This document discusses the four main processes involved in project procurement management: plan procurement, conduct procurement, administer procurement, and close procurement. It provides details on the inputs, tools and techniques, and outputs for each process. For plan procurement, it describes making make-or-buy decisions and developing procurement documents. Conduct procurement involves selecting sellers and awarding contracts. Administer procurement is managing contract performance through inspections, payments, and change requests. Close procurement completes each project procurement.

1. Dr. Mostafa Elgamala
PMP-ITIL-IBDL-LDP8
RHCE-MCSA-CCNA/CCAI-CSCU

2.  Project procurement management:
 1- Plan procurement (Planning)
 2- Conduct procurement (execution)
 3- Administer procurement (monitor & control)
 4- Close procurement (closing)

3. Plan procurement
 Process of documenting project purchasing decisions,
and identifying sellers selection criteria.

4. Inputs
• Scope baseline
• Requirements
documentation
• Teaming
agreement
• Risk register
• Risk –related
contract decision
• Activity resource
requirements
• Project schedule
• Activity cost
estimates
• Cost performance
baseline
• EEF
• OPA
Tools & techniques
• Make or buy
analysis
• Expert judgment
• Contract type
Outputs
• Procurement
management plan
• Procurement
statement of
work
• Make or buy
decisions
• Procurement
documents
• Source selection
criteria
• Change requests

5. Input
 Project management plan: Scope baseline
 Requirements documentation
 Risk register
 Activity resource requirements: contain
information on specific needs such as people,
equipment, or location
 Project schedule: contains information on required
timelines or mandated deliverable dates.

6.  Activity cost estimates: used to evaluate the
reasonableness of the bids or proposals received from
potential sellers.
 Stakeholder register
 EEF
 OPA

7. legal contractual relationships:
 Fixed-price contracts: fixed total price for a defined
product, service, may incorporate financial incentives
for achieving or exceeding selected project objectives.
buyers need to precisely specify the product or
services. (seller risk)
 Firm Fixed Price Contracts (FFP).
 Fixed Price Incentive Fee Contracts (FPIF)

8.  Cost-reimbursable contracts: Involves payments to
the seller for all legitimate actual costs incurred for
completed work, plus a fee representing seller profit.
 Scope of work cannot be precisely defined at the start
and needs to be altered, or when high risks may exist
in the effort. (buyer risk)
 Cost Plus Fixed Fee Contracts (CPFF)
 Cost Plus Incentive Fee Contracts (CPIF)

9.  Time and Material Contracts (T&M): often used for
staff augmentation, acquisition of experts, and any
outside support.

10. FP
 Buyer less management ,he know the total price
 More expensive more than CR, more work to specify
SoW

11. CR
 Simpler SoW, lower cost than FP
 Require auditing the seller’s invoices, more work to
manage, the seller has moderate incentive to control
cost.

12. Tools & techniques
 Make-or-Buy Analysis
120 is daily lease cost
1000 is investment cost with 20 daily cost
120 D = 1000 + 20 D
D=10
 Expert Judgment
 Market Research: includes examination of industry and
specific vendor capabilities
 Meetings

13. Output
 Procurement Management Plan: how a project
team will acquire goods and services from outside the
organization:
Types of contracts to be used
Handling the make-or-buy decisions
Standardized procurement documents
Procurement metrics to be used to manage
contracts and evaluate sellers

14.  Procurement Statement of Work:
 defines only that portion of the project scope that is to be
included within the related contract, include:
 Specifications
 Quantity desired & quality levels
 Period of performance
 Work location
 Other requirements.

15.  Procurement Documents: request for information (RFI),
request for proposal (RFP), invitation for bid (IFB), request
for quotation (RFQ), invitation for negotiation (IFN).
 Source Selection Criteria:
 Overall or life-cycle cost
 Technical capability
 Risk
 Warranty
 Past performance of sellers

16.  Make-or-Buy Decisions
 Change Requests
 Project Documents Updates: risk register,
Requirements documentation…

17. Conduct procurement:
 Process of obtaining sellers responses, selecting a
seller and awarding a contract.

18. Inputs
• Project
management plan
• Procurement
documents
• Source selection
criteria
• Qualified seller
list
• Seller proposals
• Project
documents make
or buy decisions
• Teaming
agreement.
• OPA
Tools & techniques
• Bidder conference
• Proposal
evaluation
techniques
• Expert judgment
• Advertising
• Internet search
• Procurement
negotiations
Outputs
• Selected sellers
• Procurement
contract award
• Resource
calendars
• Change requests
• Project
management plan
updates
• Procurement
documents
updates

19. Tools & techniques
 Bidder conference
 Sellers have a clear and common understanding of the
procurement requirements.
 Proposal evaluation techniques:
 formal evaluation review process will be defined by the
buyer’s procurement policies
 Independent Estimates:
 have an estimate of costs prepared by an outside
professional estimator, to serve as a benchmark on
proposed responses

20.  Expert Judgment
 Advertising
 Analytical Techniques: identify the readiness of a
vendor to provide the desired end state, and avoid cost
overruns due to change.
 Procurement Negotiations

21.  Contract contents: usually most of contracts contains
the following :
Statement or work/ deliverables
Schedule baseline
Project period
Pricing
Payment terms
Warranty
Penatlies
Incentives
Insurance arrangements
Change request criteria
Acceptance criteria
Claims handling.

22. Administer procurement
 Process of managing procurement relationships,
monitoring contract performance, and making
changes and corrections as needed.

23. Inputs
• Procurement
documents
• Project
management
plan
• Contract
• Performance
reports
• Approved
change requests
• Work
performance
information
Tools &
techniques
• Contract change
control system
• Procurement
performance
reviews
• Inspection &
audits
• Performance
reporting
• Payment systems
• Claim
administration
• Records
management
system
Outputs
• Procurement
documentation
• organizational
process assets
• Change requests
• Project
management
plan updates

24. Tools & techniques
 Contract Change Control System: defines the
process by which the procurement can be modified. It
includes the paperwork, tracking systems, dispute
resolution procedures
 Procurement Performance Reviews: review of the
seller’s progress to deliver project scope and quality,
within cost and on schedule, as compared to the
contract
 Inspections and Audits: to verify compliance in the
seller’s work processes

25.  Performance Reporting
 Payment Systems:
 Claims Administration: If the parties themselves do
not resolve a claim, it may have to be handled in
accordance with alternative dispute resolution (ADR)
(mediation, arbitration, courts)
 Records Management System: The system contains
a retrievable archive of contract documents and
correspondence

26.  Close procurement: process of competing each
project procurement
Inputs
• Project
management
plan
• Procurement
documentation
Tools &
techniques
• Procurement
audits
• Negotiated
settlements
• Records
management
system
Outputs
• Closed
procurement
• Organizational
process assets
updates

27. Thanks