Understanding the nuances of project management and the procurement process is a must for all project managers. This paper will review some of the more demanding aspects of these endeavors and will focus upon commonly confused terms. This paper will look at all the separate steps and details which work individually and collectively for the greater vision of project management.
Planning and Project Management
The process of planning procurements is a multi-step process that involves the task of selecting the items that need to be purchased, at what time and from what source (Lynch). it's a nuanced and detailed process that involves assessing current needs with future needs as well as looking at the "small picture" in conjunction with the "big picture." "During the procurement planning process the procurement method is assigned and the expectations for fulfillment of procurement requirements determined" (Lynch). Procurement planning is vital to any organization because it helps one zero in on the decisions and selection process and to focus on the sources. Furthermore, it helps planners asses how realistic their expectations are: "particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows" (Lynch). Furthermore, one should view all the steps as an opportunity to meet and discuss all connected requirements while fostering the creation of a general procurement strategy, such as a market survey and choosing the relevant procurement method given the current situation and requirements (Lynch). It also gives planners time to evaluate the time needed to complete the process and to delegate; this also offers a crucial snapshot to determine if the requirements can be completed within the expected period and by the parties involved (Lynch). During this time, one can discover if there is a need for added technical help for further developing technical specifications and to evaluate the feasibility of combining or separating different needs into different packages.
The first step in this process involves identifying opportunities. "Opportunities are usually triggered by a business requirement for a product or service. Material requirements might include: equipment, components, raw materials, completely finished products. Service requirements might include: computer programmers, hazardous waste handlers transportation carriers, maintenance service providers" (Handfield, 2011). During this process, other needs and opportunities will likely identify themselves. The next steps involve analyzing the situation, undertaking strategic analysis, undergoing a case study and then developing a strategic sourcing plan (Handfield, 2011).
The procurement statement of work is a vital document that presents an accurate snapshot of the job ahead and needs to have clear definitions and details. This document "…defines the scope of the work for a related procurement contract. In addition to the scope of work, it includes project objectives, specifications for the products or services being procured, project schedule and any other detail needed by the seller to be able to deliver the products or services" (projectmanagementlexicon.com, 2013).
There are several reasons why a project manager should buy scope from a seller. One is to expand the intellectual base (Fleming, 2003). Another is to have the ability to downsize, if circumstances prove them necessary (Fleming, 2003). Finally, relationships with suppliers often bring resources, facilities, investments and equipment (Fleming, 2003).
One of the main differences between a Request for Proposal (RFP) and a Request for Quote (RFQ) is that a RFQ requires that one state how much one will charge to engage in a task and an n RFP requires that one state how one would fix a given conundrum and charge for engaging in the solution. Likewise, bid packages are documents that need to be as lucid and frank as possible. "Bid packages can be used in a number of industries, including business, it systems and telecommunications. But the most common industry where bid packages are used is construction. Basically, a bid package is a portfolio of all the documents needed to take part in an invitation bid. Those who will be bidding on the project can look at the bid package and determine if they fit the criteria. Bidders will need to meet the skills and qualifications listed, be able to complete the project on time and stay within the specified budget" (Tiffany, 2012). Such documentation can help all stakeholders in a given project have a clear understanding of what is requested, required and needed. All these facts are specified within the given context of the project scope and the timeline engaged.
In the simplest terms a contract is an agreement between two or more parties. Within this contract, all the parties involved agree to do or not do something (Steinberger, 2007). A contract is considered valid if it is enforceable (Steinberger, 2007).
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