Working With Procurement

The project work performance domain addresses activities and functions associated with establishing project processes, managing physical resources, and fostering a learning environment. We’re discussing procurement. All lessons are based on the PMBOK®, 6th and 7th Edition.  

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Transcript

This is Kaye B and welcome to another episode of PMP in a Snap. 

This episode, we’re talking about working with procurement.

Many projects involve some type of contracting or procurement. Procurement can cover everything from materials, supplies, solutions like consultation, labor and services. In most organizations, project managers do not have contracting authority. They work with contracting officers or other people with expertise in contracts, laws and regulations. Organizations have their own policies and procedures regarding procurement, so it’s best for a project manager to go through that department. 

Before conducting a procurement, the project manager and someone from the procurement department develops a request for a proposal or RFP, a statement of work, SOW, terms and condition, and any other documents needed for the work to go out for a bid. 

There is a bid process and it includes developing and publicizing bid document, bidder conferences and selecting a bidder. Bid documents can include an RFI or Request for information. This is used to gather more information from the market prior to sending out bid document to a set of selected vendors. There is also a request for proposal, which is used for complex or complicated scope where the buyer is looking for the vendor to provide a solution and a request for quote. This is used when the price is the main deciding factor, and the proposed solution is readily available.

These three types cover the majority of bidding needs. There could be other bid documents, but they are usually industry-specific.

Once the bid documents are distributed, the buyer generally has a bidder conference to respond to bidder questions and clarify any questions. Then the bidders develop their responses and deliver them to the buyer by the designated due date. 

The buyer then selects the vendor based on several factors, such as the vendor’s experience, references, price, or time of delivery. 

Once the buyer selects a vendor and they reach an agreement, then they enter a contract. The type of contract depends on the size of the purchase, the stability of the scope of work, and the risk tolerances for the organization. Then, the vendor becomes a project stakeholder. 

Procurement doesn’t have to start at the beginning of the project; it can happen throughout the project at any time. All procurement activities should be integrated into the project operations. 

That is your PMP in a Snap. We’ll see you again next week.