procurement management Flashcards
(23 cards)
procurement/outsourcing/purchasing all mean
acquiring goods and/or services from an outside source
why do companies outsource (5)
- to access skills and technologies
- to reduce costs
- to allow the client organization to focus on its core business
- to provide flexibility
- to increase accountability
a contract is
a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them
why use contracts (3)
- to clarify responsibilities
- sharpen focus on key deliverables of a project
- increase accountability for delivering the work as stated in the contract
processes of project procurement management (4)
- planning procurement management
- conducting procurements
- controlling procurements
- closing procurements
what does planning procurement management involve (2)
- determining what to procure and when and how to do it
- identifying which project needs can best be met by using products or services outside the organization
procurement management plan describes
how the procurement processes will be managed, from developing documentation for making outside purchases or acquisitions to contract closure
a termination clause is
a contract clause that allows the buyer or supplier to end the contract
tools and techniques for planning purchases and acquisitions (3)
- expert judgment
- market research
- make-or-buy analysis
make-or-buy analysis is a
general management technique used to determine whether an organization should make or perform a particular product or service inside the organization or buy from someone else
contract statement of work (SOW) is
a description of the work required for the procurement
what does a good SOW give bidders
a better understanding of the buyer’s expectations
procurement documents (2)
- a proposal
- a bid
what is a proposal
a document prepared by a seller when there are different approaches for meeting buyer needs
what is a bid
a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer
how to be sure a proposal is actually good
evaluate factors, such as past performance and management approach
conducing procurements involves (5)
- deciding whom to ask to do the work
- sending appropriate documentation to potential sellers
- obtaining proposals or bids
- selecting a seller
- awarding a contract
approaches for procurement (3)
- approach the preferred vendor
- approach several potential vendors
- advertising to anyone interested
steps to selecting the seller(s) (3)
- develop a short list of potential sellers for further evaluation
- sellers on the short list often prepare a best and final offer (BAFO)
- final output is a contract signed by the buyer and the selected seller
controlling procurements ensures
that the seller’s performance meets contractual requirements
suggestions for change control in contracts (5)
- changes to any part of the project need to be reviewed, approved, and documented
- evaluation of any change should include an impact analysis
- changes must be documented in writing
- stay involved to make sure the new system will meet business needs and work in an operational environment
- have backup plans
closing procurements involves
completing and settling contracts and resolving any open items
during the closing process of procurements, project team should (3)
- determine if all work was completed correctly and satisfactorily
- update records to reflect final results
- archive information for future use
