PMPGuru

Project Procurement Management

Guruttam Creative Assets

Sample illustration.

Project procurement or purchases

'Buyer or owner preparing, engaging and disengaging of external resources for delivery of scope of work.'-Guruttam. Not all projects can independently produce expected outcome. Projects depend upon resources to successfully complete project outcome. Generally when resources are not available within organization in capability or capacity, procurement is considered. When stake or value or risks are high financial or economical analysis also determine procurement decisions. At higher level project members may be managed by these key factors -
+) Resource requirement analysis
+) Risks of undertaking scope of work
+) Contract management
+) Compliance management
+) Legal and claims management
+) Policies and guidelines
+) Relationship management

The scope of work identified as prospective procurement items are analysed for make-buy-rent-lease option followed by preparatory work for contract engagement, negotiation and actual engagement with an external resources for supplies(delivery of scope of work) and later contract disengagment(null and void) upon satisfactory handover.

May be additionally managed by
+) procurement scope of work
+) lifetime of procurement
+) local and global procurement
+) contract or delivery model
+) policy, transparency, ethics
+) terms and conditions
+) quality, performance management
+) safety, health, environment management
+) records and information management
+) conflict management
+) factual, timely, reporting
+) trust, relationship

Project procurement management examples
• Build-operate-transfer, etc
• Blanket order, purchase order, forward buying, auctions, etc
• Cost, fixed price, time and material, extensions
• Material and Service procurement
• Small, Medium and Large
• Acquisition and Consolidation

Some of commonly used tools are
• Request for proposals, quotation, bids, tenders
• selection criteria, weight-age system,
• Clarification, briefing, debriefing, meetings
• Concession, negotiations, change requests, arbitrations,
• Payables, receivables, auditing, records
• Technical and Performance reviews
• Building Trust
• Other Communications
• Professional ethics

Question and Answer

1. It is usual to use Request for Quotation (RFQ) when it is
• Quantity or item supply
• Unique or abstract scope of work
• Demand market
• Supplier market

2. If a heavy duty crane cost one million, to consider as profitable before it is considered as scrap, it is expected to generate an income from one or more projects that is
• More than one million discounted
• More than one million non discounted
• Equal to one million discounted
• Equal to one million non discounted

Answer
1. quantity or item supply
2. more than one million discounted