Not all projects require procurement of goods and services. However, projects requiring procurement need an additional level of planning to avoid the common failures and pitfalls of determining, awarding, and managing procurement activities. By carefully planning and developing a Procurement Management Plan, project managers can ensure that all procurement activities are appropriately managed throughout the project lifecycle. The following considerations can help solidify your approach to developing your Procurement Management Plan:
1. Identify Procurement Risks
Risk management is an integral part of successfully managing a project. It is also a key component of understanding and managing procurement activities associated with a project. When an organization makes the decision to procure goods or services it opens the door to a whole new set of risks which must be carefully identified and managed. These procurement risks must be identified, documented, analyzed, and managed in the same manner as other project risks and included in all project risk management documentation.
2. Develop and Utilize Standard Procurement Documentation
Procurement management, like other project management knowledge areas, is extremely dynamic and complex. Because of this, there is great benefit in simplifying and standardizing these activities wherever we can. Many organizations develop and use standard procurement forms, formats, and templates for creating their procurement documentation. Some examples of standardized documents include:
- Statement of Work
- Non-disclosure Agreement
- Request for Proposal
- Letter of Intent
- Source Selection Evaluation Forms
- Lessons Learned Forms
By standardizing these documents, an organization can simplify its procurement activities and focus more on detailed planning and procurement management activities
3. Developing Clear Decision Criteria
Before convening a contract review board and reviewing proposals, an organization should ensure that it has developed and documented clear decision criteria to evaluate proposals and award a contract. These criteria are heavily dependent on the type of procurement required by the project, however, failure to determine these criteria ahead of time can result in a lengthy and inefficient selection process.
4. Establishing Procurement Roles and Responsibilities
In many situations there may be gaps or overlap in who manages procurement activities. Often times, an organization may have a contracts department which is involved in procurement activities along with the project manager and team. In situations like this there can be confusion and blurred areas of responsibility. It is extremely important that these boundaries are established and documented as part of the Procurement Management Plan and that the organization’s management approves.
5. Procurement Performance Metrics
Any procurement of goods or services requires the project team to develop metrics against which they measure performance. Like decision criteria, these metrics are dependent on the type of procurement that was conducted. Also, while the project team may have project metrics against which performance is measured, the contracting or purchasing departments may have different performance metrics. Careful consideration must be given to the development of these metrics as they may help determine various impacts to the project. Additionally, once the project is completed, these performance metrics may be used to select vendors or service providers for future procurements through a past performance database or evaluations.
Why start from scratch when you can use our Procurement Management Plan template and tailor it to your own project? See this and my other project management templates and plans at my website www.projectmanagementdocs.com.