Defining Project Procurement
Every project at its size needs procurement which is obtaining needs for project in terms of goods and services externally (outsourced). Here we just discuss on project procurement which is procuring goods and services to support and fulfill the needs of a project.
National Competency Standards for Project Management defines project procurement as,
“Project procurement involves the management of contracting activities from formation, such as product and contract definition, market analysis through the tendering process up to contract formation, to contract performance, management and administration after contract award. Project procurement concludes with contractual aspects of the project finalization processes. Procurement activities are normally defined and planned early and refined throughout the project lifecycle to ensure changing project objectives are met. Whether involvement in the procurement process is as the client, the prime contractor or as a sub-contractor, may influence the perspective from which the procurement activities are addressed, however similar project management processes would normally apply. (National Standards for Project Management, 2003).”
According to the PMBOK Guide, project procurement management comprises 4 basic processes:
- Plan Procurement – which is the process of documenting procurement decisions, specifications, approach and identifying potential contractors.
- Conduct Procurement – Is process of getting contractor responses, selecting and awarding contracts.
- Control Procurement – This is the process of managing procurement relationships, monitoring contract performance, identifying and making changes and corrections as necessary.
- Close Procurement – This is the process of completing each project procurement.
(Source: PMBOK 5th edition, Chapter 12, Page 355-389)
Importance of Procurement
Based on complexity and needs of the project, deliverables are planned and managed. And at large projects, procurement is like a minefield where inadequate methods shall kill project through disputes between supplies and buyers. Walker’s research provided following responses for excellent services,
- Delivering the promise;
- Providing â personal touch;
- Going the extra mile and
- Dealing well with problems and queries.
It’s all about customer service and process should work in tangible to Iron Gate Triangle (Time, Cost and Scope)
(Source: introduction and procurement fundamentals, by Derek H.T. Walker, Justin Stork, Morio Arlt and Steve Rowlinson, Chapter 1)
Frank Winters says at PMI about reasons for project failures,
- Inadequately trained and/or inexperienced project managers
- Failure to set and manage expectations
- Poor leadership at any and all levels
- Failure to adequately identify, document and track requirements
- Poor plans and planning processes
- Poor effort estimation
- Cultural and ethical misalignment
- Misalignment between the project team and the business or other organization it serves
- Inadequate or misused methods
- Inadequate communication, including progress tracking and reporting
Source: The Top 10 Reasons Projects Fail by Frank Winters – November 6, 2002
Things affecting/contributing procurement process
Many things affect project procurement to decide its success few times failing to define procurement expectations in terms of requirements to suppliers and or contractors will affect project and even managing those expectations are very important, as every service or delivery needs to match specified requirements as defined in contract or agreement. Success key starts from planning through execution process as any missing or misleading information will overrun project by arising disputes and loss of relationships.
For better procurement we need to understand the culture of project, local (Legal System), people and organization. As behavior of project effect procurement, project being unique most of the time they won’t go parallel to organizations routine way of procurement conduct as they run on set policies for procurement and there needs variability in processes, as CMMI model ref. Prince 2 suggests maturity process levels,
- Level 1 – Ad hoc (Chaotic)
- Level 2 – Repeatable
- Level 3 – Defined
- Level 4 – Managed
- Level 5 – Optimized
we shall look at them in later articles.
Tips to consider while bringing change,
- Keep in mind for everyone’s emotion state.
- Come ways to communicate without building fear on others.
- Keep teammates engaged by friendliness and tack them in comfortable zone.
- Always work on project to fulfill project needs and keep sponsors engaged , well informed as they are the purpose for project and they (sponsor) will benefit from the project.
- Build no fear in team, as change in project may bring fear in team mates either by assuming loss of job due to delay or lack of skills. Proper work ethic is important.
Human thoughts and behaviors on change,
- There is control – Today’s world we look is controlled zone .
- There is comfort – We all form a comfortable environment.
- There is predictable – We know our work and predict future based on routine work.
- Habits – are positive way of doing things again and again.
- Deep understanding – Knowing things by repetitive work, which is the current state for everyone.
- Strong support – Deliver support to team and individuals.
- Unknown future – May result loss of control bring discomfort, unprofitable, etc because there is a lack of experience.
- How to transit: – Engage people by showing visions as where we lead and clarity of project needs builds comfort.- Incremental steps, as change should happen in baby steps by providing help to change habits.- Training is gaining knowledge to perform tasks.- Support act as bridge to do that transition.
- Doubt is fear, Clarity is, – What is change – Why is change – When is change taking place – Do I get training – Is there support to show way – Who is responsible for support – Consequences of failure – Duration of change
Considering legal systems at procurement,
- Law of contract (A contract is a mutually binding agreement that obligates the seller to provide the specified products or services and obligating the buyer to pay for them.)
- Common law (eg. Duty of care)
- Particular State and National legislation that relates to procurement (eg. Trade Practices Act) or to the items being procured.