6th Edition PMBOK® Guide–Process 12.1 Plan Procurement Management: Inputs

Goods and services needed to do your project can be procured from other parts of the organization performing the project, in which case you will get them through Resource Management, which is covered by chapter 9 of the PMBOK® Guide, or you will get them from external sources, in which case you get will get them through Procurement Management, which is covered by chapter 12 of the PMBOK® Guide.

The first process in Procurement Management is process 12.1 Plan Procurement Management, which outlines how to do the other do processes, Conducting Procurement (process 12.2) and Controlling Procurement (process 12.3).

This post will cover the inputs to this process 12.1 Plan Procurement.

12.1.1 Plan Procurement Management:  Inputs  Project Charter

This contains the objectives of the project, a project description, summary milestones and the pre-approved financial resources for the project.    The objectives of the project and project description will help when describing the project to the potential sellers, and the summary milestones and pre-approved financial resources for the project will help in determining when to acquire the needed goods and services and how to acquire them.  Business Documents

  • Business case–this is usually created by the business analyst, and the main point in referring to this document is that the procurement strategy needs to be aligned to the strategy underlying the business case.
  • Benefits management plan–this describes when the specific project benefits are expected to be available, which will drive the dates of the procurement as well as the language of the contract.  Project Management Plan

The components of the project management plan that may serve as inputs to this process are:

  • Scope management plan–this will describe how the scope of work done by the contractors will be managed through the execution phase of the project.
  • Quality management plan–this will describe any applicable industry standards as well as any other codes that the project is required to follow.   These standards will be included in bidding documents such as the Request for Proposal (RFP), and may be used as part of the selection criteria for supplier prequalification.
  • Resource management plan–this has information on which resources will be purchased or leased, along with any assumptions or constraints that would influence the procurement.\
  • Scope baseline–the scope baseline actually consists of three separate documents:  the scope statement (which breaks the scope down from the requirements to the level of deliverables), the Work Breakdown Structure or WBS (which breaks the scope down further from the level of deliverables to the level of work packages), and the WBS dictionary (which gives additional information on the work packages).   The scope baseline is used to develop the
    • statement of work (SOW), a narrative description of products, services, or results to be delivered by the project, and the
    • terms of reference (TOR), which defines the purpose and structures of the project.   Project Documents

  • Milestone list–this list of major milestones for the project will show when the sellers are required to deliver their results
  • Project team assignments–this contains information on the skills and abilities of the project team and their availability to support the procurement activities.
  • Requirements documentation–this may include:
    • Technical requirements that the seller is required to satisfy
    • Requirements with contractual and legal implications, such as health and safety regulations, licenses, permits, intellectual property rights, etc.
  • Requirements traceability matrix–this lists the product requirements from their origin to the deliverables that satisfy them, as well as the “owners” of the requirements who can be consulted if there are questions concerning them.
  • Risk register–some risks may be transferred to the seller via a procurement agreement.
  • Stakeholder registre–provides details on the project participants and their interests in the project, which for the sake of procurement will include the contracting personnel (those specializing in procurement within the organization doing the project) as well as legal personnel (who manage the agreements with sellers).  Enterprise Environmental Factors

  • Marketplace conditions, as well as products, services and results available in the marketplace.
  • Past performance of reputation of potential sellers
  • Multi-tier supplier system of prequalified sellers based on prior experience
  • Typical terms and conditions for products, services and results for the specific industry
  • Unique local requirements, such as regulatory requirements for sellers (including local labor)
  • Contract management systems, including procedures for contract change control)
  • Legal advice regarding procurements
  • Financial accounting and contract payments system  Organization Process Assets

  • Preapproved seller lists–lists of sellers that have been properly vetted can streamline the steps needed for the seller selection process
  • Formal procurement policies, procedures, and guidelines–most organizations have formal procurement policies and buying organizations.   In fact, all aspects of procurement may be handled not by the project manager, but by a designated procurement manager for the organization.   If this is not the case, then the project team will have to supply both the resources and the expertise to perform such procurement activities.
  • Contract types–all legal contractual relationshps generally fall into two broad families:   either fixed-price contracts where the cost risk falls on the seller, or cost-reimbursable contracts where the cost risk falls on the buyer.   These contract types can be modified by incentive fees, economic price adjustments, and/or award fees in order to balance the risk between the parties.  There is a third type of contract called the time and materials contract, which is considered a hybrid type or contract, as the risk is shared by both the seller and the buyer.

The details regarding the variations on the fixed-price and cost-reimbursable contracts are on pp. 471 and 472 of the 6th Edition of the PMBOK® Guide.   The next post will cover the tools and techniques of the process 12.1 Plan Procurement Management.


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