Project Procurement Management (15) Flashcards
(51 cards)
What is the objective of Project Procurement Management?
The processes necessary to purchase or acquire products, services, or results needed from outside the project organization
What is included within the objective of Procurement Management?
Administer Agreements
Contracts
Purchase Orders
Memorandum of Agreement (MOAs)
Service Level Agreement (SLAs)
What subprocess are included within Project Procurement Management?
(Planning) Plan Procurement Management
(Executing) Conduct Procurements
(Monitor & Control) Control Procurements
Explain the steps within Plan Procurement Management?
Make-or-buy decisions
Procurement Management Plan
Procurement SOW
Source collection criteria
What are the 3 different contract types?
Fixed Price
Cost Reimbursable
Time & Material
Purchase order is also a type of fixed price contract
What does it mean to have a Fixed Price contract?
You are going to pay one fixed amount regardless of how much it costs the contractor/seller to do the work
When does a Fixed Price contract make the most sense?
ONLY in cases where the scope is very well defined
Where is the risk highest in a Fixed Price contract?
The risk is HIGH on the SELLER side
What are the 3 types of contracts within the fixed price contracts?
1) Firm Fixed Price Contracts (FFP)
2) Fixed Price Incentive Fee Contracts (FPIF)
3) Fixed Price with Economic Price Adjustments Contracts (FP-EPA)
Define Firm Fixed Price (FFP) contracts?
One fixed price
Define Fixed Price Incentive Fee Contracts (FPIF)?
Fixed Price + Incentive bonus by achieving certain performance targets
Define Fixed Price with Economic Price Adjustments contracts (FP-EPA)?
Fixed Price + Inflation Charges
What does a cost reimbursable contract mean?
you pay the seller back for the costs involved in doing the work plus you agree to an amount that you will pay in top of that
Where is the risk highest in a Cost Reimbursable contract?
RISK is HIGHER on the BUYER side, because the buyer does not have any control on the seller price
What are the 3 types of contracts within the Cost Reimbursable contracts?
1) Cost Plus Fixed Fee Contracts (CPFF)
2) Cost Plus Incentive Fee Contracts (CPIF)
3) Cost Plus Award Fee Contracts (CPAF)
Define Cost Plus Fixed Fee (CPFF) contracts?
Costs in doing the work + agree to pay a fixed amount
Define Cost Plus Incentive Fee (CPIF) contracts?
Costs in doing the work + pre determined fee as incentive/bonus
Define Cost Plus Award Fee (CPAF) contracts?
Costs in doing the work + a contract fee and an award amount
What is a Time & Material contract?
Used in Labor Contracts.
It means that you will pay a rate for each of the people working on our project plus their materials costs.
The “time” part means that the buyer pays a fixed rate for the labor, and the “materials” part means that the buyer also pays for the materials, equipment, office space, etc. overhead costs.
What is Plan Procurement Management?
Process of documenting project purchasing decision, specifying the approach and identifying potential sellers
What are the Tools and Techniques within Plan Procurement Mana agent?
Make or buy analysis
Source Selection Analysis
Expert Judgement
Market Research
Meetings
What are the outputs for Plan Procurement Management?
Procurement Management Plan
Procurement SOW
Procurement Documents
Make-or-buy decisions
Source Selection Criteria
Change Requests
Project Document Updates.
Define Procurement Management Plan?
How the procurement processes will be managed from developing procurement documentation through contract closure.
Define Procurement SOW?
Describes the procurement item is specific detail to allow prospective sellers to determine if they are capable of providing the products, services or results
