Chapter Review: chapter 12

Chapter 12
Project Procurement Management
Procurement means acquiring goods and or services from an outside source. Other terms include purchasing and outsourcing
Many companies prefer to do outsourcing while some other companies not prefer outsourcing. Some company so outsourcing because:
 To reduce both fixed and recurrent costs
 To allow the client organization to focus on its core business
 To access skills and technologies
 To provide flexibility
 To increase accountability
A contract is a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them. Contracts can clarify responsibilities and sharpen focus on key deliverables of a project. Because contracts are legally binding, there is more accountability for delivering the work as stated in the contract.
Project procurement management: acquiring goods and services for a project from outside the performing organization
Processes include:
Planning purchases and acquisitions: determining what to procure, when, and how
Planning contracting: describing requirements for the products or services desired from the procurement and identifying potential sources or sellers (contractors, suppliers, or providers who provide goods and services to other organizations)
Requesting seller responses: obtaining information, quotes, bids, offers, or proposals from sellers, as appropriate
Selecting sellers: choosing from among potential suppliers through a process of evaluating potential sellers and negotiating the contract
Administering the contract: managing the relationship with the selected seller
Closing the contract: completing and settling each contract, including resolving any open items
A statement of work is a description of the work required for the procurement
If a SOW is used as part of a contract to describe only the work required for that particular contract, it is called a contract statement of work.