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Sellers, sometimes called vendors, are the companies that a program will work with to purchase the needed resources There are two executing processes you ll use to work with sellers in your program The first one is to request a seller response You ll execute this process by contacting the sellers through advertisements, such as public notices in your newspaper s advertising section, by calling sellers you know and inviting them to participate, or by using a preferred vendors list your organization provides When you execute the seller response, you ll usually provide a contract statement of work that details the goods or services you want to procure The contract statement of work, sometimes just called a SOW, details what your program needs and is usually updated based on queries and clarifications when dealing with the vendors You ll get these queries and clarifications through a bidders conference that you host Here s the typical procurement approach: You create a contract statement of work detailing what you want to buy You create a request for quote (RFQ), an invitation for bid (IFB), or a request for proposal (RFP) You give the SOW and the RFQ, IFB, or RFP to the vendors you d consider doing business with You host a bidders conference where all of the sellers can attend and ask for clarifications about your SOW and questions about the work you want them to do for you Considering the outcome of the bidders conference, you ll update the SOW and resubmit it to all of the potential sellers so that everyone has the same information to create a bid, quote, or proposal NOTE A bid and a quote are the same thing: just a price, no fancy ideasYou ll usually ask for a bid or quote when you know exactly what you want, such as four tons of pea gravel A proposal, however, provides lots of fancy ideas and suggestions for your programYou ll ask for a proposal when you have a good idea of what you d like, but you need some guidance, such as designing a new web site
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The sellers will provide their bids, quotes, or proposals as you ve asked, and then you ll do the second procurement management executing process: selecting a seller If you ve asked for a bid or quote, price is usually the determining factor, though you may have other concerns, such as date of delivery, warranties, and the like If you ve asked for a proposal, then it s usually much more involved You ll have to read, evaluate, meet with the sellers, and ponder the suggestions you ve received to make a decision on which vendor will win the contract The primary output of selecting a seller is the contract for the goods and services the vendors will provide to the program You may also have updates to the procurement management plan to reflect any adjustments you and the vendor have negotiated, such as terms of payment, delivery methods, and other contract requirements The contract will be an input to the monitoring and controlling process, program contract administration
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Here s the scoop with this monitoring and controlling process: both parties have to live up to the terms of the contract It s easy for the program manager to see how well the vendor is performing, as he can track costs, schedule, quality of work, and other details of what the vendor is providing to the program What s not so obvious, however, is that the program manager s organization has obligations outlined in the contract as well Both parties have to abide by the terms of the contract As the vendor completes their work, they ll submit invoices for the work they ve done The program management team will inspect the vendor s work and confirm that it s complete or not If the work is lacking, the seller must redo the work in order to satisfy the contract terms before being paid When the seller s work is complete, the payment request will be approved, and the vendor is paid When change requests are made in the program scope, they may affect the program s sellers The contracts should define how changes may enter the contract Some contracts allow changes to be added to the contract via an addendum, while other contracts may require a whole new contract, if the cost of the change exceeds a given amount Whatever approach is taken, communication with the seller about the change is mandatory, or there ll be confusion, frustration, and possibly claims to settle
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