PROJECT MANAGEMENT COST AND PROCUREMENT

Question 3 (20 Marks)

3.1. Projects are carried out in a turbulent environment with external forces such as financial, political, technological, socio-cultural and environmental. Highlight any FIVE factors that affect the Project Procurement process. (10 Marks)

3.2. Discuss the Procurement Planning process and identify the activities performed during this process. (10 Marks)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

YOU CAN MAKE THE USE OF THE FOLLOWING NOTES:

> Marketplace conditions; 5000-cultural and environmental. The following factors affect the Project Procurement process (PMI, 2013) 1.1. Factors which affect Project Procurement Management Projects are carried out in a turbulent environment with external forces such as financial, political, technological, Products, services, and results that are available in the marketplace; Formal procurement policies, procedures, and guidelines. Most organizations have formal procurement policies and buying organizations. When such procurement support is not available, the project team should supply both the resources and the expertise to perform such procurement activities. Management systems that are considered in developing the procurement management plan and selecting the contractual relationships to be used. An established multi-tier supplier system of prequalified sellers based on prior experience. Suppliers, including past performance Typical terms and conditions for products, services, and results or for the specific industry; or reputation; Project Cost and Procurement Management es help shows ents 6.2.1. Plan Procurement Management Procurement planning is the process of identifying which project needs can be best met by procuring products or services outside the project organization. According to PMI (2017) the procurement planning process documents project procurement decisions, specifying the approach, and Vdentifying potential sellers. It involves consideration of whether to procure, how to procure, what to procure, how much to procure, and when to procure it Burke, 2014). The project management team should seek support from specialists in the disciplines of contracting and procurement when needed. According to (Mulcahy, 2013) the Plan Procurement Management process includes the following activities: Performing the make or buy decision >Creating a Procurement Management Plan >Creating a Procurement Statement of Work Selecting a contract type >Creating procurement documents > Determining source selection criteria Figure 6.2 shows an overview of the Plan Procurement Management process. Inputs Tools & Techniques Outputs 1 Make-or-buy analysis 2 Expert judgment -3 Market research 4 Meetings .1 Project management plan 2 Requirements documentation 3 Risk register 4 Activity resource requirements .5 Project schedule .6 Activity cost estimates .7 Stakeholder register .8 Enterprise environmental factors 9 Organizational process assets 1 Procurement management plan 2 Procurement statement of work 3 Procurement documents 4 Source selection criteria 5 Make-or-buy decisions 6 Change requests .7 Project documents updates Figure 6.2 Plan Procurement Management process (Source PMI, 2013)