg cost can be the salaries of the full
time staff members, or equipment purchased
exclusively for use in the project.
• Indirect costs represent costs refer to costs,
such as administrative costs and general
overhead costs.
• PLUS a fee or profit

12. Multi arrear contract
• It is extendable contract

13. Master Plan
Product Specificatio
n
Estimated
cost
Procuremen
t process
Type of
contract
Year 1 Transport
vehicle
Able to carry
10,000 kg
load ,fuel
efficient,
four wheel,
45,00,000 RFQ Fixed
price/single
contract
Year 2
Year 3
Year 4
Year 5

14. What is there in annual plan
• Details of products and detail specification
(drawings) with justification statements and
timelines
• Type of contract to be used
• Contract approval process
• Decision criteria
• Establishing contract deliverables and deadlines
• Vendor Management
• Contract administration and close
• Performance metrics for procurement activities

15. Produ
ct
Type of
procurem
ent
Type of
contract
Procurem
ent
process
start
Decision
Criteria
Vendor
manageme
nt
Transpor
t vehicle
45,00,
000
quotation Specific
goods and
service
contract
July 2011
45 Days
lead time
LC with
evaluation(Pa
st record of
vendor,
delivery date,
brand image,
technical
inspection,
delivery date)
Schedule of
after sales
service and
other
support
Abel to
carry
10,000
kg load,
fuel
efficient,
four
wheel,

16. What is contract approval process
• purpose of this section is to define the process
through which contracts must be approved.
• Mention of the procurement team

17. Establishing contract delivery ad
dead lines
• Prepare the schedule of delivery deadlines

18. Establishing decision criteria
• The purpose of this section is to define the
criteria used by the contract review board to
decide on selecting the eligible suppliers
• There are three bid evaluation approaches
Least cost method
Least cost with quality evaluation
Best value of money
• Supplier evaluation and product evaluation
criteria to be fomulated on basis of above

19. • Least cost method(selection based on lowest
bidder)
– Without evaluation of supplier
– With evaluation and minimum score requirement
for suppler
• Best value of money
There is weightage for technical evaluation and
financial evaluation
Different Bid opening methods

20. Vendor management
• To Ensure the vendor buyer relationship
-Schedule meeting and review with vendor
-Type of after sales service required

21. Contract administration and close
• Process of administering the contract after
contract has been signed
• How to close the account

22. Performance metrics
• Compile data on the performance of various
vendors in order to assist with future
procurement activities’ vendor selection
criteria.