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Project Procurement Management

What is Project Procurement Management?

Project Procurement Management is part of the project management process, in which products or services are aquired or purchased from outside the project team, in order to complete the task or project.

Project procurement involves a systematic process of identifying and procuring, through purchase or acquisition, necessary project services, goods, or results from outside vendors who will carry out the work. It is usually a function of the project manager; however, some organizations choose to select a person other than the project manager to handle these duties.

Project Procurement Management Process

There are four processes widely recognized by the project management industry as integral to project procurement management.

Plan Procurements

The first of these processes is planning purchases and acquisitions. In this step, needs that require outsourcing are identified. Sources for obtaining the required goods, services or results are differentiated through a market analysis. In planning the procurement, project objectives are reviewed to ensure the acquisition does not stray from the stated objectives.

The Plan Procurements process includes consideration of the risks involved with each make-or-buy decision. It also includes reviewing the type of contract planned to be used with respect to mitigating risks, sometimes
transferring risks to the seller.

Completion of this step includes identification of the resources necessary for the acquisition, determination of the contract type needed to secure the acquisition, and preparation of a procurement management plan.

Conduct Procurements

Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract. In this process, the team will receive bids or proposals and will apply previously defined selection criteria to select one or more sellers who are qualified to perform the work and acceptable as a seller.

Administer Procurements

Administer Procurements is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections as needed. Both the buyer and the seller will administer the procurement contract for similar purposes. Each must ensure that both parties meet their contractual obligations and that their own legal rights are protected. The Administer Procurements process ensures that the seller’s performance meets procurement requirements and that the buyer performs
according to the terms of the legal contract.

Administering contracts is critical to project procurement duties. Clearly outlining the obligations, responsibilities, and performance goals is essential to completing this step. Satisfactory performance of the contract entails tracking the execution of stated goals. At times, the project procurement manager may need to correct processes in order to obtain the desired results. Contract changes should be controlled and documented to prevent unnecessary legal claims.

Close Procurements

Once the contract is complete, the final step is to close the contract. The contract is audited to make certain all terms of the contract were fulfilled. Contract closure involves evaluating the performance of vendor and documenting any lessons learned in executing the contract.

Conclusion

In recent years, project procurement is generally accepted within the industry, actual execution may differ between organizations. As a project manager, you should make an appropriate strategy for it according to the inner and outter enviroment.

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