This document provides an overview of a training session on PMP and CAPM exam preparation. It discusses the key topics covered in each of the sessions, including the nine knowledge areas and five process groups. It then goes into detail about project procurement management, explaining the processes of planning procurements, conducting procurements, administering procurements, and closing procurements.

1. PMP & CAPM
Exam Preparation
March 5, 2013

2. Sessions
1. About the exam
2. Integration & Scope Management
3. Time & Cost Management
4. Quality & HR Management
5. Communication & Risk
Management
6. Procurement Management

3. Last Session Key point
• Process groups: IPEMCC
• 9 Knowledge Area: ISTiCoQuHurCoRiP
• Project Integration Management
– DevPC.PMP.DirManPex.MoConPW.PerICC.CloPP
• Project Scope Management
– CoDeWoBVCon

4. Last Session Key point – cont’d
• Project Time Management (DeSeReDDevCon)
• Project Cost Management (EsCDeBCon)
• Project Quality Management (PlanQAQC)
• Project Human Resources (Plan ADM)
• Project Communication Management (IdS
Plan DisInt ManSEx RepPer)
• Project Risk Management (PlanR IdR QQ Rp
MC)

5. Project Procurement Management
• Plan Con Ad Close

6. Project Procurement Management
• To acquire / purchase products, services, or
results needed from outside the project team
• Includes contract management
• Contracts: legal document between buyer and
seller, represents a legally binding agreement
which obligates the seller to provide the
specified products, services, or results and
obligates the buyer to provide monetary or
other valuable consideration

7. Project Procurement Management

8. Project Procurement Management
• A complex project may involve managing
multiple contracts or subcontracts
simultaneously or in sequence
• Seller = contractor, subcontractor, vendor,
supplier, service provider
• Buyer = client, customer, prime contractor,
acquiring organization, purchaser, requestor

9. Project Procurement Management
• This chapter assumes as buyer and seller is
external provider

10. Project Procurement Management
• Plan Procurements
• Documenting project purchasing decisions
• Specify purchasing approach
• Identifying potential sellers
• Answers, “Should we acquire it externally?, What
to require, How to require, How much and When
to acquire”

11. Project Procurement Management
• Plan Procurements

12. Project Procurement Management
• Plan Procurements – I
• Scope baseline (…)
• Requirement documentation
• Teaming agreements
• Joint ventures, partnerships, or other
form of agreements between defined
parties

13. Project Procurement Management
• Plan Procurements – I (cont’d)
• Risk register
• Risk related contract decisions
• Activity resource requirements
• Project schedule
• Activity cost estimates
• Cost performance basline
• EEF

14. Project Procurement Management
• Plan Procurements – TT
• Make-or-buy analysis
• Expert judgment
• Contract types
Fixed-price contract
Cost-reimbursable contract
Time and material

15. Project Procurement Management
• Plan Procurements – TT (cont’d)
• Contract types (cont’d)
Fixed-price contract
– Firm fixed price (FFP)  buyer preffered
– Fixed price incentive fee (FPIF)
 Set price ceiling
 Price is based on seller’s performance
related to cost, schedule, or technical
performance

16. Project Procurement Management
• Plan Procurements – TT (cont’d)
• Contract types (cont’d)
Fixed-price contract (cont’d)
– Fixed price with economic price adjustment
(FP-EPA)  usually a very long project
 Takes inflation and commodities cost,
into account
 Relies on financial index

17. Project Procurement Management
• Plan Procurements – TT (cont’d)
• Contract types (cont’d)
Cost reimbursable contract
– Cost plus fixed fee (CPFF)
– Cost plus incentive fee (CPIF)
 Seller can reimburse allowable costs
 Based on seller’s performance
 Utilizes sharing formula, e.g.: 80/20

18. Project Procurement Management
• Plan Procurements – TT (cont’d)
• Contract types (cont’d)
Cost reimbursable contract (cont’d)
– Cost plus award fee (CPAF)
 Subjective determination of seller
performance by buyer
 Not a subject for appeals

19. Project Procurement Management
• Plan Procurements – TT (cont’d)
• Contract types (cont’d)
Time and Material
– A hybrid type
– Used when a precise statement of work
cannot be quickly prescribed
– A form of cost reimbursable if it is left open
ended
– A form of fixed price if buyer limits
parameters and apply unit labor cost

20. Project Procurement Management
• Plan Procurements – O
• Procurement management plan
 Contract type, risk management issue
 Evaluation criteria, multiple contracts criteria
 Constraints and assumptions, etc

21. Project Procurement Management
• Plan Procurements – O (cont’d)
• Procurement statement of work
 Developed from project scope baseline and
defines only a portion of project scope to be
included in related contract
 Must be in sufficient detail so that prospective
sellers can determine their capability to
provide such product, service, or results

22. Project Procurement Management
• Plan Procurements – O (cont’d)
• Procurement statement of work (cont’d)
 Includes specifications, quantity, quality
levels, performance data, performance
period, work location, etc
 Must be clear, complete, and concise
 Multiple products / services can be grouped
into single SOW
 Is subject to change until a contract is awarded

23. Project Procurement Management
• Plan Procurements – O (cont’d)
• Make-or-buy decisions
 May include decision to require insurance
policies or performance bonds to address
some identified risks
• Procurement documents
 Quotation, bidding
document, tender, RFP, RFQ, RFI, etc

24. Project Procurement Management
• Plan Procurements – O (cont’d)
• Source selection criteria

25. Project Procurement Management
• Plan Procurements – O (cont’d)
• Source selection criteria (cont’d)

26. Project Procurement Management
• Plan Procurements – O (cont’d)
• CR

27. Project Procurement Management
• Conduct Procurements
• To obtain seller’s response
• Selecting a seller
• Awarding a contract

28. Project Procurement Management
• Conduct Procurements – I
• PMP
• Procurement document
• Source selection criteria
• Qualified seller list
• Seller proposals
• Project documents
• Make-or-buy decisions

29. Project Procurement Management
• Conduct Procurements – I (cont’d)
• Teaming agreement
• OPA

30. Project Procurement Management
• Conduct Procurements – TT
• Bidder conferences
 To ensure buyer and seller have a clear and
common understanding of the procurement
 No sellers received preferential treatment
 Every prospective sellers hear individual
questions and the answers from buyers
• Proposal evaluation techniques

31. Project Procurement Management
• Conduct Procurements – TT (cont’d)
• Independent estimates
• Expert judgment
• Advertising
• Internet search
• Procurement negotiations

32. Project Procurement Management
• Conduct Procurements – O
• Selected sellers
• Procurement contract award

33. Project Procurement Management
• Conduct Procurements – O (cont’d)
• Resource calendars
• CR
• PMP U
• PD U

34. Project Procurement Management
• Administer Procurements
• Process of managing procurement
relationships, monitoring contract
performance, making changes / corrections
• To ensure both parties meet their contractual
agreements and their own legal rights are
protected
• Might be carried out by separate function of the
organization

35. Project Procurement Management
• Administer Procurements
• Applied project management processes (but not
limited to):
 Direct and manage project execution
 Report performance
 Perform quality control
 Perform integrated change control
 Monitor and control risk

36. Project Procurement Management
• Administer Procurements
• Also includes monitoring payments to sellers
• Document seller’s performance / evaluation
• Contracts can be amended at any time prior to
contract closure by mutual consent

37. Project Procurement Management
• Administer Procurements

38. Project Procurement Management
• Administer Procurements – I
• Procurement documents
• PMP
• Contract
• Performance report
• Approved CR
• WPI

39. Project Procurement Management
• Administer Procurements – TT
• Contract change control system
• Procurement performance review
• Inspection and audit
• Performance reporting
• Payment system
• Claims administration
• Records management system

40. Project Procurement Management
• Administer Procurements – O
• Procurement documentations
• OPA U
• CR
• PMP U

41. Project Procurement Management
• Close Procurements
• Completion of project procurement
• Includes administrative activities
• Finalizing open claims, update
information to project records
• In multi phase project, close procurement
only applicable to given phase of the
project

42. Project Procurement Management
• Close Procurements
• Early termination also triggers close
procurements

43. Project Procurement Management
• Close Procurements – I
• PMP
• Procurement documentation

44. Project Procurement Management
• Close Procurements – TT
• Procurement audit
• Negotiated settlement
• Record management system

45. Project Procurement Management
• Close Procurements – O
• Closed procurements
• OPA U

47. Sample Questions
1. Which of the following is a false statement about
project risks?
A. A risk arises out of uncertainty.
B. A risk can only have a negative effect on a project.
C. Identified risks are usually listed in a document
called the risk register.
D. Risks can be categorized by developing a risk
breakdown structure (RBS).