Term
| Project Procurement Management Processes |
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Definition
Plan Procurements
Conduct Procurements
Administer Procurements
Close Procurements
Place Clouds Around Clothes |
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Term
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Definition
the process of documenting project
purchasing decisions , specifying the approach , and
identifying potential sellers |
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Term
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Definition
| the process of obtaining seller responses , selecting a seller , and awarding a contract |
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Definition
| the process of managing procurement relationships , monitoring contract performance and making changes and corrections as needed |
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Term
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Definition
| the process of completing each project procurement |
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Term
| Project Procurement Management |
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Definition
> Project procurement management is the process of purchasing the products necessary for meeting the needs of the project scope.
> It involves planning, acquiring the products or services from
sources, choosing a source, administering the contract, and closing out the contract.
> Project need materials, equipment, consultants, training, and many other goods and services.
> It can be applied to internal work orders, formal agreements, and contracts between organizational units within a single entity.
> When buying anything from a vendor, the buyer needs a
contract, which becomes a key input to many of the
processes within the project.
> The contract, more than anything else, specifies the rules and agreements for the project. |
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Term
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Definition
| – Third party dispute resolution |
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Term
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Definition
| – When a contract provision is not met |
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Definition
| – Riots, wars, weather, or other “Acts of God” |
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Definition
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Term
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Definition
| – Estimated damages for specific types of defaults as defined in the contract |
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Definition
| – A violation of the contract of sufficient magnitude that the contract cannot be completed |
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Term
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Definition
| – Monies withheld to ensure performance at the end of the contract |
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Definition
| – Stopping the work before it is completed |
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Term
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Definition
| – Statements in the contract that indicate that rights cannot be ignored or modified without written agreement between the two parties |
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Definition
| – Seller is placed on notice that delivery agreements are strictly binding |
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Term
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Definition
| – At the end of the contract the work product generated will be owned by the buyer |
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Term
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Definition
| Teaming Agreements are legal contractual agreements between two or more entities to form a partnership or joint venture , or some other arrangement as defined by the parties the agreement defines the buyer seller roles for each party . Whenever a teaming agreement is in place for a project, the roles of buyer and seller are predetermined |
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Term
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Definition
| Involves preparing several documents needed for potential sellers to prepare their responses and determining the evaluation criteria for the contract award |
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Term
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Definition
(HUGE IN procurement process) used to solicit proposals from prospective sellers
- A proposal is a document prepared by a seller when there are different approaches for meeting buyer needs |
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Term
| Requests for Quotes (RFP): - BOB said big deal in real life |
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Definition
used to solicit quotes or bids from prospective suppliers
- A bid, also called a tender or quote (short for quotation), is a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer |
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Term
Plan Procurements – Tools & Techniques - Contract Types
Fixed Price Contract |
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Definition
In this type of contract one price is agreed upon for all the work.
- The buyer has the least cost risk (remember), provided the buyer has a completely defined scope, because the risk of higher costs is borne by the seller.
- The seller is most concerned with the contract statement of work in this type of contract. |
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Term
Plan Procurements – Tools & Techniques - Contract Types
Fixed Price Incentive Fee Contracts (FPIF) |
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Definition
There are also incentives for fixed price contracts.
Ex. Contract = $1,100,000.
- For every month early the project is finished, an additional $10,000 is paid to the seller. |
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Term
Plan Procurements – Tools & Techniques - Contract Types
Fixed Price Economic Price Adjustment (FPEPA) |
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Definition
| - Sometimes a fixed price contract allows for price increases if the contract is for multiple years. |
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Term
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Definition
- This type of contract is normally unilateral (signed by one party) instead of bilateral.
- It is usually used for simple commodity procurements. |
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Term
| Cost-reimbursable Contract |
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Definition
| - The seller's cost are reimbursed, plus an additional amount. - - The buyer has the most cost risk (remember) because the total costs are unknown. |
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Term
Cost-reimbursable Contract - Variations
Cost plus Fixed Fee (CPFF) |
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Definition
This is the most common type of cost reimbursable contract.
> In this type, the buyer pays all costs, but the fee (or profit) is fixed at a specific amount.
> This helps to keep the seller's costs in line because a cost overrun will not generate any additional fee or profit. Fees only change with approved change orders. |
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Term
| Cost Plus Fee (CPF) or Cost Plus Percentage of Costs (CPPC) |
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Definition
This type of cost reimbursable contract requires the buyer to
pay for all costs plus a percent of costs as a fee. Sellers are not motivated to control costs because the seller will get paid profit in every cost without limit. |
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Term
| Cost Plus Incentive Fee (CPIF) |
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Definition
| This type of cost reimbursable contract pays all costs and an agreed upon fee, plus a bonus for beating the performance objectives stated in the contract. |
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Term
| Cost Plus Award Fee Contracts |
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Definition
The seller is reimbursed for all legitimate costs , but the majority of
the fees is only earned based on the satisfaction of certain broad subjective performance criteria defined and incorporated into the contract. |
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Term
| Time and Material (T&M) or Unit Price |
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Definition
| > This type of contract is usually used for small amounts. |
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Term
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Definition
- is a description of the work required for the procurement
- used as part of a contract to describe only the work required for that particular contract, it is called a contract statement of work |
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Term
| Procurement Documents: Non-Disclosure Agreement |
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Definition
| This is an agreement between the buyer and any prospective sellers stating what information or documents they will hold confidential and control, and who in their organization will gain access to the confidential information. |
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Term
| Procurement Documents: Standard Contract |
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Definition
Companies frequently have standard, preauthorized contracts for the
purchase of goods or services. These types of standard contracts need no
further legal review if used as they are. |
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Term
| Procurement Documents: Special Provisions (Special Conditions) |
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Definition
| The project manager should determine what needs to be added, changed or removed from the standard provisions, so that the resulting contract addresses the particular needs of the project |
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