Deal governance for Procurement

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hey guys this is eric from invensis and i welcome you to our youtube channel [Music] in today's session we will understand what procurement management is in detail before we start let us quickly go through the agenda firstly we will discuss why project procurement management is important then moving on we will talk about what is procurement management we will then address the various processes of procurement management finally we will conclude the session by talking about the project manager's role in procurement i hope the plan is clear if you like this video do subscribe to our youtube channel also to learn more about project management and its practices check out invensis learning's project management certification training on prince2 capem project management fundamentals po and msp all of the necessary information is given in the description box below firstly let us understand why procurement management is important many projects necessitate some type of contracting or procurement material capital equipment supplies solutions labor and services can all be covered under procurement most organizations do not provide project managers contracting authority rather they collaborate with contracting officers or other experts in contracts laws and regulations procurement regulations and procedures are typically stringent in organizations the policies define who has the authority to enter into a contract the boundaries of authority and the processes and procedures that must be followed before performing a procurement the project manager and technically competent project team members collaborate with contracting specialists to create the request for proposals rfp statement of work sow terms and conditions and other documents that will be put out to bid this is where the bid process comes into play let's talk about the bid process the bid process includes creating and distributing bid documents bidder conferences and selecting a bidder bid documents can include requests for information request for proposals and quote request a request for information is used to acquire more market information before submitting bid documents to a set of pre-selected vendors a request for proposal is a bid document used for sophisticated or difficult scopes where the buyer wants the vendor to deliver a solution quote request is used when the price is the primary deciding factor and the offered solution is easily available these three classes cover the vast majority of bidding requirements other bid documents exist however they are usually industry specialized following the distribution of the bid documents the buyer will usually hold a bitter conference to answer bitter inquiries and give clarifying information the bidders then prepare their responses and submit them to the buyer within the deadline indicated in the bid documents choosing the best vendor also known as source selection frequently depends on several variables including experience references pricing and timely delivery each of these factors can be weighted to represent its relative importance the buyer compares vendor bids to the criteria s to pick an appropriate vendor terms and conditions are negotiated between the buyer and seller almost anything can be negotiated from the pricing to the delivery and payment dates the site of work intellectual property ownership and so on next we have contracting eventually the parties agree and sign a contract the type of contracting vehicle used is determined by the magnitude of the purchase the stability of the scope of work and the organization's risk tolerances now moving to the next part of today's session let us talk about project procurement management processes project procurement management encompasses the processes required to purchase or acquire products services or results from sources other than the project team project procurement management includes the management and control processes required to create and manage contracts purchase orders memorandums of agreement moas and internal service level agreements slas personnel authorized to acquire the goods and services needed for the project may be members of the project team management or if applicable members of the organization's purchasing department the first process is plan procurement management which is documenting project procurement decisions outlining the strategy and finding possible sellers then there are conduct procurements which seek seller answers select a seller and issue a contract finally the last process of procurement management is control procurements which refers to managing procurement relationships monitoring contract performance making modifications and corrections as needed and closing out contracts let's talk about plan procurement management in detail the process of documenting project procurement decisions outlining the approach and finding possible sellers is known as plan procurement management the primary advantage of this method is that it determines whether or not to purchase goods and services from outside the project and if so what to acquire as well as how and when to acquire it goods and services may be obtained from other departments within the performing company or outside sources this procedure is carried out only once or at predetermined points during the project defining procurement roles and responsibilities should occur early in the plan procurement management process the project manager should ensure that the project team is adequately equipped with procurement experience at the project's required level in addition personnel from the purchasing or procurement department and personnel from the legal department of the buying organization may be involved in the purchase process the procurement management plan should include a list of these tasks typical steps include prepare the statement of work sow or terms of reference for the procurement tor to calculate the budget create a high high-level cost estimate advertise the opportunity create a list of qualified sellers create and issue bid documents the seller must prepare and submit proposals conduct a technical examination of the proposals taking into quality conduct a cost analysis of the plans prepare the final combined quality and cost evaluation to choose the winning proposal negotiations between the buyer and seller should be completed and signed the project schedule requirements might substantially impact the approach during the plan procurement management process decisions made during the procurement management plan development process can impact the project timeline and are connected with the develop schedule process the estimate activity resources process and make or buy decisions we will now discuss the inputs of plan procurement management the first input is the project charter the objectives project description summary milestones and pre-approved financial resources are all included in the project charter the second input is the business documents the business documents include the business case and the benefits management plan the business case the procurement strategy and business case must be matched to guarantee that the business case stays legitimate benefits management plan the benefits management strategy specifies when specific project benefits should be available influencing procurement dates and contract language the third input of the plan procurement management is the project management plan project management plan components include the scope management plan quality management plan resource management plan and the scope baseline scope management plan the scope management plan specifies how the contractor's scope of work will be handled during the project's execution phase quality management plan the quality management plan outlines the industry standards and rules that the project must adhere to this information is used in bidding papers such as the rfp and will be referenced in the contract this information could pre-qualify suppliers or as part of the selection criterion resource management plan the resource management plan specifies which resources will be purchased or leased and any assumptions or constraints that may affect the procurement scope baseline the scope baseline includes the scope statement work breakdown structure and work breakdown dictionary the project scope may still be evolving early in the project therefore the known scope elements are utilized to create the statement of work sow and the terms of reference tor the fourth input is the project documents project documents that can be considered inputs for this process are milestone lists project team assignments requirements documentation requirements traceability matrix resource requirements risk register and stakeholder register milestone list this list of significant milestones indicates when the sellers must provide their outcomes project team assignments the project team assignments include information about the project team's skills and competencies and their availability to assist procurement activities if the project team lacks the necessary capabilities to carry out the procurement tasks for which they are responsible extra resources must be secured training must be provided or both requirements documentation technical requirements that the seller must meet in contractual and legal requirements such as health safety security performance environmental insurance intellectual property rights equal employment opportunity licenses permits and other non-technical requirements be included in requirements documentation requirements traceability matrix the requirements traceability matrix connects product requirements to the deliverables that meet them from their inception resource requirements specific needs such as team and physical resources that may need to be acquired are detailed in resource requirements risk register the risk register contains a list of risks and the outcomes of risk analysis and risk response plans a procurement agreement transfers some risks stakeholder register the stakeholder registry contains information on project participants and their interests including regulatory agencies contracting personnel and legal personnel the fifth input is the enterprise environmental factors the enterprise environmental factors that can influence the planned procurement management process include marketplace conditions products services and results that are available in the marketplace sellers including their past performance or reputation typical terms and conditions for products services and results with a specific industry unique local requirements such as regulatory requirements for local labor or sellers legal advice regarding procurements contract management systems including procedures for contract change control established multi-tier supplier system of pre-qualified sellers based on prior experience and financial accounting and contract payment system the sixth input is organizational process assets the various types of contractual agreements utilized by the company also impact the plan procurement management process the organizational process assets that can impact the planned procurement management process are pre-approved seller lists formal procurement policies procedures guidelines contract types fixed price contracts cost reimbursable contracts and time and material contracts pre-approved seller lists lists of fully vetted sellers can help to reduce the steps required to publicize the opportunity and minimize the timetable for the seller selection process formal procurement policies procedures and guidelines most businesses have straightforward procurement procedures and purchasing organizations when such procurement assistance is unavailable the project team should provide the resources and the competence to carry out such procurement tasks contract types all legal contractual relationships can be classified into one of two types fixed price or cost reimbursable in addition a third hybrid kind is often employed known as the time and materials contract fixed price contracts this type of contract involves establishing a fixed total price to provide a specific product service or result these contracts should be employed when the requirements are well defined and no significant modifications to the scope are envisaged types of fixed price contracts include firm fixed price fixed price incentive fee fixed price with economic price adjustments cost reimbursable contracts this type of contract includes payments to the seller cost reimbursements for all actual genuine costs incurred for completed service plus a charge indicating seller profit this type should be used if the scope of work is likely to vary significantly during the contract's execution variations can include cost plus fixed fee incentive fee and cost plus award fee time and material contracts 10. time and material contracts also known as time and means contracts are a type of contractual structure that combines elements of cost reimbursable and fixed price contracts they are frequently used for staff augmentation expert acquisition and other outside assistance when a specific statement of work cannot be readily prescribed in the next part we will discuss the various tools and techniques of plan procurement management first we have expert judgment individuals or groups with particular knowledge or training in procurement and purchasing contract types and contract documents and regulations and compliance topics should be evaluated for expertise secondly we have data gathering market research is one data gathering strategy that can be utilized for this process but it is not the only one market research entails an assessment of the industry and specific seller capabilities for example procurement teams may use information gathered at conferences internet reviews and other sources to identify market capabilities the team may also revise specific procurement targets to capitalize on evolving technology while balancing risks associated with the breadth of vendors that can supply the needed goods or services moving on there is data analysis this process can benefit from data analysis approaches such as make or buy analysis among others a make or buy study is used to determine if work or deliverables can be completed by the project team or should be outsourced the organization's current resource allocation and skills and talents the need for specialized expertise the desire to not grow permanent employment commitments and the necessity for independent expertise are all factors to consider in the make or by decision it also entails assessing the risks associated with each make or buy decision payback period return on investment roi internal rate of return irr discounted cash flow net present value npv benefit slash cost analysis bca and other approaches may be used in make or by analysis to determine whether to incorporate something as part of the project or acquire it outside the next technique is the source selection analysis before deciding on a selection technique it is vital to assess the priority of the competing demands for the project because competitive selection methods may necessitate a significant upfront investment of time and resources on sellers it is best to disclose the evaluation method in the procurement documents hence bidders understand how they will be evaluated commonly used selection methods include the least cost qualifications only quality based highest technical proposal score quality and cost based sole source and fixed budget meetings collaboration with potential bidders can benefit the organization by acquiring the material or service and the supplier by influencing a mutually beneficial strategy or product in addition meetings can define the procurement management and monitoring plan moving on let us talk about the outputs of plan procurement management the first output is the procurement management plan the procurement management plan outlines the activities carried out during the procurement process it should specify whether worldwide competitive bidding national competitive bidding local bidding or any other method shall be used if the project is being funded externally financing sources and availability should be coordinated with the procurement management plan and project timetable the procurement management plan can include instructions on how procurement will be linked with other project features such as project schedule development and control processes key procurement activities timetable contract management will be aided by procurement analytics stakeholder procurement roles and duties including project team authority and limits where the performing organization has a procurement department constraints and assumptions that may have an impact on plan procurements the legal jurisdiction and currency in which payments are to be made determination of whether or not independent estimations will be employed as evaluation criteria risk management concerns include determining the need for performance bonds or insurance contracts to mitigate certain types of project risk and if there are any pre-qualified sellers they will be used the following output is procurement strategy once the make or buy analysis has been completed and the decision to acquire from outside the project has been taken a procurement strategy should be developed the procurement strategies goal is to identify the project delivery method the type of legally binding agreements and how the procurement will progress through the procurement phases let us talk about the delivery methods professional services and construction projects have diverse delivery strategies buyer slash services provider with no subcontracting buyer services provider with subcontracting allowed a joint venture between buyer and services provider and buyer services provider acts as the representative are all delivery methods for professional services project delivery methods for industrial or commercial construction include turnkey design build db design bid build dbb design build operate dbo build on operate transfer voot and others contract payment types contract payment methods are distinct from project delivery methods and are coordinated with the internal financial systems of the purchasing entity contract types and variations include lump sum firm fixed price cost plus award fees cost plus incentive fees time and materials target cost others fixed price contracts are appropriate when the nature of work is predictable the needs are well specified and the requirements are unlikely to change cost plus contracts are appropriate when the task is dynamic likely to alter or not well specified again incentives and prizes can be used to align the goals of the buyer and the vendor procurement phases procurement phases might also be included in the procurement strategy the following information may be included the procurement sequencing or phasing a description of each phase and the precise objectives of each phase monitoring procurement performance indicators and milestones criteria for advancing from face-to-face monitoring and evaluation plan for tracking progress and knowledge transfer process for use in succeeding stages the following output is bid documents bid documents are used to solicit bids from potential sellers terms like bid tender or quotes are commonly used when the seller selection decision is centered on price when purchasing commercial or standard items in contrast proposal is commonly used when other factors like technical capability or technical approach are most significant specific procurement language may differ depending on the industry and region of the procurement we also have the procurement statement of work the statement of work sow for each procurement is created from the project scope baseline and outlines only the portion of the project scope covered by the relevant contract the sow outlines the procurement item in sufficient detail for prospective sellers to judge their ability to provide the items services or outcomes sufficient detail can vary depending on the nature of the item the buyer's needs or the intended contract type for example specifications amount desired quality levels performance data performance duration work location and other requirements can all be contained in and so the procurement so should be concise transparent and thorough it offers a description of any additional services necessary for the procured item such as performance reporting or post-project operational assistance the sal can be amended as needed during the procurement process until integrated into a signed agreement the word terms of reference tor is sometimes used when contracting for services the following output is source selection criteria the buyer selects evaluation criteria to ensure that the proposal chosen will provide the best quality for the services sought capability and capacity product cost and life cycle cost delivery dates technical expertise and approach specific relevant experience adequacy of the proposed approach and work plan and responding to the sal key staff qualifications availability and confidence financial stability of the firm management experience and suitability of the knowledge transfer program including training maybe source selection criteria evaluation criteria for international projects may include local content requirements such as participation by natives among suggested key personnel the exact criterion could be a numerical score a color code or a textual assessment of how well the vendor meets the needs of the purchasing organization the criteria will be part of a waiting method used to select a single seller who will be asked to sign a contract and build a negotiation sequence by ranking all offers ing to the weighted assessment scores awarded to each proposal next we have make or buy decisions a make or buy study determines whether specific work can be completed by the project team or must be obtained from other sources independent cost estimates is the next output the buying organization may choose to generate its independent estimate for big procurements or have an outside professional estimator prepare a cost estimate to serve as a benchmark for proposed solutions independent cost estimates can indicate that the procurement so was defective or imprecise or that prospective sellers misunderstood or failed to reply completely to the procurement so then we have change requests a decision involving the acquisition of products services or resources may need a modification request in addition other decisions made during procurement planning may necessitate further modification requests for example changes to the project management plan its subsidiary plans and other components may result in change requests influencing procurement activities the perform integrated change control method is used to assess and dispose of change requests the following output on the list is project documents updates project documentation that may need to be modified due to this process includes the lessons learned register the milestone list requirements documentation requirements traceability matrix and risk register the final output is the organizational process assets updates information about qualified sellers is one of the organizational process assets that is updated due to the planned procurement management process some of these outcomes may be merged for projects with few and reasonably easy procurements however there are numerous sorts of paperwork for projects with big complex procurements and where contractors handle most of the labor the process of procurement management is conduct procurements the process of soliciting seller answers selecting a seller and issuing a contract is known as conducting procurements the main advantage of this approach is that it picks a competent seller and puts the legal agreement for delivery into action the procedure leads to formed agreements including legal contracts this step is repeated as needed throughout the project now that we know what conduct procurements are let's discuss the procurement's inputs in detail the first input is project management plan project management plan components include the scope management plan requirements management plan communications management plan risk management plan procurement management plan configuration management plan and cost baseline we will talk about each of these in detail the scope management plan specifies how the whole scope of work will be handled including the scope completed by sellers requirements management plan the requirements management plan specifies how needs will be identified assessed recorded and managed the requirements management strategy may explain how sellers will manage the requirements they have agreed to meet communications management plan the communications management plan outlines how buyers and sellers will communicate risk management plan the risk management plan is a component of the project management plan that defines how risk management activities will be designed and carried out procurement management plan the procurement management plan outlines the actions carried out during the conduct procurements process configuration management plan the configuration management plan specifies which things are configurable which require formal change control and govern modifications to such items in addition it specifies formats and techniques for how sellers will deliver configuration management following the buyer's perspective cost baseline the cost baseline comprises the procurement budget and the expenses of managing the procurement process and suppliers the second input is project documents project documents that can be considered inputs for this process include lessons learned register project schedule requirements documentation risk register and stakeholder register the third input is procurement documentation procurement documentation provides a written record used in reaching the legal agreement and may include older documents predating the current project for example procurement documentation can include bid documents procurement statement of work independent cost estimates and source selection criteria the fourth input is seller proposals seller proposals made in response to a procurement document package serve as the foundation for an evaluating body to pick one or more successful bidders sellers if the seller intends to submit a pricing proposal it is best to separate it from the technical proposal the assessment body examines each submitted proposal in light of the source selection criteria and chooses the seller who can best meet the needs of the buying organization the fifth input is the enterprise environmental factors the enterprise environmental factors that can influence the conduct procurements process include local procurement rules and regulations local procurement laws and regulations guaranteeing that significant procurements engage local sellers are among the enterprise environmental elements that might impact the conduct procurements process external economic climate restricting procurement procedures market circumstances relevant historical experience with sellers both good and poor prior agreements already in effect and contract management systems the final input is the organizational process assets organizational process assets that can influence the conduct procurements process include a list of pre-qualified preferred sellers organizational policies that influence seller selection specific organizational templates or guidelines that will determine how agreements are drafted and built and financial policies and procedures invoicing and payment processes let us now talk about the various tools and techniques in conduct procurements firstly we have expert judgment individuals or groups with specialist knowledge or training in the various fields should be evaluated for expertise in evaluation of proposals technical or subject matter expertise finance engineering design development supply chain management and other relevant functional areas the regulatory environment in the industry negotiation as well as laws rules and compliance needs the next technique is advertising advertising is the communication of a product service or outcome to consumers or potential users existing lists of potential sellers are frequently augmented by advertising in general circulation publications such as chosen newspapers or specialized trade magazines in addition most government jurisdictions require pending government contracts to be advertised publicly or posted online next we have bitter conferences before submitting a proposal bitter conferences are held between the buyer and prospective sellers they are used to guarantee that all prospective bidders have a shared knowledge of the procurement and that no bidder receives special treatment data analysis is another technique used in control procurements proposal evaluation is one data analytic approach utilized for this procedure but it is not the only one proposals are examined to verify that they are comprehensive and fully responsive to the bid materials procurement statement of work source selection criteria and any other documents included with the bid package finally we have air personal and team skills negotiation is an example of an interpersonal and team ability employed in this process negotiation is a debate that aims to reach an agreement procurement negotiation reveals the structure rights and duties of the parties and other aspects of the procurement to establish mutual agreement before contract signing all agreements achieved are reflected in the final text wording negotiation culminates with a written contract paper or other formal agreement that both buyer and seller can execute a procurement team member should lead the negotiation with the contracting authority during the negotiation the project manager and other project management team members may be present to give support as needed moving on to the next part we will discuss the various outputs of the conduct procurements the first output is selected sellers the chosen sellers are those deemed to be in a competitive range depending on the proposal or bid review outcome complex high-value high-risk procurements will often require final clearance from top organizational management before award next we have agreements a contract is a legally binding agreement that binds the seller to supply the stated items services or outcomes binds the buyer to reimburse the seller and constitutes a legal relationship that may be resolved in court the following output is change requests change requests to the project management plan subsidiary plans and other components are sent via the perform integrated change control procedure for assessment and disposal then we have project management plan updates any changes to the project management plan are submitted as a change request to the organization's change control mechanism components of the project management plan that may need a project management plan modification request include the requirements management plan quality management plan communications management plan risk management plan procurement management plan scope baseline schedule baseline and cost baseline we will discuss each of these in detail requirements management plan due to modifications recognized by sellers project requirements may vary quality management plan sellers may provide alternative quality standards or solutions that influence the quality methods outlined in the quality management strategy communications management plan the communications management strategy is revised to reflect their communication requirements and techniques when new sellers are employed risk management plan each agreement and seller has its unique set of hazards which may need changes to the risk management plan in addition the risk registry contains information about certain dangers procurement management plan depending on the outcome of the contractual and negotiating procedures updates may be necessary scope baseline when undertaking procurement operations the project wbs and deliverables stated in the scope baseline are considered during the procurement process any or all of these may alter schedule baseline if sellers make delivery adjustments that affect overall project schedule performance the baseline schedule may need to be modified and authorized to reflect the current expectations cost baseline prices for contractors and materials might fluctuate dramatically throughout a project these variations might arise due to variable material and labor prices caused by the external economic environment and must be factored into the cost baseline the following output is project documents updates project documents that may be updated due to carrying out this process include lessons learned register requirements documentation requirements traceability matrix resource calendars risk register and stakeholder register the final output is the organizational process assets updates organizational process elements listings of potential and pre-qualified sellers and information on relevant experience with sellers both good and poor are examples of assets that may be updated due to the conduct procurements process moving to the final project procurement management process we have control procurements control procurements is the process of managing procurement relationships monitoring contract performance and making modifications and corrections as needed it also includes contract closure the main advantage of this method is that it assures that both the sellers and buyers performance meets the project standards as specified in the legal agreement both the buyer and the seller manage the procurement contract for similar reasons each party ensures that both parties contractual commitments are met and that their legal rights are maintained because of the legal nature of the partnership the project management team must understand the consequences of actions performed while overseeing any purchase an important part of contract management for bigger projects with several suppliers is coordinating communication among the various providers because of the legal implications many organizations approach contract administration as a separate organizational activity from the project while a procurement administrator may be a project team member they usually report to a supervisor from a separate department control procurements entail applying the necessary project management procedures to the contractual relationships and incorporating the outputs of these processes into the overall project management when several vendors and multiple items services or outcomes are involved this integration frequently occurs at multiple levels let's talk about the inputs of control procurements the first input is the project management plan project management plan components include requirements management plan procurement management plan change management plan schedule baseline since we have discussed each of these in detail in the previous section we will move to the next input project documents project documents that can be considered inputs to this process include assumption log lessons learned register quality reports milestone list requirements documentation requirements traceability matrix risk register and stakeholder register the next input is agreements agreements are understandings between parties including understanding each party's responsibilities the applicable agreements are examined to ensure that the terms and conditions are satisfied we also have procurement documentation procurement documentation includes all supporting records required to manage the procurement procedures for example the statement of work payment information contractor work performance information plans drawings and other communications are all part of the procurement documents the next input is approved change requests change requests that have been approved can include changes to the contracts terms and conditions such as the procurement statement of work sow price and descriptions of the items services or outcomes to be given before being implemented through the control procurements procedure all procurement related modifications are properly recorded in writing and authorized change requests from vendors participating in the project may impact other sellers involved in complicated projects and programs the project should be able to recognize communicate and resolve changes that affect the work of many sellers moving on we have a work performance data work performance data includes seller data on project status including technical performance activities that have begun are in progress or have been finished and money incurred or committed work performance data may also contain information on paid bills from sellers also there are the enterprise environmental factors contract change control system marketplace conditions financial management and accounts payable system and buying organizations code of ethics are some of the enterprise environmental aspects that might impact the control procurements process next input is the organizational process assets procurement policies are examples of organizational process assets that might impact the control procurements process let's now talk about the tools and techniques of control procurements the first technique is expert judgment individuals or groups with specialized knowledge or training in the following area should be considered for expertise relevant functional areas such as finance engineering design development supply chain management etc laws regulations and compliance requirements claims administration then we have claims administration contested modifications and future constructive changes are requested adjustments in which the buyer and seller cannot agree on remuneration for the change or agree that a change has happened these challenged alterations are referred to as claims when they can't be resolved they turn into disputes and appeals claims are typically documented handled monitored and managed throughout the contract life cycle in compliance with the contract provisions if the parties cannot resolve a claim it may have to be resolved through alternative dispute resolution adr which normally follows the processes outlined in the contract however negotiation is the recommended way for resolving all claims and conflicts data analysis is also an important technique of control procurements data analysis techniques that can be used to monitor and control procurements include performance reviews earned value analysis and trend analysis performance reviews contract performance reviews assess evaluate and analyze the agreement's quality resource schedule and cost performance identifying work packages that are ahead or behind time over or under budget or have a resource or quality concerns as part of this earned value analysis eva to determine the degree of deviation from target schedule and cost variances and schedule and cost performance indices are determined trend analysis trend analysis may be used to provide an estimate at completion eac for cost performance to determine if it is improving or deteriorating then there is inspection an inspection is a systematic examination of the contractor's work this might be as basic as a review of the deliverables or as extensive as a physical examination of the job itself for example inspections on a construction engineering slash infrastructure project includes site walks by the buyer and the contractor to ensure a common knowledge of the work in progress finally we have audits audits are a systematic examination of the procurement process audit rights and duties should be included in the procurement contract in addition audit findings should be brought to the attention of the buyer's project manager and the seller's project manager for project changes as needed let us talk about the control procurements outputs the first output is the closed procurements in writing the buyer notifies the seller that the contract has been concluded generally through its designated procurement administrator the requirements for official procurement closure are often established in the contract terms and conditions and are included in the procurement management strategy typically all deliverables should have been delivered on schedule by technical and quality standards there should be no outstanding claims or bills and all final payments should have been made before project closing the project management team should have authorized all deliverables the second output is work performance information work performance information comprises data on how a seller performs by evaluating deliverables received technical performance attained and expenditures paid and accepted against the sow budget for the work accomplished then we have the procurement documentation updates the contract with its supporting schedules proposed unapproved contract amendments and accepted change requests are all examples of procurement documents that may be amended procurement paperwork also includes any seller developed technical documentation and other work performance information such as deliverables seller performance reports and warranties financial documents such as invoices and payment records and the findings of contract related inspections the fourth output is change requests the control procurements process may result in requests for changes to the project management plan subsidiary plans and other components such as the cost baseline schedule baseline and procurement management plan the perform integrated change control method is used to assess and dispose of change requests requested but unresolved adjustments might include buyer instruction or seller activities that the other party deems a positive alteration to the contract because many of these constructive improvements might be challenged by one party and result in a claim against the other they are uniquely identifiable and documented through project communications moving on there are the project management plan updates any change to the project management plan goes through the organization's change control process via a change request components that may require a change request for the project management plan include risk management plan procurement management plan schedule baseline and cost baseline risk management plan each agreement and seller has its unique set of hazards which may need changes to the risk management plan if large unanticipated risks arise during contract execution the risk management strategy may be updated the risk registry contains information about certain dangers procurement management plan the procurement management plan outlines the actions carried out during the purchase process updates may be necessary based on the outcomes of the seller's performance during the works execution schedule baseline if sellers make major timeline modifications that influence overall project schedule performance the baseline schedule may need to be amended and authorized to reflect current expectations in addition the buyer should be aware of any cascade effects of a seller's scheduling delays that affect other vendors cost baseline contractor and material prices might fluctuate dramatically throughout a project these variations might arise due to variable material and labor prices caused by the external economic environment and must be factored into the cost baseline the sixth output is project documents updates project documents that may be updated due to carrying out this process include lessons learned register resource requirements requirements traceability matrix risk register and stakeholder register lessons learn register the lessons learned register can be updated with strategies that successfully kept the scope timeline and cost of the acquired products on track where deviations occurred the register should reflect the remedial activities taken in response to the deviations and how effective those efforts were the information should be documented to avoid recurrences if any claims are made additional data on how to enhance the procurement process can be recorded resource requirements as the contractor's work advances the resource needs may alter due to work being completed that is not in compliance with the anticipated work schedule also we have a requirements traceability matrix the requirements traceability matrix is updated with information on requirements that have been met next is the risk register each approved seller has its own set of risks which vary based on the sellers organization contract length the external environment the project delivery technique the kind of contracting vehicle used and the ultimate agreed upon pricing the risk register is updated during the project's execution when early hazards become obsolete and new risks emerge then we have stakeholder register contractors and suppliers may change as the project goes through the execution phase these modifications must be recorded in the stakeholder registry the final output is the organizational process assets updates organizational process assets that can be updated due to the control procurements process include payment schedules and requests seller performance evaluation documentation pre-qualified seller lists updates lessons learned repository procurement file payment schedules and requests all payments must be made in line with the terms and circumstances of the procurement contract seller performance evaluation documentation the buyer prepares seller performance evaluation documentation which documents the seller's ability to continue performing work on the current contract indicates whether the seller can perform work on future projects or rates how well the seller is performing or has performed in the future past prequalified seller lists updates prequalified seller listings are lists of prospective sellers who have already been qualified approved these lists will be updated based on the outcomes of the procurement control process since suppliers may be rejected and removed from the list due to poor performance lessons learned repository lessons learned should be preserved in the lessons learned repository to enhance future project procurements the actual procurement outcomes are compared to the expected results in the original procurement management plan at the end of a contract these lessons learned state whether or not the project objectives were met and if not why they were not procurement file the finished project files will include a complete set of index contract paperwork including the closed contract in the last part of today's session we will discuss the project manager's role in procurement the project manager is involved in procurement as with any other component of the project management process that they have responsibility for however this is a procedure that they may not have as much power over as other aspects of the project while the project manager can enter into agreements with contractors on behalf of the organization the project manager is not often the person who oversees the contract after it is in place regardless the project manager must be kept informed that entails familiarity with the six processes and project procurement management knowledge domain specified in the project management body of knowledge pmbok the first is to plan purchases and acquisitions assessing what external resources are required for the project because they are better educated about the entire project requirements the project manager will control this plan contracting is the process of developing specifications for whatever items or services are required in determining which organizations provide these products or services then seek seller answers by reducing the firms down to a few and then picking the sellers who are generally the purchasing department's purveyors contract administration is the management of the vendor's contract the project manager will collaborate daily with the vendor's account manager contract closure occurs when the contract is completed the buying department is normally in charge of this again with this we come to the end of today's session on project procurement management if this has spiked your interest and you want to know more about project management i recommend you to opt for pmp certification training and clear the exam at invensis learning we provide various pmp certifications that will pave the way for your career and project management we are accredited by respective governing bodies or courses in line with their guidelines for each of these certifications post enrollment you will get lifetime access to a personalized learning management system lms has all the class recordings live class webinar links along with assignments and case studies to practice all classes are live instructor led delivered by trainers with rich domain experience thank you guys see you in the next session you