Project Procurement Management

A project is a catalyst for change. If an organization cannot manage that change independently then they outsource the work to somebody who is more competent or who is the sole supplier of product or services. Sometimes a project can be managed by the organization independently but not by the project manager. He has a dependency on many other departments and his project team cannot complete the project work on his own. This is the place where understanding project procurements become critical. A procurement may be purchasing a testing service, hiring some consultant from a service organization, purchasing some raw material, purchase some machine or equipment, getting some technical training, get help in instructional design work from an expert organization, travel planning, food catering services, security services, etc.

In a small organization or small project, most of the work of procurement is done by an independent procurement department of the organization or different functional heads of the organization provides their services towards the project, and the project manager ensures the project gets completed successfully. Here managing dependencies becomes a very critical function of a project manager. But whatever is the case project manager need to understand the following to ensure project success.

  • What are the resources which my project needs?
  • Specification of product or services needed
  • When do I need those (earliest, latest date)
  • How to measure the work done by the vendor is successfully meeting the expectations?
  • Who will verify the quality of the vendor’s products or services?
  • What kind of contract type should be signed for a particular type of work?
  • What is my max budget for particular procurement need?
  • What is the quality expectation?
  • If vendor engagement is for a long time and at any time if we want to change the requirement then how to proceed?
  • How reward, penalty, and payment are attached to various milestones of the procurement?
  • Who and where are my potential vendor of a particular product or service?
  • What is the process of procurement within my organization?
  • Are there any source selection criteria defined at the organization level? Do I need to add, edit anything in the existing criteria or I can use them directly.
  • How copyright, patent, trademarks ownership will be handled, if any

To answer all these questions either directly or through the procurement department (indirectly) PMBOK provides 3 processes.

  1. Plan Procurement Management
  2. Conduct Procurements
  3. Control Procurements