PREPAREPM: Project Procurement Management

Procurement Management involves getting work done by people outside the project team. The knowledge area of Project Procurement Management consists of the following processes -

Procurement Management Processes
Process Project Phase Key Deliverables

Plan Purchases and Acquisitions Planning Procurement Management Plan

Plan Contracting Planning Contract Statement Of Work,
Evaluation Criteria

Request Seller Responses Execution Sellers list, Proposals

Select Sellers Execution Selected Sellers,
Contract

Contract Administration Execution Contract Changes

Contract Closure Closure Closed Contracts

Procurement Planning involves build versus buy decisions.

A contract is a formal agreement. It is a legal document biding to both seller and buyer. Changes to contract must be in writing and formally controlled. Most Governments back all contracts by providing a court system.

Sole Source refers to a market condition in which only one qualified seller exists in the market.
Single Source refers to a market condition in which the company prefers to contract with only one seller.
Oligopoly refers to a market condition where very few sellers exist, and the action of one seller will have impact on other seller prizes.

Contract can be used as a risk management tool, as in transferring risk.

Centralized Contracting refers to a separate contracting office that handles contracts for all projects. In De-centralized Contracting a contract administrator is assigned for each project.

Force majeure is a powerful and unexpected event, such as hurricane or other disaster.

Privity is contractual information between customer and vendor.

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