Notes on Procurement

Procurement is the act of acquiring a product, service, or result from outside the project team. Usually, all the procedures related to this topic are reported in Project Procurement Management.

Project Procurement Management describes the relationship between two parties, a buyer and a seller. Such agreements can be complex or simple.

Procurement starts with the Plan Procurement Management. While Planning your project, you need to have a broad understanding of which material or service you might need. In this phase, it’s time for a Make-or-Buy decision. In other words, you try to understand which items you’d like to buy or not.

After you outline what you want to outsource, you need to identify the possible vendors. You must be very careful in identifying whether vendors can really produce what you are aiming for and if they are able to produce at the scale you want. You should also check if such vendors are reliable in doing what you want in the agreed-upon time frame. This is when the Conduct Procurement phase starts.

Once you’ve identified your vendor, it’s now time to write the contract.

A contract should clearly state the deliverables and expected results, including any knowledge transfer from the seller to the buyer. Anything not on the contract cannot be legally enforced.

When writing a contract, it’s important to pay attention to the details and ensure that you review the inclusions and exclusions in the vendor’s offer.

You may be able to save costs by using in-house resources for certain items such as storing materials or labor. If the vendor writes the contract, review it carefully for clarity and accuracy. As there are some legal considerations to be taken into account, this means that the approval timing, by default, will be longer. You might also be involved in the legal department.

The procurement process isn’t over when the contracts are signed. The next step is to ensure that the work is being done according to the terms of the contract. You will need to review each vendor’s performance and quality periodically.

The procurement process isn’t over until the contracts are signed. Now, it’s time to check that the product or service respects the requirements stated in the contract. This phase is also called Control Procurement.

Note that in this phase, you should build and maintain good relationships with your vendors. Having a good relationship makes it easier to make adjustments and contract revisions.