Project Contracting

1
Project Contracting

• Procurement Quality Management
• Unit 1
• Introduction to Procurement Management

2
Todays Agenda

• Administrative Details
• Class Introductions
• Hopes Fears
• Recap from Fundamentals
• Introduction to Procurement Management
• Six Major Project Procurement Processes
• Organizing for Procurement
• Class Exercise

3
Administrative Details

• Course Text
• Required
• Project Procurement Management Contracting,
  Subcontracting, Teaming, Quentin W. Fleming 2003
• Quality Management for Projects Programs, Lewis
  R. Ireland
• Optional
• Project Management Body of Knowledge (PMBOK) 3rd
  edition

4
Administrative Details

• Marking
• 4 Quizzes at 15 each (60 total)
• Final Exam (40)
• Questions will be drawn from class material,
  discussions, and the assigned reading.
• All will be multiple choice and/or short answer

5
Administrative Details

• Class Details
• Break 20 minutes at approx 745
• Class normally completes at 920
• Class cancellations
• Unexpected Please provide phone number and
  email
• Weather Listen to local radio stations. No
  calls will be made
• Instructor Cindy Trask
• Contact ctrask_at_conestogac.on.ca

6
Introductions

• Your name
• Background
• Exposure to formal project management
  methodologies
• Experience with Procurement and Quality Management

7
Hopes Fears

• What would you like to get out of this course?
• Fears?
• Not being able to relate it back to your job
• Not adequately preparing you for the exam

8
Recap from Fundamentals

• What do you remember about Procurement
  Management, introduced in the Fundamentals of
  Project Management course?

9
Todays Learning Objectives

• Understand the terms Procurement Procurement
  Management
• Understand the overall Procurement Management
  Process
• Understand how organizations organize for
  Procurement Management

10
Introduction to Procurement

• Definitions
• Procurement
• The acquisition of goods or services
• Kerzner, Project Management, 2003
• Project Procurement Management
• Describes the processes that purchase or acquire
  products, services or results, as well as
  contract management processes.
• PMBOK, 3rd edition

11
Introduction to Procurement

• Why do organizations procure project scope from
  outside sources?
• Expand knowledge base
• A valuable alternative for obtaining resources
• Gain access to skills outside the company
• Reduce risk through partnering
• Ability to expand/downsize quickly
• It can speed up delivery times

12
Introduction to Procurement

• A way to look at Projects..
• The Project the Make content
• the Buy content
• Source Fleming, Project Procurement Management

13
6 Major Project Procurement Processes
Project Start
Procurement Management Plan
Request for Proposal
Seller Proposals
Contract Award
Seller Delivery
Contract Complete
Source Fleming, Project Procurement
Management PMBOK 3rd edition
14
6 Major Project Procurement Processes
15
6 Major Project Procurement Processes
16
6 Major Project Procurement Processes
PMBOK, 3rd edition
17
Organizing for Procurement

• Centralized Purchasing A functional person has
  delegated procurement authority a buyer is
  assigned to support the project.
• This method ensures procurement authority is
  restricted to people familiar with contracting
  terms, regulations, etc.
• Decentralized Purchasing The PM has authority
  to execute contracts directly

Source Fleming, Project Procurement Management
18
Organizing for Procurement

• Buyer or Seller

Customer (as buyer)
Contract management
Project Manager (as seller)
Project Manager (as buyer)
Procurement management
Supplier (as seller)
Source Fleming, Project Procurement Management
19
Class Exercise

• Divide into groups of 3 or 4
• Consider 1 or 2 projects from your current or
  past experience that had some procurement
• Why do you think the procurement was performed?
• Was a Make or Buy analysis completed?
• Could the work have been completed internally?
• Were there challenges that were encountered as a
  result of the procurement decisions made?
• Select a spokesperson to present the results back
  to the class

20
Next Week

• Unit 2 Procurement Planning, part 1
• Reading
• Project Procurement Management
• Chapters 1, 2 (unit 1)
• Chapters 3, 6 (unit 2)
• Optional
• PMBOK, chapter 12.1