Project Management Professional (PMP)

Procurement Management Process

The procurement process is designed to obtain a seller at most reasonable prices. The process involves waiting time for the sellers to look at the needs of the project and to respond. The process can thus, take from one month to three months for this type of procurement. The project manager need to be involved in the entire process of procurement management and he also needs to plan for the amount of time procurements take.

The four sequential procurement management processes are:

  • Plan Procurements

  • Conduct Procurements

  • Administer Procurements

  • Close Procurements

Inputs To Procurement Management Process

  • Enterprise Environmental Factors: It involves company culture and existing systems that the project can make use of.

  • Organizational Process Assets: Procurement procedures, standard contracts, lessons learned from last project, and list of prequalified sellers are some of organizational process assets.

  • Procurement Manager Assigned: If the amount of procurement is high, a procurement manager needs to be assigned for the process.

  • The Scope Baseline (WBS, WBS dictionary, project scope statement): It helps in making the project members understand the need of procurement.

  • Risk Register: An understanding of risks uncovered to date is termed as risk register.

  • Any procurement already in place for the project: The project manager must manage interface between multiple sellers and multiple procurements on one project.

  • Identification of resources not available within the performing organization: One of the critical aspects is to determine if services need to be procured. This steps allows us to think about it.

  • The project schedule: The project schedule helps to determine when the procurements are needed.

  • Initial cost estimates for work to be procured: An initial cost estimate is required for each work that is getting procured to compare between the sellers prices.

  • Cost baseline for the project: Knowing the cost baseline helps to make sure the procurement fits within baseline costs.

Plan Procurements

The buyer has needs and he has criteria using which he will select a seller. The plan procurements process involves creating procurement documents which describes these details. Additionally, this process also explains the procurement management plan. The Plan Procurements process includes:

  • Perform make-or-buy analysis

  • Create procurement management process

  • Create a procurement statement of work for each procurement

  • Select a contract type for each procurement

  • Create the procurement documents

  • Determine the source selection criteria

Make Or Buy Analysis

The organization has several constraints including one constraint, cost. The organization needs to decide about whether to do project work themselves or procure services for some or all the work. One of the main reasons to buy is to decrease the project constraints. However, organizations should make if:

  • The organization has an idle plant or workforce

  • Work involves proprietary information or procedures

  • The organization wants to retain control


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