Administer Procurements

April 20, 2010
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Introduction

Once procurements have been initiated by awarding a contract to a seller, it has to be managed through to fruition; the Close procurement stage. The administering of the process takes a lot of doing. It is crucial too. We have already seen how the success of procurement is intertwined with the success of the project. There are three essential things that have to be managed through this process. Managing the procurement relationship(s), monitoring the contract performance and making changes or corrections to the contract as and when necessary are the three activities required of the administering personnel.

Administering Procurements

It is essential to remember that the relationship is legal and any decisions taken should always be weighed against the legal implications. As such, both the buyer and the seller follow similar processes to ensure that the other party is meeting their legal responsibility and the contract performance is as per the requirements of the contract. When more than one such procurement actions are on, the administering personnel must be able to manage all the interfaces with different sellers. An additional complication to this scenario is that the contract administering is quite often considered to an administrative job and are handled by an administrative department. A procurement specialist may be on a project team, the administration can be completely outside the project team. The procurement specialist thus reports to someone outside the project team. These can create additional communication interfaces and make the process a little more complicated.

Administering of procurement is about managing the contractual relationships and also to ensure the outputs from that process mesh with the overall project management processes seamlessly. With multiple procurements on, these integration points can be at different places in the project management plan and processes. The typical processes involved in administering the procurement include the following, though there can be variations depending on the organization and the type of the project.

Direct and manage project execution process actions are required to authorize the seller’s outputs at the right time. Report performance is an essential part and ensures that procurement performance is visible to the project management team. The performance on scope, cost, schedule and technical performance need to be reported. Perform quality control processes ensure that the seller’s product meet the needs of the project as specified. The Perform integrated change control is absolutely crucial as uncontrolled changes that arise out of the procurement process can create chaos in the whole process. All change requests thus must be clearly approved and communicated to relevant people. Monitor & control risks processes must ensure that any changes in the risk scenario are brought out and mitigation measures are undertaken.

Payments to the seller and monitoring the performance are crucial parts of the process too. While good performance by the seller lets you identify a seller that could be used later, non performing sellers will also need to be handled. That includes corrective actions and even termination of the contract, if appropriate.

Inputs used in the process

A diverse set of documents need to be consulted often to make sure the administering procurement process works well. These include the contr4act document first and foremost. Project management plan is the master references for most things anyway. You will need to refer to the procurement documents too as that will tell you what were the original commitments from the seller and what the original requirements were. Two sets of performance reports are required reading. These are the seller performance report and the work performance reports. The former tells you whether the seller has been meeting his deliverables schedule as also his technical documentation about deliverables. The work performance reports essentially record the work standards being met by the seller. This also tracks the invoices submitted by the seller and the payments made to him. Approved change requests also should remain in the mind map of the administrators.

Outputs of the process

The outputs of this process are essentially updates to a set of documents. Starting with procurement documents updates may involve other documents such as organizational process assets, payment schedules and requests, seller performance evaluation documentation, change requests and project management plan documents.

Any updates necessary to the project documents such as changes in the contract document and its schedules, set of correspondence with the seller can add to the process assets etc. are outputs that happen. Tracking of payments are managed through the payment requests and actual payments made. Change requests and the overall changes required in the project management plan are the other important outputs.

The tools & techniques that help transform the inputs into the desired output include inspections and audits. These are the tools that will let you make out the performance of the seller. The inputs will come from the formal reviews as well. Corresponding performance reports document the performance of the seller for the information of all. Procurement performance reviews are structured and formal reviews of seller’s performance per the contract terms. Payments and claims administration is to be managed well too. Claims, unless settled through negotiations can lead to legal actions or the arbitration processes. A record management system to support all the records and documents associated with the administer procurement processes will be a big help and is a necessity.

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