PMEducation

Procurement: the processes necessary to purchase or acquire products, services, or results needed from outside the project team

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Monitor and Control Procurements: The process of monitoring contract performance, managing procurement relationships, making changes and corrections as appropriate, and closing out contracts. This process is carried on throughout the project, as needed.

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Why do we need to Monitor and Control Procurements?

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• ensure each party attains the benefits of the contracted agreement

• protect the rights of each contracted party

• ensure each party fulfills their contractual obligations

• provide the necessary background for financial or legal audits

 

Monitor and Control Procurements includes these processes:

 

• Inspect: Collect performance data

• Measure collected data against expected performance

• Make reports, including vendor performance evaluations

• Correct: Make necessary changes

• Manage relationships

• Monitor the environment

• Pay invoices appropriate to the work accomplished

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                 PROCUREMENT  MEASUREMENTS:

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How is the procurement going? This is a question you will want to answer for each procurement made in you project. To quantify "How is it going" you will need some key performance indicators (KPI's) to measure. These KPI's should have been determined in the planning stage. Some possible key performance indicators are:

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• timeliness of the deliveries. This will impact your schedule

• quality of what has been delivered. This will impact your Quality Control

• quantity of delivered goods. This will impact your inventory control

• capability of the personnel provided by the contractor

• any other contracted requirements

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                 VENDOR PERFORMANCE EVALUATION

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The Vendor Performance Evaluation (VPE) is a review and documentation of a seller's performance. It may suggest corrective actions for the current project and/or comment on the suitability of the seller for future contracts. These documents become extremely valuable when the corrective action contemplated is early termination of the contract such as for cause, for convenience, or for default.

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                 CHANGE ORDER

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A special type of change request is found in contracts. This occurs when the seller requests a change from the buyer, or vice versa. Such requests, when agreed by the other party, lead to a written change order document. The change order is the document that amends the contract.

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               CLAIM: In some instances the buyer and seller cannot agree on:

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• the amount of compensation due for a change or,

• that a change has even occurred    

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         In this case, the seller will present a claim to the buyer to formalize their point of view. To settle claims, alternative dispute resolution mechanisms are available such as:

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• Negotiation: the contracted parties reach a mutually acceptable solution

• Mediation: a neutral third party assists

• Conciliation: a structured form of mediation

• Arbitration: a neutral third party makes the decision, which is binding upon the contracted parties

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