Introducing Project Procurement Management - Planning for Purchases

15 important questions on Introducing Project Procurement Management - Planning for Purchases

What are the four elements procurement planning focusses on?

  • Whether procurement is needed
  • What to procure
  • How much to procure
  • When to procure

What are other names for sellers?

Contractors, subcontractors, vendors, suppliers, and service providers.

What are other names for buyers?

Clients, customers, prime contractors, contractors, acquiring organizations, government agencies, service requestors, or purchasers.

What are the two things a project manager relies upon when starting with procurement?

Enterprise Environmental Factors and Organizational Process Assets.

Why is an evaluation of the marketplace needed?

To determine what products and services are available and from whom and on what terms and conditions they are available.

What do the following key terms mean: sole source, single source, oligopoly?

Sole source - Only one qualified seller exists in the marketplace
Single source - The performing organization prefers to contract with a specific seller
Oligopoly - There are few sellers, and the actions of one seller will have a direct effect on the sellers' prices and the overall market condition

Why is the scope baseline important as input for making procurement decisions?

Because it defines the project work and thus the limitations of the project it can help the project manager, the contract specialist, and other procurement professionals to determine what needs to be purchased, and what does not.

Why is the WBS and WBS dictionary important for procurement planning?

It defines the end result of the project and serves as valuable input regarding what needs to be procured and what does not.

When could the SOW be interesting for procurement?

When an entire project is to be procured from a vendor, the SOW and the product description become one and the same.

How is the project management plan important for the procurement planning process?

It guides how the project should progress, and each subsidiary plan may need to be referenced for procurement guidelines.

What is one of the most important things to consider during procurement management?

The reliance on the risk response transference.

What do we mean with a teaming agreement?

A legally binding venture between two or more organizations that plan to complete a defined set of work or to seize an opportunity or some other venture that the parties involved couldn't completely necessarily on their own.

How is the project schedule important for procurement planning?

The project manager needs to understand when resources are needed to keep the project moving. Coupling this with the activity cost estimate and the cost performance baseline and the project manager can do cash flow forecasting, communication with management about upcoming expenses and ensuring that the vendors are paid on time.

How are project requirements important in project procurement?

  • To determine what you'll purchase from vendors
  • To understand whether any aspects of the requirements affect the contracting process

What other things should be considered when looking at procurement?

  • The risks
  • The project schedule - the vendor can impact it
  • The project budget - how much can you spend on the vendor

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