Procurement Management

The 9 topic areas of project management knowledge

Procurement is one of the 9 topic areas of project management knowledge.

Procurement Management involves getting work done by people outside the project team.

Procurement of the a set of activities performed as part of an acquisition effort. It combines the functions of purchasing, inventory control, traffic and transportation, receiving, inspection, store keeping, and salvage and disposal operations.

Procurement management more commonly refers to the management of organisation's purchasing processes, including the management of the purchasing activity, market research, buyer development and related activities.

Procurement management in projects/programmes include at least the following processes

Procurement Planning: identifying all potential acquisition transactions; discuss contracting approach, administrative requirements, and lead-times for each contract action.
Procurement Process: Identifying requirements, costs, and lead-times for procurements; discuss administrative and performance risks.
Procurement Liaison: Contact procurement officials and discuss plans to support project; solicit their requirements and issues; maintain active communications exchange. Contract Administration Follow-up with contractors to ensure compliance with delivery, performance, and cost requirements; manage changes deliberately and maintain good records.

The knowledge area of Project Procurement Management consists of the following processes -

Procurement Management Processes
Process	Project Phase	Key Deliverables
Procurement Planning	Planning	procurament plan Contract Statement Of Work Evaluation Criteria
Procurement Process:	Execution	Sellers list, Proposals
Procurement Liaison:	Execution	Selected Sellers, Contract Contract Changes
Contract Closure	Closure	Closed Contracts

A contract is a formal agreement. It is a legal document biding to both seller and buyer. Changes to contract must be in writing and formally controlled. Most Governments back all contracts by providing a court system.
Sole Source refers to a market condition in which only one qualified seller exists in the market.
Single Source refers to a market condition in which the company prefers to contract with only one seller.
Oligopoly refers to a market condition where very few sellers exist, and the action of one seller will have impact on other seller prizes.
Contract can be used as a risk management tool, as in transferring risk.
Centralized Contracting refers to a separate contracting office that handles contracts for all projects. In De-centralized Contracting a contract administrator is assigned for each project.
Force majeure is a powerful and unexpected event, such as hurricane or other disaster.
Privity is contractual information between customer and vendor.

Procurement Management

See also Logistic plan ;