1. Introduction
In this next series of posts, we move onto step 5, which is memorizing the TOOLS & TECHNIQUES associated with each process. In order to breakdown the memorizing into more bite-size chunks, I am going to break down this topic into at least 9 posts, one for each knowledge area. (There may be some knowledge areas that require more than one post.)
This post covers chapter 12 of the PMBOK® Guide, which covers the Procurements Knowledge Area. This knowledge area contains 4 processes, one in each of the 5 process groups except for the Initiating Process Group.
I am splitting the discussion of the Tools & Techniques into two different posts. This post will cover the tools & techniques in the last two of these four processes, 12.3 and 12.4.
| Process Number & Name |
Process Description | Tools & Techniques |
| 12.1 Plan Procurements | Project purchasing decisions, identifying potential sellers. | 1. Make-or-buy analysis 2. Expert judgment 3. Contract types
|
| 12.2 Conduct Procurements | Selecting a seller through bids or proposals, awarding a contract. | 1. Bidder conferences 2. Proposal evaluation techniques 3. Independent estimates 4. Expert judgment 5. Advertising 6. Internet search 7. Procurements negotiations
|
| 12.3 Administer Procurements | Managing procurement relationships, monitoring contract performance, making changes as needed. | 1. Contract change control system 2. Procurement performance reviews 3. Inspections and audits 4. Performance reporting 5. Payment systems 6. Claims administration 7. Records management system
|
| 12.4 Close Procurements | Verification that deliverables are acceptable, formal closure of contract. | 1. Procurement audits 2. Negotiated settlements 3. Records management system |
Let’s take a look at the tools & techniques for the processes 12.1 and 12.2 in the Procurements Knowledge Area.
12.3 ADMINISTER PROCUREMENTS
12.3.1. Contract change control system
There is an integrated change control system which handles changes to the project which regards to the work done by the company itself; one portion of this system is a contract change control system which handles changes to the project which regards to the work done by subcontractors or sellers.
12.3.2. Procurement performance reviews
The regular project team has periodic performance reviews that monitor their performance in producing deliverables according to the project scope within cost and on schedule. Similarly, there are procurement performance reviews which monitor the contractors performance in producing deliverables, but in this case according to the contract.
12.3.3. Inspections and audits
As part of the procurement contract, periodic inspections and audits can be held to make sure that the seller is complying with the terms of the contract. The inspections and audits may include personnel from the buyer if this is allowed by the contract.
12.3.4. Performance reporting
This is essentially reporting the results of the procurement performance reviews (12.3.2) to management.
12.3.5. Payment systems
Payment to the seller must be made in strict accordance with the terms of the contract, usually after certification by the buyer that the work done by the seller has been completed satisfactorily.
12.3.6. Claims administration
As a result of the contract change control system (12.3.1), there may be occasions when the buyer and seller cannot agree on changes to be made, or on the amount of compensation to be paid for that change. Many contracts call for settlement of all disputed claims such as these through something called alternative dispute resolution (ADR) to avoid the necessity of litigation.
12.3.7. Records management system
This has to do with the managing of records relating to the procurement process itself and any contract made with the seller as part of that process.
12.4 CLOSE PROCUREMENTS
12.4.1. Procurements audits
This is a review of the processes 12.1 (Plan Procurements), 12.2 (Conduct Procurements), and 12.3 (Administer Procurements). This is to help with lessons learned on the project to help future projects in the company with their procurements processes.
12.4.2. Negotiated settlements
If there is a disputed claim by either buyer or seller (12.3.6) relating to alleged failure of the other party to comply with the terms of the contract, then there should be an attempt to a) directly negotiate a settlement, or b) participate in an alternative dispute resolution or ADR. If that fails, then litigation is the last option.
12.4.3. Records management system
This has to do with the managing of records relating to the procurement process itself and any contract made with the seller as part of that process. As part of the closing process, it means indexing and archiving these records for use by other projects.
Well, we’ve now gone through each of the individual knowledge areas except one: Integration. And that’s because, as I mentioned at the beginning of this series of posts on Tools & Techniques, the Integration processes actually ties together all of the processes in the other knowledge areas (hence its name). So that is why I am covering the Integration Knowledge Area from chapter 4 of the PMBOK® Guide in the last few posts of this series.
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