Partly adapted from Video Lessons ofTrudy Robinson

(source:BSBPmG408A,www.trudyrobinson.com)(misilamani@yahoo.com))

PROJECT PROCUREMENT

Lecture on

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PROJECT PURCHASING

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Objectives

• To understand and apply knowledge regarding, Purchasing Contract Project Inputs & Outputs

Which need to be managed by a formal procurement process(PMBOK V4 reference-pg 313, Chapter 12)

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It’s all a load of Balls!

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Procurement Indices

AttainmentFulfillmentContractAppropriationSecuringProvidingTender

GainingAcquisitionVendorBuyingPurchasingFurnishingSupplier

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Public Procurement

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Procurement

INPUTS TO PROJECT

OUTPUTS FROM PROJECT

Project Activities

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Procurement

(supply, deliver & purchase)

OUTPUTS to

PROJECT

INPUTS To

PROJECT

PROCUREMENTCONTROL

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RESPONDING

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Project Procurement Management

Identifying what you Need to Buy In

Clear requirements

Who you are going to work with(supplier)

INCOMING

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Project Procurement Management

Contract Management

Process, DIFOT(Delivery In Forlorn Time)

Payments

OUTGOING

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PROJECT PROCUREMENT PRACTICE

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Project Procurement Management

PROCESS Identify procurement

requirements(Concept) Plan procurement(Design) Conduct & Administer(Implementation) Close procurements(Finalization)

(Referrence: PMBOK pg 317)

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Project Procurement Management

• CONTRACTS Agreements Purchase order Memorandum of Understanding(MOU) Sub- contract Service level agreements

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Project Procurement Management

CONTRACTS-cont Terms & Conditions Clear points of payment Specific product/service provisions Schedule Exclusions Model-Time & Material

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TROUBLE SHOOTING

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Project Procurement Management

WIDER PICTURE Organizational policies• Who decides?

Quality/OHS• Occupational safety & health

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Project Procurement Management

WIDER PICTURE-cont Other projects Legal counsel Existing commitments

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Procurement ProcessProcurement Process

PROCUREMENT PROCESS

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Project Procurement Management

YOU Will CREATE Procurement management plan Procurement statement of work(SOW)-

similar to a PD but for the contract; not the individual

Invitation To Tender(ITT) Request for Information(RFI), request for

Proposal(RFP) etc.

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Project Procurement Management

SELECTION CRITERIA Clear outline of requirement Ensure all responses received are in

identified format Think ahead- word the ITT to enable

numerical value to be applied to a supplier’s response(simplifies overall analysis)

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PROJECT CONTRACTING

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Project Procurement Management

• SELECTION CRITERIA-cont.• No duplications or ambiguity in

requirements• Provide one point of contact where

questions can be asked• Evaluate, compare, choose

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Boeing’s Procurement Process

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Project Procurement Management

MANAGE DIFOT Performance Adherence of contract Payment approvals Change requests/variations

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Project Procurement Management

• CLOSE Final review

DIFOTPerformance

Final payments

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Project Procurement Management

CLOSE• Input to lessons learned• resources management

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PROJECT CLOSING

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Summary

Procurement is managing contracts, inputs to the project as well as outputs

Influences outside the project will influence (organizational policies..)

Identify, Clarify, Invite, evaluate & decideKnow your contracts and the clients of eachDIFOT ‘FORMAL PROCESS’-stick to it

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procurement cycle

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Thank You