Introducing Project Procurement Management

In this chapter, you will

♦ Plan for project procurement

♦ Select the project vendors

♦ Create contracts for the project work

♦ Control and administer the contractual relationships

♦ Close out the contract with the project vendors

Projects routinely require procurements. Projects need materials, equipment, consultants, training, books, software, hardware, and lots of other stuff in order for the project to be successful. Project procurement management is the process of purchasing the products necessary to meet the needs of the project scope.

Procurement management also involves planning, requesting seller information, choosing a source, administering the contract, and closing out the contract. Procurement management, as far as your Certified Associate in Project Management (CAPM) and Project Management Professional (PMP) exams are considered, focuses on the practices from the buyer's point of view, not the seller's. Usually. Sometimes, you may be presented as the vendor that is completing a project for your customer, the buyer. You should also recognize that the seller can be seen as a contractor, subcontractor, vendor, or supplier. In whatever condition you're put into on your exam, always do what's "fair" for both parties and what's in the best interest of the project scope.

When buying anything from a vendor, the buyer needs a contract. A contract becomes a key input to many of the processes within the project. The contract, above anything else, specifies the rules and agreements for the project.

Here's a neat twist: When the seller is completing his or her obligations to supply a product, Project Management Institute (PMI) treats those obligations as a project. In other words, if ABC Electricians were wiring a building for your company, ABC Electricians would be the performing organization completing its own project. Your company becomes the customer of their project—and is, of course, a stakeholder in their project.

VIDEO Working with contract types.

VIDEO Working with contract types.

Project Management Made Easy

Project Management Made Easy

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.

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