Control Procurement

Lecture 3c
Adapted from PMBOK 6th ed.
 Control Procurement
 Control Procurements is the process of managing procurement
relationships; monitoring contract performance and making changes
and corrections as appropriate; and closing out contracts.
 The key benefit of this process is that it ensures that both the seller’s
and buyer’s performance meet the project’s requirements according
to the terms of the legal agreement. This process is performed
throughout the project as needed.
INPUTS
Project Management Plan

 Include but not limited to:

 Requirements management plan
 Risk management plan
 Procurement management plan
 Change management plan
 Schedule baseline.
PROJECT DOCUMENTS
 Assumption log: The assumption log documents the assumptions that
have been made during the procurement process.
 Lessons learned register
 Milestone list
 Quality reports: the quality reports can identify seller processes,
procedures, or products that are out of compliance
 Requirements documentation
 Requirements traceability matrix
 Risk register
 Stakeholder register
 AGREEMENTS
 Agreements are understandings between parties, including
understanding of the duties of each party.
 The relevant agreements are reviewed to verify terms and conditions
are met.
 PROCUREMENT DOCUMENTATION
 Procurement documentation contains complete supporting records for
administration of the procurement processes.
 Procurement documentation includes the statement of work, payment
information, contractor work performance information, plans, drawings, and
other correspondence.
APPROVED CHANGE REQUESTS
 Approved change requests can include modifications to the terms and
conditions of the contract, including the procurement statement of
work (SOW), pricing, and descriptions of the products, services, or
results to be provided.
 All procurement-related changes are formally documented in writing
and approved before being implemented through the Control
Procurements process.
 WORK PERFORMANCE DATA
 Work performance data contains seller data on project status such as
technical performance; activities that have started, are in progress, or
have completed; and costs that have been incurred or committed.
 Work performance data can also include information on the seller
invoices that have been paid.
ENTERPRISE ENVIRONMENTAL
FACTORS
 The enterprise environmental factors that can influence the Control
Procurements process include but are not limited to:
 Contract change control system,
 Marketplace conditions,
 Financial management and accounts payable system
 Buying organization’s code of ethics.
 ORGANIZATIONAL PROCESS ASSETS
 The organizational process assets that can influence the Control
Procurements process include but are not limited to, procurement
policies.
 Tools and
Techniques
EXPERT JUDGMENT
 Expertise should be considered from individuals or groups with
specialized knowledge or training in the following topics:
 Relevant functional areas such as finance, engineering, design,
development, supply chain management, etc.
 Laws, regulations, and compliance requirements; and
 Claims administration.
 CLAIMS ADMINISTRATION
 Contested changes and potential constructive changes are those requested
changes where the buyer and seller cannot reach an agreement on
compensation for the change or cannot agree that a change has occurred.
 These contested changes are called claims.
 When they cannot be resolved, they become disputes and finally appeals.
 Claims are documented, processed, monitored, and managed throughout
the contract life cycle, usually in accordance with the terms of the contract.
 If the parties themselves do not resolve a claim, it may have to be handled
in accordance with alternative dispute resolution (ADR) typically following
procedures established in the contract.
 Settlement of all claims and disputes through negotiation is the preferred
method.
 DATA ANALYSIS
 Performance Reviews. Performance reviews for contracts measure,
compare, and analyze quality, resource, schedule, and cost
performance against the agreement.
 This includes identifying work packages that are ahead or behind
schedule, over or under budget, or have resource or quality issues.
 Earned Value Analysis (EVA). Schedule and cost variances along with
schedule and cost performance indexes are calculated to determine
the degree of variance from target.
 Trend Analysis. Trend analysis can develop a forecast estimate at
completion (EAC) for cost performance to see if performance is
improving or deteriorating.
INSPECTION
 An inspection is a structured review of the work being performed by
the contractor.
 This may involve a simple review of the deliverables or an actual
physical review of the work itself.
 On a construction/engineering/infrastructure project, inspections
involve walkthroughs of the site by both the buyer and the contractor
to ensure a mutual understanding of the work in progress.
 AUDITS
 Audits are a structured review of the procurement process.
 Rights and obligations related to audits should be described in the
procurement contract.
 Resulting audit observations should be brought to the attention of the
buyer’s project manager and the seller’s project manager for
adjustments to the project, when necessary.
Outputs
 CLOSED PROCUREMENTS
 The buyer, usually through its authorized procurement administrator,
provides the seller with formal written notice that the contract has been
completed.
 Requirements for formal procurement closure are usually defined in the
terms and conditions of the contract and are included in the procurement
management plan.
 Typically, all deliverables should have been provided on time and meet
technical and quality requirements, there should be no outstanding
claims or invoices, and all final payments should have been made.
 The project management team should have approved all deliverables
prior to closure.
WORK PERFORMANCE INFORMATION

 Work performance information includes information on how a seller is

performing by comparing the deliverables received, the technical
performance achieved, and the costs incurred and accepted against
the SOW budget for the work performed.
PROCUREMENT DOCUMENTATION
UPDATES
 Procurement documentation that may be updated includes the
contract with all supporting schedules, requested unapproved
contract changes, and approved change requests.
 Procurement documentation also includes any seller-developed
technical documentation and other work performance information
such as deliverables, seller performance reports and warranties,
financial documents including invoices and payment records, and the
results of contract-related inspections.
 CHANGE REQUESTS
 Change requests to the project management plan, its subsidiary
plans, and other components such as the cost baseline, schedule
baseline, and procurement management plan, may result from the
Control Procurements process.
 Change requests are processed for review and disposition through the
Perform Integrated Change Control process
 Since any of these constructive changes may be disputed by one
party and can lead to a claim against the other party, such changes
are uniquely identified and documented by project correspondence.
PROJECT MANAGEMENT PLAN
UPDATES
 Risk management plan
 Procurement management plan
 Schedule baseline
 Cost baseline
PROJECT DOCUMENTS UPDATES

 Lessons learned register

 Resource requirements
 Requirements traceability matrix
 Risk register
 Stakeholder register
 ORGANIZATIONAL PROCESS ASSETS
UPDATES
 Payment schedules and requests. All payments should be made in
accordance with the procurement contract terms and conditions.
 Seller performance evaluation documentation: Seller performance
evaluation documentation is prepared by the buyer and documents
the seller’s ability to continue to perform work on the current
contract, indicates whether the seller can be allowed to perform work
on future projects, or rates how well the seller is performing the
project work or has performed in the past.
 Prequalified seller lists updates: Prequalified seller lists are lists of
potential sellers who are previously qualified (approved). These lists
will be updated according to the Procurement Control process
outcomes because sellers could be disqualified and removed from the
lists based on poor performance.
ORGANIZATIONAL PROCESS ASSETS
UPDATES
 Lessons learned repository. Lessons learned should be archived in the
lessons learned repository to improve procurements on future
projects. At the end of a contract, the actual results of the
procurement are compared with the projected results in the original
procurement management plan. These lessons learned state whether
the project objectives were achieved and, if not, provides the reasons
they were not.
 Procurement file. A complete set of indexed contract documentation,
including the closed contract, is prepared for inclusion with the final
project files.