Administer Procurements is the process of managing procurement relationships, monitoring contract performance, and making changes and corrections as needed (see Table 12-4 and Figure 12-3). Both the buyer and the seller will administer the procurement contract for similar purposes. Each must ensure that both parties meet their contractual obligations and that their own legal rights are protected. The Administer Procurements process ensures that the seller's performance meets procurement requirements and that the buyer performs according to the terms of their legal contract. The legal nature of the contractual relationship makes it imperative that the project management team is aware of the legal implications of actions taken when administering any procurement. On larger projects with multiple providers, a key aspect of contract administration is managing interfaces among the various providers.
Due to varying organizational structures, many organizations treat contract administration as an administrative function separate from the project organization. While a procurement administrator may be on the project team, this individual typically reports to a supervisor from a different department. This is usually true if the performing organization is also the seller of the project to an external customer.
Administer Procurements includes application of the appropriate project management processes to the contractual relationship(s), and integration of the outputs from these processes into overall management of the project. This integration will often occur at multiple levels when there are multiple sellers and multiple products, services, or results involved. The project management processes that are applied may include, but are not limited to:
• Direct and Manage Project Execution (Section 4.3) to authorize the contractor's work at the appropriate time;
• Report Performance (Scction 10.5) to monitor contractor cost, schedule, and technical performance;
• Perform Quality Control (Section 8.3) to inspect and verify the adequacy of the contractor's product;
• Perform Integrated Change Control (Scction 4.5) to assure that changes arc properly approved, and that all those with a need to know are aware of such changes; and
• Monitor and Control Risks (Section 11.6) to ensure that risks are mitigated.
Procurement administration also has a financial management component that involves monitoring of payments to the seller. This ensures that payment terms defined within the contract arc met and that sclicr compensation is linked to seller progress, as defined in the contract. One of the principal concerns when making payments to suppliers is that there be some close relationship of payments made to the work accomplished.
The Administer Procurements process reviews and documents how well a seller is performing or has performed based on the contract and established corrective actions when needed. Also, the performance is documented as a basis for future relationships with the seller. Seller performance evaluation by the buyer is primarily carricd out to confirm the compctcncy or lack of competency of the seller, relative to performing similar work on the project or other projects. Similar evaluations are also carried out when it is necessary to confirm that a seller is not meeting the seller's contractual obligations, and when the buyer contemplates corrcctivc actions. Administer Procurements includes managing any early terminations of the contracted work (for cause, convenience, or default) in accordance with the termination clause of the contract.
Contracts can be amended at any time prior to contract closure by mutual consent, in accordance with the change control terms of the contract. Such amendments may not always be equally bcncficial to both the seller and the buyer.
Table 12-4. Administer Procurements Inputs, Tools & Techniques and Outputs
Tools & Techniques
2. Procurement management plan
3. Selected sellers
4. Performance reports
5. Approved change requests
6. Work performance data
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
2. Organizational process asset updates
3. Change requests
4. Project management plan updates
12.3.1 Administer Procurements: Inputs .1 Procurement Documents
Described in Scction 18.104.22.168. .2 Procurement Management Plan
Described in Section 22.214.171.124.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.