1. IT PROJECT MANAGEMENT 2008 1 B U D I L U H U R U N I V E R S I T Y POST GRADUATE PROGRAM OF INFORMATION TECHNOLOGY

2. PROJECT PROCUREMENT MANAGEMENT 2

3. 2008 Project procurement management includes: The processes to purchase or acquire the products, services, or results needed from outside the project team to perform the work The processes to purchase or acquire the products, services, or results needed from outside the project team to perform the work The contract management and change control processes required to administer contracts or purchase orders issued by authorized project team members The contract management and change control processes required to administer contracts or purchase orders issued by authorized project team members Administering any contract issued by an outside organization (the buyer) that is acquiring the project from the performing organization (the seller) and administering contractual obligations placed on the project team by contract Administering any contract issued by an outside organization (the buyer) that is acquiring the project from the performing organization (the seller) and administering contractual obligations placed on the project team by contract 3

4. 2008 PROJECT PROCUREMENT MANAGEMENT PROCESSES Planning 1. Plan Purchases & Acquisition 2. Plan Contracting Executing 3. Request Seller Responses 4. Select Seller Monitoring & Controlling 5. Contract Administration Closing 6. Contract Closure 4

5. 2008 1 PLAN PURCHASES & ACQUISITION Determining: W h a t W h e n H o w to purchase or acquire 5

6. 2008 INPUTOUTPUT 1.Enterprise environmental factors 2.Organizational process assets 3.Project scope statement 4.WBS 5.Project management plan 1.Procurement management plan 2.Contract statement of work 3.Make-or-buy decisions 4.Requested changes PLAN PURCHASES & ACQUISITION PROCESS TOOLS & TECHNIQUES 6

7. 2008 Enterprise environmental factors Conditions of the marketplace Product / service / result availability From whom Under what term & condition Organizational process assets Procurement related policies, procedures, guidelines Pre-qualified sellers PLAN PURCHASES & ACQUISITION INPUT 7

8. 2008 Project scope statement Constraints (sellers option, availability of funds, organizational policies) Assumptions (multiple sellers / single seller) Requirements with contractual and legal implications (licenses, IP rights, etc) Deliverables and acceptance criteria Product scope description WBS & WBS dictionary PLAN PURCHASES & ACQUISITION INPUT 8

9. 2008 Project management plan Scope, procurement, quality, contract management plan Risk register Risk-related contractual agreements Activity resource requirements Project schedule Activity cost estimates Cost baseline PLAN PURCHASES & ACQUISITION INPUT 9

10. 2008 Make or buy analysis Analysis component : ongoing needs; l long-range strategy Expert judgment Expert legal judgment; Expert purchasing judgment Contract types PLAN PURCHASES & ACQUISITION TOOLS & TECHNIQUES 10

11. 2008 Contract types: Fixed price / lump sum Cost-reimbursable CPF (cost + fee) or CPPC (cost + percentage of cost) CPFF (cost + fixed fee) CPIF (cost + incentive fee) Time and material contracts The full value of the agreement and the exact quantity of items to be delivered are not defined by the buyer at the time of the contract award PLAN PURCHASES & ACQUISITION TOOLS & TECHNIQUES 11

12. 2008 Procurement management plan, can includes: Types of contract Person who will define the independent estimates, and eveluation criteria Actions independent on the organization procurement regulations Standardized procurement documents Managing multiple providers Setting the scheduled dates for each contract Procurement metrics to be used to manage contracts and evaluate sellers etc PLAN PURCHASES & ACQUISITION OUTPUTS 12

13. 2008 Contract statement of work Defines item being purchased/acquired, just the portion of the project scope that is included within the related contract. Should be clear, complete, concise Can be revised and refined as required as it moves through the procurement process until incorporated into a signed contract Make-or-buy decisions Requested changes Using the procedures in Integrated change control process PLAN PURCHASES & ACQUISITION OUTPUTS 13

14. 2008 2 PLAN CONTRACTING Documenting products, services, and results requirements Identifying potential sellers 14

15. 2008 INPUTOUTPUT 1.Procurement management plan 2.Contract statement of work 3.Make or buy decision 4.Project management plan 1.Procurement documents 2.Evaluation criteria 3.Contract statement of work (updates) PLAN CONTRACTING PROCESS TOOLS & TECHNIQUES 15

16. 2008 1.Procurement management plan 2.Contract statement of work 3.Make or buy decision 4.Project management plan: Risk register Risk related contractual agreements Activity resource requirements Project schedules Activity cost estimates Cost baseline PLAN CONTRACTING INPUT 16

17. 2008 1. Standard forms Standard contracts Standard description of procurement items Non-disclosure agreements Proposal evaluation criteria checklist 2. Expert judgments PLAN CONTRACTING TOOLS & TECHNIQUES 17

18. 2008 PLAN CONTRACTING OUTPUTS Procurement Documents: Formal documents used to seek proposals / bid / quotation from prospective sellers Evaluation criteria : Understanding of need Production capacity Overall / life cycle cost Business size / type Technical capability References Management approach Intellectual property rights Technical approach Proprietary rights Financial capacity 18

19. 2008 3 REQUEST SELLER RESPONSES Obtaining as appropriate information :  Quotations  Bids  Offers  Proposals on how project requirements can be met 19

20. 2008 INPUTOUTPUT 1. Organizational process assets 2. Procurement management plan 3. Procurement documents 1. Qualified seller list 2. Procurement document package 3. Proposals REQUEST SELLER RESPONSES PROCESSES TOOLS & TECHNIQUES 20

21. 2008 REQUEST SELLER RESPONSES INPUT 1. Organizational process assets List of prospective sellers 2. Procurement management plan 3. Procurement documents 21

22. 2008 REQUEST SELLER RESPONSES TOOLS & TECHNIQUES Bidder conferences  Vendor / pre-bid conferences  Used to ensure that all prospective sellers have a clear, common understanding of the procurements Advertising Develop qualified sellers list  Can be developed from the organizational assets if available, or developed by the project team 22

23. 2008 REQUEST SELLESR RESPONSES OUTPUTS Qualified seller list (short list) Limited seller Procurement document package Buyer prepared formal request sent to each seller and is the basis upon which a seller prepares a bid for the requested products, services, or results that are defined and described in the procurement documentation Proposals Seller prepared documents that described the seller’s ability and willingness to provide the requested products, services or results describe in the procurement documents. 23

24. 2008 4 SELECT SELLERS Reviewing offers Choosing among potential sellers Negotiating a written contract with each sellers 24

25. 2008 INPUTOUTPUT 1.Organizational process assets 2.Procurement management plan 3.Evaluation criteria 4.Procurement document package 5.Proposals 6.Qualified seller list 7.Project management plan 1.Selected sellers 2.Contract 3.Contract management plan 4.Resource availability 5.Procurement management plan (updates) 6.Requested changes SELECT SELLERS PROCESSES TOOLS & TECHNIQUES 25

26. 2008 1. Organizational process assets : Policies that affect the evaluation of proposals 2. Procurement management plan 3. Evaluation criteria 4. Procurement document package 5. Proposals 6. Qualified sellers list 7. Project management plan, including: risk register and risk-related contractual agreements SELECT SELLERS INPUT 26

27. 2008 SELECT SELLERS TOOLS & TECHNIQUES 1. Weighting systems Using numerical weight for each of the evaluation criteria 2. Independent estimates Cost (harga perkiraan sendiri = HPS) 3. Screening systems Using minimum requirement to eliminate candidate. 27

28. 2008 SELECT SELLERS TOOLS & TECHNIQUES 4. Contract negotiation Clarifies the structure and requirements of the contract so that mutual agreement can be reached prior to signing the contract 5. Seller rating systems Using past performance information, quality rating, delivery performance, contractual conformance 6. Expert judgments 7. Proposal evaluation techniques Combination of several techniques 28

29. 2008 1.Selected sellers Based upon the outcome of theproposal or bid evaluation, who have negotiated a draft contract 2.Contract 3.Contract management plan 4.Resource availability 5.Procurement management plan (updates) 6.Requested changes SELECT SELLERS OUTPUTS 29

30. 2008 Contract Mutually binding legal agreement that: obligates the seller to provide the specified product, services, or results, and obligates the buyer to pay the seller Can be in the form of complex documents or simple purchase order SELECT SELLERS OUTPUTS 30

31. 2008 Contract Includes: SELECT SELLERS OUTPUTS 31 - Section headings, - SoW, - Schedule, - Period of performance - Roles & responsibility - Pricing & payment, - Inflation adjustment, - Acceptance criteria, - Warranty, - Product Support, - Limitation of Liability, - Fees, - Retainage, - Penalties, - Incentives, - Insurance, - Performance bonds, - Subcontractor approval, - Change request handling, - Termination & dispute resolution mechanism

32. 2008 5 CONTRACT ADMINISTRATION Managing the contract and relationship between the buyer and seller Reviewing and documenting how a seller is performing or has performed to establish required corrective actions Provide a basis for future relationships with the sellers Managing contract related changes Managing the contractual relationship with the outside buyer of the project 32

33. 2008 INPUTOUTPUT 1.Contract 2.Contract management plan 3.Selected sellers 4.Performance reports 5.Approved change requests 6.Work performance information 1.Contract documentation 2.Requested changes 3.Recommended corrective actions 4.Organizational process assets (updates) 5.Project management plan (updates) Procurement management plan Contract management plan CONTRACT ADMINISTRATION PROCESS TOOLS & TECHNIQUES 33

34. 2008 1. Contract 2. Contract management plan 3. Selected sellers 4. Performance reports Seller developed technical documentation & other deliverables information (as mentioned in the contract) Seller performance reports (Project Communication Management, Performance Reporting output) CONTRACT ADMINISTRATION INPUT (1) 34

35. 2008 5. Approved change requests Modifications to the terms and conditions of the contract 6. Work performance information Indicate which deliverables have been met and which have not CONTRACT ADMINISTRATION INPUT (2) 35

36. 2008 Contract change control system Defines the process by which the contract can be modified Buyer conducted performance review Structured review of the seller’s progress to deliver project scope and quality, within cost and schedule as compared to the contract Inspections and audits Conducted during execution of the project Identify weaknesses in the seller’s work processes or deliverables Performance reporting (Project Communication Management) CONTRACT ADMINISTRATION TOOLS & TECHNIQUES 36

37. 2008 Payment system Using Account Payable System or develop a new system for the project Claims administration Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract Records management system Parts of the PMIS Information technology ICT facilities CONTRACT ADMINISTRATION TOOLS & TECHNIQUES 37

38. 2008 Contract documentation, includes: The contracts, with the Supporting schedules Requested unapproved contract changes Approved contract changes Deliverables Requested changes Requested changes to the project management plan and its subsidiary Recommended corrective actions CONTRACT ADMINISTRATION OUTPUTS 38

39. 2008 Organizational process assets (updates) Correspondence Payment schedules and request Seller performance evaluation documentation Project management plan (updates) Procurement management plan Contract management plan CONTRACT ADMINISTRATION OUTPUTS 39

40. 2008 6 CONTRACT CLOSURE Completing and settling each contract including the resolution of any open items Closing each contract applicable to the project or project phase 40

41. 2008 INPUTOUTPUT 1.Procurement management plan 2.Contract management plan 3.Contract documentation 4.Contract closure procedure 1.Closed contracts 2.Organizational process assets (updates) CONTRACT CLOSURE PROCESSES TOOLS & TECHNIQUES 41

42. 2008 Procurement management plan: Output of Plan Purchases and Aquisition Contract management plan A plan to administer the contract Includes documentation, delivery & performance requirements that the buyer and sellers must meet Contract documentation: Output of Contract Administration Contract closure procedure All activities, and related responsibilities of the project team members, customers, other stake- holders involved in the contract closure procedures CONTRACT CLOSURE INPUT 42

43. 2008 Procurement audits A structured review of the procurement process, from the Plan Purchases and Acquisition process through Contract Administration Records management system A set of processes, control functions, and automation tools used to manage contract documentation and records CONTRACT CLOSURE TOOLS & TECHNIQUES 43

44. 2008 Closed contracts Formal closure notice Organizational process assets (updates) Contract file (a complete set indexed contract documentation) Deliverable acceptance (formal written notice that the deliverables have been accepted or rejected) Lesson learned documentation: Lesson learned analysis Process improvement recommendations CONTRACT CLOSURE OUTPUTS 44

45. 2008 THANK YOU 45