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Do you have an example of a seller selection that can serve as a learning experience Yes, in response to an RFP from a seller to a bid for 24/7 (three 8-hour shifts per day) call center support, the seller stated they would provide support in two 12-hour shifts per day When the seller was asked why they proposed different shift coverage, they said that it would be more efficient and save money to provide two-shift 12-hour coverage instead of three 8-hour shifts When the truth came out, the company didn t have enough trained staff to perform coverage for three shifts Needless to say, they were not awarded the contract
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12: Project Procurement Management
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Conduct Procurements Inputs, Tools and Techniques, and Outputs
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The inputs, tools and techniques, and outputs for the Conduct Procurements process are as follows
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Inputs There are many inputs to be considered in the Conduct Procurements process and the inputs in most cases are the outputs from the previous (Plan Procurements) process
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Project management plan Procurement documents Source selection criteria Qualified seller list Seller proposals Other project documents Make-or-buy decisions Teaming agreements Organizational process assets
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Tools and Techniques When it comes time to work the Conduct Procurements process, there are a number of tools and techniques available Each has its purpose and may be predetermined by your PMO, procurement department, or organization The PM should be involved in this process even if it is being handled or managed by a centralized procurement department or group A few of the tools and techniques available are
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Bidders conference, contractor conference, or vendor conference Proposal evaluation techniques using selection criteria based on procurement policies Independent cost estimates Expert judgment Advertising, Internet search Procurement negotiations
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Outputs The outputs of the Conduct Procurements process are
Selected sellers and procurement contract award (contract or agreement) Resource calendars (work schedule, work periods, and so on)
PMP Certification: A Beginner s Guide
Change requests Project management plan updates Procurement document updates
NOTE
You should remember that the outputs from a given process typically become the inputs to the next process Watch for the links this will help when studying for PMI exams
3 Administer Procurements Process
The Administer Procurements process involves managing procurement relationships and monitoring contract performance to ensure the work (or product) is meeting quality requirements The legal nature of the contractual relationship makes it extremely important for the project team to be fully aware of the implications of their actions when administering procurement This is what is often referred to in the business world as a bet your job situation Most companies have established procurement policies and follow strict business conduct guidelines pertaining to how contracts should be managed
The best way to do good and avoid evil is to stay current on all your business conduct guidelines Ensure you follow all regulatory requirements and your company s code of ethics The PMI professional and social responsibilities/ethics are available on the wwwpmiorg website I highly recommend you print it out two to three weeks prior to taking the exam to get very familiar with this section and the two key categories ( Mandatory and Aspirational )
Managing the Relationship
The key to success when it comes to procurement is the relationship between the buyer and the seller As the PM (assumed buyer), it is extremely important that you manage this relationship The best way to manage the relationship during the administration of procurements is with a formal document of agreement (DOA) or statement of work (SOW) to establish the ground rules and roles and responsibilities between the buyer and seller
Statement of Work (SOW)
Most project managers use SOWs or a similar type of document For performance-based contracts, the SOW is often referred to as the performance work statement (PWS) An SOW is a narrative description of the services (or products/results) to be delivered on the project Other titles include work order, request for service, service request, service order,
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