Procurement Flashcards
What is the process of procurement management?
Plan Procurements
Conduct Procurements
Administer Procurements
Close Procurements
Name inputs to the procurement management process.
EEFs OPAs Scope baseline Risk Rgister Project Schedule Initial cost estimates for contracted work Cost baseline
What are key putputs of the Plan contracting process?
Procurement Management Plan
Procurement SOW
Make-or-buy decisions
Procurement documents
What are key outputs of the Conduct Procurements process?
Selected Sellers
Procurement contract
What are key outputs of the Administer Procurements process?
Procurement documentation
Change Requests
Project management plan updates
What are key outputs of te close procurements process?
Closed procurements
Formal acceptance
What is a procurement management plan?
A plan for how each contract procurement will be administered.
What is the differance between centralized and decentralized contracting?
Centralized contracting: There is on eprocurement, and the procurement manager handles procurements on many projects.
Decentralized contracting: A procurement manager is assigned to one project full-time and reports directly to the PM.
What is required for a legal contract?
Offer Acceptance Consideration Legal Capacity Legal Purpose
What is a contract?
It may include all of the following:
Legal terms Business terms Procurement SOW Marketing literature Drawings
Describe the PM’s role in procurement.
Understand the procurement process
Make sure the work described in the contract is complete
Be involved in the whole procurement process
Help tailor the contract to the project
Incorperate mitigation and allocation risks into the contract.
Name the advantages of centralized contracting.
Increased expertise in contracting
Standarized practices
Clear career path
Name the disadvantages of centralized contracting.
One person works on many projects
It may be difficult to obtain contracting help when needed.
Name the advantages of decentralized contracting.
Easier access to contracting expertise
More loyalty to the project
Name the disadvantages of decentralized contracting.
No home for the contracts person after the project
Less focus on improving contracting expertise/process
Inefficient use of resources
Little standardization of contracting processes from one project to the next
What is a make-or-buy decision?
Analysis of whether the performing oganization should do the work or buy the services/supplies from outside the organization.
What are the main types of contracts?
Cost reembursable
Fixed price
Time and materials
Pruchase order
What is a cost reembursable (CR) contract?
All costs are reembursed. Differant types:
- Cost plus fixed fee (CPFF)
- Cost plus incentive fee (CPIF)
- Cost plus award fee (CPAF)
- Cost plus percentage of cost (CPPC) or cost plus fee (CPF)
What is a cost plus fixed fee (CPFF) contract?
All costs are reimbursed. The fee is fixed at a certain monetary amount.
Used when the buyer knows in general what is needed - but lacks detail.
Medium risk for buyer - becuase he doesnt know what he is asking for.
Minimal risk for seller.
What is a cost plus percentage of cost (CPPC) or cost plus fee (CPF) contract?
All costs are reimbursed, plus a specific percentage of costs as a fee or profit.
Covers the sellers cost for building something for a buyer and pays a % of total costs as a fee.
The more the seller spends, the higher the fees.
Most companies will nto enter into this type of contract becuase it can hurt both parties.
What is a cost plus incentive fee (CPIF)contract?
Costs are reimbused plus an incentive, usually an additional fee, for exceeding performance criteria that have been determined in advance.
I.E. I know what I want, but lack some details. I am going to give you an incentive to help out vs. a fixed fee.
What is a time and materials (T&M) contract?
Usually a fixed hourly rate or a fixed cost per item, plus a reimbursable componant for expense or materials.
- Smaller incentives, services, or staff supplimentation
- Minimal risk on both sides
What is a fixed price contract?
There is only one fee for accomplishing the work.
Couple of differant types:
- Firm fixed prioces (aka lump sum)
- Fixed price Incentive Fee (FPIF)
- Fixed proce economic proce adjustment (FPEPA)
What is a fixed price incenive fee (FPIF) contract?
Total price is fixed, but an additional amount may be paid for exceeding performance criteria determined in advance.
Contract w/ incentives
Think road contracts - i.e. bonus for finishing early
Minimal risk for buyer - significant risk for seller
