12.1 Plan Procurement Management
The Plan Procurement Management process establishes in writing the specific means of procurement for the project. It can spell out who from and how purchases are made and how the document trail will be established to ensure accountability. It identifies the need to, and who, what, when and how to obtain outside sources. The Inputs, Tools & Techniques and Outputs for this process are listed in figure 26 below.
Figure 26. Plan Procurement Management: Inputs, Tools & Techniques, and Outputs. Reprinted from "A Guide to the Project Management Body of Knowledge (PMBOK Guide), 5th Edition" by Project Management Institute, 2013, p.358. Copyright 2013 by Project Management Institute, Inc. Reprinted without permission.
The plan procurement process is where the project team coordinates with project owners to identify contactors or sellers. This is where discussion are had as to the types of permits required and who pays for and holds those permits. During this process the risk analysis regarding making, buying or contracting project components is made. This is also were the procurement management plan is creates which spells out:
- types of contracts
- Risks management issues
- needs for estimates or evaluation of estimates
- standards for procurement processes and documents.
- how to manage suppliers
- how and when to make purchases
- evaluates constraints and assumptions
- schedules and plans for lead time with regard to procurement
- decision and schedules for make vs buy vs contract activities.
The procurement management plan can be broad or very detailed to meet the needs of the project.
Without a plan procurement management process and discussing procurement with the project team and owner miss appropriations can happen. The wrong parts may be ordered. Parts may be ordered at the wrong time and require storage increasing costs. contracts may be inappropriate for the type of work. agreements on terms of project components will be ambiguous. and appropriate stock levels may not be met to keep project deadlines.
The Activity cost estimate provides a list of the activities and a cost of the material that may need to be purchased. This is like a shopping list for the project procurement process. The artifact included is from PMGT614 our build a bicycle activity list. Another Great tool for this process is the WBS dictionary which is where we documented the specifics for costs and where to purchase from before placing them in this list. see 12.1.1
Tools & Techniques
During PMGT501 we took on a particularly large project in designing a high end sustainable home. I knew a local contractor who built such home and was able to provide us with market research and expert judgement in one document. This became the groundwork for our procurement, pricing and estimating processes. see 12.1.2
In PMGT614 we developed the procurement plan for our bicycle build it provides, items sources, and procurement schedule for our project. see 12.1.3