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Lecture Project management in practice - Chapter 15: Project procurement management. This chapter presents the following content: Procurement and project management, procurement management plan, outsourcing project work, contracting and contract types,...
CHAPTER 15 Project Procurement Management Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-1 Procurement and Project Management Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-2 Procurement and Project Management (cont.) • Long lead-time items • Large capital items • Make or Buy decision Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-3 Procurement Management Plan • Governance • Organisational policy and procedures in relation to procurement, contracting and legal processes • Requirements of long lead-time items and large capital-purchase items • Purchasing assumptions • Risk analysis of procurement decision • Review of procurement lessons learned from previous projects Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-4 Common Tender Types Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-5 Outsourcing Project Work f the decision is to ‘buy’ into the project, one of the most frequently used phases is to outsource Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-6 Outsourcing Project Work (cont.) Advantages Disadvantages • Cost reduction •Coordination breakdowns • Faster project completion •Loss of control • High level of expertise Conflict Flexibility Security issues Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-7 Outsourcing Project Work (cont.) Best practices • Well-defined requirements and procedures • Extensive training and team-building activities • Well-established conflict management processes in place • Frequent review and status updates • Co-location when needed • Fair and incentive-laden contracts Long-term outsourcing relationships Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-8 Contracting and Contract Types • Infrastructure ‘type’ contracts Build, Own, Operate, Transfer (BOOT) Build, Own, Operate (BOO) Build, Operate, Transfer (BOT) • Partnerships Time and material contracts Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-9 Contracting and Contract Types (cont.) • Fixed Price Contracts Firm fixed price (FFP) Fixed price incentive fee (FPIF) Fixed price with economic price adjustment (FPEPA) • Cost Reimbursable Contracts Cost plus fixed fee (CPFF) Cost plus incentive fee (CPIF) Cost plus award fee (CPAF) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-10 Summary of Contract Types Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-11 Essential Elements of a Contract Offer and acceptance (agreement) Intention to create legal relations Consideration Legal capacity Consent Illegal and void contracts Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-12 The Art of Negotiating Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-13 Project Procurement Integration continue d Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-14 Project Procurement Integration (cont) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-15 Key Terms • • • • • • • • • • • • • • BATNA closed tender contract law contract types large capital items long lead-time items make or buy (decision) open tender Outsourcing partnering charter principled negotiation procurement six essential elements of a contract tender process Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 15-16 ... Gray, Project Management in Practice, 1e 1 5-1 3 Project Procurement Integration continue d Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, ... Project Management in Practice, 1e 1 5-4 Common Tender Types Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 1 5-5 Outsourcing.. .Procurement and Project Management Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 1 5-2 Procurement and Project Management