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Week 5 – Contracting Process Paper

Write a 1,400- to 1,750-word paper in which you explain the process for conducting and closing procurements.

Include the following:

Outline and explain high-level process steps for conducting project procurements.

1. Plan Procurement Management – Procurements are first identified during the planning phase of the project. For every external contractor, there needs to be a statement of work (SOW) to serve as a document outlining the work being contracted. (https://www.projectmanager.com/blog/project-procurement-management-quick-guide)
   • Project Charter
   • Project Statement of Work (SOW)
   • Work Breakdown Structure (WBS)
2. Conduct Procurement – the conduct procurement phase is when you study the bids that come back and determine which one to accept. Before deciding, however, there should be a criterion in place to decide which bid is best for the project and fits your logistics management. The agreements are then signed, and the project management plan is updated. (https://www.projectmanager.com/blog/project-procurement-management-quick-guide)
   • Make or Buy
   • Lease or Own
   • Internal vs External
3. Control Procurement – Contractors can have negative impact on budgets and schedules, which can lead to a project going off-track or worse. (https://www.projectmanager.com/blog/project-procurement-management-quick-guide)
   • Organizational Levels
   • Project Levels
   • Preferred supplier/vender list
   • Vendors
   • Source selection
4. Close Procurement – What constitutes completed work should be detailed in the initial agreement with the contractor, so there is no confusion of either’s part as to when the work is done. (https://www.projectmanager.com/blog/project-procurement-management-quick-guide)

• Outline and explain contract administration policies and procedures.
• Describe tools and techniques for the contract administration process, including the following:

• • Contract change control process – PMO should have a process that documents, and templates created, managed, and controlled. (Wilson, pg. 226).
  • Procurement performance reviews – includes the evaluation of items, such as the performance of various suppliers/vendors and subcontractors, quality audits for products delivered or work performed, and general assessment of the relationship. (Wilson, pg. 224).
  • Inspections and audits – These inspections can include quality of product or work performed, attention to critical details, and on-time delivery of a product or deliverable. (Wilson, pg. 225).
  • Performance reporting
  • Payment process (n/30, n/60, and so forth) – this is a procurement strategy that creates a billing relationship that can be established between the buyer’s accounting dept. and the seller that ensures monthly invoices are paid on time. This strategy also allows the purchasing agent to make purchases that can simply be put on account and maintains a good relationship between the purchasing agent and the seller agent.
  • Records management system (RMS)

• Describe conflict resolution techniques used while managing contractual relationships.
• Outline steps to be taken to close out project procurements.
• Explain the importance of closing project procurements and accounts.
• Examine external influences on the procurement and risk management process.

• • Avoidance
  • Transfer
  • Mitigate
  • Acceptance
• Analyze the relationship between the risk response plan and the external influences.

Reference

Wilson, R. (2015). Mastering risk and procurement in project management: A guide to planning, controlling, and resolving unexpected problems. Upper Saddle River, NJ: Pearson.