Hot Topics (12) Procurement Management Flashcards
(51 cards)
What is the process of procurement management?
- Plan Procurement Management
- Conduct Procurements
- Control Procurements
- Close Procurements
What are the inputs to the Plan Procurement Management process?
- Project management plan
- Requirements documentation
- Activity resource requirements
- Enterprise environmental factors
- Organizational process assets
- Risk register
- Stakeholder register
- Any procurements already in place
- Project schedule
- Initial cost estimates for work to be procured
What are the key outputs of the Plan Procurement Management process
- Make-or-buy decisions
- Procurement management plan
- Procurement statements of work
- Procurement documents
- Source of criteria
- Change requests
What are the key outputs of the Conduct Procurements process?
- Selected sellers
- Signed contracts
- Resource calendars
- Change requests
- Updates to project management plan and project documents
What are the key outputs of the Control Procurements process?
- Substantial completion of contract requirements and deliverables
- Work performance information
- Change requests
- Updates to project management plan and project documents
What are the key outputs of the Close Procurements process?
- Formal acceptance
- Closed procurements
- Updates to lessons learned and records (part of organizational process assets)
What is an agreement?
What is a contract?
Agreement: A document or communication that outlines internal or external relationships and their intentions.
Contract: A type of written or verbal agreement, typically created with an external entity, where there is some exchange of goods or services for some type of compensation (usually monetary) ; a contract forms the legal relationship between the entities.
What is the difference between centralized and decentralized contracting?
Centralized: There is one procurement departement, and the procurement manager handles procurements for many projects.
Decentralized: A procurement manager is assigned to one project full-time and reports directly to the project manager
What are the advantages and disadvantages of centralized contracting?
Advantages:
- Higher level of procurement expertise
- Standardized practices provide efficiency
- Clear career path in procurement management
- Continuous improvement, training, and shared lessons learned
Disadvantages:
- Procurement manager’s attention is divided among many projects
- More difficult for the project manager to obtain contracting help when needed
What are the advantages and disadvantages of decentralized contracting?
Advantages:
- Project manager has easier access to contracting expertise
- Procurement manager has more loyalty to the project
- Procurement manager has a better understanding of the project needs
Disadvantages:
- No home department for the contracts person after the project
- Difficult to maintain a high level of contracting expertise
- Duplication of expertise/inefficient use of procurement resources
- Contracting processes aren’t standardized
- No career path as a procurement manager in the company
What is required for a legal contract?
- Offer
- Acceptance
- Consideration
- Legal capacity
- Legal purpose
What is included in a contract?
- Legal terms
- Business terms regarding payments
- Reporting requirements
- Marketing literature
- Proposal
- Procurement statement of work
Describe project manager’s role in procurement.
- Understand the procurement process
- Make sure the contract contains all the scope of work and project management requirements
- Incorporate mitigation and allocation of risks into the contract
6 Help tailor the contract to the project - Be involved during contract negotiations to protect the relationship with the seller
- Make sure all the work in the contract is done, not just the technical scope
- Work with the procurement manager to manage changes to the contract
What is a procurement management plan?
A plan that documents how procurements will be planned, executed, controlled, and closed
What is make-or-buy analysis?
Deciding whether the performing organization should do the project work itself or outsource some or all of the work
What are the three broad categories of contracts?
- Cost-reimbursable (CR)
- Fixed price (FP)
- Time and material (T&M)
What is a cost-reimbursable contract?
All the seller’s costs are reimbursed by the buyer
What is a fixed-price contract?
There is one set free for accomplishing all the work
What is a time and material contract?
The buyer pays on a per-hour or per-item basis
What is a cost plus fixed fee (CPFF) contract?
All the seller’s costs are reimbursed by the buyer, and a fixed fee is negotiated for the seller’s profit
What is a cost plus percentage of cost (CPPC) contract?
All the seller’s costs are reimbursed by the buyer, and the buyer also pays a specified percentage of those costs as a fee or profit
What is a cost plus incentive fee (CPIF) contract?
The seller’s costs are reimbursed by the buyer, and the buyer and seller share any cost savings orverruns
What is a cost plus award fee (CPAF) contract?
All the seller’s costs are reimbursed by the buyer, and the buyer pays a base fee plus an award amount (a bonus) based on performance
What is a fixed price incentive fee (FPIF) contract?
The buyer pays a fixed price plus an additional fee if the seller exceeds performance criteria stated in the contract
