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Project Procurement Management

 

Project Procurement Management is a part of project management that includes the processes required to acquire goods and services from outside the performing organization. Project Procurement Management consists of procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract close­out. Project Procurement Management provides the processes to acquire goods and services required for successful completion of the project.

 

Project Procurement Management is one of the nine knowledge areas defined by the PMBOK®. Project Procurement Management provides the processes to acquire goods and services required for successful completion of the project. Project Procurement Management includes the processes required to acquire goods and services (most often design and construction services) from outside the owner’s organization for a program, project, or a specific sub-project.  Project Procurement Management evaluates various project delivery approaches such as traditional design-bid-build, construction management, multi-prime and design/build to promote a contract strategy that can yield the most successful project.

 

Project Procurement Management is concerned with the processes for acquiring goods and services from outside the performing organization. The participation of external parties is common in projects. Commensurate with the risk involved in performance, projects need to coordinate and communicate requirements. These include legal documents defining the relationship, duration, nature and extent of work, terms, and conditions. The component processes of Project Procurement Management are procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract close out.

 

The Project Procurement Management plan: The Project Procurement Management plan defines the strategy for aligning the supply chain to meet project needs and forms the basis for managing internal and external suppliers. At a minimum, this plan should address the following issues:

 

  • What are the key capabilities requirements for the project? Which capabilities exist in the parent organization, and which will need to be procured? Does the existing supply chain possess the required capabilities, or will new suppliers need to be introduced?
  • Who are the potential suppliers and what relationships currently exist or will need to be developed? What is the nature of existing supplier relationships (e.g., long-term agreements, preferred suppliers, etc.)? In the case of existing agreements, are there potential remedies for not involving the supplier?
  • How will suppliers be evaluated and selected? What specific key performance indicators will be used? How many sources are available? Which procured items will be competitively bid, which ones will be procured using existing supplier agreements or relationships, and which must be sourced from a specific supplier?
  • How will communications with suppliers be managed and documented? How will necessary technical meetings be facilitated between the supplier and project team members?
  • How will supply chain performance be measured? Which performance measures will apply? How often will progress be measured? What corrective actions will be taken for variations?
  • When and how will supply management resources be managed and integrated into the project team?
  • What are the supply chain risks and how will they be mitigated or managed?

 

The Project Procurement Management plan should be developed at project initiation and integrated into the overall project management plan. This is particularly important for high-risk projects or projects that have significant bought-out elements.

 

Summary of the Project Procurement Management (PPM) Template: In complex procurement, project and procurement must be properly integrated in order for clients and other stakeholders to achieve program, project and procurement objectives. Complex procurement is characterized by changing requirements, many stakeholders, an extensive solicitation and source selection process, and the need for advanced contract management disciplines.

 

The Project Procurement Management Template describes the complex procurement business process of the Supply Operations Service Branch (SOSB) of PublicWorks and Government Services Canada (PWGSC). The Project Procurement Management template is based on the experience of the Aerospace Marine and Electronic Systems Sector (AMES) management of Major Crown Projects (MCPs) over the last 20 years. Although the Project Procurement Management template is focused on equipment system acquisition and updates, it also addresses the principles of Benefits Driven Procurement as applied to Information Technology and System Integration projects.

 

The Project Procurement Management template is intended as a guidance document for procurement managers and the teams involved in complex procurement. It describes our business process, assists us in communicating with clients and industry, and it is an input to training and process improvement initiatives. The Project Procurement Management template provides a description of each of the 49 processes in terms of its objective, process, and output. There is also a description of the objectives; inputs and outputs for each phase that links procurement, project, and program objectives.


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  • Ensuring you have the necessary equipment and resources available
  • Properly documenting all project activities
  • Identifying staff skills by roles needed
  • Putting quality controls in place
  • Identifying and estimating indirect costs
  • Documenting and prioritizing requirements
  • And much more

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