Project Procurement Management Plan — The Ultimate Guide of 2022
A project procurement management plan is a complex process that needs to consider a lot of factors before executing it successfully. With this in mind, it needs careful planning in order for an efficient procurement process. But how is this done?
In this article, we will see what the project procurement management plan is. We will discuss its steps to further your knowledge on procurement.
Finishing this article will allow you to utilize a project procurement management plan that will surely help you. Without further ado, let’s begin!
What is a Project Procurement Management Plan?
Project procurement management plan defines the requirements for a specific project. It lays out the required steps to get the final contract. This is an important process to purchase the products or services needed through sourcing.
The project procurement management plan encompassess the processes required to make sure project procurement is executed perfectly. It is a document that contains all that will be needed for the project.
The project procurement management plan serves as a guide in contract implementation and procurement. It is a vital reference to monitor the procurement process.
Why is it needed?
Having a project procurement management plan does not just result in saving money and time but it increases organizational compliance. It helps you define what the project will be from start to finish. You will have a clear vision of the project that makes it successful.
Project procurement management plans also make everyone understand every step from start to finish. It helps to examine the previous procurement process which can be a guide for a cost-efficient plan.
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7 Steps in Creating a Project Procurement Management Plan
1. Define Roles, Terms, and Agreements
In starting a plan, everyone must know their roles in creating the project. This is to ensure that all parties involved in working the project understand their scope of work. It also defines the boundaries of roles to make sure that no one overlaps with their responsibility.
One must also identify the terms in a project procurement management plan. You must list what you need to procure to make the project. In creating this, you must also know what service will be provided in the project.
In defining the agreement, both parties must agree on the terms of their agreement. The type of agreement will decide on how the project will be managed.
A project procurement management plan must contain the details of what will be needed in the project. This is to make sure that the procurement process will be completed within your anticipated timeline.
3. Identify and Mitigate Risks
Everything comes with a risk. It is natural in every part of the procurement process. The project procurement management plan figures what risks may come once the project starts. Once a list of possible risks are collected, then you will be able to resolve it immediately.
4. Know the Costs
You need to identify the costs of materials needed in the project procurements. You need to ask for a request for a proposal to know if it matches your proposed budget.
5. Make a decision Criteria
This Phase outlines the workflow of each contract. It specifies the parts required before you have the final approval, review of proposals, and identifying the costs. Having a decision criteria helps in making sure that all the contracts are reviewed thoroughly before its approval.
6. Create a Vendor Management Plan
This step helps to ensure that goods and services are delivered on time. It also details the invoice processing, status reporting, and timesheet approval.
7. Review the Approval process
Of course, after settling all the things in a procurement management plan, it must be reviewed. This step explains the processes for approving and reviewing possible changes to be made in the documents. It ensures that only the amendments that have been reviewed and approved will be implemented.
The Role of Project Manager
It’s natural to have a procurement department or team within your company. This department or team knows their role in project procurement management and also the project manager. Below are the responsibilities of a project manager:
1. Planning Process
Not because you’re the project manager does it mean you will create the whole plan. The project manager plans the project with the entire procurement, proeject, and legal team. It can also include those who are affected such as the finance. Design, and operations department.
2. Controlling Procurements
The Project manager must ensure that all procurement processes are conducted accordingly. It needs to be aware of the delivery and status of procurements. The project manager also resolves the disputes between the department requirements.
3. Vendor Coordination
Sometimes, various vendors are involved in the project. It is important for the project manager to coordinate them accordingly. This will ensure that everything will go well in the procurement process.
4. Communicate the Progress of the Project
The project manager must communicate all the changes in the project. This is to ensure that all the people involved in the project are informed of the deadlines and schedule changes.
Frequently asked questions
1. What is a Project Procurement Management Plan?
A project procurement management plan is a document that contains all the requirements for the project.
2. Is it necessary to have one?
It is not necessary to have one but it will help you greatly in executing your project successfully.
3. Who is responsible for the plan?
Commonly, it is the project manager who handles and coordinates all people that will be involved in the project.
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