Project pipeline management for purchasing

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it's a bit difficult to pick up a topic from Midway in in anywhere from PNP actually because the topics in PNP are quite interrelated and you got to explain the topics from initiation till the closure it's also important to remember the sequence of project management activities that a project manager is supposed to follow so what we'll do is we'll give you a quick background of this particular topic that's how this procurement is initiated what is procurement management all about and then we will talk about the project managers role in procurement management make sense now I want I do not want this to be on one-way conversation guys in PMP terminologies I don't want it to be a push communication I rather want it to be an interactive communication okay so it would be better that we talk to each other any questions please pop up your question at any point of time any topic or any particular point you want to contribute to or you want to say something to rest of the participants you're always welcome I just raise your hand that was unmute you okay we will take up this session as per p.m. Bach 5.0 the reason being since 31st of July 2013 PMP has enhanced their version or upgraded their version to fifth edition actually so as per fifth edition these are the project management processes that you see on your screen first question is what is a project management process anybody want to answer what's a project management process just in case you have gone through the first chapter of p.m. Bach you must be able to answer that question what do I mean by the word project management process if you look into a dictionary the meaning of the word would say word process is standard guidelines or procedures it's a clear signal right but when I say when I use the word process from PMP terminology point of view it simply refers to activities or tasks that's absolutely correct Anat its tasks it is that PMI does not use the word task or activity when it comes to project management they rather prefer to use the word process so when I say a project management process I'm I refer to a project management task or activity that a project manager a project management team or any other key stakeholder is supposed to do or supposed to perform in order to complete the project into end for example what you see on your screen let's say develop project charter if I talk about this this is a project management process or in other words a project management task or project management activity which is performed by the sponsor or the customer who creates an initial document that describes the border brown boundaries of the project or initiates the project we can say the Charter formally recognizes the existence of the project so that's an activity a document creation related task which we call a project management process similarly let's say control cost this one this is another project management activity which is all about comparing the project projects performance in terms of cost or budget against a cost baseline okay to find out if there is any deviation from the set baseline if there is a deviation from the baseline as part of this process we would raise a few change requests in form of corrective or preventive actions so what in a nutshell we can say that starting from here 4.1 till 13-point core all you see inside the lighter part of the table these are all project management processes all project management tasks or activities that a project manager project management team or some other key stakeholders need to perform in order to complete a project in - it makes sense any question so far see questions are good if I don't get any questions there can be two reasons number one I'm explaining it well and that's why you don't have a question and number two that I'm unable to explain it properly you are unable to understand the topic and that's why you don't have a question the first one is better but just in case you have a query please let me know okay now in order to understand the project management processes in a better way PMI segregates this processes in to five process groups and ten knowledge areas have a question from Naren asking us does pm play any role in framing the cost of the new kickoff project yes see this might not be true for your day-to-day project management experience however as per PMI best practices a project manager should be associated or should be assigned to a project at the very initial stage of the project and the project manager should be involved in the planning pre-planning and post planning phase of the project so that way the budget the cost estimation the budget the school baseline the WPS requirement documentation scope documentation everything is a responsibility of the project manager the approval of those depends on the nature of the contract might be with the sponsor or the customer or senior management or some other key stakeholder but yes it's a primary responsibility of the project manager as per PMI best practices okay now what I was saying that we segregate the project management processes into five process groups initiating planning execution monitoring and controlling and closing process group this is depending on what stage of project management lifecycle do we do these processes for example during the planning stage of the project we do all these activities that you see in this particular column so they are all part of the planning process group similarly depending on the area of concern or depending on the focus area we have 10 knowledge areas for example what all do we do in order to manage the schedule of a project would be part of project time management knowledge area okay what all do we do in order to manage the project cost and budget will be part of project cost management knowledge area and so on so just to summarize all these project management processes are broken into five process groups depending on what stage of project management lifecycle do we do them and they're also broken into ten knowledge areas depending on when you know what's a area of concern or what's the focus of the project manager now hope you understand that all the processes that you see in on this particular screen on this particular table okay these are mainly primary responsibility of the project management team leaving a few processes apart how do we start a project we start a project with the help of an S or W a statement of work that initiates a project what's a statement of work it documents what am I expecting out of the project it documents the product or the services that's supposed to be the outcome of the project in a detailed way okay it doesn't focus on the work that needs to be done in order to complete the project it rather focuses on all the specifications or all the characteristics of the final product or the deliverables that I'm trying to produce out of this project make sense in case it's a vendor supplier relationship the s o W becomes an integrated part of the contract hope you understand that we initiate the vendors initiate the project in case of a vendor supplier relationship with the help of a contract which is a mutually a legal document or a mutually agreed document between the customer and the supplier okay and s wa W becomes an integrated part of it in case it's an in-house project with might not have a contract but will still have the S or W no project charter is different project Charter gets created by the sponsor but that's after a vendor has been selected s o W is different its statement of work marine that comes as an integrated part of the contract it describes the project deliverables now with the help of a contractor so W I can say that my project has been initiated and from here my first step would be to create the project Charter the project charter is again created by the sponsor or the customer and this project charter in this process formally recognizes the existence of the project and hence we can say only the Charter gives the project manager the authority to spend organizational resources on the project without the Charter I don't have an existence of the project makes sense up to this much is it clear guised how exactly do we start a project any question guys I'm just talking about how exactly do you initiate a project is this up to this much is it clear you can confirm on the chat on the question panel or you can raise your hand in case you have a query you have a query okay somebody has a query you see an hand is raised Tina has a question on the Charter is my understanding it is my understanding that the project manager starts the project charter can you comment on that Tina asked for PMI best practices Charter is a primary responsibility of the sponsor or the customer ideally the person or the organization who is funding the project who is initiating the project okay charter firmly recognizes the existence of the project and hence provides the authority to the project manager to spend organizational resources on the project so it is not the responsibility of the customer to create the Charter its responsive sorry it's not the responsibility of the project manager to create the Charter it's a responsibility of the sponsor or the customer to create the Charter you might tell me that okay but I create a charter for my projects why do I do that that is because our customers have become lazy they do not really like to do this and they rather outsource this work to the fellow project managers okay from the performing organization we create the Charter and get it approved but in p.m. a PMP we always consider the best practices and ask for the best practices it's supposed to be created by the sponsor does the project charter achieve buy-in from the sponsor of the stakeholders see a charter is a very initial document Rochelle it goes this way that it just describes the border broader boundaries of the project you cannot go beyond the Charter it cannot change the Charter it's a static document so you can say that charter is the basis of your project which draws the boundary of the project you would rather create the project scope document during the planning stage okay when we get into this process of defined scope we come up with a detailed project scope statement and we get it approved by the customer that helps me the buy-in from the customer in a better way make sense Russell you have a flowchart just in case I do have a flowchart but that XD that's not for this process that's for the entire project management lifecycle so won't be able to discuss that in this particular seminar or it's rather you know very lengthy topic and you've got to have some understanding of the all the topics in this particular table to understand that who had a question I had raised him from somebody that's one now not sure okay now put yourself in customers position we said that customer creates a w signs the contract and the project gets initiated at the same time we also say that the customer creates the project Charter and that prom li recognizes the existence of the project that means we are saying that a customer is responsible for drawing the project boundaries in the Charter and is also responsible for creating the Esso W which gives you the description of the product the end result of the project okay in the initiation stage of the project having said that if I asked you to put yourself in customers position okay what you would be let's say you are the your your a project manager or from your organization but you want to you're going to is clay or you know outsource a part of your project or you are simply going to outsource the entire project to some other organization okay what would you do in that case first you would take a procurement decision once the procurement decision has been taken then you would create an S o W and you would look for a suitable vendor to assign that assign the contract does it make sense I repeat if you are a project manager from the buyers organization for example you're part of a construction project and you want to outsource the electrical and plumbing work of that particular project you would first create an issue W which describes the product or that you are looking for the outcome of the project that you are looking for then you would look for a suitable vendor and you would assign the you know contract to that particular vendor I hope that's very clear so now as we are discussing this though this is not called RFP Narine ll discuss all right we don't worry so as we are now talking about procurement management specifically so we would rather concentrate on the project manager's role in procurement management in other ways we would put ourselves in the customers position to understand the project managers role in a procurement management in a better way see procurement is just a fancy name for the word purchasing so if you are purchasing something you become the customer you become the client right that's why all the topics in procurement management knowledge area needs to be considered from the customer or from the sponsors point of view from develop projects charter till control risk of all the topics that we have in rest of the knowledge areas we always considered them from performing organizations point of view but in procurement management we got to consider the topics from customers point of view because now you are procuring something so you become the customer make sense from exam point of view also if not mentioned otherwise all the questions from procurement management considered from customer or sponsors point of view okay now in order to understand the project managers role in procurement management let's quickly and very briefly understand the objective of the processes we have in procurement management knowledge area the first process in this knowledge area is plan procurement management land procurement management is the planning part of procurement wherein we come up with a procurement management plan procurement management plan is a subset of the project management plan you can say it's a subsidiary plan which is part of the project management plan wherein we mainly take the decision whether to procure or not for example I will do a cost and benefit analysis to find out is it really a good idea to outsource the work to some other organization or is it a better idea to do it in-house okay so that kind of a procurement decision is taken as part of plan procurement management process we also select a suitable type of a contract there are various contract types that we will discuss today but we select the most suitable type of a contract as part of this process okay two things number one we take a decision whether to procure or not second we select a suitable type of a contract that we would use for procurement then in the conduct procurement process my objective would be to select the vendor how do I select the vendor that's the process wherein I would raise an AR f.e RFP is request for proposal we would raise that we would invite proposals or solutions from various vendors suppliers etc we would go through the vendor selection process that's obtaining the sailors responses going for bidders conference etc applied the selection criteria and select the most suitable vendor that fits my type of work my type of project once the vendor is selected we would enter into the contract so we can say this process is mainly the vendor selection process right we through an RFP through evaluating the responses we received for the RFP we select a vendor and we enter into the contract the second the third process in this knowledge area that's as part of execution process group is control procurement this is mainly the vendor management process that means you look into the type of the contract that you have obtained and ingly you control your vendor to ensure that your project is performing efficiently finally as part of the closure procedures when you enter into the closer phase of the project project you would audit the deliverables from the supplier or the vendor formally select or approve or reject it and make the payments in case it is approved right so you would accept you would go for a procurement audit you would accept the deliverables if the deliverables fall within their predefined acceptance criteria and you would formally close the project from your site this is briefly what all do you do in procurement management any question guys no I see somebody has raised hand but unfortunately I don't see who is that okay I have raised hand from two actually yeah Rachelle I just unmuted you can you tell me what's your query yeah Russell you can go ahead no worries another person is because you discussed more about the project Charter and now I don't have any questions nobody's that's mine thank you another question from marine it seems okay is this whole responsibility of the project manager Loraine it's the sole responsibility of the project management team that includes the project manager you can say that it's the responsibility of the project manager's office okay which includes the project manager the program manager has to approve it or if the project manager is reporting to senior management they have to approve it and the support staff the various staff functions of the project manager's office r.fp Phyllis RFP stands for request for proposal when you intend to procure something when you intend to outsource something you would raise an RFP in the market that you would invite responses or proposals from various sailors available in the market the sailors would raise a you know would submit their proposals based on the RFP document okay you would evaluate those proposals and you would go for the most suitable of the lot that is and you know a vendor selection process we would not discuss vendor selection in much details just to give you a brief my idea that's the flow that you raise them RFP you obtain the sailors responses you apply the ceiling sailor selection criterias you select the most suitable type of a response and you finally enter into a contract you can use RFP for procurements for products or services if something is readily available in the market you go for RFQ request for coat why because in case something is readily available in the market you do not really need the specifications or the fine you know details proposal in the kind of a response you just need the cost part of it so you would simply raise for an RFQ that is request for coat that's true Bishop thank you or she says another point doesn't conduct procurement include the ordering and actual process of procurement apart from vendor selection conduct procurement is the entire vendor selection process wherein you raise the RFP you you go for the bidders conference you or the vendors conference wherein you clarify the doubts of the vendor you receive the final response from their side we call it a before the best available financial option kind of first stuff okay and then you get into a you know you're finally enter into the contract will have to move ahead now let's discuss these points in a bit more details will now focus on the project managers role in this procurement management process what kind of response is called in related to RFP Narine it depends on type of the project you are going to submit for example it's in let's consider a non IT example if my project is about constructing a building and I want to outsource the electrical and plumbing work I would raise an rfp stating that these are my requirements this is how the end product should look like and the salut would be that how exactly they would do the electrical plumbing work what material they're going to use what would be the timelines what would be the measurement criteria and what would be the final cost in case I'm looking for a solution to a complex problem that is the project all about then the RFU content would be different different so Naren in a nutshell the RFP depends on the type of product that you're going to procure first of all let's concentrate on taking the procurement decision very simple we have to go for a make versus buy decision as I said earlier you consider which is more beneficiary you normally consider everything for example you consider procurement from resource point of view that let's say we do not have experience resources within the organization to perform these activities and hence we want to outsource we might go for it from risk point of view that this project work is very risky and we don't want to go for the work in-house we want to outsource it it might be from cost point of view purely that doing the work in-house is costlier than doing outsourcing it it's a great aggressive procurement decision can be driven from any of the factors but normally when we go for a make versus buy decision we keep all the other factors at their baseline value and we consider the the procurement we considered the decision based on the cost factor how step one we define the product that we are actually supposed to generate we calculate the total in-house cost we calculate the total cost of outsourcing then we simply compare apple with Apple to find out which is more beneficiary is it beneficiary to do it in-house or to outsource it in a nutshell that is a make versus buy decision let's say if you find out that it's more beneficial to purchase it from the outer outside or outsource or contract out the work to some other vendor rather than doing it in-house then you would take the decision for procurement since now you are you're becoming the customer because you're going to procure something what's your next step your next step is to document the soow in case you have all the information about the product that you are supposed to purchase you would put in every information that's possible in case you're not sure that what you're looking for that's always a possibility right let's say I simply want to upgrade my IT infrastructure I'm not sure what's the best possible solution shall we go for Windows 2008 servers shall we go for Windows 2010 servers shall we go for Windows 7 pcs or Windows 8 pieces what kind of network topology we should have so I would not document all the details I would simply you know share my requirements and I would invite the proposal so the ingly the soow would be written now the most critical part I have to decide what type of contract is more suitable for me that entirely depends on what product I am purchasing in order to understand it better we got to understand different type of contracts in a better way take a look into the current slide we are mainly talking about three different type of contracts cost-reimbursable contract fixed-price contract time and material contract in cost reimbursable contract we have a few subtypes like cost plus fixed because plus percentage cost cost plus incentive fee cost plus award fee and we have also few subtypes in fixed price contract and then we have something called purchase order please keep in mind purchase order is not a contract type it's rather a unilateral the document where in unit let's say you want to procure something that's readily available in the market you simply want to raise a purchase order and it's not a contract rather then you would go for this kind of an document let's say I want to procure 700 computers or 700 desktop computers the market with standard specifications I would raise a purchase order now why it is important to understand the different type of contracts because the role of the project manager depends or varies depending on the type of the contract so we got to take a look into different type of contracts quickly please first of all cost-reimbursable contract as a name itself suggests in cost-reimbursable contract the sailors costs are reimbursed and the buyer bears the highest risk of all contract types let's say I want to procure something or I want to purchase something I would simply go for cost reimbursable contract I would create a statement of work I would assign all the work to the vendor or to the supplier and the agreement would be that we would reimburse all the costs incurred for the project additionally there would be some fee or you know some remuneration separately given to the vendor we can have a cost plus fixed fee contract example would be the total cost would be reimbursed by the buyer plus an additional fee let's say 10 $100,000 okay so whatever cost incurred for the project time and material wise okay that's whether material and labor wise would be given by the project manager additionally a fee a fixed fee would be also given by the project manager then you have the cost plus percentage cost which is a a bit different from the previous type the entire cost of the project is reimbursed by the Sailor or by the buyer and additionally a percentage of the total cost is given as a fee hope you understand that in both this type of contracts the Sailor doesn't have any incentive or any motivation to control cost if the cost goes higher the buyer simply pays for it right so in order to ensure that the Sailor has some motivation to control cost we have the third type that's cost plus incentive fee in this type of a contract we have some extra bonus allotted for controlling cost or controlling any other parameter and cost plus a word fee is also very similar to the previous one just that you have an incentive or motivation factor based on the percentage of the total cost itself makes sense now if we talk about the characteristics of this type of a contract very true that the total cost of the project is unknown to both the parties the cost going higher the risk factor related to the cost who beers it who has a risk factor related to the cost yes guys in case the cost goes high who pays for it yes the buyer because the Sailor is in a very safe zone he doesn't need to pay anything extra he is simply getting the cost reimbursed by the buyer so the buyer has the maximum risk from cost point of view in order to ensure that we actually do not run into a trouble like this we have the second time a fixed price contract pretty simple I would say that these are all the word that you've got to do tell me what's the cost you need our words the total money I need to pay okay that is a fixed price contract we can have a firm fixed price contract wherein the contract is a value is fixed at the one single dollar value let's say you would complete all the project work come what may for $1,000,000 simple so that's a fixed price contract or you can go for a fixed price incentive fee contract wherein you have some motivation to the Sailor with in order to beat a particular quality parameter or something like that let's say if you complete the work early you would get 10% additional right and you have a third type or called fixed price fixed prize economic price adjustment vary in let's say your project would run through for multiple years it's always very risky for the buyer for the Sailor to quote one single price because the raw material cause the labor cost would increase with time so in this kind of a contract you would have the price factor adjustment in second or third year okay so again what's the characteristics of this kind on this type of a contract we can say that in fixed price contract the Sailor has the highest risk from the cost point of view right because in case the cost goes high the Sailor still earns the same less profit rather the cost goes high but he would still earn the same revenue so the profit becomes less for the Sailor right and then we have the third type time and material which is a blend of these two in cases wherein I cannot explain all the factors related to the project let's say my server is crashing again and again I want IBM to find out what's the issue what's the reason this is happening and fix it I don't know it might be a software problem a hardware problem it might be simply something else antivirus or sorry virus related issues whatever so as the solution is not known to anybody the only option is to go for time and material contract so I would have a contract with me that we would fix this issue at a contract value let's say hundred dollars per hour plus whatever hardware is required has to be paid by you that's an example of time and material contract or let me give you an on i.t example let's say I want to you know develop the pavement the footpath beside the road now the total length and breadth is known but it's a huge area I'm not sure that what would be the total cost in order to create the pavement so we set it this way that the pavement cost we would assign as let's say 20 dollars per square feet okay now depending on the total area the project would be charged it's an example of time and material contract then I already discussed the fourth type the purchase order considering all these definitions if I ask you to find out the advantages and disadvantages of different type of contracts I think that's that that should not be difficult for you to do that simply for cost reimbursable contract the advantages of that I do not have to spend much effort to create the a so W I would simply create the description of the project or the product give it to the vendor let okay whatever the cost is I would reimburse for for it let's say I want the suit to be he states I go to the tailor I tell them I tell him that okay I want this to be States and you go for it so the Sailor would purchase her raw material he would you know stitch it all the material cost and the labor cost would be reimbursed by me additionally I would give us a separate fee to the tailor so that's a simple you know simple method of a contract creation I do not need to write a detailed a so W but usually it would require less work to write the air so W but the Sailor also do not have to add cost for businesses another very good point let's say if I have an assurance from the customer that whatever risk factor occurs the buyer or the customer would take care of those risk factors I do not really have to have a contingency budget within my cost I do not have to add up for the unknown risk factors and you know quota price I would simply charge the customer for those risk factors that occur in reality but think about the fixed price contract in a fixed price contract where you you know in case you have to quote a single price you would evaluate the total cost of the project it would also add the buffer from risk mitigation point of view before quoting the price to the customer so that that way the cost reimbursable project would be a bit cheaper but then disadvantages it requires auditing sailors invoices hence requires more work from the buyer to manage I always need to be careful if further the invoice is raised by the vendor is appropriate so have to look into it very carefully the Sailor has a very little motivation to control cost and the total price is unknown so now if I asked you what is the project manager's role in cost reimbursable contract very simple my first and foremost point is to manage cost ensure that the Sailor is not charging me and necessarily for the cost he or she is not billing me for something that is not justified and we got to audit every sellers invoice right moving ahead I have a raised hand but looking into the time constraint I will take up the question at a later stage let me quickly go through you know the content first coming back to the time in which will contract yes it is quick to create and say very good tries in case you're having associates on a staff augmentation basis but the profit is on every hour built here the the total price is not known to the Sailor so the Sailor would try to sit on the project simply delay the work and would earn more profit Sailor has no motivation to control cost and that's why it's appropriate only for small projects it requires more day-to-day oversight from the buyer to ensure that the Sailor is not sitting on my project and he's the project is actually progressing we have to set concrete deliverables to ensure that the project is moving from fixed price project point of view I'm in a good shape because I know that the total cost is known to me the cost is not going to be more than that but then I have a big disadvantage that I have to create a detailed statement of work if my statement of work that's attached with the contract has gaps the Sailor would let her come back to me tell me hey you never mentioned that this needs to be done I will charge you for this I will charge you extra for this right so if my statement of world doesn't have the nitty-gritty of the scope then I'm exposing myself to the risk that the Sailor would find out the gap consider it as a change request and would say that this was not included in the base price and would raise a change request on a paid basis also if the Sailor finds out that the cost is not adequate and he's running sort of budget he would try to cut down on quality or scope so that becomes another concern of the project manager right now considering the advantages and disadvantages if we try to list down the project managers role in procurement management let's go through it quickly this should be just recap because we already have discussed this cost reimbursable contract the project manager needs to make sure that the costs are charged of course which are charged are applicable to the project audit every invoice make sure the project's the sailors work is progressing efficiently watch out for the Sailor adding resources that doesn't add value to your project watch out for resources being shifted from what was originally decided watch out for the sailors charges that we're not part of the original plan we estimate the cost of the project whenever possible so you can see that the focus of the project manager from customers point of view or the buyers point of view is mainly from cost point of view in cost reimbursable contract any doubt any question guys yes yes any questions No similarly what's the project project manager's role in time and material contract well I don't have much you know to control cost but I have to control the time or the schedule to ensure that the project doesn't go out of my hands if I can control the schedule then the budget is somehow controlled anyways janitor fixed price contract is the first reference for the project manager from customer site only in case I do not have the option to describe the project scope in a detailed way then normally I would go for the other two type of contracts otherwise I would always try to go for a fixed price contract from customer's point of view that's the most frequently used contract type coming to the tent this cost and material contract then the project manager needs to provide day-to-day direction to the Sailor to ensure that the project is you know going through valid deliverables attempt to get concrete deliverables do not simply give up the work to the supplier or to the vendor rather take some control of the project scope set some concrete deliverables set some predefined target dates for achieving them so that you have some control on the work being done make sure the number of hours spent is reasonable like I said ensure that the vendor is not sitting on the project watch out for situations where in switching to a different form of contract makes more sense for example I inserted I initiated the project on a time and material basis because I didn't know what's the actual solution now after spending a couple of months in the project the vendor is able to find out the total you know the actual general cause of the problem so now I can go for a fixed price contract I would tell them that well we you you now know what is causing this issue come up with the actual scope of the project and we will enter into a fixed price contract I have a question from skids is there a threshold like number of hours etc which helps the project manager decide whether to go for cost-reimbursable or time and material it goes this way in cost reimbursable at least you have to define the end product isn't it skip it if you cannot define the end product then you cannot go for time and material project it's not that you have a criteria based on time or material it's it's rather that it depends whether the final product is known to you or not like the example I gave you my server is pressing again and again I want IDM to fix the issue permanently that cannot be a cost reimbursable project because I've been will tell me that I need to check and you know go for a few tests to find out what's the actual problem so I cannot guarantee how much time it's going to take ingly I cannot guarantee that you know what would be you know cost so I cannot go for a cost reimbursable or fixed price in case you know the solution tell me I would implement it otherwise go for time in material so the answer to your question is is whenever the solution or the product is not known we go for time and material it's the least favored method and it's applicable only for small projects where in let's say I'm hiring expertise from outside or I'm hiring professionals from outside those kind of projects I would go for time in material okay for example I want to paint the entire interior of my house I don't know how much cost you to take raw material wise or labor wise neither it's difficult to go for the planning and initial States so I go for a standard market rate that it would be ten dollars of per square feet now after the work is done there won't be a measurement done ingly the invoice would be raised and then I as I said the fixed price contract now cost is no longer my focus watch out for the sailors cutting on scope or quality scope and quality or my primary focus now and also ensure that we have a proper change control process in place wherein we have you know we monitored the change orders whether they are actually part of the contract or they should be charged separately etc etc and as I said ensure that the soow is written very aggressively and in a detailed way see the exam would ask you a question that a project manager is trying to outsource a project on fixed price basis what what it would be his primary focus or it can give you a scenario based question that a project manager is is writing a statement of work or he's spending a lot of time and efforts for writing the scope of work so what kind of contract is he creating the answer is fixed price contract so be ready to answer both type of questions from this topic it's important that you understand different type of contracts and the normally you can understand the project manager's role in procurement management have a question from V new technical experts in the team have to give some kind of time duration project managers may not subject to expert in this area very true so that's why we say that we we try to give concrete deliverables so let's say you decide that the maximum time for RCA the root cause analysis time frame is let's say five days once the root cause analysis is done then you know the solution design okay that is another five days so this kind of a time frame you might have menu but you cannot really have full and final project schedule like you can have in fixed price contract so this is project managers role in planning and administration and controlling of procurement during the closure phase the project manager is would be doing mainly two things one the project manager would be involved in contract closer contract closer includes you know the contractual closure part that is perform an audit of the deliverables find out whether the deliverables are within the acceptable criteria or not and then ingly close the project prove complete the payments and close it and it also includes the administrative closure which includes the documentation part that is documenting the lessons learned or documenting the project related information in the organizational process assets etc okay administrative closure happens at the end of every phase and at the end of the project as a whole contract loser happens only once that is at the end of the project both are responsibilities of the buyer from you know you know in order to close a procurement process if you don't have any further questions from me for me this is the end of the topic we discussed different type of contracts we also discussed different advantages disadvantages and we also discussed the project managers role initially in taking a procurement decision then writing the S o W and entering into the contract then finally selecting the suitable type of a contract and depending on the contract manage the vendor have a question from Shankar Raman yeah you were unmuted Shanker can you just tell me your question yes yes actually I have a question suppose that the project is fully completed but I have not received the payment from the buyer so in the case can I close the project and the release 13 members or how can I pleasing the team members is concerned yes you can do that first please understand Center that we have a contract which is a legally bound document okay it's a legal obligation for the buyer to pay for the project right so if the contract is you know if the project deliverables are within the acceptance criteria the buyer has to make the payments otherwise the Sailor would drag him to the court please remember that the contract is a mutually binding document but then it's a legal document and then yes if the deliverables are accepted and the project is scope wise over as per the release criteria or for the resources we can release the resources but we cannot consider the project as contractually closed till the time the payment doesn't is not made hope that makes sense yeah