Sometimes you need to hire an outside company to do some of your project work. That’s called procurement, and the outside company is called the seller.
The PMP exam is based on contracting laws and customs in the United States. If you are someone who hasnt spent time in the states or worked with a customer from the states, it would be useful if you visit http://www.acquisition.gov/ and gather some knowledge about the same.
Procurement is pretty straight forward, and the Procurement Management processes follow a simple order that you can figure out with just common sense. First you plan what you need to contract; then you plan how you’ll do it. Next, you send out your contract requirements to sellers. They bid for the chance to work with you. You pick the best one, and then you sign the contract with them. Once the work begins, you monitor it to make sure the contract is being followed. When the work is done, you close out the contract and fill out all the paperwork.
Teaming Agreenents are partnership documents that describe the relationship between a buyer and a seller when they’re working together as a team. When a buyer and a seller have a teaming agreement in place, they act as partners. They make management decisions together, and both have an increased stake in the outcome.
Contracting adds an extra dimension of risk to your project because your seller will have different management and policies. So managing risks is especially important!
force majeure - is a kind of clause that you’ll see in a contract. It says that if something like a war, riot, or natural disaster happens, you’re excused from the terms of the contract.
The point of total assumption is the point at which the seller assumes the costs. In a fixed price contract, this is the point where the costs have gotten so large that the seller basically runs out of money from the contract and has to start paying the costs.
You always put together procurement documents and source selection criteria before you start talking to individual sellers who want your business.
Buyer-conducted performance reviews let buyers check all of the work that the sellers are doing.
Whenever you see “inspection” or “audit” it means that you’re looking at the products that the seller delivered to see if they meet your standards.
Points to Remember - Other Topics:
Introduction to Projects & Project Management
Relationship Between Knowledge Areas & Process Groups
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Human Resource Management
Project Communication Management
Project Risk Management
Ethics & Professional Responsibility
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Friday, July 22, 2011
Sample PMP Exam Q & A
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