Online PMP® Training and Preparation: Administer Procurement Process in Project Procurement Management
Administer Procurement Process:
This is the process of managing procurement relationships, monitoring contract performance and making changes and corrections as needed.
The key inputs to this process are contract, other procurement documents and work performance information. Work performance Information basically has the information about the progress of the work, i.e. how much work is completed and what's the cost incurred to complete that work. In this case, it has information like how much work is completed as per the contract and money spent to get that work completed as per the contract.
Performance reports listed as inputs are basically reports created by the seller on what they have completed and any other seller created technical report about the contract work progress. The Project Management Plan is also listed as input because the contract work should progress as per the project plan.
There are various techniques used for administering procurement. Lets first look at, Contract Change Control System. This is similar to normal change control system, but used specifically for managing changes to the contract. Usually the process of making changes to the contract, i.e. Contract Change Control System is listed in the contract document itself. The next technique is Procurement Performance reviews this is process of formally reviewing the seller deliverables. Usually this is also documented in the contract document. In many large contracts, the procurement performance reviews are done once a month. Sometimes unscheduled inspection and audits can also be performed by the buyer to ensure that seller is following the processes that they claim they do. Many a times this is done to ensure compliance.
For example, as a buyer you can have a policy that all your seller should comply to ISO 9001:2008 standards. You can do your own audit on seller to check whether they really comply with that standard or not. Releasing the payment of the work performed by the seller is also part of this process. Sometimes buyer and seller may get into a dispute regarding a change. The seller may ask for additional money for the change and buyer may claim that it's the part of the original scope. Such contested changes are also called claims or dispute. The contracts usually have claims administration process to settle such disputes. The best way to settle such dispute for the buyer and the seller is to seat across a table negotiate and agree on a mid way.
The key output of the process is the change request. Why Change request is the output of this process? In addition to this, Project Plan updates also happen as part of this process, because, if there is a delay in getting a contract deliverable that would result in whole project getting delayed. Any such delay needs to be updated in the Project Management Plan.
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