Procurement Flashcards
What is project procurement management?
The processes required to develop and administer agreements such as contracts, purchase orders, memoranda of agreements, service level agreements
Who are the parties involved in procurement processes?
The buyer and seller
What is the role of the project manager in project procurement management?
Preparing requests for proposals, negotiating contracts, selecting a seller. Collaborate with legal, technical and financial departments.
What is another name for sellers?
Bidders
What are the processes in project procurement management?
Plan procurement management
Conduct procurements
Control procurements
What are some trends and emerging practices in project procurement management?
Advances in tools More advanced risk management Changing contracting processes Logistics and supply chain management Technology and stakeholder relations Trial engagements
What are some tailoring considerations for project procurement management?
Complexity of procurement
Physical location
Governance and regulatory environment
Availability of contractors
What are questions to ask when tailoring considerations for project procurement management?
“Is there one main procurement or multiple procurements at different times with different sellers?”
“Are the buyers and sellers in the same location? Are they in different time zones, countries or continents?”
“Are local laws and regulations integrated into the organizations procurement policies?”
“Are there available contractors who can perform the work?”
What are considerations for agile environments for project procurement management?
The supplier might become part of the development team to respond quickly to the needs of the project. Collaborative working relationship can lead to a shared risk model.
What is the purpose of the plan procurement management process?
Documents project procurement decisions, specifying the approach and identifying potential sellers. Determines whether to acquire goods or services from outside the project.
What are the steps of procurement?
Prepare the procurement statement of work (SOW) or terms of reference (TOR)
Prepare a high level cost estimate
Advertise the opportunity
Identify a short list of qualified sellers
Prepare and issue bid documents
Prepare and submit proposals by the seller
Conduct a technical and quality based evaluation
Perform a cost evaluation
Prepare the final combined quality and cost evaluation to select the winning proposal
Finalize negotiations and sign a contract
What is a statement of work?
A narrative description of products, services or results to be delivered by the project. Developed from the project scope baseline.
What are bids?
Bid documents are used to solicit proposals from sellers. Used when the seller selection decision is based on price.
What is a proposal?
Generally used when considerations other than price are important, such as technical capability or technical approach.
What is a fixed price contract?
Involves setting a fixed price for a defined result.
What is a firm fixed price?
The price for goods is set and is unlikely to change
What is a fixed price incentive fee?
Allows for deviation of the price of the goods depending on the performance of the seller.
What is a fixed price with economic price adjustments?
Allows for adjustments to the contract price due to changed conditions.
What are cost-reimbursable contracts?
Involves payments to the seller for all costs incurred while completing the work, plus a fee representing seller profit.
What is a cost plus fixed fee?
A seller is reimbursed for all costs and received a fixed fee payment
What is a cost plus incentive fee?
A seller is reimbursed for all costs and receives a predetermined incentive fee
What is a cost plus award fee?
A seller is reimbursed for all costs but the fee is based on satisfaction criteria
What is a time and materials contract?
A hybrid type of contract with aspects of both cost reimbursable and fixed price contracts. Often used for the acquisition of experts and any other outside support when a precise statement of work cannot be quickly prescribed.
What are some criteria used for source selection?
Capability and capacity Product cost and life cycle cost Delivery dates Technical expertise and approach Specific relevant experience
What is a make or buy analysis?
The act of choosing between manufacturing a product in house or purchasing it from an external supplier
What are some procurement strategies or delivery methods for professional services?
Buyer/seller provider with no subcontracting
Buyer/seller provider with subcontracting allowed
Joint venture between buyer and services provider
Buyer/services provider acts as the representative
What are some procurement strategies or delivery methods for industrial or commercial construction?
Turnkey Design build Design bid build Design build operate Build own operate transfer
What are some types of contract payments?
Lump sum Firm fixed price Cost plus award fees Cost plus incentive fees Time and materials Target cost
Describe information for procurement phases.
Sequencing or phasing of the procurement, a description of each phase and the objectives of each.
Performance indicators and milestones
Criteria for moving from phase to phase
Monitoring and evaluation plan for tracking progress
Process for knowledge transfer for use in subsequent phases
What is the procurement management plan?
An output of the plan procurement management process. Contains activities to be undertaken during the procurement process.
What are the inputs to the plan procurement management process?
Enterprise environmental factors Organizational process assets Project documents Project charter Project management plan Business documents
What are the outputs to the plan procurement management process?
Organizational process assets updates Project documents updates Source selection criteria Procurement strategy Make or buy decision Procurement management plan Bid documents Independent cost estimate Procurement statement of work Change requests
What are some tools and techniques used in the plan procurement management process?
Source selection analysis Expert judgement Data gathering Data analysis Meetings
What is the conduct procurements process?
Involves obtaining responses to bids and proposals, selecting a vendor, and awarding the contract.
What is the role of the project manager during the conduct procurement process?
Help the procurement department as a facilitator for the project and give recommendations, write the requirements (SOW) for the supplier, conducts site visits, get status reports,
What is advertising for procurements?
Communicating with users or potential users of a product, service or result.
What is procurement negotiation?
Clarifies the structure, rights and obligations of the parties and other terms of the purchases so that mutual agreement can be reached prior to signing the contract
Who should lead procurement negotiations?
A member of the procurement team that has the authority to sign contracts.
What are the inputs to the conduct procurements process?
Project management plan Seller proposals Project documents Procurement documentation Enterprise environmental factors Organizational process assets
What are the outputs to the conduct procurements process?
Project management plan updates Selected sellers Agreements Organizational process assets updates Project documents updates Change requests
What are tools and techniques used in the conduct procurements process?
Expert judgement Interpersonal and team skills Bidder conferences Data analysis Advertising
What are bidder conferences?
Ensures that all prospective bidders have a clear understanding of the procurement and no bidders receive preferential treatment
What is the control procurements process?
Managing procurement relationships, monitoring contract performance, making changes as appropriate, and closing out contracts
What is the role of the project manager in the control procurements process?
Collect data and manage project records Refine procurement plans and schedules Set up for gathering, analyzing, and reporting procurement related project data Monitor procurement environment Pay invoices
What are contested changes?
Requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred
How are procurement contracts closed?
The buyer provides the seller with formal written notice that the contract has been completed.
What are inputs to the control procurements process?
Procurement documentation Organizational process assets Agreements Project management plan Enterprise environmental factors Project documents Work performance data Approved change requests
What are the outputs to the control procurements process?
Organizational process assets updates Change requests Work performance information Closed procurements Procurement documentation updates Project management plan updates Project documents updates
What are tools and techniques used in the control procurements process?
Audits Inspection Data analysis Expert judgement Claims administration
