If the project is procuring services or products from other organization then we project team needs to create some documents which help them in knowing the answer of many questions like below, but not limited to these.
- What exactly is needed?
- Why do we they need it from other organization?
- What should be the specification of the product or service?
- What price range we can afford for this purchase?
- What is the market condition for this product/service? Is it a monopolistic market or a competitive market?
- Do we have the capability/competency to evaluate and select a good vendor?
- What kind of contract makes sense for that kind of purchase?
- What will be the impact of this purchase on our service or product which we are creating for our customers?
- What are the legal, patent, copyright, ownership complications of the purchase?
- Does our contract with our customer allow this or not? If yes then are there any constraints imposed by our customer for third-party buying?
- Overall purchase from another vendor is increasing risk or decreasing risk?
These kinds of questions need to be answered in Procurement Documentation. This is the input of the PMBOK processes. One interesting thing to note is this document is not the output of any of the PMBOK processes! It looks PMBOK guide expects that a project should have this document ready before a project starts. It means this document is created before the project charter is signed off or at the stage of creating the project proposal. Another interesting thing to note is Procurement Documentation Updates is output of Control Procurements process. It means this document can be updated by this process. But in real life situation, if you want to procure anything from other vendors does the Project Manager create a procurement document during the project life cycle? The answer is a big Yes.
Procurement Documentation is input to the following processes of PMBOK 6.