PROJECT MANAGEMENT

COURSE 11 : PROJECT PROCUREMENT MANAGEMENT

G.N. Sandhy Widyasthana

widyasthana@gmail.com
0811 226 2020
 11.3 Perform
Qualitative Risk
Analysis Project Management Process Groups
11.4 Perform
Quantitative Risk
Knowledge Areas Initiating Planning
Analysis Executing Monitoring Closing
Process Process Process & Controlling Process
11.5 Plan Risk
Group Group Group Process Group Group
Responses

12. Project 4.1 Develop 12.1 Plan

4.2 Develop 12.2Direct
4.3 Conduct
and 12.3Monitor
4.4 Administer
and 12.4
4.6 Close
Close Project
4. Project
Procurement
Integration Project Charter Procurements
Project Procurements
Manage Project Procurements
Control Project Procurements
or Phase
Management
Management Management Plan Execution Work
This copy is a PMI member benefit, not for distribution, sale or reproduction. 4.5 Perform
Integrated Change
Control
uide to the Project Management Body of Knowledge (PMBOK Guide) Fourth Edition
008 Project5.Management Institute, 14 Campus Blvd., Newtown
Project Scope Square, PA 19073-3299 USA 5.4 Verify Scope
5.1 Collect
12.1 Plan ProcurementsRequirements
Management The process of documenting
5.5 Controlproject
Scope purchasing
5.2 Define Scope
decisions, specifyng the5.3
approach,
Create WBS and identifyng potential sellers. 43
6. 6.1 Define 6.6 Control
Project Time
12.2 Conduct Procurements
Management Activities The process of obtaining
Schedule seller responses, selecting a
6.2 Sequence
seller and awarding a contract.
Activities
6.3 Estimate
12.3 Administer Procurements The process of managing procurement
Activity Resources
6.4 Estimate
relationships, monitoring contract performance and making changes and
Activity Durations
6.5 Develop
corrections as needed. Schedule

7.3 Control Costs

7. 12.4 Close Procurements7.1
Project Cost
Management

Costs
Estimate
The process of completing each project procurement.
7.2 Determine
Budget
8. Project 8.1 Plan Quality 8.2 Perform 8.3 Perform
Quality Quality Assurance Quality Control
Management

9. Project 9.1 Develop 9.2 Acquire

 Definition
Contract :
Legal documents between a buyer and a seller
Represents a mutually binding agreement that obligates the seller to provide the
specified products, services or results and obligates the buyer to provide monetary or
other valuable consideration
Seller can be called :
Contractor, sub contractor, vendor, service provider or supplier
Buyer can be called :
Client, customer, prime contractor, contractor, acquiring organization, governmental
agency, service requestor or purchaser
Purchase Order
Simple contract for purchasing or delivery an item
 Plan Procurements

Process of documenting project purchasing decisions,

specifying the approach and identifyng potential sellers
 Make Or Buy Analysis

Depend on :
Time : Scheduled availability
Cost : Budget availability
Quality : Personal capability
 Contract Type
Fixed Price Contract
Firm Fixed Price Contracts (FFP)
Fixed Price Incentive Fee Contracts (FPIF)
Fixed Price With Economic Price Adjustment Contracts (FP-EPA)
Cost Reimbursable Contract
Cost Plus Fixed Fee Contracts (CPFF)
Cost Plus Incentive Fee Contracts (CPIF)
Cost Plus Award Fee Contracts (CPAF)
Time and material Contracts
 Contracting vs. Risk

Scope of work Very LiFle Par/al Complete

informa/on

Uncertainty High Moderate Low

Degree of risk High Medium Low

100% 0%
Suggested risk Owner (client)
alloca/on contractor
0% 100%

Contract Types CPPF CPIF CPFF FPIF FFP

CPPF : Cost Plus Percentage Fee
CPIF : Cost Plus Incen2ve Fee
CPFF : Cost Plus Fixed Fee
FPIF : Fixed Price Incen2ve Fee
FFP : Firm Fixed Price
 Selection Criteria
Understanding of Need Production Capacity and
Overall or Life Cycle Cost Interest
Technical Capability Business Size and Type
Risk Past Performance of Seller
Management Approach
References
Technical Approach
Intelectual Property Rights
Warranty
Financial Capacity
Proprietary Rights
 Conduct Procurement

Process of obtaining seller reponses, selecting a seller

and awarding a contract
Major Component in a Contract Document

Statement of work or deliverables Product Support

Schedule Baseline
Limitation of Liability
Performance Reporting
Fees and Retainage
Period of Performance
Penalties
Roles and Responsibilities
Incentives
Sellers Place of Performance
Pricing
Insurance and Performance Bonds

Payment Terms Subordinate Subcontractor approvals

Place of Delivery Change Requesst Handling
Inspection and Acceptance Criteria Termination and Alternative Dispute
Warranty Resolution
 Administer Procurement

Process of managing procurement relationships,

monitoring contract performance and making changes
and corrections as needed
 Close Procurement

Process of completing each project procurement

 Reference

PM BOK, Project Management Body Of Knowledge

Fourth Edition, Project Management Institute
 Case 6

Perform make or buy analysis for Apple to provide their

newest Iphone product
 Class Assignment

Develop SWOT analysis for Project of Developing Fast

Train from Jakarta to Bandung
Define five risks arise from this project that have high
probability of occurence and have high impact to the
project