Procurement Management Plan - Doc-1
Procurement Management Plan - Doc-1
Procurement Management Plan - Doc-1
SANG 8472
DATE: JULY 28
TH
2013
SANG 8472-Project
TABLE OF CONTENTS
Introduction......................................................................................................................................3 Procurement Management Approach..............................................................................................3 Procurement Definition....................................................................................................................3 Type of Contract to be Used............................................................................................................4 Contract Approval Process..............................................................................................................4 Decision Criteria..............................................................................................................................5 Vendor Management........................................................................................................................5 Performance Metrics for Procurement Activities............................................................................6 Management Acceptance ................................................................................................................7
SANG 8472-Project
INTRODUCTION
The purpose of the Procurement Management Plan is to define the procurement requirements for the project and how it will be managed from developing procurement documentation through contract closure. The Procurement Management Plan defines the following: SOL Strategy and Policy for Subcontracting Items to be procured with justification statements and timelines Type of Contracts and Work Orders to be used Contract approval process Decision criteria Establishing contract deliverables and deadlines Vendor Management Performance metrics for procurement activities This Procurement Management Plan sets the procurement framework for this project. It will serve as a guide for managing procurement throughout the life of the project and will be updated as acquisition needs change. This plan identifies and defines the items to be procured, the types of contracts/ or work orders to be used in support of this project, the contract approval process, and decision criteria. The importance of coordinating procurement activities, establishing firm contract deliverables, and metrics in measuring procurement activities is included.
PROCUREMENT DEFINITION
The purpose of procurement definition is to describe, in specific terms, what items will be procured and under what conditions. Sometimes items which must be procured for a project can be made internally by an organization. Additionally, procurement deadlines are usually affected by the project schedule and are needed by certain times to ensure timely project completion. This section is where these items must be listed, justified, and the conditions must be set. Any important technical information should also be included. Individuals may also be listed with authority to approve purchases in addition to or in the absence of the project manager.
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The following procurement items and/or services have been determined to be essential for project completion and success. The following list of items/services, justification, and timeline are pending CM and PCM review for submission to the contracts and purchasing department:
Item/Service Item A; 3 x tool Item B; 4 x tool Item C Justification Needed for manufacturing widget type 1; we do not make this item Needed for building tool type 2; we make this item but do not know the cost comparison vs. purchasing it Needed for transferring data to new operating system; we do not make this item Needed By 31 July 2009 15 August 2009 1 September 2009
In addition to the above list of procurement items, the following individuals are authorized to approve purchases for the project team: Name John Smith Jane Doe Bob Jones Role Project Manager Lead Engineer Design Technician
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The first step in the contract approval process is to determine what items or services will require procurement from outside vendors. This will be determined by conducting a cost analysis on products or services which can be provided internally and compared with purchase prices from vendors. Once cost analyses are complete and the list of items and services to be procured externally is finalized, the purchasing and contracts department will send out solicitations to outside vendors. Once solicitations are complete and proposals have been received by all vendors the approval process begins. The first step of this process is to conduct a review of all vendor proposals to determine which meet the criteria established by the project team and the purchasing and contracts department. Purchases less than $x,xxx only require the approval of the Project Manager; whereas, purchases greater than $x,xxx must be approved by the Contract Review Board. For these larger purchase the contract review board will meet to determine which contract will be accepted. The Contract Review Board consists of representatives from the project team, purchasing and contracts department, finance, and the PMO.
DECISION CRITERIA
The purpose of this section is to define the criteria used by the contract review board to decide on what contract(s) to award. Again, these criteria may vary between organizations but must be defined as part of the Procurement Management Plan. The criteria for the selection and award of procurement contracts under this project will be based on the following decision criteria: - Ability of the vendor to provide all items by the required delivery date
Quality
Cost Expected delivery date Comparison of outsourced cost versus in-sourcing Past performance
These criteria will be measured by the contracts review board and/or the Project Manager. The ultimate decision will be made based on these criteria as well as available resources.
VENDOR MANAGEMENT
The purpose of this section is to describe the roles and actions the project team and purchasing and contracts department will take to ensure that the selected vendors provide all of the products/services agreed upon and that the appropriate levels of quality are maintained. The Project Manager is ultimately responsible for managing vendors. In order to ensure the timely delivery and high quality of products from vendors the Project Manager, or his/her designee will meet weekly with the contract and purchasing department and each vendor to discuss the progress for each procured item. The meetings can be in person or by teleconference. The purpose of these meetings will be to review all documented specifications for each product as well as to review the quality test findings. This forum will provide an opportunity to review each items development or the service provided in order to ensure it complies with the requirements established in the project specifications. It also serves as an opportunity to ask
SANG 8472-Project
questions or modify contracts or requirements ahead of time in order to prevent delays in delivery and schedule. The Project Manager will be responsible for scheduling this meeting on a weekly basis until all items are delivered and are determined to be acceptable.
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MANAGEMENT ACCEPTANCE
Approved by the Project Director: ___________________________________________ Date:____________________