Two-Minute Drill

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Procurement Planning

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Procurement planning is determining which aspects of the project can best be fulfilled by procuring the specified products or services.

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The project scope serves as a key input, as this describes the work, and only the required work, needed to complete the project.

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A clearly defined product description is needed in order to successfully procure the product.

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Make-or-buy analysis calculates and predicts which is better: for the performing organization to make the product or to hire an entity outside of the organization to make the product.

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Some contracts can transfer the risk to the seller; other contract types require the buyer to retain the risk of cost overruns.

Solicitation Planning

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The Procurement Management Plan describes the procedures for procuring work or products.

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Bids and quotes are needed when the decision is made on price. Proposals are needed when decisions are based on other factors, such as experience, qualifications, and approaches to the project work.

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The buyer should provide the seller with a SOW, details on the type of response needed—such as a proposal, quote, or bid, and any information on contractual provisions, such as non-disclosure agreements or a copy of the model contract the buyer intends to use.

Solicitation

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Solicitation is requesting the potential sellers to provide bids, proposals, or quotes to complete the project work or supply the described product.

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An organization may retain a qualified seller list from which the project team is forced to select a vendor. In other instances, the project team can rely on trade associations, industry directories, and other resources to locate qualified sellers.

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Advertisements for the procured process in newspaper and trade publications can increase the list of sellers the buyer can choose from. Many government entities must publish procurement opportunities.

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Bidder conferences allow sellers to meet with the buyer to query the buyer on details of the procurement process. The goal of the bidder conference is to ensure that all prospective sellers have the same information and all of the needed information to complete an accurate bid or proposal.

Source Selection

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Samples of the sellers’ previous, related products or services can serve as evaluation criteria.

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Contract negotiation focuses on finding a fair and reasonable price for both the buyer and the seller.

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Weighting systems are unbiased approaches to determine which seller has the best offer to complete the procured product or service.

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Screening Systems allow an organization to screen out sellers that do not qualify for the procured product or service.

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“Should cost” estimates are completed by the performing organization to determine if sellers completely understand the requirements of the project work.

Contract Administration

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Contract administration ensures the sellers are meeting their contractual obligations.

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Change requests may require updates to the contract between the buyer and the seller. Contract Change requests are part of the Integrated Change Control system.

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The project manager must document and report to the seller and management on how the seller is meeting its contract obligations.

Contract Closeout

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Contract closeout is similar to administrative closure.

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Contract documentation—such as the contract, schedules, relevant documentation, approved contract changes, performance reports, and other pertinent information—is needed to complete contract closeout.

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Procurement audits are intended to review, document, and share the successes and failures of the current project’s procurement process. The information can be applied to other projects within the organization.

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A contract file is created and is included with the project records as part of the historical information of the current project.



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PMP Project Management Professional Study Guide
PMP Project Management Professional Study Guide, Third Edition (Certification Press)
ISBN: 0071626735
EAN: 2147483647
Year: 2004
Pages: 209

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