Managing Project Procurement

Project procurement management Plan

• Planning components • Controlling components

• Plan procurement management : The process • Control procurements : Process of
of documenting project procurement decisions, managing procurement relationship,
monitoring contract performance, and
specifying the approach and identifying
making changes & corrections as
potential sellers appropriate
• Conduct procurement: The process of
obtaining sellers responses, selecting a seller,
and awarding a contract
• Close procurement : The process of completing
each project procurement
Project procurement management Plan

• Sometimes you need to hire an

outside company to do some of your
project work. That’s called
procurement and outside company is
called seller/vendor
• Do you think project manager should involved
him/herself in the contracting details ?
• Do you think PM should intimate the expected
price of your client to the estimator ?
 Project procurement management Plan : make or buy
Make
• Specific quality requirements
• Internal costs are less than supplier’s
quotations
• Retaining the knowledge within firm
• Legal requirements e.g. contracts for
Defense
Buy
• Internal lead time is higher than supplier
• Higher costs for training internal staff
• Suppliers are experts in the domain of
the project and has wider experience
• Shortage of internal staff
• Supplier’s bid price is substantially
lesser compared to internal costs