ch 12 Flashcards
(20 cards)
What is Project Procurement Management?
It’s the process of acquiring goods and/or services for a project from outside the performing organization.
What are some terms that refer to procurement?
Purchasing and outsourcing.
Who are the individuals or organizations that provide procurement services?
Suppliers, vendors, contractors, subcontractors, or sellers.
List 3 reasons why organizations outsource.
To access skills and technologies, reduce costs, and focus on core business.
Name the four processes in Project Procurement Management.
Plan Procurement Management, Conduct Procurements, Control Procurements, Close Procurements.
What does “Planning Procurements” involve?
Determining what to procure, how, when, and how much.
What is a Procurement Plan?
A document that describes how procurement will be managed from documentation to contract closure.
What is make-or-buy analysis?
A technique to decide whether to produce in-house or purchase from external sources.
What is the make-or-buy breakeven point for $12,000 purchase + $400/day vs. $800/day lease?
30 days.
When should you lease instead of buying?
When the equipment is needed for less than 30 days (in the provided example).
What is involved in “Conducting Procurements”?
Obtaining bids, selecting a seller, and awarding a contract.
What is the main goal of “Controlling Procurements”?
Ensuring the seller’s performance meets contract requirements.
What is a constructive change order?
Oral or written acts or omissions that act like a written change order.
Why should legal professionals be involved in contract management?
Because contracts are legal relationships.
What does “Closing Procurements” include?
Completion and settlement of contracts and resolving open items.
Name a tool used in contract closure.
Procurement audits.
What is the purpose of a procurement audit?
To identify lessons learned in the procurement process.
What is the function of a records management system?
To organize, find, and archive procurement-related documents.
In the quiz, what reason for outsourcing is hiring a specialist for training?
Accessing skills and technologies.
If an item costs $6,000 to purchase and $100/day to operate, but leases for $200/day, when is leasing more cost-effective?
For less than 60 days (breakeven at 60 days).
