Procurement Mgmt Flashcards
What is the process of procurement mgmt?
- Plan procurement
- Conduct procurements
- Adminster procurements
- Close procurements
Name the inputs to procurement mgmt process
- Enterprise environmental assets
- Organizational process assets
- Scope baseline
- Risk register
- Project schedule
- Initial cost estimates for contracted work
- Cost baseline for the project
What are key outputs of the Plan Procurements Process
- Procurement Mgmt Plan
- Procurement Statement of Work
- 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 mgmt plan updates
What are key outputs of the Close procurements process?
Closed procurements
Formal Acceptance
What is a procurement mgmt plan?
A plan for how each procurement will be adminstered
What is the difference btwn centralized & de-centralized contracting?
Centralized Contracting: Ther is 1 procurement, and the procurement mgr handles procurements on many projects
Decentralized contracting: A procurement mgt is assigned to one project full-time and reports direclty to the project mgr
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 statement of work
- Marketing literature
- Drawings
Describe the project manager’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
- Incorporate mitigation and allocation of risks into the contract
Name the advantages of centralized contracting
Increased expertis in contracting
Standardized practices
Clear career paths
Name the disadvantages of centralized ocntracting
One person works on may projects
It may be difficult to obtain contracting help when needed
Name advantages of decentralized contracting
Esier acces to contracting expertise
More loyalty to the project
Name the disadvantages of decentralized contracting
No home for contracts person after the project
Less focus on improving contracting expertise
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 organzation should do the work or buy th services/supplies from outside the organization
What are the main types of contracts?
Cost reimburseable
Fixed price
Time and material
What is a cost re-imbursable contract?
All costs are reimbursed
What is a cost plus fixed-fee contract?
All costs are reimbursed
The fee is fixed at a certain monetary amount
What is a cost plus percentage of cost contract?
All costs are reimbursed plus a specific percentage of costs as fee or profit
What is a cost plus incentive fee contract?
Costs are reimbursed plus an incentive, usually an additional fee, for exceeding performance criteria tha thave been determined in advance
What is a time and material contract?
Usually a fixed hourly rate of a fixed cost per item, plus a reimbrsable component for expenses or material
What is a fixed price contract?
There is only one fee fora ccomplsihing all the work
What is a fixed price incentive fee contract?
Total price is fixed, but an additional amount may be paid for exceeding performance criteria determined in advance
What is a fixed price economic price adjustment contract?
A fixed price contract iwht an allowable adjustment for price increase, due to cost increase in later time periods
Describe how contract adminstration effots will be different with each contract form
The critical concept cannot be sumarized here:
Se PMP Exam Prep for more info
What is a purchase order?
A unilateral contract
What do incentives accomplish? What might they be used for?
Help bring the seller’s objectives in line with the buyer’s
Incentives for:
- Time
- Cost
- Quality
- Scope
Who has the cost risk in a cost reimburseable contract? In a fixed price contract?
The buyer
The seller
Name types of procurement statements of work
Performance
Functional
Design
Wnat are procurement documents
Request for proposal (RFP)
Invitation for bid (IFB)
Request for quotation (RFQ)
What are contract terms and conditions?
What are special provisions?
Standard conract terms and provisions: Terms and conditions that are used for all contracts w/in the company
Special provisions: Terms and conditions created for the unique needs of the project
Created with the input of the PM
Name common terms and conditions in a contract
Review long list of terms and conditiosn in Procurement Mgmt chapter of PMP Exam Prep
What is a letter of intent?
A ltter from the buyer , without legal binding, saying the buyer intends to hire the seller
What does privity refer to?
Contractual relationships between two or more companies
What does non-competative procurement mean?
Work awarded to a single source or sole source without competition
When are source selection criteria created and used?
What do they refer to?
Rationale that the buyer will use to weight or score sellers’s proposals
Created during the Plan Procurements process
Used during the Conduct Procurements process to pick a seller
What is a bidder conference?
What should be watched out for?
A meetin with prospective sellers to make sure all understand the procuement and have a chance to ask questions.
Watch for:
- Collusion
- Sellers not asking questions
All questions and answers are distributed to all
What is a qualified seller list?
A list of sellers who have been preapproved
What are objectives of negotiaion?
Obtain a fair and rasonable price
Develop a good relationship with the other side
Name some negotiation tactics
Attacks
Good guy/bad guy
Deadline
Lying
Missing man
Delay
WIthdrawal
Fait Accompli (somethine already occurred)
Name some of the PM activities during the Adminster Procurements process
Review invoices
Integrated change control
Interpret the contract
Montitor performance against the contract
Risk mgmt
Please see long list in PMP Exam Prep
Why might there be a conflcit between the contract administrator and the project manager?
The contract administrator is the only one with the power to change the contract ( including project scope)
What is a contract change control system?
A system created to modify the contract and to control changes to the contract
What must be done for all contract changes?
They must be formally discussed
What is the purpose of a procurement performance review?
To identify seller’s successes or failures, and allow the buyer to rate the seller’s ability to perform
Define claims administration
Managing contested changes and constructive changes (claims) reuested by the seller
What is the key function of a records mgmt system?
Maintain and index of contract documentation and records to assist in retrieval
Part of the project management information sysytem
Name guidelines for interpreting what is or is not included in the contract
Pleas see contract interprestion discussion and excercise in the book
What occurs during the Close Procurements process?
Product verification
Procurement audit
Financial closure
What is a procurement audit?
A structured review of the procurement process and determination of lessons learned to help other procurements
