Procurement means acquiring.But what we need to acquire or purchase for the project? This might be a product or a services from outside to complete the project task.From organization prospective it manages both party who buys a product,service or sell a product, service .
Procurement Management is a process which plans whether to purchase or not. What to purchase when and from whom to purchase.It has 6 following steps:
- Define what and which part of the project service need to be purchased or acquired when and how as per project requirement.
- Document the baseline or criteria for the product or service to be acquired.
- Request for Proposals, bids from sellers, and make sure ALL potential seller well understood the service requirement.
- Use evaluation system as per organisation process asset to select potential seller.
- Establish the relationship between buyer and seller through Contract administration, which is a legal binding between two.
- Close the contract upon successful delivering or acquiring product or service else accept terminating contract on failure as per contract.
Before we plan for Purchase & Acquisitions we need to use techniques of
- Make -Buy Analysis – Whether to Produce or Buy.
- Expertise information from Experts.
- Decide to go for either FP or Reimbursable contracts(CPF,CPFF/CPIF)
- Time & Material contractual engagements.
Contract Administration plays a crucial Role in ensuring both the seller and buyer are performing according to terms in the contracts..