Project Management Professional

Dr. Ahmed Hassan, PgMP, PMP, RMP,PBA

PMP
 Plan Procurement Management

Today Conduct Procurements

Outlines Control Procurements

Agile Project Management

Agile Manifesto - Values

Agile Project Lifecycle

Difference Between Agile & Waterfall

12. PROJECT
PROCUREMENT MANAGEMENT

Presented by:

Dr. Ahmed Hassan

PMO Director, MCIT
Certified Project Managers Trainer
 3

2
PROJECT
PROCUREMENT
Project Procurement Management includes the processes
MANAGEMENT necessary to purchase or acquire products, services, or
results needed from outside the project team

Project Procurement . Includes the management and

control processes required to develop and administer agreements
such as contracts, purchase orders, memoranda of agreements
(MOAs), or internal service level agreements (SLAs).
 Project Management Process Groups 22
Knowledge Areas Initiating Planning Executing Monitoring and Controlling Closing
4. Project Integration 4.1 Develop 3. Direct and Manage Project Work 5. Monitor and Control Project Work 4.7 Close
4.2 Develop Project Management Plan
Management Project Charter 4. Manage Project Knowledge 6. Perform Integrated Change Control Project
5.1 Plan Scope Management
5. Project Scope 5.2 Collect Requirements 5.5 Validate Scope
Management 5.3 Define Scope 5.6 Control Scope
5.4 Create WBS
6.1 Plan Schedule Management
6.2 Define Activities
6. Project Schedule
6.3 Sequence Activities 6.6 Control Schedule
Management
6.4 Estimate Activity Durations
6.5 Develop Schedule Management
7.1 Plan Cost Management
7. Project Cost
7.2 Estimate Costs 7.4 Control Costs
Management
7.3 Determine Budget
8. Project Quality
8.1 Plan Quality Management 8.2 Manage Quality 8.3 Control Quality
Management
9.3 Acquire Resources
9. Project Resource 9.1 Plan Resource Management
9.4 Develop Team 9.6 Control Resources
Management 9.2 Estimate Activity Resources
9.5 Manage Team
10. Project
Communications 10.1 Plan Communications Management 10.2 Manage Communications 10.3 Monitor Communications
Management
11.1 Plan Risk Management
11.2 Identify Risks
11. Project Risk
11.3 Perform Qualitative Risk Analysis 11.6 Implement Risk Responses 11.7 Monitor Risks
Management
11.4 Perform Quantitative Risk Analysis
11.5 Plan Risk Responses
12. Project Procurement
12.1 Plan Procurement Management 12.2 Conduct Procurements 12.3 Control Procurements
Management

13. Project Stakeholder 13.1 Identify

13.2 Plan Stakeholder Engagement 13.3 Manage Stakeholder Engagement 13.4 Monitor Stakeholder Engagement
Management Stakeholders

2 24 10 12 1
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Key concepts for Project Procurement Management

• The Project Procurement Management processes involve agreements

that describe the relationship between two parties—a buyer and a
seller. Agreements can be as simple or complex
• A contract should clearly state the deliverables and results expected,
including any knowledge transfer from the seller to the buyer.
• A contract means it will be subjected to a more extensive approval
process, often involving the legal department
• A complex project may involve managing multiple contracts
simultaneously or in sequence.
• Seller may be identified as a contractor, vendor, service provider, or
supplier.
• The buyer may be the owner of the final product, a subcontractor, the
acquiring organization, a service requestor, or the purchaser.
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Trends and emerging practices in Procurement Management

Logistics and supply chain management.

 Long-lead items may be procured in advance of other procurement contracts to meet theplanned
project completion date. .
 It is possible to begin contracting for these long-lead materials, supplies, or equipment beforethe
final design of the end product itself is completed based on the known requirements identified in
the top-level design.

Technology and stakeholder relations.

 Use of technology including webcams to improve stakeholder communications and relations.
 The progress on the project can be viewed on the Internet by all stakeholders.
 Video data can also be stored, allowing analysis if a claim arises.

Trial engagements.
 Some projects will engage several candidate sellers for initial deliverables and work products on a paid basis
before making the full commitment to a larger portion of the project scope.
 This accelerates momentum by allowing the buyer to evaluate potential partners, while simultaneously
making progress on project work.
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Key concepts for Project Procurement Management

TAILORING CONSIDERATIONS
• Complexity of procurement.
• Physical location
• Governance and regulatory environment.
• Availability of contractors
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Contracts Type
Firm Fixed Price Contracts

Firm Fixed Price (FFP)

Fixed Price Incentive Fee (FPIF)
Fixed Price Economic Price Adjustment (FPEPA)

Cost Reimbursable Contracts (CR)

Cost Plus Fixed Fee (CPFF)

Cost Plus Incentive Fee Contracts (CPIF)
Cost Plus Award Fee Contracts (CAF)

Time and Material Contracts (T&M)

Marge of above two contracts types.

$
Planning Executing Monitor & Control
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12.1 Plan Procurement Management

Input Tools & Techniques Outputs

1. Project charter 1. Procurement management plan

1. Expert judgment
2. Business documents 2. Procurement strategy
2. Data gathering
• Business case 3. Bid documents
• Market research
• Benefits management plan 4. Procurement statement of work
.3 Data analysis
3. Project management plan 5. Source selection criteria
• Make-or-buy analysis
• Scope management plan 6. Make-or-buy decisions
4. Source selection analysis
• Quality management plan 7. Independent cost estimates
5. Meetings
• Resource management plan 8. Change requests
• Scope baseline 9. Project documents updates
4. Project documents • Lessons learned register
• Milestone list • Milestone list
• Project team assignments • Requirement documentation
• Requirements documentation • Requirements traceability matrix
• Requirements traceability matrix • Risk register
• Resource requirements • Stakeholder register
• Risk register .10 OPA updates
• Stakeholder register
5. EEF
6. OPA
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12.1 Plan Procurement Management

Typical steps might be:

1. Prepare the procurement statement of work (SOW) or terms of
reference (TOR).
2. Prepare a high-level cost estimate to determine the budget.
3. Advertise.
4. Identify a short list of qualified sellers.
5. Prepare and issue bid documents.
6. Prepare and submit proposals by the seller.
7. Conduct a technical evaluation of the proposals including quality.
8. Perform a cost evaluation of the proposals.
9. Prepare the final combined quality and cost evaluation to select the
winning proposal.
10. Finalize negotiations and sign contract between the buyer and the
seller.
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12.1 Plan Procurement Management Input

01 PROJECT CHARTER

02
BUSINESS DOCUMENTS
• Business case
• Benefits management plan

03 PROJECT MANAGEMENT PLAN

• Scope management plan • Resource management plan
• Quality management plan • Scope baseline.

04
PROJECT MANAGEMENT PLAN.
• Milestone list. • Resource requirements.
• Project team assignments. • Risk register.
• Requirements documentation. • Stakeholder register.
• Requirements traceability matrix.

05 ENTERPRISE ENVIRONMENTAL FACTORS

06 ORGANIZATIONAL PROCESS ASSETS

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12.1 Plan Procurement Management Tools & Techniques

01
EXPERT JUDGMENT

02 DATA GATHERING
Market research includes examination of industry and specific seller capabilities.

03 DATA ANALYSIS
Make-or-buy analysis

04 SOURCE SELECTION ANALYSIS

• Least cost.
• Qualifications only.
• Quality-based/highest technical proposal score.
• Quality and cost-based.
• Sole source.
• Fixed budget.

05
Meeting
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12.1 Plan Procurement Management Output

01 PROCUREMENT MANAGEMENT PLAN
02 PROCUREMENT STRATEGY
The objective of the procurement strategy is to determine:
1. Delivery methods.
2. Contract payment types.
3. Procurement phases.

03 BID DOCUMENTS
Biding document can include:
o Request for information (RFI): is used when more information on the goods
and services to be acquired, needed from the sellers.
o Request for quotation (RFQ) : used when more information is needed on how
vendors would satisfy the requirements and/or how much it will cost.
o Request for proposal (RFP). is used when there is a problem in the project and
the solution is not easy to determine.
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12.1 Plan Procurement Management Output

04 PROCUREMENT STATEMENT OF WORK (SOW)

• The SOW describes the procurement item in sufficient detail (specifications, quantity desired,
quality levels, performance data, period of performance, work location, and other requirements).
• The procurement SOW should be clear, complete, and concise.
• terms of reference (TOR) is sometimes used when contracting for services.
• SOW, a TOR typically includes these elements:
• Tasks the contractor is required to perform as well as specified coordinationrequirements;
• Standards the contractor will fulfill that are applicable to the project;
• Data that needs to be submitted for approval;
• Detailed list of all data and services that will be provided to the contractor by the buyer
• Definition of the schedule for initial submission and the review/approval time required.

05 SOURCE SELECTION CRITERIA

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12.1 Plan Procurement Management Output

06 MAKE-OR-BUY DECISIONS

07
INDEPENDENT COST ESTIMATES

08 CHANGE REQUESTS

09
PROJECT DOCUMENTS UPDATES.
• Lessons learned register. • Requirements traceability matrix.
• Milestone list. • Risk register.
• Requirements documentation. • Stakeholder register.

10 ORGANIZATIONAL PROCESS ASSETS UPDATES

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12.1 Plan Procurement Management

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12.2 Conduct Procurement Management

Input Tools & Techniques Outputs

1. Project management plan 1. Expert judgment 1. Selected sellers

• Scope management plan 2. Agreements
2. Advertising
• Requirements management plan 3. Change requests
3. Bidder conferences
• Communications management plan 4. Project management plan updates
• Risk management plan 4. Data analysis • Requirements management plan
• Procurement management plan • Proposal evaluation • Quality management plan
• Configuration management plan .5 Interpersonal and team skills • Communications management plan
• Cost baseline • Risk management plan
• Negotiation
2. Project documents • Procurement management plan
• Lessons learned register • Scope baseline
• Project schedule • Schedule baseline
• Requirements documentation • Cost baseline
• Risk register 5. Project documents updates
• Stakeholder register • Lessons learned register
3. Procurement documentation • Requirements documentation
4. Seller proposals • Requirements traceability matrix
5. EEF • Resource calendars
6. OPA • Risk register
• Stakeholder register
6. OPA updates
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12.2 Conduct Procurement Management Input - 1

01 PROJECT MANAGEMENT PLAN
• Scope management plan
• Requirements management plan
• Communications management plan
• Risk management plan
• Procurement management plan
• Configuration management plan
• Cost baseline

02
PROJECT DOCUMENTS
• Lessons learned register.
• Project schedule.
• Requirements documentation.
• Risk register.
• Stakeholder register.
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12.2 Conduct Procurement Management Input

03
PROCUREMENT DOCUMENTATION
• Bid documents.
• Procurement statement of work.
• Independent cost estimates.
• Source selection criteria.

04 SELLER PROPOSALS
• If the seller is going to submit a price proposal, good practice is to require that it be
separate from the technical proposal.
• The evaluation body reviews each submitted proposal according to the source selection
criteria and selects the seller that can best satisfy the buying organization’s
requirements.

05
ENTERPRISE ENVIRONMENTAL FACTORS(EEF).

06 ORGANIZATIONAL PROCESS ASSETS (OPA).

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12.2 Conduct Procurement Management Tools & Techniques

01 EXPERT JUDGMENT

02 ADVERTISING
• Advertising is communicating with potential users of a product, service, or result.
• Existing lists of potential sellers often can be expanded by placing advertisements in
general circulation publications such as selected newspapers or in specialty trade
publications.
• Most government jurisdictions require public advertising or online posting of pending
government contracts.

03 BIDDER CONFERENCES
• (also called contractor conferences, vendor conferences, and pre-bid conferences) are
meetings between the buyer and prospective sellers prior to proposal submittal.
• They are used to ensure that all prospective bidders have a clear and common
understanding of the procurement and no bidders receive preferential treatment.
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12.2 Conduct Procurement Management Tools & Techniques

04 DATA ANALYSIS
• Proposal evaluation. to ensure they are complete and respond in full to the bid
documents, procurement statement of work, source selection criteria, and any other
documents that went out in the bid package.

05 INTERPERSONAL AND TEAM SKILLS

• Negotiation
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12.2 Conduct Procurement Management Outputs
01 SELECTED SELLERS
• The selected sellers are those who have been judgedto
be in a competitive range based on the outcome of theproposal
or bid evaluation.
• Final approval of complex, high-value, high-risk
• procurements will generally require organizational
• senior management approval prior to award.

02 AGREEMENTS
A contract is a mutually binding agreement that obligates the seller to provide the specified
products, services, or results; obligates the buyer to compensate the seller; and represents a legal
relationship that is subject to remedy in thecourts.
The major components in an agreement document:
Procurement statement of work - Schedule, milestones, or date - Performance reporting - Pricing
and payment terms - Inspection, quality, and acceptance criteria - Warranty & support - Incentives
and penalties - Insurance - Subordinate subcontractor approvals - General terms and conditions -
Change request handling - Termination clause

03 CHANGE REQUESTS.
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12.2 Conduct Procurement Management Outputs

04 PROJECT MANAGEMENT PLAN UPDATES

• Requirements management plan.
• Quality management plan.
• Communications management plan.
• Risk management plan.
• Procurement management plan.
• Scope baseline.
• Schedule baseline.
• Cost baseline.

05
PROJECT DOCUMENTS UPDATES
• Lessons learned register.
• Requirements documentation.
• Requirements traceability matrix.
• Resource calendars.
• Risk register.
• Stakeholder register.

06
ORGANIZATIONAL PROCESS ASSETS UPDATES
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12.3 Control Procurement Management

Input Tools & Techniques Outputs

Project management plan 1. Expert judgment 1. Closed procurements

• Requirements management plan 2. Work performance information
2. Claims administration
• Risk management plan 3. Procurement documentation updates
• Procurement management plan 3. Data analysis 4. Change requests
• Change management plan • Performance reviews 5. Project management plan updates
• Schedule baseline • Earned value analysis • Risk management plan
2. Project documents • Procurement management plan
• Trend analysis
• Assumption log • Schedule baseline
• Lessons learned register 4. Inspection • Cost baseline
• Milestone list 5. Audits 6. Project documents updates
• Quality reports • Lessons learned register
• Requirements documentation • Resource requirements
• Requirements traceability matrix • Requirements traceability matrix
• Risk register • Risk register
• Stakeholder register • Stakeholder register
3. Agreements 7. OPA updates
4. Procurement documentation
5. Approved change requests
6. Work performance data
7. EEF
8. OPA
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12.3 Control Procurement Management Input

01 PROJECT MANAGEMENT PLAN

• Requirements management plan.
• Risk management plan.
• Procurement management plan.
• Change management plan.
• Schedule baseline.

02 PROJECT DOCUMENTS
• Assumption log.
• Lessons learned register.
• Milestone list.
• Quality reports.
• Requirements documentation.
• Requirements traceability matrix.
• Risk register.
• Stakeholder register.

03 AGREEMENTS
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12.3 Control Procurement Management Input

04 PROCUREMENT DOCUMENTATION

05 APPROVED CHANGE REQUESTS

06 WORK PERFORMANCE DATA

07 ENTERPRISE ENVIRONMENTAL FACTORS

08 ORGANIZATIONAL PROCESS ASSETS

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12.3 Control Procurement Management Tools & Techniques

01 EXPERT JUDGMENT

02 CLAIMS ADMINISTRATION
• The contested changes are called claims. When they cannot be resolved, they become
disputes and finally appeals.
• Claims are documented, processed, monitored, and managed throughout the contract
life cycle, usually in accordance with the terms of the contract.
• If the parties themselves do not resolve a claim, it may have to be handled in
accordance with alternative dispute resolution (ADR) typically following procedures
established in the contract.
• Settlement of all claims and disputes through negotiation is the preferred method.

03 DATA ANALYSIS
• Performance Reviews. Measure, compare, and analyze quality, resource, schedule,
and cost performance against the agreement.
• Earned Value Analysis (EVA).
• Trend Analysis. Trend analysis can develop a forecast estimate at completion (EAC)
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12.3 Control Procurement Management Tools & Techniques

04 INSPECTION
a structured review of the work being performed by the contractor.

05 AUDITS
• A structured review of the procurement process.
• Rights and obligations related to audits should be described in the procurement contract.
• Resulting audit observations should be brought to the attention of the buyer’s project
manager and the seller’s project manager for adjustments to the project, when
necessary.
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12.3 Control Procurement Management Output

01 CLOSED PROCUREMENTS
• The buyer, usually through its authorized procurement administrator, provides the seller with
formal written notice that the contract has been completed.
• Requirements for formal procurement closure are usually defined in the terms and conditions
of the contract and are included in the procurement managementplan.
• Typically, all deliverables should have been provided on time and meet technical and quality
requirements, there should be no outstanding claims or invoices, and all final payments should
have been made.
• The project management team should have approved all deliverables prior to closure.
02
WORK PERFORMANCE INFORMATION
how a seller is performing by comparing the deliverables received, the technical performance
achieved, and the costs incurred and accepted against the SOW budget for the workperformed.
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12.3 Control Procurement Management Output

03 PROCUREMENT DOCUMENTATION UPDATES

• includes the contract with all supporting schedules, requested unapproved
contract changes, and approved change requests.
• Procurement documentation also includes any seller-developed technical
documentation and other work performance information such as deliverables,
seller performance reports and warranties, financial documents including
invoices and payment records, and the results of contract-related inspections.

04
PROJECT MANAGEMENT PLAN UPDATES
• Risk management plan.
• Procurement management plan.
• Cost baseline.
• Schedule baseline.
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12.3 Control Procurement Management Output

05
PROJECT DOCUMENTS UPDATES
• Lessons learned register.
• Resource requirements.
• Requirements traceability matrix.
• Risk register.
• Stakeholder register.

06 ORGANIZATIONAL PROCESS ASSETS UPDATES

• Payment schedules and requests.
• Seller performance evaluation documentation
• Prequalified seller lists updates.
• Lessons learned repository.
• Procurement file.
Project Management Professional
(Thanks)

Presented by:

Dr. Ahmed Hassan

PMO Director, MCIT
Certified Project Managers Trainer