17 | Monitoring and Controlling Procurements Flashcards
In this lesson, you will: • Monitor and control vendors and procurements. • Handle legal issues associated with procurements.
Vendor Management?
Vendor management is a management technique that is used to obtain and oversee contracted
resources, including people, facilities, equipment, and materials. Managing project vendors is
important for obtaining procured project elements without any delays. Contracts must be
established to stipulate the quality and services of vendors.
Factors to consider when selecting vendor services include?
- Impact on other projects.
- Initial and ongoing maintenance costs internally versus externally.
- Intellectual capital considerations. For example, will the organization lose the opportunity to gain a critical competence if the work is done externally?
- Performance capabilities.
- Compatibility with existing support structure.
- The organization’s capability to manage a vendor relationship.
Procurement Documentation?
Procurement documentation contains information about vendor performances on the cost, scope, quality, contract change notes, approved and rejected changes, payment notifications, and claims. It can also include technical documentation, deliverables, seller performance reports, warranties, financial documents, and results of contract inspections. Procurement documentation is acknowledged and validated for contract closure. The documentation is created when administering project procurements.
The Procurements Administrator’s Duties?
- Act as a contract compliance officer.
- Interpret contract specifications and ensure that their terms are met.
- Monitor vendor performance.
- Integrate subcontracted elements.
- Manage change requests.
- Resolve disputes and manage payments.
- Deal with contract breach, early termination, and so forth.
Procurement Performance Reviews?
A procurement performance review is the evaluation of the vendor’s work. It verifies that the work performed is in accordance with the scope, schedule, quality, and cost as defined by the contract. It can include a review of documentation submitted by the vendor, inspections, or quality audits. The purpose of this review is to identify strengths and weaknesses with project performance
and to monitor the progress of schedules and tasks.
The Contract Change Control System?
The contract change control system might be a component of the integrated change control system or it might be a separate system, but it is dedicated specifically to control contract changes. It specifies the process by which project contract changes can be made. It includes the documentation, dispute-resolution processes, and approval levels to authorize the changes to contract specifications.
Vendor audit?
A vendor audit seeks to answer several questions about the procurement process.
- Were the contract specifications completed as specified and were all terms and conditions met?
- Were the quality, timelines, and cost acceptable?
- Were the vendor’s project management, contract management, financial management, and communications management practices acceptable?
- Was the vendor able to accommodate requested changes?
- Were the members of the vendor’s staff acceptable? Did any individuals merit special recognition?
- Was there anyone you will not recommend for future assignments?
- Were there areas for improvement?
- What were the lessons learned from this contract?
Payment Systems?
Payment systems are used to make payments to vendors that are made contingent on the acceptance of the delivered goods or services and on the receipt of a valid invoice. Typically, invoices are sent to the organization’s Accounts Payable department, which in turn checks with the project organization to verify that the goods or services were delivered and accepted and then authorizes payment.
Claims Administration?
Disputes that arise when buyers and vendors cannot agree on changes are referred to as claims or appeals. Claims are handled in accordance with contract terms and are managed throughout the term of the contract. If the buyer and vendor do not resolve the claim, it will be handled according to the dispute resolution procedures in the contract. Contract clauses may include arbitration or
litigation and may be brought up after contract closure.
The Records Management System?
The records management system is a software application that is used to generate, track, and
retrieve documents and for correspondence purposes. It is also used to manage the project vendors,
procurements, and contract documentations. It contains the processes, control functions, and
automation tools. The records management system is a subsystem of the PMIS.
What are the 5 types of contract changes?
- Administrative changes
- Contract modification
- Supplemental agreement
- Constructive changes
- Termination of contract
Administrative contract changes?
These are non-substantive changes to the way the contract is administered. This is the most common type of contract change. Administrative changes should be documented and written notification sent to the vendor with a clear expectation that the vendor will approve and return the change document. Administrative changes require no adjustment in payment.
Contract modification?
This is a substantive change to the contract requirements such as a new deadline or a change to the product requirements. Contract modifications should be documented and a formal change order should be sent to the vendor. Contract modifications may result in claims for payment adjustment.
Supplemental agreement contract change?
This is an additional agreement related to the contract but negotiated separately. A supplemental agreement requires the signatures of both buyer and vendor. A separate payment schedule is attached for the work in a supplemental agreement
Constructive changes contract change?
These are changes that the buyer may have caused through action or inaction. As a result of constructive changes, a vendor is required to change the way the contract is fulfilled. The vendor may claim a payment adjustment as a result of constructive changes.
