project procurement

This is a guest post by Ryan Sauer.

No two projects are the same.

Sometimes for a similar deliverable, a project requires additional manpower or additional goods or services from outside vendors.

Procurement is a necessity for most projects

This is a big responsibility for project managers and an opportunity to showcase their skills and prove they can accomplish tasks requiring external resources.

Therefore, it is necessary for a project manager to understand the project procurement management process.

Project Procurement Management

The project procurement management process ensures all products, materials, goods, and services required for the project are acquired.

Project procurement management has four processes to ensure the job is accomplished on time and within budget. These processes are:

  1. Plan Procurements
  2. Conduct Procurements
  3. Administer Procurements
  4. Close Procurements

Plan Procurements

This initial step involves an analysis of the scope of the job and finding what it will require to address the needs. How much outsourcing will be required? What quantity of materials will be needed from outside vendors, and when? Get precise numbers so that the bidders can provide accurate estimates.

If the information is not available to the organization, the project manager can raise a Request for Information (RFI) to get estimates from vendors.

Refer constantly to the original business objective to ensure that estimates align with the projected budgets. Also, the old saying that “time is money” is essential during this stage. Keep watching the project time and ensure that resources are available so you can complete the project before the deadline.

What type of contract will you use for procurement? Would a fixed-price, a cost-reimbursable, or a time & materials contract work best? Regardless of the contract type, the terms and conditions must be clearly stated to avoid confusion with vendors over expectations, performance, or compensation.

Conduct Procurements

With the planning stage complete, it is time to evaluate responses and bids from vendors, narrow down the list of choices, and award a contract. Attention to detail is critical in this process. Not everyone interprets a Request for Proposal (RFP) and a Request for Quotation (RFQ) the same way, so it’s vital that potential vendors understand the work involved or the materials required. 

In this process, bidders can clarify any misunderstandings about the scope of work or statement of work. Scheduling a bidder conference with interested vendors can help resolve questions and issues before the bidding process.

Research the performance and financial history of the bidders. Have they handled similar projects? If so, what were the results? Then, match the RFP criteria against the bidders’ qualifications and proposals.

Administer Procurements

The project pieces are in place. Now, you must ensure the project is running smoothly and progressing as planned. This process is about monitoring success, evaluating performance, and making changes or corrections when necessary.

Procurement audits, performance reviews, and inspections can be incorporated into this phase. These audits discover problems early rather than when deadlines are looming. Vendor payments can be dependent upon completing specified portions of the project within budget and on time.

Close Procurements

After the procurement is completed, you must verify that the work fulfills the stated contract requirements and that stakeholders are satisfied. If these conditions are met, you will close the contract.  Were deadlines met? Did the vendor have any cost overruns? It is common for inspectors to be on-hand during this process to resolve any technical issues.

The final procurement audit is also an opportunity to discuss any shortcomings and gather the information that could improve future project procurement contracts.

A project manager shoulders many responsibilities throughout the project procurement process, from determining who will create the request for information and request for proposal, to developing a timeline for project milestones and verifying the receipt of materials. Therefore, project managers must maintain regular communications with vendors, team members, supervisors, and, sometimes, regulatory agencies.

This is where this blog post ends. Are you involved with project procurement management? If yes, please share your experiences through the comments section below.

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, which helps prepare professionals interested in project management to succeed. Through the University Alliance, Ryan writes to help enable professionals to obtain project management certification.