Procurement Management

Introduction to Planning in Project Procurement Management

Plan Procurement Management is a crucial process in project procurement management. It involves documenting project procurement decisions, specifying the approach, and identifying potential sellers. The main advantage of this process is that it determines whether to acquire goods and services from outside the project and, if necessary, what, how, and when to acquire.

The procurement process typically begins with the preparation of the procurement statement of work (SOW) or terms of reference (TOR). A high-level cost estimate is then prepared to determine the budget for the procurement. The procurement opportunity is advertised to potential sellers, and a shortlist of qualified sellers is identified. Bid documents are prepared and issued to the shortlisted sellers, who then prepare and submit their proposals.

The proposals are evaluated technically, assessing their quality, and a cost evaluation is also performed. The final step in the procurement process is the preparation of a combined quality and cost evaluation to select the winning proposal. Once the winning proposal is selected, negotiations are finalized, and a contract is signed between the buyer and the seller.

Defining roles and responsibilities in procurement should be done early in the Plan Procurement Management process. The project manager is responsible for ensuring the project team has the necessary procurement expertise. Responsibilities in the procurement process should be documented in the procurement management plan.

The project schedule requirements can greatly impact the strategy in the Plan Procurement Management process. Decisions made while developing the procurement management plan can influence the project schedule and make-or-buy decisions. The development of the procurement management plan is integrated with the Develop Schedule process and the Estimate Activity Resources process.