What to know about Procurement Management for the PMP Exam!

Happy Sunday! Happy Mother’s Day to all the mothers around the world! Hope your enjoying your well-deserved day!

Today is one of the busiest days of the year for purchasing goods and services!

As everyone is out and about buying their wives, mother’s, sister’s, girlfriends beautiful gifts, I figured it was a great day to write about procurement management.

I know most purchases will be a one-time transaction and won’t require contracts.  But, here I will try to simplify Procurement Management for the PMP.

Procurement Management = buying of goods and/or services.

Procurement Management has one processes in the Planning (Plan Procurement Management), Executing (Conduct Procurement) and Monitoring and Controlling (Control Procurement) process groups.

Yes, a total of 3 processes make up Procurement Management!

Plan Procurement Management — The make buy technique is utilized by the project manager to decide if it would benefit the project if they purchased either goods or services from a 3rd party or to stay in house.

The technique is an analysis of market research that also includes cost information to make the best decision for the project.  Depending on their findings a decision will be made on how to move forward.

If it was decided to purchase something then the plan is developed. Remember the plan is a how to guide stating the contract type, statement of work (what is needed), procurement strategy, selection criteria, make buy analysis, independent estimates and any change requests that are due to the new findings.

Conduct Procurement – Now you are receiving responses from the interested sellers. Major technique here used is bidder conference where you designate a time and place for all the interested sellers to meet and answer any questions they might have regarding the proposal.

The objective here is to ensure everyone is on the same page and it’s a fair procurement process all around.

Output of Conduct Procurement is yes, Select Seller! You select your seller and award the contract!

Control Procurement — Now that the contract is in place it is your responsibility to ensure the contractor is working per the term and conditions of the contract. If there are any issues you have a claims administration technique that can be utilized.

Claims Administration — resolving contract issues, changes, etc. between the seller and buyer.

Closed Procurement is the major output! Once the work has been completed and the contract needs to be closed, this is where we would close the procurement!

That was Procurement Management in a nutshell.

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