PMP Exam Quiz 07

The procurement SOW describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the products, services, or results. The procurement SOW is written to be clear, complete, and concise. It includes a description of any collateral services required, such as performance reporting or post-project operational support for the procured item. Each individual procurement item requires a SOW; however, multiple products or services can be grouped as one procurement item within a single SOW. The procurement SOW can be revised and refined as required as it moves through the procurement process until incorporated into a signed agreement.

Procurement documents are used to solicit proposals from prospective sellers. The buyer structures procurement documents to facilitate an accurate and complete response from each prospective seller and to facilitate easy evaluation of the responses. These documents include a description of the desired form of the response, the relevant procurement statement of work (SOW) and any required contractual provisions.

Procurement documents are used to solicit proposals from prospective sellers. The buyer structures procurement documents to facilitate an accurate and complete response from each prospective seller and to facilitate easy evaluation of the responses. These documents include a description of the desired form of the response, the relevant procurement statement of work (SOW) and any required contractual provisions. The complexity and level of detail of the procurement documents should be consistent with the value of, and risks associated with, the planned procurement. Procurement documents are required to be sufficient to ensure consistent, appropriate responses, but flexible enough to allow consideration of any seller suggestions for better ways to satisfy the same requirements.

Source selection criteria are often included as a part of the procurement documents. Such criteria are developed and used to rate or score seller proposals, and can be objective or subjective. Selection criteria may be limited to only the purchase price if the procurement item is readily available from a number of acceptable sellers. Purchase price in this context includes both the cost of the item and all ancillary expenses such as delivery.

Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract. The key benefit of this process is that it provides alignment of internal and external stakeholder expectations through established agreements.

Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract. The key benefit of this process is that it provides alignment of internal and external stakeholder expectations through established agreements. During the Conduct Procurements process, the team will receive bids or proposals and will apply previously defined selection criteria to select one or more sellers who are qualified to perform the work and acceptable as a seller.

Conduct Procurements: Inputs
1. Procurement Management Plan
2. Procurement Documents
3. Source Selection Criteria
4. Seller Proposals
5. Project Documents
6. Make-or-Buy Decisions
7. Procurement Statement of Work
8. Organizational Process Assets

Factors that influence make-or-buy decisions may include:
• Core capabilities of the organization,
• Value delivered by vendors meeting the need,
• Risks associated with meeting the need in a cost-effective manner, and
• Capability internally compared with the vendor community.

Conduct Procurements: Tools and Techniques
1. Bidder Conferences
2. Proposal Evaluation Techniques
3. Independent Estimates
4. Expert Judgment
5. Advertising
6. Analytical Techniques
7. Procurement Negotiations

Bidder conferences (sometimes called contractor conferences, vendor conferences, and pre-bid conferences) are meetings between the buyer and all prospective sellers prior to submittal of a bid or proposal. They are used to ensure that all prospective sellers have a clear and common understanding of the procurement requirements), and that no bidders receive preferential treatment.

Bidder conferences (sometimes called contractor conferences, vendor conferences, and pre-bid conferences) are meetings between the buyer and all prospective sellers prior to submittal of a bid or proposal. They are used to ensure that all prospective sellers have a clear and common understanding of the procurement requirements), and that no bidders receive preferential treatment. To be fair, buyers should take great care to ensure that all prospective sellers hear every question from any individual prospective seller and every answer from the buyer.

Procurement negotiations clarify the structure, requirements, and other terms of the purchases so that mutual agreement can be reached prior to signing the contract. Final contract language reflects all agreements reached. Subjects covered should include responsibilities, authority to make changes, applicable terms and governing law, technical and business management approaches, proprietary rights, contract financing, technical solutions, overall schedule, payments, and price.

Conduct Procurements: Outputs
1. Selected Sellers
2. Agreements
3. Resource Calendars
4. Change Requests
5. Project Management Plan Updates
6. Project Documents Updates

The selected sellers are those who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when an award is made. Final approval of all complex, high-value, high-risk procurements will generally require organizational senior management approval prior to award.

A procurement agreement includes terms and conditions, and may incorporate other items that the buyer specifies regarding what the seller is to perform or provide. It is the project management team’s responsibility to make certain that all agreements meet the specific needs of the project while adhering to organizational procurement policies. Depending upon the application area, an agreement can also be called an understanding, a contract, a subcontract, or a purchase order.

A contract is a mutually binding legal agreement that obligates the seller to provide the specified products, services, or results, and obligates the buyer to compensate the seller. A contract is a legal relationship subject to remedy in the courts.

A contract is a mutually binding legal agreement that obligates the seller to provide the specified products, services, or results, and obligates the buyer to compensate the seller. A contract is a legal relationship subject to remedy in the courts.

Conduct Procurements: Outputs
Elements of the project management plan that may be updated include:
• Cost baseline,
• Scope baseline,
• Schedule baseline,
• Communications management plan, and
• Procurement management plan.

Control Procurements is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections to contracts as appropriate. The key benefit of this process is that it ensures that both the seller’s and buyer’s performance meets procurement requirements according to the terms of the legal agreement.

Control Procurements is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections to contracts as appropriate. The key benefit of this process is that it ensures that both the seller’s and buyer’s performance meets procurement requirements according to the terms of the legal agreement. Control Procurements also has a financial management component that involves monitoring payments to the seller. The Control Procurements process reviews and documents how well a seller is performing or has performed based on the contract and establishes corrective actions when needed.

Control Procurements: Inputs
1. Project Management Plan
2. Procurement Documents
3. Agreements
4. Approved Change Requests
5. Work Performance Reports
6. Work Performance Data

Control Procurements: Tools and Techniques
1. Contract Change Control System
2. Procurement Performance Reviews
3. Inspections and Audits
4. Performance Reporting
5. Payment Systems
6. Claims Administration
7. Records Management System

A contract change control system defines the process by which the procurement can be modified. It includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary for authorizing changes. The contract change control system is integrated with the integrated change control system.

A procurement performance review is a structured review of the seller’s progress to deliver project scope and quality, within cost and on schedule, as compared to the contract. It can include a review of seller-prepared documentation and buyer inspections, as well as quality audits conducted during seller’s execution of the work.

Control Procurements: Outputs
1. Work Performance Information
2. Change Requests
3. Project Management Plan Updates
4. Project Documents Updates
5. Organizational Process Assets Updates

Close Procurements is the process of completing each procurement. The key benefit of this process is that it documents agreements and related documentation for future reference. The Close Procurements process also involves administrative activities such as finalizing open claims, updating records to reflect final results, and archiving such information for future use.

Close Procurements is the process of completing each procurement. The key benefit of this process is that it documents agreements and related documentation for future reference. The Close Procurements process also involves administrative activities such as finalizing open claims, updating records to reflect final results, and archiving such information for future use. Close Procurements addresses each contract applicable to the project or a project phase. In multiphase projects, the term of a contract may only be applicable to a given phase of the project. In these cases, the Close Procurements process closes the procurement(s) applicable to that phase of the project. Unresolved claims may be subject to litigation after closure.

Close Procurements: Tools and Techniques
1. Procurement Audits
2. Procurement Negotiations
3. Records Management System

A procurement audit is a structured review of the procurement process originating from the Plan Procurement Management process through Control Procurements. The objective of a procurement audit is to identify successes and failures that warrant recognition in the preparation or administration of other procurement contracts on the project, or on other projects within the performing organization.

A records management system is used by the project manager to manage contract and procurement documentation and records. Contract documents and correspondence are archived through the records management system as part of the Close Procurements process.