1. 12.3 Control Procurements
The process of managing procurement relationships, monitoring contract performance and making changes or corrections as needed
Undertaken by both the buyer and the seller as both parties need to ensure that the other is meeting their contractual obligations
Many organisations treat contract administration as an administrative function separate from the project and it is carried out by a Purchasing Department or by a designated functional manager
Managing these relationships both internally and externally can be a very complex communication activity with it’s own processes and procedures that must be followed, often dictated by the terms of the contract and internal policies and procedures
Occurs during Monitoring and Control
Initiation
Planning
Execution
Close
Monitor
Control
Adapted from PMBOK 5th Edition

2. 12.3 Control Procurements
This process is closely related to the following project management processes:
Direct and Manage Project Work
Control Quality
Perform Integrated Change Control
Control Risks
The Project Manager must regularly monitor the efficiency and effectiveness of this process in order to successfully manage the project and any dependencies
Close financial management is also required to ensure that payments are being made according to the terms in the contract
Adapted from PMBOK 5th Edition

3. 12.3 Control Procurements Inputs to Control Procurements
Project Management Plan
Procurement Documents
Agreements
Approved Change Requests
Work Performance Reports: technical and work performance from the Seller
Work Performance Data
Quality
Costs including seller invoices
Adapted from PMBOK 5th Edition

4. 12.3 Control Procurements
Tools and techniques to Control Procurements –
Performance
Reporting
Inspections
& Audits
Procurement
Policies &
Procedures
Contract
Change
Control
Procurement
Performance
Reviews
Claims
Administration
Payment
Systems
Record
Management
System
Adapted from PMBOK 5th Edition

5. 12.3 Control Procurements Contract Change Control
The process by which procurements can be modified, often included in each specific contract and can vary between them
Closely related to the processes of Control Scope and Perform Integrated Change Control
Often jointly managed by the Project Manager and the purchasing department
Procurement Performance Reviews
A structured review of the seller’s progress to delivery the contracted scope and quality within the cost and timeframe that have been agreed
Performance information is compared against actual outcomes
Often conducted by the purchasing department or internal audit
Adapted from PMBOK 5th Edition

6. 12.3 Control Procurements Inspections & Audits
If required by the buyer, then these will be specified in the contract
Often involves the buyer having access to regular external audit reports on the seller, can include buyer procurement personnel
Performance Reporting
Regular status reports and performance information required of the seller as specified in the contract
Tracks the seller’s performance against contractual obligations of scope, quality, time and cost
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Payment Systems
Payments to the seller are typically processed by the accounts payable system after they have been authorised by project or procurement personnel
Adapted from PMBOK 5th Edition

7. 12.3 Control Procurements Claims Administration
Relates to contested changes where the buyer and seller cannot agree on items such as Change Requests, Incentive Payments or Penalties
Referred to as Claims, Disputes or Appeals
A resolution process is normally documented in the contract and settlement via negotiation is preferred
If agreement cannot be reached then legal action may be required
Records Management Systems
Used by the Project Manager to manage contract and procurement documentation and records
Contains a retrievable archive of all contract documentation, correspondence and performance reports
Adapted from PMBOK 5th Edition

8. 12.3 Control Procurements Procurement Policies and Procedures
Most large organisations and all government departments will have comprehensive policies and procedures
It is critical that the project team are aware of these and that they are followed, otherwise approval may not be obtained for purchasing requirements and timeframes can be severely impacted
These procedures will also impact the project schedule during the planning stage as critical internal specialist may not be available when required by the project
It is often mandatory to engage internal purchasing professionals and either internal or external legal professionals
Purchasing decisions may need to be escalated to senior management or even the Board for approval, depending on the overall cost. This can also impact timelines.
Adapted from PMBOK 5th Edition

9. 12.3 Control Procurements Outputs of this process include –
Work Performance Information
Change Requests
Project Management Plan Updates
Procurement Management Plan
Schedule and Cost baselines
Project Document Updates
Contract and supporting schedules
Contract Change Requests
Claims and disputes
Results of inspections
Invoices and financial information
Organisational Process Assets
Correspondence regarding the contract
Payment schedules and requests
Seller performance evaluation documentation
Adapted from PMBOK 5th Edition