A. Procurement Management Approach Procurement planning aims to document how the

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A.           Procurement Management Approach

Procurement planning aims to document how the acquisition/purchase of resources will be conducted, communicates the procurement approach to stakeholders, and identifies potential vendors (PMBOK, 2013). It is the project management team’s responsibility to ensure the procurement management plan contains all the necessary elements for effective acquisition of products/services, materials, or results for the project.

Describe how procurement management will be approached for the project. (1 page)

What process will be used to plan, execute, monitor, and control procurements?

Who will be involved in the procurement management process?

What business policies must be considered when procuring the resources for the project?

To what extent will eProcurement be used to obtain resources for the project?

B.           Procurement Definition

The purpose of procurement definition is to describe, in specific terms, what items will be procured and under what conditions. The project manager, in collaboration with stakeholders, must define the items that must be procured and in what quantity. Decisions about where to procure resources must be made as well. Some items may be available or can be made internally while others must be procured from external sources. In addition, it is important that the procurement of goods and services meets the overall project schedule.

Define at least 10 resources that must be procured for the project. Document them in the table below. (1 page)

Include: the item name; the quantity that must be procured; the source(s) or vendor(s) that may supply the item; when the item is needed to meet project requirements.

Item

Quantity

Source

Needed By

C.           Types of Contracts

The purpose of this section is to describe the type of contract to be used so the contracts and purchasing department can proceed accordingly. There are many different types of contracts like firm-fixed price, time and materials (T&M), cost-reimbursable, and others. Different procurement items may also require different contract types. A well-defined product may be a firm-fixed price, while a product which will require a research and development effort may be a T&M contract.

Describe the type of contract(s) that will be used to procure each of the items required for the project. (3–4 paragraphs)

What factors did you consider when choosing the contract type?

In what ways is the contract type chosen appropriate for the procurement of the item?

Procurement

Item

Quantity

Source

Needed By

Explanation / Answer

Procurement management is the process of establishing relationship with external vendors and suppliers, to procure goods and services required for the project. These goods and services serve as the raw material for the project. These relationships are established on a contractual basis.

Procurement management is a sequential activity. The 5 major steps involved in procurement management are:

Once this decision is taken, a list is made of the products that the company contemplates to buy from external vendors. The procurement and logistics team invites bids from external vendors and suppliers for the products.

Based on the analysis, the bidder with the best bid is selected for contracting.

Role of Project Manager in the procurement management process:

B. Procurement items list for furniture production project

Item

Quantity

Source

Needed By

Skilled labor

100

ABC Contractor

Production department

Labor

50

CNC Contractor

Packaging department

Mica Wood Ply

5000 pieces

Woodfront Inc.

Production department

Spring Foam

100 kg

Klick Corporation

Production department

Tools

200

Ranson Hardware

Production department

Varnish

200 bottles

Ranson Hardware

Furniture poishing department

Corrugated pallets

500 pieces

Klick Corporation

Packaging department

C. Procurement Contract forms the basis of the procurement management process. The contract binds the relationship between the company and the external vendors. The contract can be of 2 types:

Item

Quantity

Source

Needed By

Skilled labor

100

ABC Contractor

Production department

Labor

50

CNC Contractor

Packaging department

Mica Wood Ply

5000 pieces

Woodfront Inc.

Production department

Spring Foam

100 kg

Klick Corporation

Production department

Tools

200

Ranson Hardware

Production department

Varnish

200 bottles

Ranson Hardware

Furniture poishing department

Corrugated pallets

500 pieces

Klick Corporation

Packaging department

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