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Procurement Management Plan in Project Management Practices

Purpose of the Procurement management plan

The purpose of the Procurement Management Plan is to define the parameters for corporate procurement for all projects of the company to ensure their successful completion.

Procurement is a deliberate process that involves many internal departments as well as external suppliers. This procurement management plan is designed to provide a framework in which all procurement actions will be managed by all participating organizations. References: Procurement Management Plan in project management practices, STC-MONTREAL.org, 2019 and Procurement Management Plan template with real example data, Wikipedia-Lab.org 2019

Roles and responsibilities

This section describes the roles and responsibilities of all key project staff. These roles should be clear to prevent gaps or overlaps in supply management activities. In addition, roles and responsibilities help to establish accountability throughout the project life cycle.

To facilitate effective project management, the following roles and responsibilities have been identified:

Project sponsor

  • Approves the supply management plan
  • Approves the choice of supplier
  • Approves all contracts before award
  • Approve any costs associated with deliveries over $ 50,000

Project Manager

  • Provides control of procurement
  • Approves actions for contracts under $ 50,000
  • Manages the supplier selection process
  • Measures the efficiency of the supplier
  • Closes supplier contracts

Director of Purchasing

  • You send requests for proposals to the identified providers
  • Development of a contract for a supplier
  • Help measure performance

Project team

  • Supporting the development of requirements for suppliers
  • Assistance in evaluating suppliers
  • Procurement requirements

This section should list the items that must be purchased for the project to succeed. In addition to the description of what the item is, this list must also contain a justification or explanation of what can be achieved, as well as the date from which the item is required to meet the design schedule. Reference: Presentation of the project manager to stakeholders, clients and project teams, WorldForgeMagazine.com, ISSN: 1933-8848, 2020

The following list is created to indicate the required items, the delivery that each item supports, and the date on which the item is needed to match the delivery according to the project schedule

Identification and selection of supplier

This section outlines the process by which suppliers will be identified and selected to meet procurement requirements related to corporate projects. The project team will identify the suppliers on the basis of which the existing and new suppliers are able to fulfill the above requirements for awarding supplies/orders. Once potential suppliers have been identified, the project manager will work with a purchasing specialist to develop a “request for proposal” to be circulated to suppliers to collect their bids/proposals.

Once the contracting group has received all the proposals for suppliers, the contracting manager, the project manager/team, and the project sponsor will meet to evaluate the proposals. The group will use the following selection criteria to make its choice of supplier:

  • The supplier best able to meet delivery deadlines
  • Past vendor results (if applicable)
  • Costs / price of service / item
  • Quality assurance measures
  • other if necessary

Once the supplier (s) have been selected and approved by the Project Sponsor, the project manager will work with the director of the contracting department or a designated representative to prepare and finalize the necessary contract (s) with the supplier (s). Upon completion of all contracts, the project manager will start the supplier management phase of the procurement process.

Supplier management

The project manager is responsible for the management of suppliers and will work with the director of the purchasing department to monitor the implementation of the assigned delivery. The project manager will measure the current performance of each selected supplier. In order to ensure acceptable performance by the provider, service level agreements (SLAs) will be included in the contracts to be performed by the suppliers. Vendor performance SLAs include:

Delivery of the item (s) on or before the date as agreed in the contract
Delivery of item (s) at our lower price as agreed in the contract
Acceptable performance/quality of the item as agreed in the contract
Failure by a provider to provide these SLAs will result in the Negotiating Department filing a formal dispute where appropriate.

Contract requirements

It is important to indicate the type of contract (s) that will be used for the procurement activities under the project. This section describes the type of contract to be used and provides all other necessary details on the negotiation process for the requirements of the procurement project.

All contracts related to the project will be fixed price. The Director of the Contracting Department is responsible for ensuring that each contract complies with internal corporate guidelines and policies.

The project manager is responsible for ensuring that all SLAs and performance criteria and expectations are clearly stated in the contract (s) prior to the award.

The project sponsor will review and approve all contracts before awarding.

Approvals

All project delivery plans and their management must have the approval of the Project Sponsor and Project Manager.
The signatures of the people below show an understanding of the purpose and content of this document by those who sign it. By signing this document, you agree to this as a formal order management plan for the software upgrade project.

By Michael Young

Michael Young is the chief publisher of Libraryofmu.org and is passionate about all project management and business management disciplines from the modern education programs presented by the popular universities in the United States (USA) and the United Kingdom (UK)

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