Procurement Management Plan

This document discusses the procurement management plan, its importance in maximizing purchasing power and minimizing risk exposure. It also covers the process of selecting tenders, evaluating contractor performance, and reviewing contracting and procurement activities. The document provides insights into the market analysis for website redesign and the key steps in contract administration planning.

Procurement Management Plan
1.1
 Maximising the purchasing power
 Minimising risk exposure while maintaining flexibility
 Maintaining rules and regulations
 Investing in new technologies
 Maintaining flexibility in procurement activities
 Keeping the record of all procedure actions
 Maintaining all the ethical issues
1.2
It has been found in a paper that the cost effective mechanism has not been taken in the
procurement management plan. This may create a severe problem for the business organisation
as the entire expense may exceed their limited budget. In order to mitigate this policy gap, the
firm has to make the list of activities and fulfil those goals according to their priorities.
1.3
The firm requires these things mentioned below in order to redesign their existing website.
 business email address
 domain name
 website building software
 logo design
 website hosting

 image editors
 high quality images for website
 website template design
The manager of the company has to make a plan in order to acquire these products and
services for completing the project. As per his plan, he should order the products as soon as
possible and also recruit some experts for handling the task.
11) Market Analysis
a) In order to redesign their existing website, one of the team members has been assigned a
task to do a market analysis for the service, image editing. After conducting the market
analysis, he has suggested three potential suppliers of photo editing which are Adobe
Photoshop, Digital Photography and Adobe Lightroom.
b) He has performed the task really well as all the tools he suggested are really perfect for the
purpose of editing the images. On the other hand, he took some additional time in order to
finish his job as he could not understand which tools are better and which are not in the initial
stage.
c) He could observe some sample edited images primarily in order to identify the features of
that software.
111) Planning to procure
3.1 It has been found in a paper that there are six procurement methods which are used by the
IT companies. Those are open tendering, single source, two stages tendering, Request for
Proposals (RFP), Request for Quotations and restricted tendering. Moreover, the documents

which are required to distribute to the sellers are Request for Proposals (RFP), Request for
Quotations (RFQ), offers, contract papers, solicitations and Request for Proposal (RFP).
These methods can be used by the company in order to redesign their existing website.
3.2
In order to procure the service or product for the project, contract management is required. It
is an essential part of the procurement cycle which provides an immense help to the contract
managers. In other words, the contract is required in order to address the transition
management, performance management as well as keeping all the records.
IV) Contract Administration Planning
4.1
The contract administration process requires a sequential step which is followed by this
business organisation. As mentioned in a paper that those steps are planning, organising,
direction and control of the activities. Planning refers to choosing the best alternative,
policies, process as well as programs whereas organising means performing the assigned
tasks within their deadlines. On the other hand, direction means showing the right path to the
employees and controlling refer to monitoring all the activities. Robert Mackenzie is the
person who is involved in the contract administration procedure. He has to make sure that the
contract administration process is well implemented following the sequential steps.
4.2
The key performance indicators which have been developed by the project team for the
contract are funnel drop-off rate, inventory turnover, the growth rate of revenue, relative

market share, accounts payable turnover, gross profit margin and so on. The performance of
the contractors would be evaluated by measuring the revenue. Apart from that, some reports
are required for administering the contract such as Request for Proposals (RFP), Request for
Quotations (RFQ), bank documents and so on.
V) Establishing procurement processes
5.1.1 In order to conduct the establish procurement process, the company must have a
comprehensive knowledge about all the tenders who are well recognised.
5.1.2 All the responses of the tenders must be evaluated so that they can choose the best
tender.
5.1.3 In order to select the preferred contractors, the company has to receive the quotations
from all the tenders.
5.1.4 In order to develop the key performance indicators for a contract, the managers must
have some specific long term goals.
5.1.5 In order to monitor the performance of the contractor, they must measure the progress
of all their activities.
5.1.6 If the managers of the company find that the project is not executed in the right track,
then they can make changes to the procurement management plan.
5.1.7 In order to complete the project within its deadline, they must conduct the review of the
procurement activities.

5.2 If the company does not have the Request for Proposals (RFP) and Request for
Quotations (RFQ), then they may face a problem in selecting the best tender. On the other
hand, if they do not have the proper bank documents, then they may have to get into troubles
for taking bank loans while designing their website.
VI) The product which would be acquired is the redesigned website.
It would have more high definition pictures as well as more information about the company
which would be very beneficial for the customers.
The contractor would be successfully evaluated if they can
i) finish the job within the proper time
ii) complete the task with the allocated budget
iii) perform the job perfectly
iv) keep records of all activities
VII) Tender selection process
7.1.1 The key stages required for choosing the tender are registering the interest, attending
the tender information session, developing tender responses strategy, writing a compelling
bid, understanding payment terms and submitting the bid. It requires more than six months in
order to complete the project. The senior manager of the company was on the tender
selection panel as he has all the information about the company.
7.2.2 The documents which are required in the procedure of seeking tenders and tenderers are
invitation letter to tender, the form of tender, site waste management plan, pre-construction
information, contract conditions and amendments.

7.1.3 The important things which have to be considered while running a competitive tender
are the budget for the project and the timeframe for finishing this task. Moreover, the pitfalls
which must be avoided are subjective or unclear scoring, deviation from the present process,
personal opinions to influence the evaluation procedure and so on.
VIII) Contracts
8.1
The important characteristics of a good contract are the offer and acceptance, certainty of
terms, statutory regulation of contracts, transparency and competency of the parties.
Following the research studies, this fact is clear that some problems occur during the contract
writing process. Some common problems are legal issues related to the contract,
misinterpretation, unclear language, lack of transparency, involvement of risk factors and so
on.
8.2 An example of contract is explained with the following figure 1.

Figure 1: Example of Contract
8.3 The performance of the contract has been monitored by change management, risk
management, relationship management, financial monitoring and compliance monitoring.
The positivity of the contract was it had been finished within proper deadline and budget, and
it could avoid the risk as well. On the other hand, there was a lack of transparency in some
parts of the contract which was a drawback of this contract.
Dispute with the contractor

i) The person who was writing the contract was irresponsible for this mistake, and the
reason was that he used some vague words and unclear language in the paper.
ii) In order to handle the dispute, efficient employees must be recruited for the purpose
of handling the contracts.
iii) Other team members have helped the person in order to write the contract clearly
without any mistake.
iv) The outcome of the policy was that the person had corrected his mistake from his
next job.
IX) Reviewing Contracting and Procurement
9.1 It has been identified in a paper that different methods have been used in order to review
the contracting as well as procurement activities. For example, meeting with the team
members, measure the performance of the contractor, monitor the progress and so on. Apart
from that, the project was about redesigning the existing website for a business organization.
9.2 The issues which were identified in the review process were the poor correspondence
between the monitoring systems and the planning, poor coordination and so on. Apart from
that, the performance of the contractor was satisfactory. It has been identified that the senior
and the assistant manager were involved in the entire review process.
9.3 Some recommendations have been made for future contracting as well as procurement
activities which are discussed in this section. According to the latest researches, a market survey
has to be done before selecting the tenders. Apart from that, the past work experience of every
contractor must be evaluated before choosing the contractor.