Amendment review and approval process. Describe how changes are made to procurement documents to ensure that changes are valid, understood, and approved by the appropriate people. Procurement process. This section provides a brief overview of the process requirements required to manage the procurement of identified needs. This process should include: Includes an overall timeline that highlights key results in the form of a milestone plan. Should also include estimates of costs and resource requirements. The specific content includes the explanation of risk management processes. Working with an external supplier brings new risks to a project that would not be relevant if the project were purchased internally. This section of the procurement plan describes the risk profile of the project, including: the schedule. This section describes the period during which resources are required. This gives a better idea of when to start the procurement process for each item. Identify roles and responsibilities.
This section of the procurement plan identifies the different people working on the project and all the stakeholders who will be affected by the project. The different roles involved in the procurement process include: This means that you need to determine whether you need to order the work or do it yourself. It could also mean deciding whether you want to create a solution to your problem or buy one that is already available. Most of the same factors that will help you make any other important project decision will help you with this one. How much does it cost to build it instead of buying it? How will this decision affect the scope of your project? How does this affect the project schedule? Do you have time to get the job done while fulfilling your obligations? When you plan what you contract and what you don`t, you need to think very carefully about your reasoning. The fixed-price contract with price adjustment is used for exceptionally long projects that span years. The most common use of this type of contract is the inflation-adjusted price. In some countries, the value of their local currency can vary greatly within a few months, affecting the cost of local materials and labor. In times of high inflation, the client assumes the risk of higher costs due to inflation, and the contract price is adjusted according to an inflation index.
The volatility of certain commodities can also be taken into account in a price adjustment agreement. For example, if the price of oil has a significant impact on the cost of the project, the customer may accept the risk of oil price volatility and include in the contract a provision that would allow for an adjustment of the contract price based on a change in the price of oil. Payment methods and currencies must be described in the purchasing management plan. Most contracts are paid on a progression basis, with periodic payment (monthly, etc.) up to a certain point. This can lead to conflicts, even if all work goes smoothly if the contractor feels they have done more work than an inspector admits. Equipment and materials purchased for use in the project must be transported, inventoried, stored and often secured. This area of expertise is called logistics. Project logistics can be controlled by the project team or included in the tender or tender. For international projects, materials can be imported and the procurement team manages the customs process. For small projects, the logistics function is often performed by the parent company.
For larger projects, these activities are usually outsourced to companies specializing in logistics services. For larger and more complex projects, the procurement team will incorporate logistics know-how. The work of the project often depends on the materials purchased for the project. .