Procurement Management Plan

April 12, 2010


Procurement management plans needs to cover all the aspects of the procurement processes. The activities that start with creating the procurement documents and end in procurement closure must all be covered in the plan. The plan can be formal or informal in nature. The details included could be a lot or some broad guidelines depending on the needs of the project as also the standards used in an organization. The procurement management plan thus developed is part of the overall project management plan, of course.

Aspects of the procurement Management Plan

Guidelines about several aspects of the procurement processes need to be specified in this plan. This would, typically, include the following issues. There can be variations to this depending on the actual needs of an organization but this set gives you an overall idea as to what needs to be covered in such a plan.

Assuming the procurement items have been identified broadly, the plan would identify pre-qualified sellers if available. The types of contract to be used also will need to be identified. Procurement metrics to be used for evaluating vendors and terms & conditions to be used in contracts should need to be decided.

Each item to procured individually or as a group of related items will need a statement of work specified. The form and formats of these documents will have been specified in the procurement management plan. Establishing how the seller should create and maintain a WBS will have to be specified. This plan should specify that to the seller. The kinds of performance bonds or insurance that would be asked for mitigating any risks associated with the specific procurement actions.

Prior to this the make or buy analysis would have to be done and integration of the aspects of make or buy decisions would have to iterated with the activity resource plans and schedule planning to suitably modify them. Delivery dates for the procurements and matching them with the schedule plan and modifying/moderating them as needed may have to happen. Most procurement actions will have a lead time associated with it. Taking care of these lead times with the project scheduling requirements will be essential for the overall project success. Inputs related to this activity should come from the procurement management plan too. Any and all constraints and assumptions will have to be clearly documented. Depending on just word of mouth communication or some one’s memory could be very risky in all but very simple procurement plans. Managing multiple sellers is an issue on which, once again, there should be clear guidelines available in the procurement plan.

The plan must specify any standardized procurement documents that have to be used, if necessary. Throughout the procurement process the coordination of procurement of products and services for the project is absolutely crucial. This coordination with project schedules and performance reporting are essential to get a complete and true picture of the project performance. Which, in turn, indicate the probability of the project success and whether cost and time overruns can be avoided.

Risk management issues and if the project team can take independent actions on specific procurements and to what extent will have to be specified. The procurement plan must specify if independent estimates are required and evaluation criteria where they must be used.

In each of these issues the actual extent, format or even what kind of metrics and measurements make sense or the specific way the procurement actions must coordinate with the schedule plan could well be dictated by the organization’s process assets. Expert opinions in the existing procurements department and the legal departments could well mandate the types of contracts and other issues in the buyer seller relationships being set up.

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