What is Procurement?
Project managers must, throughout the process of project management, undertake various procurement activities. It is the project manager’s responsibility to ensure that the obtaining of goods and services from external sources is undertaken in a controlled manner that ensures quality and value for money, as well as conforming to the time constraints of the project.
In the project initiation phase, the project manager must ensure that analysis of procurement needs is undertaken and that the process by which procurement will be conducted is identified.
9 procurement activities in the project planning phase
During the planning phase, procurement activities run from identification of associated risks through to negotiating and preparing contracts. The nine activities of procurement during the planning phase are:
- Identification of procurement risks
These risks run through the entire process of procurement and include understatement of needs; misinterpretation of needs; insufficient funding; impractical timeframe; biased specifications; providing inadequate information to tenderers; etc.
- Obtaining authorisation for procurement to take place
- Determine the resource requirements
- Prepare specifications
- Identify potential suppliers
- Develop the procurement plan
- Prepare documents for solicitation
- Conduct solicitation
- Negotiate and prepare contracts
Procurement in the execution phase
The project manager must organise the management and administration of contracts and then:
- Monitoring performance
- Managing variations
During the closure phase
The closure phase must allow procurement activities to aid the process of education and learning, to take forward to subsequent projects. It must also enable the completed project to be handed over to the client by:
- Verifying that the outcomes are acceptable
- Provide feedback to suppliers
- Finalise contracts and payments
- Examine lessons learned and record for future use
- Identify best practice inn procurement management
Tools and techniques used in procurement activities
Several tools and techniques will be utilised to conduct procurement activities. The project manager may hold conferences with bidders, who may have been solicited by advertisement, internet search, or previous knowledge. Resource calendars will determine timeframes and delivery dates, while a system of contract change control will be necessary.
Reviews and inspections should be carried out throughout the procurement process to measure performance, using audits to agree and review metrics.
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