Project Procurement Management Processes

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Processes involved in Project Procurement Management? Explain its components.

Definition:-

   The contract management and change control processes required to administer contracts or purchase orders issued by authorized project team members.

    It also includes administering any contract issued by an outside organization(the buyer) that is acquiring the project from the performing organization(the seller), and administering contractual obligations placed on project team by contract.

Project Procurement Processes:-   (PPRSCC)

1. Plan Purchases and acquisition

2. Plan Contracting

3. Request Seller Responses

4. Select Sellers

5. Contract Administration

6. Contract Closure

1. Plan Purchases and Acquisitions:- 

• Making the decision as to what will be purchased or acquired as well as determining the logistics of when purchases will be made and how.
• Determines which project will be fulfilled internally and which externally.
• This decision is same as "make-or-buy" decision.

2. Plan Contracting:-

• Documenting the product, services, or results needed as well as identifying potential sellers, vendors, suppliers, contractors, sub-contractors, or other service providers.
• focuses on developing procurement documents such as request for proposal, used for solicit bids, quotes, or proposals from sellers.
• Done so that different sellers can be compared and evaluated.

3. Request Seller Responses:-

• Obtaining bids, quotes, proposals, literature and other information from potential sellers or service providers. 

4. Select Sellers:- 

• Negotiating, selecting and contracting with a seller for a particular product or service.
• Selected according to analysis done in "Plan purchases and Acquisition"
• Price or cost are important consideration
• Once seller is selected, contract is signed.

5. Contract Administration:-

• Managing the relationship and contract between the buyer and seller. This includes reviewing and documenting the seller's performance, contract changes, and taking corrective action when necessary.
• It includes:-
• Authorizing and coordinating the contracted work at the appropriate time.
• Monitoring the contractor's performance with respect to scope, schedule, budget and quality.
• Managing scope in terms of its definition and change control.
• Risk identification, assessment and control.
• Monitoring that all payments, as stipulated in the contract, are made.
• Determining whether the contract needs to be amended.
• Deciding if the contract should be terminated early for just cause, convenience, or when the seller is in default. 

6. Contract Closure:-

• Centers on verifying that all of the work outlined in the contract is finished.
• Includes updating records to reflect final results, archiving information for future use, as well as other administrative activities.
• buyers send notice that everything is provided and seller, everything is acceptable.
• Early termination occurs when one party is unable to fulfill their rights and responsibilities. 
• All the lessons learnt should be identified for future references.