In my last submission I explained that project planning results in an analysis of what the project requires in order to be completed. If all the required goods and services are not available when needed, either the plan must change, or they must be procured.
The PMI process called ‘plan procurements’ results in the generation of a number of planning documents. These include a ‘procurement management plan’ and ‘bid packages.’
Procurement Management Plan
The ‘procurement management plan’ is where procurement strategy is documented. It records decisions on what will be procured, and how.
The ‘procurement management plan’ is the document that ties all procurement activities together. It allows someone unfamiliar with the project to learn what has been decided, why, and the implications in terms of procedures and risk management.
The Scope of Work (SOW) or Statement of Work, is the backbone of effective procurements. This is the document that explains to vendors exactly what it is that is being procured.
A unique SOW is created for each procurement (every separate purchase).
A complete and thorough contract scope document (ie. SOW) is the best defense against conflicts arising during contract execution. If the SOW unambiguously defines everything that must be accomplished for a particular contract, then there can be no argument about what a contractor must accomplish before being paid.
Procurement Documents = Bid Packages
The PMI term ‘procurement documents’ is synonymous with the more common terminology of ‘bid or tender’ documents. These documents are what’s distributed to potential vendors (sellers or contractors) in hopes of receiving ‘bids,’ ‘proposals’ or ‘offers.’
Next week I will explain how bid packages are used to elicit specific types of responses from vendors.