EXECUTING STAGE (PROCUREMENT) : CONDUCT PROCUREMENTS

Conduct procurement is the process in the executing stage that obtains the sellers’ responses through bids or proposals, selects the qualified seller based on the defined selection criteria and award the contract/agreement to perform the work.  

The inputs of this process are:

• Procurement management plan that explains how the procurement processes will be managed from the development of procurement documents towards the contract closure
• Procurement documents that explain the persons or organizations to be contracted out like the suppliers, contractors, consultants etc. Note that these documents are also used to request bids, proposals, quotations and tenders from the sellers
• Source Selection Criteria that are used for rating or scoring the seller’s proposals in terms of capabilities, technical expertise, capacity, costs etc
• Seller proposals that provide information needed by the buyer for evaluation before selecting the successful seller
• Project documents such as risk register that provides all the risks related to procurement activities
• Make or Buy Decisions that are used after obtaining the sellers’ responses. Sometimes depending on the responses may lead to make the procuring goods or services or buy them. These decisions will only be made after evaluation of capabilities, risks associated, cost to be incurred and value to be delivered
• Procurement statement of work that provides a clear description of goals, requirements and outcomes of procurement activity such as specifications, desired quantity and quality, a period of performance etc.
• Organizational Process Assets that provide the list of qualified sellers from the previous projects, the past experiences with them and agreements used.

The process can be done by:

• Conducting bidder conference whereby the buyer and the sellers meet to discuss the procurement statement of work, in order to have one clear and common understanding before the submittal of the bidders or proposals
• Using formal proposal evaluation review in order to make the selection prior to the award
• Having independent cost estimates that will be used as a benchmark on the proposed sellers’ responses. This will indicate whether the procurement statement of work was unclear, incomplete or sellers failed to understand it
• Using experts with multi-disciplines who can make an evaluation of the sellers’ proposals
• Advertising in the newspapers or online publications to expand the list of the potential sellers
• Using analytical techniques that can help to identify the readiness of the seller to provide the wanted value of procured good or service, determine the expected cost and monitor areas that may lead to risks
• Performing procurement negotiations prior to signing the contract in order to meet mutual agreement between the buyer and the seller of the procured good or service. The contract will reflect all the agreements like the responsibilities, authority to make changes, proprietary rights, payments, prices, schedule, terms and conditions to mention a few.

The outputs of Conduct procurement process are

• The selected sellers who were evaluated as competitive bidders, approved and negotiated a draft contract before awarded
• Procurement agreement that includes terms, conditions and other items that the buyer specifies for the seller regarding the procuring good or service. The agreement may include the statement of work, schedule baseline, the period of performance, roles and responsibilities, pricing, payment terms, place of delivery, warranty, penalties, acceptance criteria etc
• Resource calendars that indicate the dates, availability and quantities of the contracted resources
• Change requests where applicable and
• Updates in project management plan and project documents like risk register, stakeholder register and requirements documentation

References:

PMI (2013). A Guide to the Project Management Book of Knowledge (PMBOK Guide 5^th Ed.) USA, Project Management Institute

http://www.internationalpaper.com/company/regions/asia/businesses-overview/procurement