This is a guest post by Ryan Sauer.
In business, no two projects are ever the same.
It would be nice if every task required the same resources but that’s not going to happen. Sometimes additional manpower is needed; other projects require additional goods and services from outside vendors to get the job done.
As a result, it’s necessary to have an understanding of procurement process – or the business of going beyond the confines of your company’s everyday capabilities.
For the project managers, this is a big responsibility, as well as a huge opportunity to showcase their skills and prove that they can accomplish tasks requiring outside resources.
Although, there are numerous variables in the project procurement management, there are four specific phases that can help ensure the job is accomplished on time and on budget.
This initial step involves a complete analysis of the scope of the job and what it will take to ensure all needs are addressed. How much outsourcing will be required? How much material will be needed from outside vendors and when? Get precise numbers so project bidders can provide accurate estimates on their costs.
Refer constantly to the original business objective to ensure estimates are in line with projected budgets. Also, the old saying “time is money” is important during this stage. Know the project timetable and make sure adequate resources are available to meet the deadlines.
What type of contract will be utilized with vendors? Would a fixed-price or a cost-reimbursable contract work best? Regardless of the contract type, the terms must be clearly stated to avoid any confusion with vendors over expectations, performance or compensation.
With the planning stage complete it’s time to evaluate responses and bids from vendors, narrow down the list of choices and ultimately award a contract. Attention to detail is a critical aspect of this part of the process. Not everyone interprets a request for proposal (RFP) the same way, so it’s vital that potential vendors understand the work involved. Now is the time to clarify any misconceptions about the project. Scheduling a conference with all interested vendors can help resolve questions and issues in advance of the bidding process.
Research the performance and financial history of the bidders. Have they handled similar projects? If so, what were the results? Then it’s a case of matching the RFP criteria against the bidders’ qualifications and proposals.
The project pieces are in place – now it’s time to make sure work is running smoothly and progressing at a rate that will meet deadlines. This phase is all about monitoring success, evaluating performance and, when necessary, making changes or corrections.
Routine audits, performance reviews and inspections can all be incorporated into this phase, making it the equivalent of a periodic report card. It’s better to discover problems or shortcomings at this point rather than when deadlines are looming. Vendor payments can be dependent upon completion of specified portions of the project within budget and on time.
As the name implies, during this phase the project has been completed and it’s time to verify that work has been done to the satisfaction of all involved parties before closing the contract. Were deadlines met? Did the vendor have any cost overruns? It’s common for inspectors to be on-hand during this process to resolve any technical issues.
The final audit is also the opportunity to discuss any shortcomings and gather information that could improve future procurement projects.
Throughout the procurement process a project manager shoulders many responsibilities, from determining who will create the RFP to developing a time line for project milestones and verifying the receipt of materials. As a consequence, project managers must maintain regular communications with vendors, team members, supervisors and, in some cases, regulatory agencies.
Article author, Ryan Sauer is a writer and editor for Bisk Education in association with University Alliance. His writing includes topics in project management such as online PMP certification that helps prepare professionals interested in project management to succeed. Through the University Alliance, Ryan writes to help enable professionals obtain project management certification.