project procurement management 2

Download Project Procurement Management 2

Post on 05-Apr-2018

215 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • 8/2/2019 Project Procurement Management 2

    1/61

    4/14/12

  • 8/2/2019 Project Procurement Management 2

    2/61

    Click to edit Master subtitle style

    4/14/12

    Project ProcurementManagement

  • 8/2/2019 Project Procurement Management 2

    3/61

    4/14/12

    Topics

    v Procurement Plan

    vArjay Dela Cruz

    v Solicitation PlanningvAndrea Ramos

    v Solicitation

    v Michelle Rose Hernal

    v Source Selection

    v Ma. Gella Monancillo

    v Contract Administration

  • 8/2/2019 Project Procurement Management 2

    4/61

  • 8/2/2019 Project Procurement Management 2

    5/61

    4/14/12

    Project ProcurementManagement Overview

    PROJECT PROCUREMENT MANAGEMENT

  • 8/2/2019 Project Procurement Management 2

    6/61

    4/14/12

    PROCUREMENTPLANNING

  • 8/2/2019 Project Procurement Management 2

    7/614/14/12

    PROCUREMENTPLANNING

    Procurement planning is the processof identifying which project needscan be best met by procuring

    products or services outside theproject organization. It involvesconsideration of whether to procure,

    how to procure, what to procure,how much to procure, and when toprocure it.

    Procurement planning should also

  • 8/2/2019 Project Procurement Management 2

    8/614/14/12

    Inputs to ProcurementPlanning

    Scope statement

    The scope statement describes the

    current project boundaries. It providesimportant information about projectneeds and strategies that must beconsidered during procurement

    planning.Product description

    The description of the product of the

    project provides important information

  • 8/2/2019 Project Procurement Management 2

    9/614/14/12

    Inputs to ProcurementPlanning

    Procurement resources

    If the performing organization does not

    have a formal contracting group, theproject team will have to supply boththe resources and the expertise tosupport project procurement activities.

    Market conditions

    The procurement planning process mustconsider what products and services are

    available in the marketplace, from

  • 8/2/2019 Project Procurement Management 2

    10/614/14/12

    Inputs to ProcurementPlanning

    Other planning outputs

    To the extent that other planning

    outputs are available, they must beconsidered during procurementplanning. Other planning outputs whichmust often be considered include

    preliminary cost and scheduleestimates, quality management plans,cash flow projections, the workbreakdown structure, identified risks,

    and planned staffing.

  • 8/2/2019 Project Procurement Management 2

    11/614/14/12

    Inputs to ProcurementPlanning

    Constraints

    Constraints are factors that limit the

    buyers options. One of the mostcommon constraints for many projects isfunds availability.

    Assumptions

    Assumptions are factors that, forplanning purposes, will be considered tobe true, real, or certain.

  • 8/2/2019 Project Procurement Management 2

    12/614/14/12

    Tools and Techniques forProcurement Planning

    Make-or-buy analysis

    This is a general management

    technique which can be used todetermine whether a particular productcan be produced cost-effectively by theperforming organization. Both sides of

    the analysis include indirect as well asdirect costs.

    A make-or-buy analysis must also reflectthe perspective of the performingorganization as well as the immediate

  • 8/2/2019 Project Procurement Management 2

    13/614/14/12

    Tools and Techniques forProcurement Planning

    Expert judgment

    Expert judgment will often be required

    to assess the inputs to this process.Such expertise may be provided by anygroup or individual with specializedknowledge or training and is available

    from many sources including: Other units within the performing

    organization.

    Consultants.

    Professional and technical associations.

  • 8/2/2019 Project Procurement Management 2

    14/614/14/12

    Tools and Techniques forProcurement Planning

    Contract type selection

    Different types of contracts :

    Fixed price or lump sumcontracts: involve afixed total price for a well-defined product orservice.

    Cost reimbursablecontracts: involve payment

    to the seller for direct and indirect costs. Time and materialcontracts: hybrid of both

    fixed price and cost reimbursable contracts, oftenused by consultants

    Unit pricecontracts: require the buyer to paythe seller a predetermined amount per unit of

  • 8/2/2019 Project Procurement Management 2

    15/614/14/12

    Outputs from ProcurementPlanning

    Procurement management plan

    The procurement management planshould describe how the remainingprocurement processes (from solicitationplanning through contract close-out) willbe managed.

    A procurement management plan maybe formal or informal, highly detailed orbroadly framed, based on the needs ofthe project. It is a subsidiary element of

    the overall project plan described in

  • 8/2/2019 Project Procurement Management 2

    16/614/14/12

    Outputs from ProcurementPlanning

    Statement(s) of work (SOW)

    A statement of workis a description

    of the work required for theprocurement.

    If a SOW is used as part of a contract todescribe only the work required for thatparticular contract, it is called acontract statement of work.

    A SOW is a type of scope statement.

    A good SOW gives bidders a better

  • 8/2/2019 Project Procurement Management 2

    17/61

    4/14/12

    Statement Of Work(SOW) Template

  • 8/2/2019 Project Procurement Management 2

    18/61

    4/14/12

    Solicitation Planning

  • 8/2/2019 Project Procurement Management 2

    19/61

    4/14/12

    Solicitation Planning

    Solicitation planning involvespreparing the documents needed tosupport solicitation.

  • 8/2/2019 Project Procurement Management 2

    20/61

    4/14/12

    Inputs to SolicitationPlanning

    Procurement management plan

    Statement(s) Of Work (SOW)

    Other planning outputsThis have been modified from when they were

    considered as part of procurement planning,should be reviewed again as part ofsolicitation. In particular, solicitation planningshould be closely coordinated with the projectschedule.

  • 8/2/2019 Project Procurement Management 2

    21/61

    4/14/12

    Tools and Techniques forSolicitation Planning

    Standard forms

    Standard forms may include standard

    contracts, standard descriptions ofprocurement items, or standardizedversions of all or part of the needed biddocuments. Organizations that do

    substantial amounts of procurementshould have many of these documentsstandardized.

    Expert judgment

  • 8/2/2019 Project Procurement Management 2

    22/61

    4/14/12

    Outputs from SolicitationPlanningProcurement documents.

    Procurement documents are used tosolicit proposals from prospective

    sellers. The terms bid and quotationare generally used when the sourceselection decision will be price-driven(as when buying commercial items),

    while the term proposal is generallyused when non-financial considerationssuch as technical skills or approach areparamount (as when buying professional

    services).

  • 8/2/2019 Project Procurement Management 2

    23/61

    4/14/12

    A bid, also called a tender or quote(short for quotation), is a documentprepared by sellers providing pricingfor standard items that have beenclearly defined by the buyer.

  • 8/2/2019 Project Procurement Management 2

    24/61

    4/14/12

    A proposal is a documentprepared by a seller when there aredifferent approaches for meetingbuyer needs.

  • 8/2/2019 Project Procurement Management 2

    25/61

    4/14/12

    Outputs from SolicitationPlanning

    Procurement documents may consist of:

    Information for sellers

    Background information

    Procedures for replying

    Guidelines for preparation of the proposal

    Evaluation criteria

    Pricing forms

    SOW

    Proposed T&C in the contract.

    The seller must be aware of all the work

  • 8/2/2019 Project Procurement Management 2

    26/61

    4/14/12

    Outputs from SolicitationPlanning

    Well designed procurement documentshave the following effects:

    Easier comparison of sellers response

    More complete proposals

    More accurate pricing

    Decrease in the amount of changes to the

    project.

  • 8/2/2019 Project Procurement Management 2

    27/61

    4/14/12

    Outputs from SolicitationPlanningEvaluation criteria

    Evaluation criteria are used to rate orscore proposals.

    Evaluation criteria are often included aspart of the procurement documents.

    Selection criteria may include:

    Understanding of needs

    Overall or life-cycle cost

    Technical capability

    Management approach

    f li i i

  • 8/2/2019 Project Procurement Management 2

    28/61

    4/14/12

    Outputs from SolicitationPlanning

    Statement of work updates

    Modifications to one or more statements

    of work may be identified duringsolicitation planning.

  • 8/2/2019 Project Procurement Management 2

    29/61

    4/14/12

    Solicitation

  • 8/2/2019 Project Procurement Management 2

    30/61

    4/14/12

    Solicitation

    Solicitation involves obtaininginformation (bids and proposals)from prospective sellers on howproject needs can be met. Most ofthe actual effort in this process isexpended by the prospective sellers,

    normally at no cost to the project.

  • 8/2/2019 Project Procurement Management 2

    31/61

    4/14/12

    Inputs to Solicitation

    Procurement documents

    Procurement Documents are used tosolicit proposals from prospective

    sellers. Common names for differenttypes of procurement documentsinclude: Invitation for Bid (IFB), Requestfor Proposal (RFP), Request for

    Quotation (RFQ), Invitation forNegotiation, and Contractor InitialResponse.

  • 8/2/2019 Project Procurement Management 2

    32/61

    4/14/12

    Inputs to Solicitation

    Qualified seller lists

    Some organizations maintain lists or

    files with information on prospectivesellers. These lists will generally haveinformation on relevant experience andother characteristics of the prospective

    sellers. If such lists are not readilyavailable, the project team will have todevelop its own sources.

  • 8/2/2019 Project Procurement Management 2

    33/61

    4/14/12

    Qualified seller lists

    T l d T h i f

  • 8/2/2019 Project Procurement Management 2

    34/61

    4/14/12

    Tools and Techniques forSolicitation

    Bidder conferences

    Bidder conferences are meetings with

    prospective sellers prior to preparationof a proposal. They are used to ensurethat all prospective sellers have a clear,common understanding of the

    procurement (technical requirements,contract requirements, etc.). Responsesto questions may be incorporated intothe procurement documents as

    amendments.

    T l d T h i f

  • 8/2/2019 Project Procurement Management 2

    35/61

    4/14/12

    Tools and Techniques forSolicitation

    Advertising

    Existing lists of potential sellers can

    often be expanded by placingadvertisements in general circulationpublications such as newspapers or inspecialty publications such as

    professional journals. Some governmentjurisdictions require public advertising ofcertain types of procurement items;most government jurisdictions require

    public advertising of subcontracts on a

  • 8/2/2019 Project Procurement Management 2

    36/61

    4/14/12

  • 8/2/2019 Project Procurement Management 2

    37/61

    4/14/12

    Outputs from Solicitation

    Proposals

    Proposals are seller-prepared

    documents that describe the sellersability and willingness to provide therequested product. They are prepared inaccordance with the requirements of the

    relevant procurement documents.

  • 8/2/2019 Project Procurement Management 2

    38/61

    4/14/12

    Source Selection

  • 8/2/2019 Project Procurement Management 2

    39/61

    4/14/12

    Source Selection

    Source selection involves the receiptof bids or proposals and theapplication of the evaluation criteria toselect a provider. This process isseldom straightforward:

    Price may be the primary determinant

    for an off-the-shelf item, but the lowestproposed price may not be the lowestcost if the seller proves unable to deliverthe product in a timely manner.

  • 8/2/2019 Project Procurement Management 2

    40/61

    4/14/12

    Source Selection

    Inp ts to So rce

  • 8/2/2019 Project Procurement Management 2

    41/61

    4/14/12

    Inputs to SourceSelection

    Proposals

    Evaluation criteria

    Organizational policies

    Any and all of the organizationsinvolved in the project may have formal

    or informal policies that can affect theevaluation of proposals.

    Tools and Techniques for

  • 8/2/2019 Project Procurement Management 2

    42/61

    4/14/12

    Tools and Techniques forSource SelectionContract negotiation

    Contract negotiation involves clarificationand mutual agreement on the structure and

    requirements of the contract prior to thesigning of the contract. To the extentpossible, final contract language shouldreflect all agreements reached. Subjects

    covered generally include, but are notlimited to, responsibilities and authorities,applicable terms and law, technical andbusiness management approaches,contract financing, and price.

    Tools and Techniques for

  • 8/2/2019 Project Procurement Management 2

    43/61

    4/14/12

    Tools and Techniques forSource Selection

    Weighting system

    A weighting system is a method forquantifying qualitative data in order tominimize the effect of personal prejudiceon source selection. Most such systemsinvolve :

    Assigning a numerical weight to each of theevaluation criteria.

    Rating the prospective sellers on eachcriterion.

    Multiplying the weight by the rating.

    Tools and Techniques for

  • 8/2/2019 Project Procurement Management 2

    44/61

    4/14/12

    Tools and Techniques forSource Selection

    Screening system

    A screening system involvesestablishing minimum requirements ofperformance for one or more of theevaluation criteria. For example, aprospective seller might be required to

    propose a project manager who is aProject Management Professional (PMP)before the remainder of their proposalwould be considered.

    Tools and Techniques for

  • 8/2/2019 Project Procurement Management 2

    45/61

    4/14/12

    Tools and Techniques forSource Selection

    Independent estimates

    For many procurement items, theprocuring organization may prepare itsown estimates as a check on proposedpricing. Significant differences fromthese estimates may be an indication

    that the SOW was not adequate or thatthe prospective seller eithermisunderstood or failed to respond fullyto the SOW. Independent estimates are

    often referred to as should cost

    Outputs from Source

  • 8/2/2019 Project Procurement Management 2

    46/61

    4/14/12

    Outputs from SourceSelection

    Contract

    A contract is a mutually bindingagreement which obligates the seller to

    provide the specified product andobligates the buyer to pay for it.

    A contract is a legal relationship subject

    to remedy in the courts. The agreementmay be simple or complex, usually (butnot always) reflecting the simplicity orcomplexity of the product. It may be

    called, among other names, a contract,

  • 8/2/2019 Project Procurement Management 2

    47/61

    4/14/12

    Contract Administration

  • 8/2/2019 Project Procurement Management 2

    48/61

    4/14/12

    Contract Administration

    The Contract Administrationprocess helps to assure the projectsgoals and needs are on track and on

    schedule and the seller is behavingappropriately. The ContractAdministration process is a part of

    the Monitoring and ControllingProcess Group.

    Inputs to Contract

  • 8/2/2019 Project Procurement Management 2

    49/61

    4/14/12

    Inputs to ContractAdministration

    Contract - A contract is an agreementbetween the buyer and the seller which detailstheir legal requirements and obligations.

    Contract Management Plan - The ContractManagement Plan utilizes the existing contractrequirements to provide the buyer and theseller with guidelines for administering and

    monitoring contracts for significant purchasesor acquisitions.

    Selected Sellers - The selected sellers aresellers that the buyer deems the best

    candidates for the project and that have

    Inputs to Contract

  • 8/2/2019 Project Procurement Management 2

    50/61

    4/14/12

    Inputs to ContractAdministration

    Performance Reports - Performancereports are more detailed than workperformance information, they use

    methods such as bar charts and S-curves to organize and summarizeinformation such as earned valuemanagement and project work progress.

    Approved Change Requests -Approved change requests verify which

    changes to contracts or procurement

    e oo s a ec ques

  • 8/2/2019 Project Procurement Management 2

    51/61

    4/14/12

    e oo s a ec quesfor the Contract

    AdministrationOnce you have been able to get throughthe selection/acquisition phase, the projectmanager needs to track administrative

    issues, contract changes, and the seller'sprogress and quality of work to assure thatthe project is running smoothly. The toolsand techniques for the Contract

    Administration process are:

    Contract Change Control System -

    A contract change control system

    e oo s a ec ques

  • 8/2/2019 Project Procurement Management 2

    52/61

    4/14/12

    e oo s a ec quesfor the Contract

    Administration Buyer-conducted PerformanceReview - A buyer-conductedperformance review tracks the vendors

    progress in execution and productdelivery within contractual parameters.Hopefully, your organization is includingthe cost and project schedule in the

    contract. The purpose is to managecontract performance by recognizingperformance success and failures,anticipated completion on the contract

    statement of work, and finally identify

    e oo s a ec ques

  • 8/2/2019 Project Procurement Management 2

    53/61

    4/14/12

    e oo s a ec quesfor the Contract

    Administration Performance Reporting -Performance reporting involvesgathering the vendors performance

    data and distributing it to stakeholders.Performance Reporting can help to alertmanagement on whether the vendor ismeeting contractual objectives.

    Payment System - Payment systemsare tools and claims administrationprocesses used for Contract

    Administration. The buyer uses a

    e oo s a ec ques

  • 8/2/2019 Project Procurement Management 2

    54/61

    4/14/12

    e oo s a ec quesfor the Contract

    Administration Records Management System - Arecords management system is a set ofprocesses, related control functions,

    and automation tools which are used tomanage contract documentation andrecords. Project managers use recordsmanagement systems to manage

    contract documentation and records; tokeep an index of contract documentsand correspondence; and for help withretrieving, accessing, and archiving that

    documentation.

    Outputs from Contract

  • 8/2/2019 Project Procurement Management 2

    55/61

    4/14/12

    Outputs from ContractAdministration

    Contract Documentation -Contract documentation includes thecontract, schedules, requestedunapproved contract changes,approved change requests, anyseller-developed technical

    documentation, and workperformance information.

    Requested Changes - Requested

    changes to the Project Management

    e o rac

  • 8/2/2019 Project Procurement Management 2

    56/61

    4/14/12

    e o racAdministration process

    outputsOrganizational Process Assets(Updates) - Updates toorganizational process assets consistof the buyers' and vendors' writtenrecords of all contractadministration, including actions

    taken and decisions made, results ofbuyer audits and inspections,payment schedule updates, and

    seller performance evaluation

  • 8/2/2019 Project Procurement Management 2

    57/61

    4/14/12

    Contract Close-out

  • 8/2/2019 Project Procurement Management 2

    58/61

    4/14/12

    Contract Close-out

    Contract close-out is similar toadministrative closure in that itinvolves both product verification (Was

    all work completed correctly andsatisfactorily?) and administrativeclose-out (updating of records to

    reflect final results and archiving ofsuch information for future use). Thecontract terms and conditions mayprescribe specific procedures forcontract close-out. Earl termination of

    Inputs to Contract Close-

  • 8/2/2019 Project Procurement Management 2

    59/61

    4/14/12

    Inputs to Contract Close-out

    Contract documentation

    Contract documentation includes, but isnot limited to, the contract itself alongwith all supporting schedules, requestedand approved contract changes, anyseller-developed technical

    documentation, seller performancereports, financial documents such asinvoices and payment records, and theresults of any contract-related

    inspections.

    Tools and Techniques for

  • 8/2/2019 Project Procurement Management 2

    60/61

    4/14/12

    Tools and Techniques forContract Close-out

    Procurement Audits

    A procurement audit is a structuredreview of the procurement process fromprocurement planning through contractadministration. The objective of aprocurement audit is to identify

    successes and failures that warranttransfer to other procurement items onthis project or to other projects withinthe performing organization.

    Outputs from Contract

  • 8/2/2019 Project Procurement Management 2

    61/61

    Outputs from ContractClose-outContract file

    A complete set ofindexed records

    should be preparedfor inclusion with thefinal project records.

    Formalacceptance andclosure