Pmp Chapter 12 2004

2/8/2006

Akram Al-Najjar, PMPProject Management Consultant

Your key in Successful Project Management

PMP Preparation Training

Akram Al-Najjar, [email protected] +20105394312Source: pmbok guide 2004 Slide 2

Chapter 12

Project Procurement Management

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AGENDA

What is Procurement Management?

Procurement Management Processes

How does the PMBoK® Guide describe Procurement Management?

Contracts - types

Discussion


Procurement Management

12.1 Plan Purchases and Acquisitions

12.2 Plan Contracting12.3 Request seller Responses12.4 Select Sellers12.5 Contract Administration12.6 Contract Closure

§Project Procurement Management include the processes required topurchase and acquire products, services, or results needed from outside the project team to perform the work.

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Plan Purchases and Acquisitions12.1

Plan Contracting12.2

Request seller Responses 12.3

Select Sellers 12.4

Enterprise EnvironmentalFactors

Organizational ProcessAssets

Scope Definition& Create W.B.S5.2 & 5.3

Develop Project Management Plan

4.3

Integrated ChangeControl

4.6

Marketplace conditions purchasing SKILLS

Polices , procedures, Lesson Learned

Scope Statement , w.B.S and dictionary

Project Management Plan

Procurement Management Plan, S.O.W , Make or buy

Approved change request & corrective action

Procurement documents , evaluation criteria , S.O.W update

Qualified sellers list , procurement documents Package , proposal

Activity Cost Estimating&Cost Budgeting

ContractAdministration12.5

ContractCloseout 12.6

Procurement Management Plan update

Requested changes

Recommended corrective actions

Risk register

Risk - contractual agreement

Performance Report

Organizational Process Assets

Selected seller

Contract , Contract Management Plan

Resource availability

Pro

ject

Pro

cure

men

t M

an

agem

en

t P

roce

ss F

low

Dia

gra

m

Activity resource estimate 6.3& schedule 6.5development

Cost Estimating&Cost Budgeting7.1 & 7.2

Risk identification& risk response Planning 11.2 & 11.5

Performance Report 10.3

Direct & ManageProject Execution

4.4

Close Project4.7

Activity resource

estimate

& Project schedule

Work performance information

Contract closure procedure

Close Contract

Contract documentation ,

Procurement management plan

Contract management Plan


Procurement ManagementPlanning ClosingExecuting

12.2

ContractAdministration

12.1

Plan Purchases and Acquisitions

12.2

Plan

Contracting

12.4

Select

Sellers

12.3

Request

seller

Responses

12.6

Contract

Closeout

Controlling

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Project Procurement Management Processes

n Plan Purchases and Acquisitions : determining what to procure when and how

n Plan Contracting : documenting product requirements and identifying potential sources

n Request Seller Responses : obtaining quotations, bids, offers, or proposals as appropriate

n Select Sellers : reviewing offers, choosing among potential sellers, and negotiating a written contract with each seller.

n Contract administration: managing the contract and relationship between the buyer and seller, reviewing and documenting how a seller is performing to establish required corrective actions

n Contract close-out: completion and settlement of the contract , including resolution of any open items


Buyer-seller Relationship

n Buyer – The customer

n Seller – Contractor; vendor; supplier external to the performing organization

n The terms and conditions of the contract become key inputs to many of the seller’s processes

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Project Procurement Management Processes and Key Outputs

Plan Purchases

and

Acquisitions

Plan

Contracting

Make Or buy

decision

Request

seller

Responses

Issue RFP

Select

Sellers

Receive Proposal

Contract

AdministrationContract

Closeout

Award contract

Complete Substantial amount of

work

Formally Close

Contract


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n Includes consideration of potential subcontracts

It identifies which project needs can best be met by purchasing or acquiring products, services, or results outside the project organization.



n Plan Purchases and Acquisitions involvesn whether to procuren how to procuren what to procuren how much to procuren when to procure

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Inputs1. Enterprise environmental factors2. Organizational process assets 3. Project Scope statement 4. WBS5. WBS dictionary6. Project management plan

• Risk register• Risk related contractual agreements• Resource requirements• Project schedule• Activity cost estimates• Cost baseline

Tools & Techniques1. Make-or-buy analysis2. Expert judgment3. Contract types

Outputs1. Procurement management plan2. Contract Statement of work3. Make or buy decisions4. Requested changes



n Enterprise Environmental Factors– that are considered include the conditions of the marketplace and what products, services, and results are available in the marketplace, from whom and under what terms and conditions.

n Organizational Process Assets– provide the existing formal and informal procurement-related policies, procedures, guidelines, and management systems that are considered in developing the procurement management plan and selecting the contract types to be used.

n Project Scope statement–describes the project boundaries, requirements, constraints, and assumptions related to the project scope.

n W.B.S.n W.B.S. dictionary n Project management Plan

Plan Purchases and AcquisitionsInput

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n Make-or-buy analysis –This is a general management technique to determine if the product can be produced cost-effectively by the performing organization .

n Expert judgment – Groups or individuals with specialized knowledge or training

Plan Purchases and AcquisitionsTools & Technique


n Contract-type selection

n Fixed price – A fixed total price for a well-defined product. May include incentives for meeting or exceeding selected project objectives.

n Example : Contract = $ 90,000,000


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- Cost reimbursable contacts – Payment to the seller of actual costs , plus typically a fee representing seller profit .

Direct costs – Cost incurred in implementing the projectIndirect costs -(Overhead) – Costs allocated to the project by the performing organization, as a cost of doing business. n Cost plus incentive fee (CPIF): the buyer pays the

seller for allowable performance costs plus a predetermined fee and an incentive bonus

n Example : Contract = Cost plus a fee of $100,000. While for every month the project is completed sooner than agreed upon, Seller will receive an additional incentive fess = $10,000



nContract-type selection (cont.)

Cost Reimbursable Contracts

n Cost plus percentage of costs (CPPC): the buyer pays the seller for allowable performance costs plus a predetermined percentage based on total costs

n Example : Contract = Cost plus 10% of cost as fee


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Cost Reimbursable Contracts

n Cost plus fixed fee (CPFF): the buyer pays the seller for allowable performance costs plus a fixed fee payment .

n Example : Contract = Cost plus a fee of $ 100,000



n Cost plus incentive fee Calculation

n Target cost $210,000

n Target Fee $25,000

n Target price $235,000

n Sharing Ratio 80 / 20

n Actual cost $200,000

Fee $210,000 - $200,000 = $10,000x20%=$2,000

$25,000 Target fee + $2,000 = $27,000 fee

Final price $200,000 + $ 27,000 = $ 227,000

Plan Purchases and AcquisitionsExample

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n Cost plus incentive fee Calculation






Fee $150,000 - $140,000 = $10,000x20%=$2,000

$20,000 Target fee + $2,000 = $22,000 fee

Final price $140,000 + $ 22,000 = $ 162,000



n Fixed price plus incentive fee calculation





n Ceiling price $200,000


Fee $150,000 - $210,000 = ($60,000x40%)= ($24,000)

$30,000 Target fee + ($24,000) = $6,000 fee

Final price $210,000 + $ 6,000 = $ 216,000

However this is above the ceiling price of $200,000

So the final price is $200,000


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Fee $200,000 - $250,000 = ($50,000x40%)= ($20,000)

$50,000 Target fee + ($20,000) = $30,000 fee

Final price $250,000 + $ 30,000 = $ 280,000

However this is above the ceiling price of $260,000

So the final price is $260,000










Fee $200,000 - $250,000 = ($50,000x40%)= ($20,000)

$50,000 Target fee + ($20,000) = $30,000 fee

Final price $250,000 + $ 30,000 = $ 280,000


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n Contract-type selection (cont.)

n Time and Material contract – Seller is paid a preset amount per unit of service, and the total value of the contract is a function of the quantities needed to complete the work




Contract Types Versus Risk


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n Procurement management plan – Describes how the remaining procurement processes will be managed for example :

n What types of contracts will be used?n If independent estimates will be needed as evaluation criteria,

who will prepare them and when?n If the performing organization has a procurement department,

what actions can the project management team take on its own?

n If standardized procurement documents are needed, where can they be

found?n How will multiple providers be managed?n How will procurement be coordinated with other project aspects,

such as scheduling and performance reporting?

Plan Purchases and AcquisitionsOutput


n Statement of work – Describes the procurement items in sufficient detail for prospective sellers to determine if they are capable of providing the itemn Should include a description of any collateral services

required for the procured item

n Make-or-Buy Decisions

The documented decisions of what project products, services, or results will be either be acquired or will be developed by the project team. This may include decisions to buy insurance policies or performance bonds contracts to address some of the identified risks.

Plan Purchases and AcquisitionsOutput

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Statement of Work (SOW) Template


I. Scope of Work: Describe the work to be done to detail. Specify the hardware andsoftware involved and the exact nature of the work.

II. Location of Work: Describe where the work must be performed. Specify thelocation of hardware and software and where the people must perform the work

III. Period of Performance: Specify when the work is expected to start and end,working hours, number of hours that can be billed per week, where the work mustbe performed, and related schedule information.

IV. Deliverables Schedule: List specific deliverables, describe them in detail, andspecify when they are due.

V. Applicable Standards: Specify any company or industry-specific standards thatare relevant to performing the work.

VI. Acceptance Criteria: Describe how the buyer organization will determine if thework is acceptable.

VII. Special Requirements: Specify any special requirements such as hardware orsoftware certifications, minimum degree or experience level of personnel, travelrequirements, and so on.


n process prepares the documents needed to support the Request Seller Responses process and Select Sellers process.

The Plan Contracting

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Inputs1. Procurement management

Plan1. Contract statement of work2. Make or buy decisions3. Project management plan

• Risk register• Risk related contractual

agreements• Resource requirements• Project schedule• Activity cost estimates• Cost baseline

Tools & Techniques1. Standard forms2. Expert judgment

Outputs1. Procurement documents2. Evaluation criteria3. Contract statement of

work (updates)

The Plan Contracting


n Standard forms – Include standard contracts, standard descriptions of procurement items, and standardized versions of all, or part, of the needed bid documents

n Expert judgment

The Plan ContractingTools and Technique

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n Procurement documents – Used to solicit proposals from prospective sellersn Invitation to bid (IFB)

n Request for proposal (RFP)

n Request for quotation (RFQ)

n Invitation for negotiation

n Contractor initial response

n Procurement documents should include:n The relevant statement of work

n Description of the desired form of the response

n Required contractual provisions

The Plan ContractingOutput


n Tactics of Negotiationn Attacks, Personal Insults, Good Guy and bad guy,

Deadline, Lying, Limited Authority, Missing man, Fair and Reasonable, Delay, Extreme Demands, Withdrawal and Fait Accompli


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Outline for a Request for Proposal (RFP)

I. Purpose of RFP

II. Organization’s Background

III. Basic Requirements

IV. Hardware and Software Environment

V. Description of RFP Process

VI. Statement of Work and Schedule Information

VII. Possible Appendices

A. Current System Overview

B. System Requirements

C. Volume and Size Data

D. Required Contents of Vendor’s Response to RFP

E. Sample Contract


n Evaluation criteria – Used to rate or score proposals (objective or subjective)n Understanding of the need-

n Overall or life-cycle cost

n Technical capability

n Management approach

n Financial capacity

n Statement of work updates – Modifications to one or more statements of work may be identified during solicitation planning


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Proposal Evaluation Criteria


n Effort usually expended by the prospective seller

Obtaining responses (e.g., bids, quotes, offers) from prospective sellers on how project requirements can be met

Request Seller Responses

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Inputs1. Organizational process assets2. Procurement management

plan3. Procurement documents

Tools & Techniques1. Bidder conferences2. Advertising3. Develop qualified sellers list

Outputs1. qualified sellers list2. Procurement document

package3. Proposals

Request Seller Responses


n Organizational Process AssetsSome organizations, as part of their organizational process assets, maintain lists or files with information on prospective and previously qualified sellers, sometimes called bidders, who can be asked to bid, propose, or quote on work. These lists willgenerally have information on relevant past experience and other characteristics of the prospective sellers. Some organizations maintain preferred sellers lists that include onlysellers already selected through some qualification methodology.

n Procurement management plan

n Procurement Documents

Request Seller ResponsesInput

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n Bidders’ conference – Meetings with prospective sellers prior to preparation of a proposaln Ensure all prospective sellers have a clear,

common understanding of the procurement

n Responses to questions may be incorporated into the procurement documents as amendments

n Advertising – Placing advertisements in general-circulation publications, such as newspapers, or in specialty publications, such as journals

Request Seller ResponsesTools and Technique


q Qualified sellers list

q Procurement document package : Is a buyer-prepared formal request sent to each seller and is the basis upon which a seller prepares a bid for the requested products, services, or results that are defined and described in the procurement documentation.

q Proposals – Seller-prepared documents that describe the seller’s ability and willingness to provide the requested product, proposal can be supplemented with an oral presentation

Request Seller ResponsesOutput

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The receipt of bids or proposals, and the application of the evaluation criteria in order to select a provider

Select Seller


Tools & Techniques1. Weighting system2. Independent estimates3. Screening system4. Contract negotiation5. Seller rating system6. Expert judgment7. Proposal evaluation techniques

Outputs1. Selected sellers 4. Resource availability2. Contract 5. Requested changes3. Contract management plan 6. Procurement management plan (updates)

Inputs1. Organizational process assets2. Procurement management Plan3. Evaluation criteria4. Procurement document package5. Proposals6. Qualified sellers list7. Project management plan

• Risk register• Risk related contractual agreements

Select Seller

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n Organizational Process Assets: Formal or informal policies that can affect the evaluation of proposals

n Evaluation criteria – May include samples of the suppliers previously produced products/services for the purpose of providing a way to evaluate their capabilities and quality of products

Select SellerInput


n Weighting systemn Select a single source, who will be asked to

sign a standard contractn Rank and order all proposals to establish a

negotiating sequence

n Select a short list of qualified sellers, based on a preliminary proposals and, then, a more detailed evaluation of a more detailed and comprehensive proposal

Select SellerTools and Technique

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Point Rating System

n Presentation 33 1/3 %

- Team 60%

- Format 40%

• Request for proposal 33 1/3 %- Technical 50%- Company 25%- Previous experience 25%

n Overall 100%

n Price 33 1/3 %

- Day rates 85%

- Expenses 15%


Criteria for Weighting Suppliers

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Independent estimates :For many procurement items , the procuring organization may prepare its own independent estimates as a check on proposed pricing .

Screening System : Involves establishing minimumrequirements of performance for one or more of the evaluation criteria



n Contract negotiation – Involves clarification and mutual agreement on the structure and requirements of the contract, prior to the signing of the contract

n Final contract language should reflect all agreements reached

n Include responsibilities and authorities, applicable terms and laws, technical and business management approaches, contract financing, and price


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n Rating Systems : Seller rating systems are developed by many organizations and use information such as the seller’s past performance, quality ratings, delivery performance, and contractual compliance.

n Expert Judgment

n Proposal Evaluation Techniques: Many different techniques can be used to rate and score proposals, but all will use some expert judgment and some form of evaluation criteria



n Selected Sellers : are those sellers who have been judged to be in a competitive range based upon the outcome of the proposalor bid evaluation, and who have negotiated a draft contract, which will be the actual contract when an award is made.

Contract – A mutually binding agreement that obligates the seller to provide the specified product, and obligates the buyer to pay for it

n A contract is a legal relationship subject to remedy in the courts

n It may be called a contract, an agreement, a subcontract, a purchase order, or a memorandum of understanding

n The review-and-approval process should ensure that the contract language describes a product or service that will satisfy the need identified

Select SellerOutput

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n Contract Management Plan: The plan covers the contract administration activities throughout

n Resource Availability

n Procurement Management Plan (Updates)

n Requested Changes

Select SellerOutput


Contract Administration

• The legal nature of the contractual relationship makes it imperative that the project team be acutely aware of the legal implications of actions they take during administration of the contract

• Payment terms should be defined within the contract and should link progress made with compensation paid

Ensuring the seller’s performance meets contractual requirements

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n Direct and Manage Project Execution – To authorize the contractor’s work at the appropriate time

n Performance reporting – To monitor contractor’s cost, schedule, and technical performance

n Quality control – To inspect and verify the adequacy of the contractor’s product

n Change control – To ensure that changes are properly approved and that the appropriate stakeholders are made aware of such changes

n Risk Monitoring and Control - to ensure that risks are mitigated.

Applying the appropriate PM processes to the contractual relationships



Inputs1. Contract2. Contract management plan3. Selected sellers4. Performance reports5. Approved change requests6. Work performance

information

Tools & Techniques1. Contract change control system2. Buyer conducted performance

review3. Inspections & audits4. Performance reporting5. Payment system6. Claims administration7. Records management system8. Information technology

Outputs1. Contract documentation 5. Project management plan (updates)2. Requested changes - Procurement management plan3. Recommended corrective actions - Contract management plan4. Org. process assets (updates)


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n Approved Change requests –Modifications to the terms of the contract or to the description of the product or the service to be provided. Contested changes are called claims, disputes, or appeals.

n Work performance information – Status of deliverables, to what extent quality standards are being met, and costs incurred or committed are collected as part of the project plan execution

Contract AdministrationInput


n Contract change control system –Defines the process by which the contract may be modified. It includes:

n Paperworkn Tracking systemsn Dispute-resolution proceduresn Approval proceduresn Performance reportingn Payment system

Contract AdministrationTools and Technique

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n Buyer-Conducted Performance Review: A procurement performance review is a structured review of the seller’s progress to deliver project scope and quality, within cost and on schedule, as compared to the contract.

n Inspections and Audits: can be conducted during execution of the project to identify any weaknesses in the seller’s work processes or deliverables.

n Performance Reporting : provides management with information about how effectively the seller is achieving the contractual objectives.

n Payment system – Handled by the accounts payable system of the performing organization. The system must include the appropriate reviews and approvals by the project management team.

n Claims Administration: Contested changes and constructive changes are those requested changes where the buyer and seller cannot agree on compensation for the change changes

n Records Management System: is used by the project manager to manage contract documentation and records. The system is used to maintain an index of contract documents and correspondence, and assist with retrieving and archiving that documentation.

n Information Technology

Contract AdministrationTools and Technique


n Contract documentation :Contract documentation includes, but is not limited to, the contract along with all supporting schedules, requested unapproved contract changes, and approved change requests. Contract documentation also includes any seller-developed technical documentation and other work performance information, such as deliverables, seller performance reports, warranties, financial documents including invoices and payment records, and the results of contract-related inspections.

n Requested Changes.n Recommended Corrective Actionsn Organizational Process Assets (Updates)• Correspondence. Contract terms and conditions often require written

documentation of certain aspects of buyer/seller communications, such as warnings of unsatisfactory performance and requests for contract changes or clarifications. This can include the reported results of buye r audits and inspections that indicate weaknesses the seller needs to correct.

• Payment schedules and requests. • Seller performance evaluation documentation.

Contract AdministrationOutput

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Contract Close Out

Completion and settlement of the contract, including resolution of any open items


Inputs1. Procurement management plan

2. Contract management plan3. Contract documentation4. Contract closure procedure 4.7.3.2.

Tools & Techniques1. Procurement audits2. Records management system

Outputs1. Closed Contracts2. Organizational process assets (updates)

Contract Close Out

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Contract documentation – Includes, but not limited to:

• Contract

• Supporting schedules

• Requested and approved contract changes

• Seller-developed technical documentation

• Seller performance reports

• Financial documents (e.g., invoices and payment records)

• Results of any contract-related inspections

Contract Close OutInput


Procurement audits –Structured reviews of the procurement process, from procurement planning through contract administration, conducted to identify successes and failures (lessons learned)

Contract Close OutTools and Technique

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n Closed contractsThe buyer, usually provides the seller with formal written notice that the contract has been completed.

n Organizational Process Assets (Updates)

• Contract file. A complete set of indexed contract documentation, includingthe closed contract, is prepared for inclusion with the final project files• Deliverable acceptance. The buyer, usually through its authorized contractadministrator, provides the seller with formal written notice that thedeliverables have been accepted or rejected. Requirements for formaldeliverable acceptance, and how to address non-conforming deliverables, areusually defined in the contract.• Lessons learned documentation. Lessons learned analysis and processimprovement recommendations are developed for future purchasing andacquisition planning and implementation.

Contract Close OutOutput


Project Procurement Management Processes and Key Outputs

Plan Purchases

and

Acquisitions

Plan

Contracting

Make Or buy

decision

Request

seller

Responses

Issue RFP

Select

Sellers

Receive Proposal

Contract

AdministrationContract

Closeout

Award contract

Complete Substantial amount of

work

Formally Close

Contract

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Definitions

n Request for Proposal (RFP)n Request for a price and a proposed method

of meeting requirementsn Often used when both price and technical

evaluation determine winners

n Request for Quote (RFQ)n Request for materials or servicesn Price-driven

Source Selection


Definitions

n Warrantyn A promise about a product made by either a

manufacturer or seller.

n Part of a contract, the truth of which is necessary to the validity of the contract

n Implied Warranty – a guarantee imposed by law in a sale

n Express Warranty – an assertion or promise concerning goods or services

Source Selection

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Summary

n Review Questions

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PMBOK® Multiple Choice Quiz

1 . A project manager is working on a project for a large technologyintegrator. His project calls for Java technology. He needs tosupplement his technical staff for 1 month because his company does not have this skill set due to unexpected leaves of absence in the technical team. He will manage the vendor's work since he wants to retain control. Which would be the BEST type of contract?

A. CPFF (Cost plus fixed fee)

B. T&M (Time and materials).

C. FP (Fixed price)

D. No contract is needed. A simple purchase order will work.

b) T&M (Time and materials) , this is short duration and small dollar amount T & M is good choice for staff augmentation


2. The seller tells you that your activities have resulted in an increase in their costs. You should

A. Issue a change to the project costs

B. Have a meeting with management

C. Ask the seller for supporting information

D. deny any wrongdoing

C) Ask the seller for supporting information


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3. Your company has an emergency and needs contracted work done as soon as possible. Under these circumstances, which of the following would be the MOST helpful to add to the contract?

A. Requirements about which subcontractors can be used

B. A clear scope of workC. IncentivesD. A force major clause

C) Incentives , helps to bring seller’s objectives in line with buyer’s



4. During the execution of your project, the seller loses key personnel who were working on your project. What is generally the BEST thing for the project manager to do?

A. Remind the seller of the next delivery due dateB. Contact the other bidding vendors and see if one could

complete the projectC. Work closely with the seller to review the qualifications of

any replacement staffD. Attempt to hire the people to work directly for you

C) Work closely with the seller to review the qualifications of any replacement staff


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5. You are managing procurement for a project and have arranged a bidders' conference with the potential proposals. All of the following are appropriate for a bidders' conference EXCEPT?

A. A walkthrough of the project scopeB. Explanation of why particular terms and conditions are in

the contractC. A request for bidders to offer their thoughts on problems

with the scope of the workD. Working with the bidders to determine alternative solutions

for the project

D) Working with the bidders to determine alternative solutions for the project (it may include in bids or proposal not now)




7 . A seller is giving you so much trouble that your time available allocated to the project has gone from 20% to over 80% for this small piece of the overall project. Most of the seller's deliverables are late and inadequate and you have little confidence in his company's ability to complete the project. What should you do?

A. Assign a group within your team to meet with the seller and reassign project work so that the seller has easier work to accomplish

B. Terminate the seller for convenience and hire another sellerC. Meet with the seller to discover the cause of the problem

D. Provide some of your own staff to augment the seller's staff

B) Terminate the seller, because this is a small piece of the overall project and you have low confidence level

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8. With which type of contract is the seller MOST concerned about project scope?

A. Time and material

B. Cost plus fixed fee

C. Fixed price

D. Purchase order

C) Fixed price



9 . A contract has just been signed with a construction company to complete a remodeling project within three months. Due to force major, the project will be delayed by an additional three months. The construction company has asked for an early termination of the contract due to lack of resources. What is the MOST appropriate thing to do in this situation?

A. Seek legal advice

B. Complete administrative closureC. Complete contract closeoutD. Renegotiate the contract

C) Complete contract closeout, (because we have uncontrollable risk)


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10. A project manager for a large international bank has a project team that just implemented an electronic funds project involvingfour large vendors. The project manager struggled through everyphase of the procurement process since the bank had a weak internal contracts department. What would be the MOST appropriate thing to do to ensure the problems are resolved for future projects?

A. Document all of the issues in a memo and schedule a meeting with the head of the contract office

B. Include an agenda item in the project closedown to discuss these issues in a no threatening manner

C. Address this through contract change controlD. Conduct a procurement audit

D) Conduct a procurement audit , it is structured review that flush out issues and set up lessons learned



11. During negotiations, the seller tells you he wants to work with you, but if he does not have a signed contract by tomorrow, he will not be able to obtain the equipment needed to meet your due date. In view of this, you should issue an:

A. contract.B. letter of intent.C. change order.D. addendum.

B) letter of intent, it gives the seller more confidence for buyer’s commitment


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12. You have just finished most of the work on a new systems integration project when the seller comes to you with detailed procedures for closeout of the contract. The contract included closeout procedures. What should you do?

A. Revise the closeout procedures after getting management's approval

B. Get a change orderC. Create new procedures that are more completeD. Assess the quality of the seller's new detailed procedures

and if they are better than the current procedures, use them

B) Get a change order, this is a change to the contract, procedures are the same as work, if the work change ,change order should be issued



13. Under a seller agreement, formal, written correspondence with the seller is required when:

A. a meeting with the seller's management is held.

B. a change to the project is issued.

C. the seller is asked for supporting information.

D. there is a follow up to a conversation.

B) a change to the project is issued, procurement is very formal processes ,any change need to be fully documented


Pmp Chapter 12 2004

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