Passing the #PMP Exam: Inputs and Outputs—Procurements Knowledge Area


 

1. Introduction

In this next series of posts on memorizing the processes, we move on to the final step 6, which is memorizing the INPUTS & OUTPUTS associated with each of the 42 processes. In order to breakdown the memorization 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 of which is in each process group except for the Initiating Process Group.

2. Review of processes in Procurements Knowledge Area

As a review, here is a chart which gives a summary of the processes themselves, plus the tools & techniques used as part of that process.

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

3. Definition of inputs, outputs

The inputs for a given process are the documents or results of other processes that are used in order to do the process. The results of going through the process are the outputs. These outputs are then used as inputs for some other process.

4. Generic inputs

Before we start, there are two “generic” inputs that are used in many, many processes. The term “generic” inputs is not to be found in the PMBOK® guide; that’s just my term I made up in our study group to clue people in to the fact that they are included as an input in more processes than you could probably name off the top of your head.

A. ENVIRONMENTAL ENTERPRISE FACTORS (EEF)

This is the “company culture”, or factors that are external to the project but which influence the project’s success. These can include the company databases and, in particular, the project management software used by the company.

B. OPERATIONAL PROCESS ASSETS (OPA)

Written procedures, policies, and guidelines that are used by the company to guide all operations, including projects. Lessons learned would be an important part of OPA.

Think of the operational process assets as the “hard copy” (written procedures), and the environmental enterprise factors as the “soft copy” (software and the company culture or “unwritten rules” that govern how work is done).

NOTE: Tools & Techniques will be listed for the purpose of completeness and for reference, but their detailed description will be omitted, because it is contained in the blog posts specifically covering Tools & Techniques for that knowledge area.

12.1 PLAN PROCUREMENTS

To remember the inputs for this process, remember that the purpose of this process is to document the purchasing decisions for the project, specifying the requirements and identifying potential sellers.

INPUTS

12.1.1 Scope baseline

The scope baseline consists of the scope statement, the WBS, and the WBS dictionary. It is the output of the process 5.3 Create WBS.

12.1.2 Requirements documentation

This is an output of the process 5.1 Collect Requirements.

12.1.3 Teaming agreements

This is a contractual arrangement between two or more entities to form a partnership or joint venture for the duration of the project.

12.1.4 Risk register

This is an output of the process 11.2 Identify Risks.

12.1.5 Risk-related contract decisions

If the risk for a company for a certain activity is too high for its level of tolerance, then the company may transfer that risk through transferring that risk to another company by procurement contract, or through some sort of insurance arrangement.

12.1.6 Activity resource requirements

This is an output of the process 6.3 Estimate Activity Resources.

12.1.7 Project schedule

This is an output of the process 6.5 Develop Schedule.

12.1.8 Activity cost estimates

This is an output of the process 7.1 Estimate Costs.

12.1.9 Cost performance baseline

This is an output of the process 7.2 Determine Budget.

12.1.10 Enterprise environmental factors

The marketplace information on the past performance of suppliers.

12.1.11 Organizational process assets

Company procurement policies.

TOOLS & TECHNIQUES (for details, see Tools & Techniques Procurements post)

12.1.1 Make-or-buy analysis

12.1.2 Expert judgment

12.1.3 Contract types

OUTPUTS

12.1.1 Procurement management plan

This includes the following elements

Element

Description

1. Risk management issues Mitigation of risk through performance bonds, insurance contracts
2. Evaluation criteria, procurement metrics Metrics such as independent estimates to evaluate sellers
3. Scheduling and performance reporting Coordinating procurements with other work on project

12.1.2 Procurement statements of work

The Statement of Work or SOW defines only that portion of the project scope which is to be included within the related contract. It describes the item to be procured in sufficient detail to allow prospective sellers to determine if they are capable of providing it. The SOW is included in the procurement documents (see output 12.1.4).

12.1.3 Make-or-buy decisions

This documents the conclusion of the decision regarding which products, services, or results of the product will be acquired from outside the project organization as opposed to being performed internally by the project team. This includes not just issues of cost, but issues of risk as well.

12.1.4 Procurement documents

These are the documents used to solicit proposals from prospective sellers. These may include a Request for Information (RFI), Invitation for Bid (IFB), Request for Proposal (RFP), and/or Request for Quotation (RFQ).

12.1.5 Source selection criteria

These criteria include such things as the risk involved, the overall cost, the financial capacity of the seller, intellectual property issues, etc.

12.1.6 Change requests

The procurements process may result in change requests to the project.

12.2 CONDUCT PROCUREMENTS

To remember the inputs for this process, remember that the purpose of this process is to obtain seller responses to a bid or proposal, to select a seller, and to award a contract to that seller.

INPUTS

12.2.1 Project management plan

The procurement management plan is part of the project management plan. It is the output of the process 12.1 Plan Procurements.

12.2.2 Procurement documents

This is an output of the process 12.1 Plan Procurements.

12.2.3 Source selection criteria

This is an output of the process 12.1 Plan Procurements.

12.2.4 Qualified seller list

This is a list of sellers who have been qualified as sellers on previous projects with the company.

12.2.5 Seller proposals

The proposals by the sellers form the basic information used to select one or more successful bidders.

12.2.6 Project documents

The risk register, and risk-related contract decisions.

12.2.7 Make-or-buy decisions

This is an output of the process 12.1 Plan Procurements.

12.2.8 Teaming agreements

In a teaming agreement, the roles of the buyer and seller are decided by executive management.

12.2.9 Organizational process assets

Listings of prospective sellers and any information on past experience with them.

TOOLS & TECHNIQUES (see Tools & Techniques Procurements post for details)

12.2.1 Bidder conferences

12.2.2 Proposal evaluation techniques

12.2.3 Independent estimates

12.2.4 Expert judgment

12.2.5 Advertising

12.2.6 Internet search

12.2.7 Procurement negotiations

OUTPUTS

12.2.1 Selected sellers

The sellers are those selected based on the evaluation of their proposal or bid.

12.2.2 Procurement contract award

A procurement contract is awarded to each selected seller.

12.2.3 Resource calendars

This shows the availability of the resources that have been contracted for.

12.2.4 Change requests

The project management plan may be updated by change requests.

12.2.5 Project management plan updates

Cost, scope, schedule baselines, and the procurement management plan.

12.2.6 Project document updates

Requirements documentation and risk register.

12.3 ADMINISTER PROCUREMENTS

To remember the inputs for this process, remember that the purpose of this process is to manage the procurement relationships, monitor the performance of the sellers on the contract, and to make any changes or corrections as needed.

INPUTS

12.3.1 Procurement documents

This is an output of the process 12.1 Plan Procurements.

12.3.2 Project management plan

The procurement management plan is a component of the project management plan, and is an output of the process 12.1 Plan Procurements.

12.3.3 Contract

This is a contract awarded as an output of the process 12.2 Conduct Procurements.

12.3.4 Performance reports

These are reports from the seller which indicated which deliverables have been completed.

12.3.5 Approved change requests

These are any modifications to the contract with regards to the pricing and/or scope of the products to be provided.

12.3.6 Work performance information

This includes the extent to which the quality standards have been satisfied, what costs have been incurred in the fulfillment of the contract.

TOOLS & TECHNIQUES (see Tools & Techniques Procurements post for details)

12.3.1 Contract change control system

12.3.2 Procurement performance reviews

12.3.3 Inspections and audits

12.3.4 Performance reporting

12.3.5 Payment systems

12.3.6 Claims administration

12.3.7 Records management system

OUTPUTS

12.3.1 Procurement documentation

This includes the procurement contract, technical documentation, and other work performance information.

12.3.2 Organizational process assets updates

Updates to the seller performance evaluation documentation.

12.3.3 Change requests

If there are any constructive changes to the contract, these may result in a change request to the project.

12.3.4 Project management plan updates

The procurement management plan may be updated as a result of this process.

12.4 CLOSE PROCUREMENTS

To remember the inputs for this process, remember that the purpose of this process is to formally complete and close each project procurement.

INPUTS

12.4.1 Project management plan

The procurement management plan is a component of the project management plan, and is an output of the process 12.1 Plan Procurements.

12.4.2 Procurement documentation

This is an output of the process 12.1 Plan Procurements. All the documentation is required because it is filed and indexed as a result of this process.

TOOLS & TECHNIQUES

12.4.1 Procurement audits

12.4.2 Negotiated settlements

12.4.3 Records management system

OUTPUTS

12.5.1 Closed procurements

The buyer provides the seller with formal written notice that the deliverables have been received and approved, and that the contract has been completed.

12.5.2 Organizational process assets updates

Lessons learned, procurement file (for use in future projects).

This concludes the discussion of Inputs and Outputs for the 42 processes in the PMBOK® Guide.

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