What’s Project Procurement?

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Project procurement involves acquiring necessary project services, goods, or deliverables from outside vendors. There are six processes involved, including planning purchases and acquisitions, contract planning, vendor selection, contract management, and contract closure. The actual execution may vary across organizations.

Project procurement involves a systematic process of identifying and acquiring, through the purchase or acquisition, the necessary project services, goods, or deliverables from outside vendors who will perform the work. It is usually a function of the project manager; however, some organizations choose to select someone other than the project manager to handle these tasks. There are six processes widely recognized by the project management industry as an integral part of project procurement management.

The first of these processes is planning purchases and acquisitions. In this phase, the needs that require outsourcing are identified. The sources for obtaining the required goods, services or results are differentiated through a market analysis. In procurement planning, project goals are reviewed to ensure that the procurement does not deviate from the stated goals. Completing this phase includes identifying the resources needed for the acquisition, determining the type of contract needed to secure the acquisition, and preparing a procurement management plan.

Contract planning, requesting vendor responses, and vendor selection are the next three processes that you might complete. In contract planning, you should describe the required products or services in detail. Requests for proposals and offers must be documented to avoid problems.

When requesting vendor responses and proposals, specific vendors are identified and placed on a qualified vendor list. The selected suppliers are considered qualified based on their ability to supply goods or services in consideration of the constraints of the project, their interest in supplying goods or services and the reasonableness of their offers. Once the prospective sellers have been set apart, the selected sellers’ proposals are evaluated in order to determine the best supplier for the delivery of the goods or services. After vendors are chosen, contracts are negotiated.

Contract management is central to project procurement tasks. Clearly defining obligations, responsibilities and performance goals are essential to completing this step. Satisfactory execution of the contract involves monitoring the execution of the stated objectives. At times, the project procurement manager may need to adjust processes to achieve the desired results. Changes to the contract must be controlled and documented to prevent unnecessary legal claims.

Once the contract is completed, the final step is to close the contract. The contract is checked to ensure that all terms of the contract have been met. Closing the contract involves evaluating the supplier’s performance and documenting all lessons learned in executing the contract.

Project procurement is not an exact science. While this process is generally accepted in the industry, the actual execution may vary across organizations. There are many courses available that teach the strategies used by project purchasers. Community colleges and universities’ extended education departments often hold lectures on this topic.




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