(BSBPMG518) - Manage Project Procurement

This plan illustrates the approach that will be followed to manage the procurement requirements for the project. The procurement team will find the answers to specific questions that are required for determining the approach to obtain the required goods or services. The contract type that is being utilized for this particular project and process through which contracts must be approved is also mentioned in this plan. The decision criteria for awarding contracts along with suitable methods for vendor management are also highlighted in this plan.

Running head: MANAGE PROJECT PROCUREMENT
BSBPMG518 - Manage Project Procurement
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1MANAGE PROJECT PROCUREMENT
Table of Contents
Introduction......................................................................................................................................2
Procurement management approach................................................................................................2
Procurement definition....................................................................................................................3
Type of contract to be used..............................................................................................................4
Contract approval process................................................................................................................5
Decision criteria...............................................................................................................................5
Vendor management........................................................................................................................6
Performance metrics for procurement activities..............................................................................7
References........................................................................................................................................8

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Introduction
The plan is focused on defining the procurement requirements for the project and process
for developing the documentation for procurement through contract closure. This plan illustrates
the approach that will be followed to manage the procurement requirements for the project.
Further, the definition of procurement is also provided to describe the items that will be procured
and under what conditions. The contract type that is being utilized for this particular project and
process through which contracts must be approved is also mentioned in this plan. The decision
criteria for awarding contracts along with suitable methods for vendor management are also
highlighted in this plan. This plan also illustrates the metrics that will be used for the
procurements activities related to the project.
Procurement management approach
The procurement for this particular project to acquire staffing solutions for the Able
Communications will be carried out in different phases as illustrated below:
Selection of the contract approach – A work description that have to be outsourced will
be developed by the project team. The procurement team will find the answers to specific
questions that are required for determining the approach to obtain the required goods or services
(Pheng 2018).
Solicitation of bids – It is the process to request price or required information from the
bidders. The bids are solicited in either form of Request for Quote (RFQ) or Request for
Proposal (RFP). For this particular project, RFQ (Request for Quote) has been selected as the
suitable method to acquire staffing solutions for Able Communications. The price required for
the services will be quoted by the bidder and the contract will be awarded to that bidder who

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quotes lowest price along with capability to meet the quality as well as schedule requirements of
the project
Evaluation of Bids – The bids from different bidders will be evaluated and then the
lowest bid that is having the lowest total price will be considered suitable for the contract (Turner
2017).
Awarding the contract – After selection of a bidder, a team member of the project team
will validate the bid conditions as well as the contract with potential contractor. The detailed
discussion of the project requirements will be conveyed to the bidder so that the project could be
accomplished according to quality and schedule requirements.
Managing the contracts – After awarding the contract to potential bidder, the project team
will keep track of the contractor performance in comparison to performance criteria as
mentioned in the contract (Jo, Lee and Pyo 2018).
Logistics and expediting – Finally, the materials or equipment that has been procured for
the project will be transported and inventoried for closure of the contract.
Procurement definition
The items that have to be procured for this project on acquiring staffing solutions for
Able Communications are listed as below:
Development of management programs – This item will comprise of developing a
program for training purposes as well as recruitment of staffs. This item have to be made
available so that the skills and knowledge of the staffs could be evaluated and proper training
could be provided (Allen et al. 2015). The development of management programs is necessary

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for this project to ensure that the organizational goals and objectives could be fulfilled by the
staffing solution. It will be procured internally as management of the organization will be
responsible for developing the management programs.
External professional services – This item will be procured through outsourcing as
speakers or advisors will be hired to conduct seminars on personal development and career
growth. It is important for the project so that the recruited staffs could excel in their work and
meet desired expectations of the organization.
Software as well as hardware – Some hardware as well as software will be required for
training purposes so that staffs being outsourced will be able to handle their work in an efficient
manner (De Araujo et al. 2017). The software and hardware will be procured from external third
party vendors hence this item will be procured externally.
Marketing spend – This item will comprise of the marketing requirements so that the
bidders could be encouraged to place their bids for the contract on providing staffing solutions to
Able Communications. This item will be procured both internally as well as externally as the
marketing strategies will be developed internally within the organization and externally as
Advertisement or other agencies will contacted to spread the awareness of contract for staffing
solutions (Lloyd-Walker and Walker 2015).
Type of contract to be used
For this particular project on staffing solution for Able Communications, it has been
identified that required items will be procured with the help of two major types of contract. The
types of contract that will be used for the items to be procured are Firm Fixed Price (FFP)
contract and Cost plus Fixed Fee (CPFF) contracts.

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The Firm Fixed Price (FFP) contract will be used for the items that will procured
internally by the organization. This type of contract will incur a lump sum cost to the
organization and it is suitable when the scope is clear (Decarolis 2014). This contract type will
be used for two items that is Development of management programs and Marketing spend that
includes development of marketing strategy for the contract.
Cost plus Fixed Fee (CPFF) contract will be used for the items that have to be procured
externally as the organization will have to pay for the products or services acquired from the
seller (Chen et al. 2015). This type of contract will be used for procuring external professional
services, software and hardware along with marketing for the contract.
Contract approval process
The approval of the contract to procure staffing solution for Able Communications will
be carried out through steps as below:
 The project team will review the contract and forward it to Vice President of the
organization.
 The contractor will be reviewed by the Vice president and Risk manager and
signed off.
 Then it will be mailed to the CEO of the organization for review and approval.
 The CEO will review and sign-off the contract then it will be emailed to vendor
for signature.
Decision criteria
The major criteria being used by the contract review board for making decisions to award
a contract are as below:

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 Reputation of the contractor – The record of the contractor will be analyzed and
reputation of the determined contractor in the market will be researched.
 Value of contracts being completed by the contractor – The total number of
projects being completed by the contractor will be analyzed along with the total
value of the completed projects.
 Commitment towards quality and schedule requirements – The commitment of
the contractor with respect to quality and maintaining the schedule requirements
will be evaluated.
The decision for awarding the contract to a particular contractor will be finalized only
after successful assessment of the contractor in terms of the above identified criteria.
Vendor management
The project team as well as the purchasing and contracts department will take certain
roles and responsibilities for ensuring that appropriate levels of quality is maintained. Some of
the roles and responsibilities are listed as below:
 The project team will develop a quality management plan that will be followed
by the purchasing and contracts department to maintain the quality requirements.
 The project team will also include a quality analyst so that quality outcomes are
achieved during procurement of products or services.
 The purchasing and contracts department will include a supervisor so that quality
of materials during procurement could be assessed properly.

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Performance metrics for procurement activities
The performance metrics that will be utilized for the procurement activities are described
as below:
Cost per product: This metrics will used to determine whether the cost being taken by the
contractor for each product as per the market.
Quality of delivered product: The products that are delivered will be assessed in terms of
quality to ensure the procurement activity is successful.
On time delivery: This metric relates to delivery of the required materials on time so that
the procurement activity is completed successfully.

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References
Allen, M., Herring, K., Moody, J. and Williams, C., 2015. Project procurement: Impact of
contract incentives and penalties. International Journal of Global Business, 8(2), p.1.
Chen, Q., Xia, B., Jin, Z., Wu, P. and Hu, Y., 2015. Choosing appropriate contract methods for
design-build projects. Journal of Management in Engineering, 32(1), p.04015029.
De Araújo, M.C.B., Alencar, L.H. and de Miranda Mota, C.M., 2017. Project procurement
management: A structured literature review. International Journal of Project
Management, 35(3), pp.353-377.
Decarolis, F., 2014. Awarding price, contract performance, and bids screening: Evidence from
procurement auctions. American Economic Journal: Applied Economics, 6(1), pp.108-32.
Jo, S.H., Lee, E.B. and Pyo, K.Y., 2018. Integrating a Procurement Management Process into
Critical Chain Project Management (CCPM): A case-study on oil and gas projects, the piping
process. Sustainability, 10(6), p.1817.
Lloyd-Walker, B. and Walker, D., 2015, April. Collaborative project procurement arrangements.
Project Management Institute.
Pheng, L.S., 2018. Project Procurement Management. In Project Management for the Built
Environment (pp. 177-193). Springer, Singapore.
Turner, J.R., 2017. Contracting for project management. Routledge.