Projects are living beings, they require input to make them work; And while some of this input is the work being made directly on the project there is also other resources that are needed such as tools for development or contracts for external resources. This is where project procurement management comes in. Project procurement management is the act of purchasing, renting, and contracting outside resources to support the project.
The first step of project procurement management is to plan your procurement. During the planning of your project, you should determine the needs of the project, and where those needs will come from. Resources that lay outside your organization will need to be procured. When contracting out you need some documents to make sure that everyone is on the same page. The first document is the statement of work (SOW), this document outlines the work that is needed to be contracted out. Once you have a solid SOW you can move to put out a request for proposal (RFP). Contractors will review RFPs and put in bids on the work, this helps you determine the best contractor for the job. Once you have bids it is time to do some analysis on the results collected, this can include make-or-buy analysis, market research, and stakeholder meetings.
The second step of project procurement management is to conduct procurement. In this step, you will actively study the bids you received on your RFP. You will need to break down each work segment into criteria which you will use to match the best contractor for each RFP. Once agreements are made your management plan should be updated to reflect such contracts. Some techniques you can use to decide the best contractor can include, meetings with each contractor, applying custom analysis to each bid, or consulting experts/stakeholders in the area of knowledge.
The last steps of project procurement management are controlling and closing procurements. First comes controlling each procurement throughout the project life cycle. You will watch contractor progress and receive regular progress updates to make sure the contractor is continuing to fit best with your project. This step allows you to see problems before they arise and implement changes to course-correct before budgets are blown. Once you have successfully monitored/controlled a procurement through its own lifecycle you are
ready to close it. Closing procurements includes going over initial paperwork to make sure that all requirements set out for the outside resources were met, this serves to finalize the agreement and make sure that both involved parties are happy and leaves an audit trail in case something down the line of project work happens due to contractor negligence.
For a project to be successful all parts need to work in harmony, this includes outside resources. This is why project procurement management is so important, all it takes is one party to unknowingly cause problems for them to snowball and end a project prematurely. Procurement management is equally a human management job as it is a purchasing job.
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