PROJECT DEVELOPMENT AND

MANAGEMENT COURSE NO. 11/2022

Project Procurement Management

Prepared
by
Susan Chesang
 Introduction

• Procurement means acquiring goods and/or services from outside sources.

• Other terms include purchasing and outsourcing
• Project procurement management involves acquiring goods and services for
a project outside the performing organization
The process include:
•Planning procurements: determining what to procure, when, and how
Conducting procurements: obtaining seller responses, selecting sellers, and
awarding contracts
•Administering procurements: managing relationships with sellers,
monitoring contract performance, and making changes as needed
•Closing procurements: completing and settling each contract,
Planning Procurements

• Identifying which project needs can best be met by using

products or services outside the organization
• If there is no need to buy any products or services from outside
the organization, then there is no need to perform any of the
other procurement management processes.
• Describes how the procurement processes will be managed,
from developing documentation for making outside purchases or
acquisitions to contract closure Contents vary based on project
needs
Conduct Procurements

• After finishing the paperwork of the first phase, the conduct procurement
phase is when you study the bids that come back and determine which one to
accept.
• Before deciding, however, there should be a criterion in place to decide which
bid is best for the project and fits your logistics management. The agreements
are then signed, and the project management plan is updated.
• Decide the winner by conferencing with the bidders, having techniques for
evaluating the proposals and having independent estimates to make sure the
bids are within the range of normal. It doesn’t hurt to seek the advice of
experts in the areas your contracting to get their perspective.
 Close Procurements
• Just as there is a process to start the procurement, there needs one in place to
finalize it.
• What constitutes completed work should be detailed in the initial agreement
with the contractor, so there is no confusion on either’s part as to when the
work is done.
• Insurance and bonding also will usually require a formal release of liability.
• This makes sure that there are no outstanding changes related to the value
and completion date of the contract.
• Procurement audits help with this process, as well as having structured
procurement negotiations. A records management system will also be needed
to manage all the paperwork that will be involved with this stage of the
procurement process.
 Project Manager’s Role in Procurement

The project manager is involved with procurement, same as any other aspect they
control in the project management process.
However, this is a process they might not own with the same authority as other
parts of the project.
• While the project manager does have the authority to make agreements with
contractors on behalf of the company, the project manager is often not the
person who administers that contract once in place. Regardless, it’s important
that the project manager is in the loop.
Project Manager’s Role in Procurement

• That means knowing the six processes within the project procurement
management knowledge areas as outlined in the Project Management Body of
Knowledge (PMBOK). The first is the plan purchases and acquisitions,
meaning determining what external resources are needed for the project.

• The project manager will have control over this, as they are more
knowledgeable about overall project needs.
 Project Manager’s Role in
Procurement
• Contract administration is the management of the
contract with the vendor. The project manager will
work daily with the vendor’s account manager.

• When the contract is fulfilled, there is contract closure.

This is usually handled again by the purchasing
department.
Public procurement provisions COK
2010

Fair, equitable, transparent, competitive & cost-effective -
Art. 227(1)
 Procurement & disposal law to provide - Art. 227(2):
 Categories of preference
 Protection of persons, groups previously
disadvantaged by unfair competition or discrimination
 Sanctions against suppliers who have not performed
professionally, agreements or law
 Sanctions against tax defaulters, corrupt & serious
violators of employment laws & practices
 Six objectives of procurement

Procure the RIGHT ITEM

Procure the RIGHT QUALITY goods, works or
services from a reliable supplier.
In the RIGHT QUANTITY ensuring cost
effectiveness and;
Delivered at the RIGHT TIME;
Delivered to the RIGHT PLACE; and
Paying the RIGHT PRICE whilst achieving the
lowest possible total cost.
KEY ACTIVITIES IN A PROCUREMENT CYCLE

1. Identify
Procureme
10. Close nt 2. Develop
the needs Proc.
Proc. File Plans

9. Manage
3. Confirm
the
Budget
Contract

4. Select
8. Award
Proc.
Contract
Methods

5. Receive
7.
&
Negotiate
Manage
(if needed) 6. Evaluate Bids
Bids
Public Procurement Requirements

• Definition
• Publication of Contracts
• Preparation of Contracts
• Creation of contracts
• Variation of Contracts
• Interest on overdue amounts
• Framework contracting
• Performance Security
• Advance Payment
• Complex/specialized Contracts
• Termination of contracts
 Tender Documents for procurement
contracts
 Contract Agreement Form
 Tender Form
 Price Schedule of BoQs submitted by the Tenderer
 Schedule of Requirements
 Technical Specifications
 General Conditions of the Contract
 Special Conditions of Contract
 Notification of Award