1. Partly adapted from Video Lessons of
Trudy Robinson
(source:BSBPmG408A,www.trudyrobinson.com)
(misilamani@yahoo.com))
Lecture on

2. 10/6/2013
PROJECT PURCHASING
2

3. Objectives
• To understand and apply knowledge
regarding,
 Purchasing
 Contract
 Project Inputs & Outputs
Which need to be managed by a formal
procurement process
(PMBOK V4 reference-pg 313, Chapter 12)
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4. 10/6/2013
It’s all a load of Balls!
4

5. Procurement Indices
Attainment
Fulfillment
Contract
Appropriation
Securing
Providing
Tender
Gaining
Acquisition
Vendor
Buying
Purchasing
Furnishing
Supplier
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6. 10/6/2013
Public Procurement
6

7. Procurement
Project
Activities
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8. Procurement
(supply, deliver & purchase)
10/6/2013
OUTPUTS
to
PROJECT
INPUTS
To
PROJECT
PROCUREMENT
CONTROL
8

9. 10/6/2013
RESPONDING
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10. Project Procurement
Management
Identifying what you Need to Buy In
Clear requirements
Who you are going to work
with(supplier)
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11. Project Procurement
Management
Contract Management
Process, DIFOT(Delivery In Forlorn Time)
Payments
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12. 10/6/2013
PROJECT PROCUREMENT PRACTICE
12

13. Project Procurement
Management
PROCESS
 Identify procurement
requirements(Concept)
 Plan procurement(Design)
 Conduct & Administer(Implementation)
 Close procurements(Finalization)
(Referrence: PMBOK pg 317)
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14. Project Procurement
Management
• CONTRACTS
 Agreements
 Purchase order
 Memorandum of Understanding(MOU)
 Sub- contract
 Service level agreements
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15. Project Procurement
Management
CONTRACTS-cont
 Terms & Conditions
 Clear points of payment
 Specific product/service provisions
 Schedule
 Exclusions
 Model-Time & Material
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16. 10/6/2013
TROUBLE SHOOTING
16

17. Project Procurement
Management
WIDER PICTURE
 Organizational policies
• Who decides?
 Quality/OHS
• Occupational safety & health
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18. Project Procurement Management
WIDER PICTURE-cont
 Other projects
 Legal counsel
 Existing commitments
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19. 10/6/2013
Procurement ProcessProcurement Process
PROCUREMENT PROCESS
19

20. Project Procurement
Management
YOU Will CREATE
 Procurement management plan
 Procurement statement of work(SOW)-
similar to a PD but for the contract;
not the individual
 Invitation To Tender(ITT)
 Request for Information(RFI), request for
Proposal(RFP) etc.
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21. Project Procurement
Management
SELECTION CRITERIA
 Clear outline of requirement
 Ensure all responses received are in
identified format
 Think ahead- word the ITT to enable
numerical value to be applied to a
supplier’s response(simplifies overall
analysis)
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22. 10/6/2013
PROJECT CONTRACTING
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23. Project Procurement
Management
• SELECTION CRITERIA-cont.
• No duplications or ambiguity in
requirements
• Provide one point of contact where
questions can be asked
• Evaluate, compare, choose
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24. 10/6/2013
Boeing’s Procurement Process
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25. Project Procurement
Management
MANAGE
 DIFOT
 Performance
 Adherence of contract
 Payment approvals
 Change requests/variations
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26. Project Procurement
Management
• CLOSE
 Final review
DIFOT
Performance
 Final payments
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27. Project Procurement
Management
CLOSE
• Input to lessons learned
• resources management
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28. 10/6/2013
PROJECT CLOSING
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29. Summary
Procurement is managing contracts, inputs to
the project as well as outputs
Influences outside the project will influence
(organizational policies..)
Identify, Clarify, Invite, evaluate & decide
Know your contracts and the clients of each
DIFOT
‘FORMAL PROCESS’-stick to it
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30. 10/6/2013
procurement cycle
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31. 10/6/2013 31