Project Procurement Planning
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Project Procurement Planning
- 2. Purpose of the Subcontracting Purchase of products, services or results outside of the project organisation www.projektor.ee/pm/#procurement
- 3. Subcontracting Management • Procurement planning • Planning call for bids • Biding • Selecting partners • Contract administration • Contract closure www.projektor.ee/pm/#procurement
- 4. Project Phases and Processes Initiation Planning Execution Control Closing www.projektor.ee/pm/#procurement
- 5. Subcontracting in the Project Plan Scope definition Quality planning Activity definition Activity sequencing Duration estimation Schedule development Organization planning Resource planning Communica- tion planning Procurement planning Plan Bidding Select sellers Seller responses Risk management Risk identification Qualitative analysis Quantitative analysis Response planning Budgeting Project plan Initiation Execution WBS www.projektor.ee/pm/#procurement
- 6. Inputs: - Environment factors - Organization assets - Project Scope - WBS - Project schedule - Risks - Procurement plan Methods: - Make or buy analysis - Contract types - Standard templates - Bidder conferences - Evaluation techniques - Evaluation criteria - Expert judgments - Contract negotiation Outputs - Contract work statement - Make or buy decisions - Procurement documents - Qualified sellers list - Proposals - Selected sellers - Contracts - Change requests Subcontracting Planning www.projektor.ee/pm/#procurement
- 8. Procurement Management Plan • Contract type • Expert evaluators • Evaluation methods and criteria • Standard documents • Constrains and assumptions • Responsibilities for project team or procurement office • Connection with the schedule www.projektor.ee/pm/#procurement
- 10. Make or Buy Analysis www.cleverism.com/make-or-buy-decision-step-by-step-guide
- 11. Make or Buy Factors (Expenses) Make: • Labor • Inventory • Capital • Materials • Operational • Management • Follow-on expenses Buy: • Purchase price • Transportation • Inspection • Follow-on expenses www.projektor.ee/pm/#procurement
- 12. Contract Types Fixed sum or lump-sum CPFF = Cost + Fixed Fee CPF = Cost + Fee CPIF = Cost + Incentive Fee T&M = Time & Materials Paymentsbasedon Investor’sControl WorkDescription RisktoSupplier Supplier’smotivation Result Time Low High Detail General High Low High Low
- 13. Evaluation Techniques • Weighting system • Independent estimates • Screening system • Seller rating systems • Proposal evaluation techniques www.projektor.ee/pm/#procurement
- 14. Evaluation Criteria • Understanding of needs • Overall cost • Technical capacity and approach • Management capacity and approach • Financial capacity • Production capacity • Business size and type • References and previous experience • IPR www.projektor.ee/pm/#procurement
- 15. Exercise Select one task from your project for subcontracting. What are the minimum requirements for the contractor? www.projektor.ee/pm/#procurement
- 16. State Procurement Criteria Example • No criminal or administrative penalties • No risk to bankruptcy • No unpaid taxes • Last 3 years net turnover bigger then 150 000 • Experience in similar projects – Total turnover at least 75 000 – One project bigger then 50 000 • Project manager has PMI certificate (issued or renewed during last 3 years) • … www.projektor.ee/pm/#procurement
- 18. Procurement Documents • Bidding invitation • Proposal for cooperation • Call for price offers • Call for negotiations • Initial offer • Contract www.projektor.ee/pm/#procurement
- 19. e.g. State Procurement Documentation • Call for tender • Conditions for qualification • Compliance with conditions • Evaluation criteria • Cost template • Schedule template https://riigihanked.riik.ee/register/Home.html
- 20. E.G: Schedule Change Requests www.projektor.ee/pm/#procurement
- 21. Procurement Contract Administration Ensuring that seller’s performance meets contractual requirements www.projektor.ee/pm/#procurement
- 22. Project Phases and Processes Initiation Planning Execution Control Closing www.projektor.ee/pm/#procurement
- 23. Procurement in the Project Execution Information distribution Project execution Procurement management Reporting Team development Schedule control Scope verification Cost control Quality control Risk monitoring Change management Planning Closing www.projektor.ee/pm/#procurement
- 24. Inputs: - Contract - Selected sellers - Performance reports - Approved change requests Methods: - Contract change control system - Performance review - Inspections - Performance reporting - Payment system - Claims admin - IS Outputs - Documentation - Change Requests - Corrective actions - Plan updates Procurement Contract Administration www.projektor.ee/pm/#procurement
Hinweis der Redaktion
- Procurement planning = vendor planning = purchasing planning
- … to perform the P work. Different roles: Buyer (you as a client, customer, prime contractor, demander, requestor, …) - INTERNAL Seller (you as a bidder, supplier, contractor, subcontractor, vendor, service provider, undertaker…) - EXTERNAL Contract describes buyer-client responsibilities – e.g. who is responsible for PM (in this work phase)? UNDERTAKER JOKE
- Plan – what to purchase and how? Contracting – requirements and potential partners Requests – providing information, invitations, offers Selecting - reviewing offers, negotiations, selecting, contracts Administration – performance reporting, change management, contract management Closure – closing contract, solving open issues Outcomes: contract – more extensive approval process agreements, subcontracts, orders, deliverables, products services
- IN: Environment – what is available? Organization – procedures, guidelines, management system Out+ - Contract management plan - Resource availability
- Make favoring factors: Direct control Cost less Higher quality control Unique – no suppliers Small quantity – nobody interested Protect IP Time control Ethical or social reasons Buy favoring factors: Missing certain know-how Cost less Reducing risks – multiple sources Limited resources Brand preferences
- + Qualitative aspects: reputation, modification possibilities, … impact on clients …
- Direct costs + indirect costs – how they are calculated
- - Weighting – numeric weights to evaluation criteria - Independent – “should cost” estimates - Screening – setting minimum requirements - Seller rating systems – previous performance, quality, delivery, - Proposal evaluation techniques -
- SOW – Statement of Work
- SOW - Statement of Work
- Procurement planning = vendor planning = purchasing planning