BSBPMG518 - Project Procurement Management: Assessment Task 2

This project report addresses project procurement management for Max Lionel Realty (MLR), encompassing several key tasks. It begins by determining procurement requirements through the project procurement plan, which identifies items for the procurement register and outlines processes for acquiring products and services. The report then establishes agreed procurement processes, including information for potential suppliers, and conducts procurement activities, considering governance constraints, vendor ranking, and contract terms. Implementation and monitoring of procurement involve addressing variations in project execution, identifying procurement issues, and assessing their impact on project timelines and costs. Finally, the report details procurement finalization procedures, including completion activities, project performance review, and a listing of procurement management issues and lessons learned. The project covers procurement register, communication strategies, ethical considerations, and the selection of suppliers based on various criteria, including cost, quality, and delivery. The report also analyzes vendor performance and discusses major components of cost-reimbursable contracts. The issues, like inflexible suppliers and budget overruns, and their impacts are also discussed.

Running head: ASSESSMENT TASK 2
Assessment Task 2: Project
Name of the Student:
Name of the University:

1ASSESSMENT TASK 2
Table of Contents
Introduction......................................................................................................................................3
Task 1: Determine procurement requirements................................................................................3
1.1 Approach to identify procurement items for procurement register.......................................3
1.2 Procurement management plan..............................................................................................3
Task 2: Establish agreed procurement processes.............................................................................6
2.1 Information to potential suppliers through selection process................................................6
Task 3: Conduct procurement activities..........................................................................................7
3.1 Governance constraints for procurement...............................................................................7
3.2 Vendor ranking......................................................................................................................8
3.3 Major components of terms and conditions of contract........................................................9
Task 4: Implement and monitor procurement.................................................................................9
4.1 Variation in project execution...............................................................................................9
4.2 Issues in procurement..........................................................................................................10
4.3 Impact of issue to project timeframes, costs and contracts.................................................10
Task 5: Manage procurement finalization procedures...................................................................10
5.1 Detailed completion activities in procurement....................................................................10
5.2 Review project performance in terms of procurement........................................................11
5.3 Listing of procurement management issues........................................................................11
Conclusion.....................................................................................................................................12

2ASSESSMENT TASK 2
References......................................................................................................................................13

3ASSESSMENT TASK 2
Introduction
Max Lionel Realty (MLR) has decided to implement project procurement program for
building goodwill as well as satisfaction of the customers. The report is reflected on determining
of the procurement requirements in MLR, establishing agreed procurement procedures,
conducting the procurement activities, implementation and monitoring of procurement items
along with management of procurement at the final stages.
Task 1: Determine procurement requirements
1.1 Approach to identify procurement items for procurement register
The project procurement plan is used to identify the items for procure for the
procurement register. This plan is included processes required for purchasing and acquiring the
products and services from external project team. The plan is included contract as well as change
control for developing and administering contracts and purchase orders concerned by the project
team (Fleming 2019). It also contains contracts and legal documents among buyer as well as
seller.
1.2 Procurement management plan
Procurement register
Procuremen
t item
Procureme
nt manager
Requiremen
ts
Sourcing
approach
Contract type
and budget
Risks
WHS and
anti-
Procurement
manager
Organization
legislation
Contracting
with supplier to
Time and
materials
Lack of
resources

4ASSESSMENT TASK 2
discriminatio
n legislation
requirements
by 9/16/19
deliver the
products
$500
Client
service and
ethical
practices
Procurement
manager
Based on the
ethical
consideration
s by 10/02/19
The
maintenance of
the products are
outsourced
Fixed price
contracts
$1700
Unavailabilit
y and
irregularity
of
procurement
documents
Legal
documents
and REIV
code of
conduct
Procurement
manager
Organization
al legal
documents
by 10/09/19
Resources are
required to staff
project
members
Cost-
Reimbursable co
ntracts
$700
Not
adherence to
the
procurement
policies
Resource
management
plan
Procurement
manager
Allocate the
resources by
10/23/19
Resources are
required to staff
project
members
Time and
materials
$690
Off tender
purchasing
Communication of procurement arrangements
Following are list of the communication strategies for conducting procurement such as:

5ASSESSMENT TASK 2
a. There is required to build a communication plan to interact among the client and
suppliers those are delivering the products and services to MLR. The vendor should
provide with couple of days for reading project brief and then a conference call is set up.
b. A small workshop is conducted with the project team members to discuss the
procurement issues which they are facing (De Araújo, Alencar and de Miranda Mota
2017).
c. There should be one-to-one session between the procurement manager as well as vendor
to share the project related information widely. The procurement manager should respect
confidentiality of vendor so that no information with shared with third party person.
Procurement processes for obtaining products and services including roles and responsibilities
Processes to obtain products
and services
Responsible person Timeline
Tender Government Before start the project plan
Project proposals Project Manager At the project planning phase
Contracts of procurement Procurement Manager At the project planning phase
Preferred suppliers Procurement Manager At the project execution phase
Quoting Financial Manager At the project closure phase

6ASSESSMENT TASK 2
Procurement processes for monitoring procurement
Processes for monitoring
and controlling the
procurement
Person responsible and when Technology used
Project management plan Procurement Manager, at the
project initiation phase
Contract change control
system
Procurement documents Procurement Manager, at the
project planning phase
Inspection and audit
system
Agreements of procurement Procurement Manager, at the
project
Record management
system
Approval of change request Procurement Manager, at the
project initiation phase
Contract change control
system
Reports on work performance Procurement Manager, at the
project execution phase
Record management
system
Data on work performance Procurement Manager, at the
project execution phase
Record management
system
End of Procurement Management Plan
Task 2: Establish agreed procurement processes
2.1 Information to potential suppliers through selection process
The selected procurement item is legal documents and REIV code of conduct. The terms
and conditions of the request to potential suppliers outlined:

7ASSESSMENT TASK 2
Specifications to ensure clarity of requirements: There is description of the quality,
preferred project outcomes to be procured with the supplier to procure and deliver for award of
the procurement contract (Suprapto et al. 2016). Design as well as performance is the main
specification.
The selection process: The process is based on capability of potential suppliers for
performing the contract awarded at end of the project work.
The selection criteria: The criteria for selecting the suppliers are cost, quality, delivery,
service, convenience and risks (Hughes, Champion and Murdoch 2015).
Task 3: Conduct procurement activities
3.1 Governance constraints for procurement
Following are the governance constraints for procurement such as:
Ethical behaviours: The ethical principles related to the procurement are loyalty as well
as respect towards REIV rules as well as regulations. At the time of interaction with the
suppliers, the procurement is treated in fair as well as balanced way.
Limits of authority: There is limitation of purchasing as well as payment approval of the
procurement authority. The payment of invoices is not approved by the financial authority at
right time (Fuller et al. 2017).
Organizational policy and procedures: ISO purchasing processes as well as sourcing
ensured that services can acquire time as well as cost effective decisions, management of project
risks.

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Prescribed decision escalation: There are decision escalation occurred for not complete
the work in specified date and delay in purchase order delivery date.
Contract types: The procurement manager is confused regarding which procurement
contract type is to be used for the procurement items (Heagney 2016).
3.2 Vendor ranking
Vendor evaluation
criteria
Vendor A Vendor B
Points Weighting Total Points Weighting Total
Quality supplier
performance
10 15% 1.5 7 15% 1.05
Cost of the product and
services
7 20% 1.4 3 20% 0.6
On time delivery 10 15% 1.5 3 15% 0.45
Quality precision 7 15% 1.05 3 15% 0.45
Communication 3 15% 0.45 7 15% 1.05
Service performance 7 5% 0.35 7 5% 0.35
Using advanced
technology
10 5% 0.5 7 5% 0.35
Quick response to the
client
9 5% 0.45 7 5% 0.35
Willingness to share
information of project
7 5% 0.35 7 5% 0.35

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Total: 70 100% 7.55 51 100% 5
From the above table, it is showing that vendor A is better as compared to vendor B
based on its weighting.
3.3 Major components of terms and conditions of contract
Cost-reimbursable contracts are mainly used in the project for describing major
components of terms as well as conditions of contract. This contract is included to ask buyer to
pay for the incurred cost by seller for completion of project work. The components are as
follows:
A. Direct cost
B. Labor materials cost
C. Equipments as well as consultants used by the contractor
Task 4: Implement and monitor procurement
4.1 Variation in project execution
During the project execution phase, the variations occurred on procurement of good as
well as services are underestimation from the side of bidder leads to poor performance of
contract along with change into the procurement performance. There are variations in project
payment leads to sum of unexpected work and variations to the design (Papke-Shields and
Boyer-Wright 2017). The issue is to be resolved by proper estimation of the project cost and
timely delivery of the goods and services. Resolve this issue can lead to timely completion of

10ASSESSMENT TASK 2
project tasks, resolution of the conflicts among procurement team members in contracted
requirements.
4.2 Issues in procurement
The issue in procurement is related to inflexible suppliers as they are not able to deliver
the materials, products and services at right time. There is exceeding in project budget because of
not completing the project on scheduled time (De Marco 2018). When the delivered order is
being damaged, then the client can have option to refuse to take the procurement items.
4.3 Impact of issue to project timeframes, costs and contracts
The issue provides impact on the project timeframes as there is delay in entire work and
the project is delayed by some days. There is exceed in the project cost and the contracts are not
finished in scheduled time.
Task 5: Manage procurement finalization procedures
5.1 Detailed completion activities in procurement
Completion of project deliverables: Once the project is closed, all the project deliverables
are completed as well as delivered to the customers. There is formal acceptance of the customers.
Completion of procurement closure: There should be completion of remaining payments
made to the suppliers.
Formal acceptance: Formal acceptance of the procurement project is to be taken from the
client. The client should present written documents (Nicholas and Steyn 2017).

11ASSESSMENT TASK 2
Final performance reporting: There is calculation of project performance based on cost,
time, quality and others.
Update lessons learned: There is collection of lessons learned documents from the project
stakeholders. The documentation is to be stored into the process assets of MLR.
5.2 Review project performance in terms of procurement
In order to review the project performance in terms of the procurement, the procurement
activities are affective as through final performance reporting, it is seen that there is proper
calculation of the project performance based on cost, time and quality (Carvalho and Rabechini
2017). There is review of project charter for evaluating the project outcomes match with the
procurement objectives.
5.3 Listing of procurement management issues
Date Description of
problem/opportunity
Recommended action for
next time/project
Lessons learnt
raised by
9/5/2019 Agents are under stress and
poor time management
It should require scheduling
the project before starting of
the plan.
Project Manager
9/19/2019 The agents are not aware of
the legal, ethical needs
It should require to aware the
agents of legal and ethical
requirements through
interactive session.
Procurement
Manager
9/27/2019 The agents have unclear
strategic aim of MLR
It should require conducting
interactive sessions with the
Procurement
Manager