Managing Projects

Assignment 1
Project Procurement
Management
Moiz Ahmed Rana
12443115

What is
Project
Procuremen
t
Manageme
nt?

The PMBOK defines project procurement management

as
the processes necessary to purchase or acquire the
products, services, or results needed from outside
the project team

Component
s of
Procuremen
t Process

Plan purchases and acquisitions

Plan contracting
Request seller responses
Select sellers
Contract administration
Contract closure

 Identifying what to purchase and acquire

Determining when and how to acquire

Plan
Purchases &
Acquisitions

Includes reviewing of risks in make or buy decisions

Project schedule is a key input to create plan
purchases and acquisitions process
Includes consideration of potential sellers

Plan
Contracting

Documentation of products, services and results

requirements
Includes descriptions for procurement items
Documents help in getting response from prospective
sellers

Request
Seller
Responses

Process of obtaining bids, information, offers or

proposals by seller
Meetings or conferences are held with the bidders
Bidders can be sought through advertising
Bidders present their prices, history of relevant work

 The stage in which sellers are selected through

evaluation

Select
Sellers

Certain factors are considered while choosing the

seller such as:
Prior performance
Cost/Price
Experience in the requirement
Capability and capacity

 After a seller is selected, a contract is made between

the buyer and seller
Contract secures the rights of both parties

Contract
Administrati
on

Used for review or documentation of sellers

performance based on the contract
Documentation can be used for future relationships
with seller
Types of contract are fixed fee, time and material,
unit price, cost plus (anything) and incentive fee
contract.

 Supports the project closure process

Contract
Closure

Verifies that all works and deliverables were

acceptable
Payments must be cleared before contract closure
Procurement audits are carried out

Plan purchases
and acquisition

Case Study
(Installation
of electrical
equipment
on the
construction
site)

Determine the electrical equipment and materials needed

in the project
Plan when they are required on the site and their
installation dates

Plan
Contracting

Descriptions and numbers of the required materials are

determined
For example the number of receptacles, their types and
standards are determined

Request Seller
Responses

The request for bids are advertised for example through

newspapers
Meetings are held with the bidders

Select Sellers

After evaluation, a seller is selected a seller is selected

which has a lower bid and is reputed

Contract
Administration
Contract
Closure

A contract is made between the contractor and the seller

After the job is done and the payment is made, the

necessary inspection is carried out and the contract is
closed

 Carr, Peter. "Week 8: Project Procurement Management".Project

Leadership. N.p., 2011. Web. 27 Apr. 2016.
<https://projectleadershipwaterloo.wordpress.com/2011/12/05/wee
k-8-project-procurement-management/>
Ghosh, Arindam. "Understanding Project Procurement
Management: ASP Alliance".Aspalliance.com. N.p., 2016. Web. 27
Apr. 2016.
<http://aspalliance.com/1149_Understanding_Project_Procurement_
Management.2>

References

"What Is Procurement & How To Plan Project

Purchases?".Mymanagementguide.com. N.p., 2013. Web. 27 Apr.
2016. <http://www.mymanagementguide.com/what-isprocurement-and-how-to-plan-project-purchases/>
"Real World Project Management: Procurement
Management".Project Smart. N.p., 2016. Web. 30 Apr. 2016. <
https://www.projectsmart.co.uk/real-world-project-management-p
rocurement-management.php
>
"Supplier Selection Guidline". 1.6 (2016): n. pag. Print.
<http://www.spb.sa.gov.au/sites/default/files/Supplier%20Selection
%20Guideline%20v%201.6%20April%202016_2.pdf>