{"id":38,"date":"2021-11-07T20:45:00","date_gmt":"2021-11-08T01:45:00","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/chapter\/4-1-procurement-management\/"},"modified":"2022-01-16T20:35:38","modified_gmt":"2022-01-17T01:35:38","slug":"4-1-procurement-management","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/chapter\/4-1-procurement-management\/","title":{"raw":"4.1 Procurement Management","rendered":"4.1 Procurement Management"},"content":{"raw":"The procurement effort on projects varies widely and depends on the type of project. Procurement can happen anytime during the project; however, planning helps set expectations to ensure that the procurement process is performed smoothly. Procurement covers everything from material, capital equipment and supplies to solutions, labor, and services. The \u201cprocurement cycle\u201d reflects all procurement-related activities from when the decision is made to outsource equipment all the way through to the payment of bills and closing of procurement contracts.\r\n\r\nIn less complex projects, the project team performs the work associated with procurement management. This includes:\r\n<ul>\r\n \t<li>Identifying the required materials, equipment, and supplies<\/li>\r\n \t<li>Identifying the potential vendors<\/li>\r\n \t<li>Preparing requests for quotes (RFQs) and requests for proposals (RFPs), which include product\/service specifications and a detailed delivery schedule<\/li>\r\n \t<li>Evaluating RFQs and RFPs to select the most suitable vendors<\/li>\r\n \t<li>Awarding and signing contracts<\/li>\r\n \t<li>Administering the contract and monitoring vendors\u2019 performance<\/li>\r\n \t<li>Managing contract changes<\/li>\r\n \t<li>Closing out the contract upon work completion<\/li>\r\n<\/ul>\r\n<h2>Procurement Cycle<\/h2>\r\n[caption id=\"attachment_37\" align=\"alignnone\" width=\"676\"]<img class=\"wp-image-36\" src=\"https:\/\/pressbooks.bccampus.ca\/costsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-300x182.png\" alt=\"\" width=\"676\" height=\"410\" \/> Exhibit 4.1: Procurement Cycle[\/caption]\r\n\r\nOn more complex projects, procurement professionals may be assigned to assist the team throughout the project\u2019s lifetime.\r\n\r\nProcurement management follows a logical order. First, determine what the project needs to contract; then plan to do it. Next, send out contract requirements (solution specifications and timeline requirements) to potential vendors. These vendors bid for the chance to work on the project. The project team selects the best vendor and then signs a contract to formalize acceptance of the terms. Once the work begins, the supplier\u2019s performance is monitored to ensure that the contract is being followed. When the work is done, the contract is closed out.\r\n\r\nPMI identifies the following three major procurement processes:\r\n\r\n[caption id=\"attachment_37\" align=\"alignnone\" width=\"709\"]<img class=\"wp-image-37\" src=\"https:\/\/pressbooks.bccampus.ca\/costsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-300x135.png\" alt=\"\" width=\"709\" height=\"319\" \/> Exhibit 4.2: Major Procurement Processes[\/caption]\r\n<h2><span style=\"color: #000000\">Corporate Procurement and Project Procurement Strategies<\/span><\/h2>\r\n<span style=\"color: #000000\"><strong>Corporate procurement<\/strong> is the relationship of specific procurement actions to the corporate strategy, e.g. centralized procurement.<\/span>\r\n\r\n<span style=\"color: #000000\"><strong>Project procurement<\/strong> is the relationship of specific procurement actions to the operating environment of a project.<\/span>\r\n\r\n<span style=\"color: #000000\">E.g. when the project manager is allowed to perform sole source procurement without necessarily involving the centralized procurement group (such as purchasing one ounce of a special chemical for an R&amp;D project).<\/span>\r\n\r\n<span style=\"color: #000000\"><strong>Project procurement strategy<\/strong> can differ from corporate procurement strategies because of:<\/span>\r\n<ul>\r\n \t<li><span style=\"color: #000000\">constraints<\/span><\/li>\r\n \t<li><span style=\"color: #000000\">availability of critical resources<\/span><\/li>\r\n \t<li><span style=\"color: #000000\">specific customer requirements.<\/span><\/li>\r\n<\/ul>\r\n<span style=\"color: #000000\"><strong>Corporate procurement strategies<\/strong> might promote purchasing small quantities from several qualified vendors, whereas project procurement strategies may dictate sole-source procurement.<\/span>","rendered":"<p>The procurement effort on projects varies widely and depends on the type of project. Procurement can happen anytime during the project; however, planning helps set expectations to ensure that the procurement process is performed smoothly. Procurement covers everything from material, capital equipment and supplies to solutions, labor, and services. The \u201cprocurement cycle\u201d reflects all procurement-related activities from when the decision is made to outsource equipment all the way through to the payment of bills and closing of procurement contracts.<\/p>\n<p>In less complex projects, the project team performs the work associated with procurement management. This includes:<\/p>\n<ul>\n<li>Identifying the required materials, equipment, and supplies<\/li>\n<li>Identifying the potential vendors<\/li>\n<li>Preparing requests for quotes (RFQs) and requests for proposals (RFPs), which include product\/service specifications and a detailed delivery schedule<\/li>\n<li>Evaluating RFQs and RFPs to select the most suitable vendors<\/li>\n<li>Awarding and signing contracts<\/li>\n<li>Administering the contract and monitoring vendors\u2019 performance<\/li>\n<li>Managing contract changes<\/li>\n<li>Closing out the contract upon work completion<\/li>\n<\/ul>\n<h2>Procurement Cycle<\/h2>\n<figure id=\"attachment_37\" aria-describedby=\"caption-attachment-37\" style=\"width: 676px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-36\" src=\"https:\/\/pressbooks.bccampus.ca\/costsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-300x182.png\" alt=\"\" width=\"676\" height=\"410\" srcset=\"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-300x182.png 300w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-1024x620.png 1024w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-768x465.png 768w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-1536x930.png 1536w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-2048x1240.png 2048w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-65x39.png 65w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-225x136.png 225w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/10\/Procurement-Cycle-350x212.png 350w\" sizes=\"auto, (max-width: 676px) 100vw, 676px\" \/><figcaption id=\"caption-attachment-37\" class=\"wp-caption-text\">Exhibit 4.1: Procurement Cycle<\/figcaption><\/figure>\n<p>On more complex projects, procurement professionals may be assigned to assist the team throughout the project\u2019s lifetime.<\/p>\n<p>Procurement management follows a logical order. First, determine what the project needs to contract; then plan to do it. Next, send out contract requirements (solution specifications and timeline requirements) to potential vendors. These vendors bid for the chance to work on the project. The project team selects the best vendor and then signs a contract to formalize acceptance of the terms. Once the work begins, the supplier\u2019s performance is monitored to ensure that the contract is being followed. When the work is done, the contract is closed out.<\/p>\n<p>PMI identifies the following three major procurement processes:<\/p>\n<figure id=\"attachment_37\" aria-describedby=\"caption-attachment-37\" style=\"width: 709px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-37\" src=\"https:\/\/pressbooks.bccampus.ca\/costsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-300x135.png\" alt=\"\" width=\"709\" height=\"319\" srcset=\"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-300x135.png 300w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-1024x462.png 1024w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-768x347.png 768w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-1536x693.png 1536w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-2048x924.png 2048w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-65x29.png 65w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-225x102.png 225w, https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-content\/uploads\/sites\/1563\/2021\/11\/Procurement-Processes-350x158.png 350w\" sizes=\"auto, (max-width: 709px) 100vw, 709px\" \/><figcaption id=\"caption-attachment-37\" class=\"wp-caption-text\">Exhibit 4.2: Major Procurement Processes<\/figcaption><\/figure>\n<h2><span style=\"color: #000000\">Corporate Procurement and Project Procurement Strategies<\/span><\/h2>\n<p><span style=\"color: #000000\"><strong>Corporate procurement<\/strong> is the relationship of specific procurement actions to the corporate strategy, e.g. centralized procurement.<\/span><\/p>\n<p><span style=\"color: #000000\"><strong>Project procurement<\/strong> is the relationship of specific procurement actions to the operating environment of a project.<\/span><\/p>\n<p><span style=\"color: #000000\">E.g. when the project manager is allowed to perform sole source procurement without necessarily involving the centralized procurement group (such as purchasing one ounce of a special chemical for an R&amp;D project).<\/span><\/p>\n<p><span style=\"color: #000000\"><strong>Project procurement strategy<\/strong> can differ from corporate procurement strategies because of:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000\">constraints<\/span><\/li>\n<li><span style=\"color: #000000\">availability of critical resources<\/span><\/li>\n<li><span style=\"color: #000000\">specific customer requirements.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000\"><strong>Corporate procurement strategies<\/strong> might promote purchasing small quantities from several qualified vendors, whereas project procurement strategies may dictate sole-source procurement.<\/span><\/p>\n","protected":false},"author":120,"menu_order":1,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-38","chapter","type-chapter","status-publish","hentry"],"part":35,"_links":{"self":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/38","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/users\/120"}],"version-history":[{"count":9,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/38\/revisions"}],"predecessor-version":[{"id":862,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/38\/revisions\/862"}],"part":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/parts\/35"}],"metadata":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/38\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/media?parent=38"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapter-type?post=38"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/contributor?post=38"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/license?post=38"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}