Project Procurement Management consists of the procedures required to acquire or purchase results, services, or products from sources external to the project team. The management and control steps needed to make and handle agreements like contracts, purchase orders, memoranda of agreements (MOAs), and internal service level agreements (SLAs) are part of project procurement management. It’s up to members of the project team, management, or, if necessary, the organization’s purchasing staff to get the goods and/or services needed for the project.
Project Procurement Management processes include the following:
- Plan Procurement Management
- Conduct Procurements
- Control Procurements
Essential Ideas for Managing Project Procurement
The procurement process can come with a lot of legal responsibilities and penalties, more so than most other project management tasks. The project manager doesn’t need to be an expert in the laws and rules of procurement management, but they should know enough about the process to be able to make smart choices about contracts and the links between contracts. Legal contracts that bind the company are usually not signed by the project manager. Only people with the right permissions can do that.
Agreements spell out the terms of the relationship between a buyer and a seller as part of the Project Procurement Management processes. Agreements can be as simple as buying a set number of hours of work at a set rate, or they can be very complicated, like international building contracts that last for years. The method to contracting and the contract itself should be based on how simple or complicated the deliverables or work is. They should also be written in a way that follows all local, national, and international contract laws.
It’s important for contracts to be clear about what they promise to do and what they expect to happen. This includes information sharing between the seller and the buyer. You can’t legally force someone to do something that isn’t in the deal. When project managers work with people from other countries, they should remember that society and local law can change the terms of a contract, even if it is written clearly.
A buying agreement has conditions and terms, and it may also include other details from the buyer about what the seller needs to do or provide. The project management team is in charge of making sure that all purchases are made in a way that meets the needs of the project. They do this by working with the procurement office to make sure that the company’s purchasing policies are followed. There are different types of agreements, such as a contract, a SLA, an understanding, a memorandum of understanding (MOA), or a buy order.
Policy and procedure documents from most organizations spell out procurement rules and who can sign and manage deals on behalf of the organization. buying departments or divisions are known by different names around the world, such as buying, contracting, procurement, or acquisitions. However, the jobs they do are probably the same.
A contract is legally binding, so it will go through a more thorough approval process that usually includes the legal department. All project papers may need to go through some kind of review and approval process. In every case, the main goal of the review and approval process is to make sure that the contract clearly states the goods, services, or outcomes that the seller agrees to provide, while also following all purchase laws and rules. In most cases, these parts are separate annexes or appendices that make it possible to use standard formal contract language.
References :