Close Procurement vs Close Project

close project vs close procurement

Close Procurement vs Close Project is another important topic for the PMP Certification Exam. These two processes have many things common, causing confusion to many professionals.

Anyway, now you have this blog post explaining the difference between the close project and the close procurement process.

Every project has five process groups that start with Initiating and end at Closing. Let’s talk about the Initiating and the Closing Process Group. Interestingly, each process group is comprised of only two processes, and that makes them equally the smallest groups in the group of five processes, and the percentage of questions from these two process groups in the PMP Examination is 21% (Translating to 42 Questions!!!).

The point is, with little study on these small process groups, you can answer approximately 42 questions in the PMP examination.

Okay, let’s discuss the difference between Close Procurement vs Close Project.

The Close Procurement Process and the Close Project Process may seem to be similar to you, and in some cases they can be the same, but this is not true in all cases. There are many differences between the Close Procurement Process and the Close Project Process that I’m going to discuss today; however, before moving into details, let’s have a look at their definitions:

Close Procurement

Close Procurement is the process of completing each project procurement. It supports the Close Project or Phase Process.”  If you notice this definition, you will see that the definition itself is trying to clarify that the Close procurement is different than the  Close Project, and in fact Close Procurements supports the Close Project.

Close Procurement is also known as Contract Closure. A procurement is said to be closed when the contract reaches its deadline and it ends. A project can have multiple procurement contracts, or a single contract. If the project has multiple contracts, then the Close Procurement Process will be performed multiple times with each procurement contract, and if the project has no contract then there will be no Close Procurement Process.

Close Project

Close Project or Phase is the process of finalizing all activities across all of the project management process groups to formally complete the project or phase.” Close Project or Phase Process is performed when the project or phase is finally completed and deliverables are accepted. To complete the close project or phase, the close procurement process must have been finished, otherwise the project closure cannot happen; however, this is not the case for Close Procurement where Project Closure is not required in order to complete the Close Procurement.

Time to see how this applies to our trademark school building example

You have identified that to construct the school building, some works are going to be performed by procurement, and you prepare the list as follows:

  • Earth excavation work
  • Electrical work
  • Carpentry work, and
  • Painting

Before starting the construction work you need a little excavation work completed, and you contract it to any contractor. He comes and finishes the work, and you give him the agreed amount of money and closed this procurement contract. Afterwards, you start your work and build the structure.

Now you need to do electrical work that is also to be performed by procurement. The contractor comes, does his part, and you released him by paying the agreed amount of money, and the contract is closed.

After, you need carpentry and painting works, and these works were already procured; therefore, contractors come and after finishing their job, they take their payment and left the site. This contract are also closed.

The building is ready, so you call the client to come inspect it. The client comes and verifies the scope with you, and once he is satisfied, he accepts the building, signs the acceptance letter and all pending payments are released. Once you get the payment, you update the lessons learned, release the team and resources, and finally you Close the Project.

Key Points

  • Close Procurement must happen before Close Project or Phase.
  • Close Procurement can occur many times in life-cycle of the project, but the Project Closure will be performed once; i.e. at the end.
  • Deliverables are accepted in Close Project.
  • Every project must be gone through the Close Project process, even it is terminated.

This was all about close procurement vs close project. I hope the difference between the two is clear to you. If not, please leave your doubts in the comments section.

Comments

    • Fahad Usmani says

      Administrative Closure and Close Project or Close Phase are the same.

      (The PMBOK Guide Page-100, first paragraph, Article 4.6).

  1. Kupa says

    Thanks for clarifying Adiministrative Closure..I’ve seen the term in several practice exams and was concerned that I missed something.

  2. Haresh Jayanth says

    Dear Mr. Fahad,

    The main performing organization (main contractor) , wants to close their contract with the client, in which processes it will happen? whether in Close procurement or Close project

    Kindly explain this…..

    regards,

    Jayanth

    • Fahad Usmani says

      If the main contractor has the whole project and wants to close contract, he must go through the close project process.

      However, if the main contractor is having a part of the project then also he must go through the close project process but the client will go through the close procurement because the project is still on.

      In any case, the contractor has to go through the close project, because for him everything is closed.

  3. Omar says

    My question is about obtaning formal acceptance of deliverables

    This is required in project or phase closing But is required in Procurement closing ? and when and how are acceptance of deliverables done in Procurement closing.

    Thank You

    • Fahad Usmani says

      If you have any procurement contract in the project and this contract is completed, you’ll closed this contract and accept the deliverable but you project will continue to proceed.

  4. Asela says

    Ref:
    KEY POINTS: Deliverables are accepted in Close Project.

    I came across a question explanation where it was stated;
    VERIFY SCOPE process accepts the deliverables. Not CLOSE PROJECT.

    Please clarify correctness of above KEY POINT.

  5. Cyril says

    Hello Fahad,

    Could you please clarify what happens if a claim on the procurement cannot be settled by the parties and is finally the subject of a court procedure (which can be very long… up to several years).

    Let’s take an easy example: there is a claim between the seller and the buyer about the price to be paid but the work has been performed and delivered by the seller.

    Does it means that the buyer cannot close the procurement and therefore the project because of the claim? Or can he close it because the work has been delivered by the seller?

    Do the project and the procurement remain “open” during several years if there is appeal procedure etc. ?

    Many thanks for your clarifications

    • Fahad Usmani says

      If the resolution cannot be solved through the arbitration, and it goes to court, you can not close procurement with the contractor.

      Although you can close the project with your client since the project is completed, case will remain open with you and your supplier.

      Also note that, since the court is involved in the dispute, it may stop whole proceeding or let you clear your deal with the client. It depends on case to case basis.

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