Module 11: Project procurement management

Question 1

Key outputs of a procurement managment plan

Answer 1

• evaluation of make-or buy decision
• procurement mangement plan
• procurement documents
• supplier evaluation matrix

Question 2

Make-or-buy analysis

Answer 2

Decide whether best done internally or externally. Budget and available skill are key determinants. Or lease-or-buy analysis

Question 3

Procurement management plan

Answer 3

How the project with purchase or lease goods and services.
- Contract types that the project team decides to use.
- Risk management issues.
- Types of estimates that will be used to evaluate make-or-buy or lease-or-buy decisions.
- Project management team responsibilities in managing the contracts.
- Managing lead times to purchase goods and services in time for work activities.
- Standard procurement document templates that will be used for various contracts.
- Guidelines for identifying sellers.

Question 4

Fixed-price contract

Answer 4

Know exactly what is expected and no surprises. Some have incentive fee that is tied to cost, schedule or performance. Used in well defined projects. Sellers may pad estimates to reduce risk, but also need to be competitive.

Question 5

Three types of contracts

Answer 5

Fixed-price, cost-reimbursable, or hybrid

Question 6

Cost-reimbursable

Answer 6

Payments to seller after work is completed. Payment for direct and indirect costs. When requirements are loose or unknown. Seller tracks billable hours and expenses. May also include incentives to cost, schedule, or performance. Risk lies with buyer because expenses vary.

Question 7

Time-and-material

Answer 7

Combo of fixed price and cost-reimbursable. some areas more easily estimated. Labour could be fixed and materials could be variable.

Question 8

Procurement documents

Answer 8

RFP & RFQ

Question 9

RFP

Answer 9

(request for proposal) - external suppliers. Describes what buyer wants to procure and seller provides solution and quote. Expensive and time consuming to prepare for both parties

Question 10

RFQ

Answer 10

Request for quote.
buyer knows what they want but needs more information from the supplier. How they will do it and how much it will cost.

Question 11

Contract statement of work

Answer 11

Buyer creates and describes the material or service that the buys wants to purchase. Accompanies RFP and includes description of services required, scope of work, project objectives, project schedule, and any other information.

Question 12

Supplier evaluation matrix

Answer 12

Review RFP check previous work experience. Create shortlist and evaluate suppliers using matrix. Identifies criteria and weights them.

Question 13

Agile procurement planning

Answer 13

Use a master agreement may be used to allow changes to occur without impacting overall contract.

Question 14

Lean-Agile procurement

Answer 14

approach where collaboration between people is key to success.

Question 15

Indefinite delivery indefinite quantity

Answer 15

This type of contract helps prevent project delays and budget overruns due to uncertainty over when goods or services would be needed.