Procurement Management 12.3 Administer Procurements

Quick Link to Procurement Management

Procurement Management 12.1 Plan Procurements

Procurement Management 12.2 Conduct Procurements

Procurement Management 12.3 Administer Procurements

Procurement Management 12.4 Close Procurements

The buyer and the seller both perform contract administration to ensure that the other party meets its contractual obligations. The process involves monitoring performance, managing interfaces if there are multiple providers, making changes and corrections, and processing interim payments (often called progress payments which are based on the seller's progress in completing the work). In some cases, contract administration involves managing the early termination of a contract (for cause, for convenience or for default). Several key project management processes are used to help accomplish these aims:

·         Direct and manage project execution (Section 4.3)

·         Report performance (Sectionl0.5)

·         Perform quality control (Section 8.3)

·         Perform integrated change control (Section 4.5)

·         Monitor and control risks (Section 11.6)

Administer Procurements
Inputs	Tools	Outputs
1.       Procurement documents 2.       Project management plan 3.       Contract 4.       Performance reports 5.       Approved change requests 6.       Work performance information	1.       Contract change control system 2.       Procurement performance reviews 3.       Inspections and audits 4.       Performance reporting 5.       Payment systems 6.       Claims administration 7.       Records management system	1.       Procurement documentation 2.       OPA updates 3.       Change requests 4.       Project management plan updates

Six Key Inputs for Administer Procurements:

1.       Procurement Documents: The contract and the SOW are two of the most important documents that would guide contract administration.

2.       Project Management Plan: contains the procurement management plan which describes how each procurement process is to be handled.

3.       Contract: Described in Section 12.2.3.2.

4.       Performance Reports: Seller performance documentation in the areas of technical achievement and performance reports (cost, schedule, resource variances and forecasts).

5.       Approved Change Requests: May include modifications to contract terms and conditions with the most important being any effect on the triple constraint (scope, schedule and cost). Verbally discussed but undocumented change requests should not be processed or implemented.

6.       Work Performance Information: Addresses whether quality standards are being met, what costs have been incurred, the completion status of deliverable, and what interim payments have been requested and/or paid.

Seven Key Tools for Administer Procurements:

1.       Contract change Control system: As always, establishes the procedures by which changes can be approved. Includes paperwork, tracking, approval levels and dispute resolution procedures.

2.       Procurement Performance Reviews: A structured review of the seller's progress (cost, schedule, scope, quality). The purpose of these reviews is to document successes and failures as well as demonstrate whether the seller is able to complete the work.

3.       Inspections and Audits: These quality management techniques are used to check for compliance with contract requirements. Inspections and audits are usually required by the buyer and supported by information from the seller.

4.       Performance Reporting: Documents the contractor's relative effectiveness in achieving contract objectives.

5.       Payment Systems: The payment system includes appropriate reviews and approvals so that interim and final payments can be made as appropriate. Payment systems are sometimes handled by the project (larger programs) but are frequently handled by the accounts payable department in the overall organization.

6.       Claims Administration: contested or constructive changes are those where the buyer and seller cannot agree on the terms (cost, schedule) for a change. In Some cases, a dispute arises over whether work item is a change in scope or is a legitimate part of the original scope.

7.       If the parties cannot resolve a claim themselves, the matter is then handled through whatever dispute resolution procedures were established in the contract. Dispute resolution can occur during project performance or after a project has been closed.

8.       Records Management System: Used to manage contract documents and records. Usually involves an index of contract documents with methods for retrieval, archiving and automation.

Four Key Outputs for Administer Procurements:

1.       Procurement Documentation: The contract itself and supporting documentation such as schedules, approved and unapproved change requests technical documentation, performance reports, invoices and payment records, the results of inspections and audits, and the status of deliverable.

2.       Organizational process Assets Updates: Key correspondence concerning audits, inspections, change requests, warnings for unsatisfactory performance, and key decisions. Information about payment schedules and how seller performance is documented would also be updated at this stage.

3.       Change Requests: Processed using integrated change control. Disputed changes are usually given special attention and documented separately.

4.       Project Management Plan updates: Elements of the plan that may be updated include:

·         Procurement management plan (to reflect approved change requests, especially those affecting costs or schedules)

·         Baseline schedule (to reflect any significant variances from the baseline or revisions to the baseline because of approved changes)