Procurement Planning

1194 Words May 16th, 2013 5 Pages
Procurement Planning CPMGT302

Kerzner (2009) defines procurement and contracting as the "process that involves two parties with different objectives who interact on a given market segment." (p. 840) As with every phase of project management, proper planning is key to the success of any project by ensuring the project gets the most out of any supplier relationships. This paper will define the project procurement planning process and how risk management affects that process. Procurement Planning There are several pieces to the procurement planning process that include documenting the procurement requirements, identifying
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In CPIF contracts the seller is reimbursed for all allowable expenses and receives a fee based upon achievement of performance objectives. In CPAF contracts the seller is reimbursed for legitimate costs, but most of the fee is base upon the subjective satisfaction of the buyer. Time and material contracts are a hybrid as they contain aspects of both fixed-price and cost-reimbursable contracts. This contract type is used when it is impossible to estimate accurately the extent or duration of the contracted work. Time and material contract represents the highest risk to the buyer. Outputs Outputs of the procurement planning process include the procurement management plan, procurement statements of work, make-or-buy decisions, procurement documents, source selection criteria, and change requests to the project management plan. Procurement statements of work (SOW) are the most valuable output of the plan procurement process. These documents directly correlate to the project scope baseline and specify the portion of the project scope to be included in any related contract. The SOW allows perspective sellers to determine if they are capable of provided for the needs of the contract before they bid, thus eliminating time and effort wasted for both the buyer and seller. This ultimately leads to the greatest efficiency in identifying the right source for the
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