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Friday, December 16, 2011

Chapter 24: Procurement Management during Project Execution

Aim: To understand the Conduct procurements process

During the Planning phase, the approach to handle procurements is created. During project execution is when we actually conduct the procurements. This is done through the “Conduct Procurements” process.

Conduct Procurements

Using the procurement management plan and other procurement documents such as the invitation for bid, statement of work, or request for quotation, developed during planning, the project team seeks out potential sellers for the items being procured. The request might be made via a bidder conference, advertising, or through the use of a qualified seller list. The most important outputs from this process are the selected sellers list, procurement contract awards, and resource calendars.

The table below shows the inputs, tools and techniques, and outputs for the conduct procurements process.

Conduct Procurements
Inputs Tools & Techniques Outputs

Project management plan
Procurement documents
Source selection criteria
Qualified seller list
Seller proposals
Project documents
Make-or-buy decisions
Teaming agreements
Organizational process assets

Bidder conferences
Proposal evaluation techniques
Independent estimates
Expert judgment
Internet search
Procurement negotiations

Selected sellers
Procurement contract award
Resource calendars
Change requests
Project management plan updates
Project document updates
Exam Watch:
The bidder conference is also known as the contractor conference, vendor conference, or pre-bid conference. Don’t get confused if the exam uses either of these terms. They all mean one and the same.

With proposals in hand, the project team must select the seller(s) that are best able to deliver the product or service. In addition to the proposals, evaluation criteria were identified during planning that are used to evaluate the proposals.

The evaluation criteria used can include any of the following:
• Seller’s overall understanding of the need
• Price
• Overall life cycle cost
• History of seller with the company
• Seller capabilities and approach including technical, managerial, and financial
• Seller’s production capacity, business size, and interest in the product/service
• Seller’s desire to assert intellectual property or proprietary rights on the product or service.
• References

PMI lists other inputs with which you should be familiar, including the procurement management plan, procurement policies, the procurement document package, proposals, qualified seller list, and the project management plan.

There are a number of tools that are used during selecting sellers. They are:
1. Proposal Evaluation Techniques
2. Independent Estimates
3. Procurement Negotiation
4. Expert Judgment
5. Bidder Conference

The proposal evaluation technique should be able to take into account both objective and subjective criteria. The technique incorporates the weighting system for the evaluation criteria. The proposal evaluation is conducted by multiple reviewers.
The output of the whole process is the signing of the “Contract” between you and the vendor/seller who is selected as part of the process.

To know more about the Conduct Procurements process Click Here

Prev: Chapter 23

Next: Chapter 25

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