Procurement Management

Procurement management processes includes:

(a) Procurement Planning (b) Solicitation Planning (c) Solicitation (d) Source Selection (e) Contract Administration (f) Contract Close-out

(a) Procurement Planning: This involves taking decision on

                                                 • What to procure?

                                                 • What type of contract to use?

                                                 • Financial and organizations issues

(b) Solicitation Planning: Make or buy analysis is used for determining the cost effectiveness of procurement. PMs need to consult experts to assist them with the legal aspects of contracts. Decisions need to be made about appropriateness of the types of contracts e.g. fixed price contracts (more risk to seller), Cost reimbursable contracts (more risk to buyer), Unit price contracts (fixed price to seller and risks passed on to buyer). Solicitation planning includes:

• Writing the statement of work in sufficient details.

• Preparing procurement documents e.g. Request for proposal (RFP), Request for bid (RFB), Request for information (RFI).

• Developing source selection evaluation criteria.

(c) Solicitation: This involves:-

 • Finalizing procurement documents

• Advertising the work

• Providing clarifications

• Holding bidder’s conference

• Receiving proposal

(d) Source Selection: Source selection criteria cover:-

• Technical criteria

• Management criteria should also be given due importance

(e) Contract Administration: This involves:

• Finalizing and awarding the contract

• Monitoring performance

• Making contract modification (when required)

• Project members should be involved in writing and administering the contracts

(f) Contract Close-out: This include product verification and administrative close out e.g. formal acceptance, closure, contract file archiving.


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