Process 12.0 Project Procurement Management processes included
Required for the preparation and management protocol management and control processes; to acquire goods or services from an outside perspective to the project described in the procurement process
12.1 Planning Procurement Management: Record project purchasing decisions, clear procurement methods, the process of identifying potential sellers
12.2 implementation of procurement: Get the seller answers, select the seller and the process of awarding contracts
12.3 Control Procurement: Procurement relationship management, monitoring contract performance, and to take corrective measures necessary changes and close the contract
The core concept of project procurement contract
This chapter assumes that by the project team to act as the buyer, the seller comes from outside the project team; staff project managers do not have to sign a binding legal agreement on the organization, should have the relevant powers of execution
Project Procurement Management processes carried out around the agreement includes including a contract ; the contract should make clear deliverables and expected results, including any knowledge transfer from the seller to the seller
Regardless of the detailed provisions of the contract, and the enforceability of contracts were affected culture where local laws (international cooperation projects); contract may transfer risk
In the life cycle of the contract, the seller is the first bidder, followed by the winning bidder, after contracting suppliers Ho supplier
The core concept of project procurement management
Two types of procurement
Decentralized procurement : start-ups or small projects, and the purchase is not set, the organization contract or purchasing department, project manager with purchasing powers to directly negotiate and sign contracts
Centralized procurement : in more mature organizations, to carry out the actual procurement contracts and contracts signed by the department dedicated work, level procurement to negotiate and sign contracts
In most cases, the seller is a formal contractual relationship outside contractors constraints
Trends and emerging practice of project management
Improved tools : use online tools, the use of BIM
More advanced risk management : the specific risks assigned to the party best able to manage it to be, buy a house must accept the risk of the contractor can not control
Changes in the contract signed practice : a large amount of complex cross-border procurement projects, contracting business, as the increasingly close cooperation with the customer , in order to facilitate bulk purchases or other special relationship of give customers discounts and deals
To reduce the process of implementation issues and claims, procurement standard model contracts for international workers
Logistics and Supply Chain Management: Logistics materials management is essential for the completion of the project ; the project clear early primary / secondary / alternative procurement channels; many countries will be asked to purchase a certain proportion of multinational contractors and material supplies from local suppliers at least
Technology and related party relationships: observing the scene through the network camera
Try Procurement: decide before purchasing large quantities, some projects will try more than one candidate seller to purchase a small amount of their deliverables and work products, has been selected
Factors to consider when cutting
The complexity of the procurement
Physical location
Governance and regulatory environment
The availability of contractors
Factor in agile or adaptive environment need to be considered
In an agile environment, the need to expand the team with a specific vendor collaboration, such collaboration can create a risk-sharing formula procurement model, let the seller and the seller share the project risk and reward sharing project
On large projects, it may be directed to certain deliverables using adaptive method, while the rest of the more stable method is used;
In this case, the main theme by protocol, such as through the main agreement, such as the Master Service Agreement (MSA) to govern the overall cooperative relationship, and will adapt to the type of work written appendix or supplementary documents; only work for adaptive change, will not affect the main agreement
12.1 Procurement Management Plan
Definition: Record project procurement decisions , a clear procurement method , to identify potential sellers of process
Role: to determine whether the procurement, purchasing what, how to purchase, how much purchase, and when purchasing
Time of occurrence: This procedure is carried into or carried out only once at a predefined point of the project
It should be early in the procurement management process of planning, establishing and procurement-related roles and responsibilities; closely related to the progress of the plan and procurement strategy, influence each other; two ways to reduce the risk of self-buy decision, the type of contract
Procurement Management Plan
Input:
1, the project charter
2, business documents
- Business Case
- Benefit Management Plan
3, Project Management Plan
- Scope Management Plan
- Quality Management Plan
- Resource Management Plan
- the reference range
4, project files
- Milestone list
- the project team to send work orders
- Requirements Document / resource requirements
- Requirements Traceability Matrix
- Risk / parties Register
5, environmental factors cause
6, organizational process assets
Tools and Techniques:
1, expert judgment
2, data collection
- Market Research
3, data analysis
- qualification or buy analysis
Homemade: internally (by the project team to complete its own, such as research and development)
Outsourcing: Outsourcing
Or homemade purchased? If purchased, leased Or buy?
The total budget has been measured: including direct costs and indirect costs, such as maintenance costs
self made |
Outsourcing |
| Low production costs | Low cost outsourcing |
No suitable suppliers |
There are suitable suppliers |
To ensure adequate supply |
Commitment to retain suppliers |
The use of surplus labor |
Technical or management skills |
Rule out collusion between suppliers |
Insufficient production capacity |
Key components, their ability to |
Reduce inventory costs |
Design patent protection, quality assurance |
Ensure supply flexibility and substitutability |
To ensure a stable supply |
Products received patent protection |
Does not meet the organization's strategic planning and implementation |
4, Source Selection Analysis
5, meeting
Output:
1, procurement management plan
How to manage contracts until finishing the preparation of procurement documents from various procurement process
include:
How to coordinate procurement and other work items
Carrying out the procurement activities schedule
Purchasing measure for management contract
Procurement-related roles and responsibilities of stakeholders
Constraints that may affect the procurement and assumptions
The need to prepare independent estimates
Risk management issues, including the requirement for performance bonds or insurance contracts
Pre-qualified sellers to be used
2, procurement strategy
Complete make-or-buy analysis, and decided to purchase from the project external sources, it is necessary to develop a procurement strategy, including:
Delivery Methods
Professional services delivery methods include: the buyer or the service provider can not / can subcontract, the buyer or the service provider to set up joint ventures, service provider acts as a buyer or only representatives
Delivery method industrial or commercial construction projects include: turnkey design - build (DB), design - bid - build (DBB), Design - Build - Operate (DBO), build - own - operate - transfer (BOOT)
The type of contract payment
Price contract: Job Type predictable, clear demand, is unlikely to change
Cost reimbursable contracts: work evolves, becomes more, not clearly defined
Motivation and incentive fee contract: coordination buyer and the buyer's goal
Procurement phase
Purchase order / phase transition standard / knowledge transfer requirements
3, the tender documents
4, the procurement manual
5, the selection criteria for the side
6, qualifications or buy decisions
7, independent cost estimates
8, change requests
9, the project file is updated
- Lessons Register
- Milestone list
- Requirements Document
- Requirements Traceability Matrix
- risk register
- parties register
10, Organizational Process Assets Updates
type of contract
Price contract (Fixed-price contracts)
Established for the procurement of goods or services set a total price ; the seller must fulfill the total price of the contract according to the law , or we need to bear the corresponding liability for breach of contract;,
Although the allowable range of change, but change the scope of the contract usually results in higher prices; price contract for buyer risk minimization, such as the signing of the contract price, special attention to changes in the scope of the buyer
Fixed-price contract (FFP --- firm fixed price contracts)
Like the buyer, a price can not be changed (unless the scope of change); any increase in cost due to the poor performance of the contract caused by the seller is responsible
When signing the contract requires the buyer to provide accurate range ; scope changes, cost a lot
The total price plus incentive fee contract (FPIF --- fixed price incentive fee contracts)
Take into account the interests of the seller, to achieve the stated objectives given financial incentives
Target cost the cost of the project is expected to be spent:
Target Profit : Profit available under target cost
Cost sharing ratio : the target cost as the reference point, where the owners sharing ratio contractor cost overruns or cost savings paid, big buyer, the seller of small
The actual cost of the cost of the actual cost of:
Actual profit : profits obtained under the actual cost may be higher / lower than the target profit
Highest price : highest contract price the buyer can pay the seller even if the actual cost exceeds this number, the owners pay only the price ceiling, the Contractor shall bear all the losses all their
Target = target cost price target profit +
PTA (point of total assumption) assume overall point / estimated total contract price : refers to the buyer to pay the price ceiling, the actual cost of the cost of the seller
PTA meaning is: assuming that costs more than the seller PTA, PTA then exceed that part of the cost will be borne by the independent seller (not divided in proportion to the share), this seller's profits will quickly lower; the actual operation, you can set the highest price, you can pre-determined PTA
Actual profit target profit = + (target cost - actual cost) x proportion seller bear
= Price ceiling (+ target profit target cost) + (PTA-target cost) x sharing ratio Buyer
PTA = (price ceiling - target price) / buyer target cost sharing ratio +
Plus total economic price adjustment contract (FP-EPA --- fixed price with econnomic price adjustment contracts)
Vendor Compliance to cross a fairly long period (several years), or between multiple buyers and sellers to maintain long-term relationships should be used in this type of contract ;
It allows changing conditions (such as currency Peng possession, increase or reduce the cost of some special items) to determine in advance the way for final adjustments to the contract price
Trying to protect buyers and sellers from external uncontrollable circumstances
Cost reimbursement contract (cost-reimbursable contracts)
The actual cost plus a fee as profit seller
Adaptation: the scope is unclear / scope change / high risk / more complex
Cost plus fixed fee contract (CPFF --- cost plus fixed fee)
Issued to the seller cost plus fixed fee; fixed costs as a percentage of the estimated cost of
Cost plus incentive fee (CPIF --- cost plus incentive fee)
Similar to the total price plus incentive fee, the difference between: None highest price
Profit is calculated in the same total price plus incentives and profit formula is the same; the most profitable cost, lowest cost; the actual contract price = cost + actual profit
Actual profit target profit = + (target cost - actual cost) x proportion seller bear
Cost Plus Incentive Fee (CPAF --- cost plus award fee)
In line with the subjective paid upon request to the seller most of the costs; entirely by the buyer to the seller according to their performance of subjective judgment to determine the incentive fee, and the seller is usually not entitled to appeal
The percentage of contract costs (CPPC --- cost plus percentage of cost)
The actual cost of the contract the buyer to the seller the implementation of the work arising from the compensation given to the seller and to the actual cost basis , according to pre-determined percentage of the payment to the seller taking (mainly profits)
Payment of actual cost + cost to the seller; fee is a percentage of the actual cost of
Quantity Contracts (T & M time and material contracts)
And cost-reimbursable contracts and the contract price of certain characteristics of the hybrid contract; the range of uncertainty / increase staff / hire experts and seek other external support; the total contract price due to increased costs vary; unit price contract