In the project to be undertaken, the Procurement Management Plan (PMP) is used to act as a benchmark for the project. During the project period, the program will serve as a guide to the project; hence an update will be done since the acquisitions will always change with time. The plan developed is the one used to determine the products and services to be acquired by the company, the nature and types of contract employed in support of the project and, the process of contract approval of the suppliers of the items to be procured and the criteria of making decisions in awarding the contracts and its termination. Also, the significance of setting up a steady contract supplies, the reason for coordinating activities of procurement and the metric of gauging the procumbent activities success levels are discussed.
In a procurement contract or preferably in a business setup, there always risks associated with the process of doing business, determination of cost of products and services supplied hence these factors are also discussed in this plan to help set the standard for gauging the procurement process too. The constraints involved in procurement and procurement documentation are also included as they serve as the proof for a procurement transaction completed by the company for future reference and valuable information for a next audit process to establish the direction of the company.
Procurement Management Approach
As the project manager, I will provide overall management and oversight for all the activities done in procurement in this project. I will also work closely with the project team in identifying all the items which need to be procured under this project, overseeing the creation of procurement documents such as a request for proposals, request for quotes and request for bids. This process is to ensure that all the documents accurately and vividly describe the work to be completed by the vendor, the method by which the contracted suppliers are evaluated and the evaluation techniques to be employed in selecting the vendors.
I will also ensure that both the project scope and the product scope are addressed in the vendor's contract, for example, a good statement of work (SOW) and keep the copy of the vendors schedule so that I can track the progress of the vendor in comparison to the supplies schedule. After that, I will examine the procurement list before its submission to which then scrutinizes the procurement products to identify if it will be viable to purchase the items or make them internally. After that, the department of purchase and contracts commence the process of selecting the vendors and the contracting and purchasing process.
For the project to be completed, the following items to be acquired have been identified to be of importance. Their timeline and justification are pending Project Management Office (PMO) assessment for them to be submitted to the department of purchase and contracts.
Additionally, the list of items to be acquired identified above will have the following individuals responsible for the approval of their purchase
|Wayne Dwayne||Project Manager|
|Catherine Blessings||Chief Engineer|
|Steve Rands||Design Technician|
Type of Contract to be Used
All the items listed in this project are to be procured under a firm-fixed-price contract since it is both beneficial to the vendors and the company. To the company, the firm-fixed-price contract allows for the planning of the finances knowing that the prices of the procured items are not going to change soon and if they do, the vendors will cover for the extra cost in prices. To the vendors, it allows them to quote prices which can include them in cases of fluctuations in prices hence could end up making lump sum profits. Above all, it provides for the balance for both parties (vendors and company) to be satisfied through a common ground.
The project team, working together with the department of purchase and contracts, will define the types of items and services to be procured, their quantities and the dates in which the deliveries are to be made. The department of contract and purchase will then advertise the items and services to be procured and receive bids from potential vendors. This department will then select and list the vendors who have quoted a reasonable price which is cost effective for the company under the firm-fixed-price contract and have agreed to deliver the items/ services within the required time frame defined during the advertisement. The contracts will be awarded to successful vendors with one base year and an option of 3-years extension.
For every procurement activity undertaken by a company, there is always a level of potential risk associated with it. These risks need management to ascertain that the project initiated by a company is successful. Even though risks are handled in line with risk management plan stipulated in the project, there are some particular risks relating specifically to the listed items and services to be procured which will need to be managed. These risks include:
The impacts on the cost of the items/services and potential delay in shipping.
The probability of the final products/services delivered not meeting the required standards and specifications of the company.
The capabilities and capacity of the contracted vendors to manufacture the procured items and deliver on time.
Existing vendors' relationship and conflict with the current contract.
Unsatisfying and questionable vendors past performances.
Unrealistic expectation of vendors in terms of cost and schedule.
Since not all of the listed risks are taken into account, the risk management procedure (always standardized) of documenting, mitigating, identifying and analyzing risk management will be used during the process.
Procurement Risk Management
The management of the risks will be done according to the documented plan for risk management. Nevertheless, there will be an extra cognition and participation for risks which relate specifically to procumbent of the listed items/services. Since project procurements always include external corporations, it affects business relationships, management of vendor operations and supply chain internally within the organization either currently or in the future. The responsiveness of these operations and relationships will call for the inclusion of a nominated person to represent the contracting department and a project facilitator (sponsor) in all the meetings and reviews of the project.
Besides, the project facilitator must approve any decision on the procurement action before it is implemented. In case the sponsor is absent, the Contract's Vice president assumes this duty. Any arising issues regarding the procurement matters will need to be communicated to the person sponsoring the project and the project's contracting department for appropriate action to be taken in a meeting including all these parties.
A Request for Proposal (RFP) will be issued for the project. This proposal will help in seeking proposals from interested vendors describing how to achieve the requirements in delivering our items or services and the quotation of their cost. The listed products (1, 2 and 3) for the vendor support will be contained in all proposals and the out-year cost and the base.
The vendors will then indicate their experience in providing these items, how they will complete the work, testimonials from their previous customers, the people who will carry out the work, resumes and background information of their employees who are to carry out the task. They also need to indicate a breakdown of the item of all the costs involved per item, a work schedule showing clearly their mastery of the job to be undertaken, ability to deliver the items/or service in the stipulated time frame and a work breakdown structure (WBS)
Since the proposal will be used as the basis of selection of the vendors, all the information will need to be included in it. This means that bids leaving out any of this information or which is unclear and unconvincing will automatically be rejected.
Standardized Procurement Documentation
Many steps are involved in the process of procurement management. These steps include routine management concerning all procurement contracts and activities. The goal of every organization should be to ease procurement management in this current sensitive and dynamic environment. This helps in accomplishing the projects and contracts. For our plan to be simplified, standard documentation will be applied in every step of the management activities of the procurement. These documents provide adequate detail allowing for ease of comparing the proposals, getting a more detailed response, accuracy in the pricing of items and services and managing the vendors' contracts efficiently.
The standard documents to be applied in this project are stored in the Procurement Management Office (PMO) since it is the center of the procurement department and provides for the safety of relevant documents. Standard documents to be applied for the project procurement undertakings include the following:
- Intent letter
- Performance evaluation form for procurement.
- Evaluation form for selection (internal source).
- Contract of organization fixed price.
- Audit form of procurement
- Agreement of non-disclosure
- Lesson learned form
- Standard Request for Proposal Template. It will have to include the following:
- Criteria for source selection.
- Formant for proposal and media.
- Work statement.
- Pricing form.
- Guidelines of the proposal.
- Terms and conditions.
Several constraints should be viewed as sections of the procurement management strategy in this project. These constraints are incorporated in the Request for Proposal to all suppliers to identify their capability to do business with...
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