Project procurement management is an important area of knowledge addressed by the contracting organization or service requester, and the seller, who is the service provider, supplier, or contracted company.

As outsourced services become increasingly common, projects come to involve different vendors, which requires effective management to avoid problems that impact their completion and realization.

Get to know the best practices for procurement management which can ensure the smooth progress and success of your projects:

What is procurement management for?

The main thing to say is that this area of knowledge is made up of a few processes:

Planning

Planning procurement management involves documenting all purchasing decisions of the project, including specification of the approach and identification of potential suppliers.

This process can be divided into a few stages:

• definition of what is intended to be done or acquired;
• product or service specification;
• establishment of evaluation criteria;
• Order preparation;
• Request for Proposals.

Driving

Conducting procurements means moving to the next step, which consists of obtaining responses from vendors, analyzing and selecting the vendor, and finally, drafting and signing the contract.

Control

This process concerns monitoring aimed at controlling procurement relationships, which means that contract performance is monitored and, if necessary, changes and corrections are made.

Best practices

The first step to be executed is the decision of whether or not to acquire a good or service externally for the project. From there, the procurement management plan should emerge, in which information such as objectives, standards to be verified, and routines for contract management are documented.

Since managing procurements during project implementation is not easy, it is recommended to seek best practices according to the PMBOK Guide, among which we can highlight some elements:

Statement of Work

In the procurement planning phase, a Statement of Work (SOW) must be developed, which includes a detailed description of the service to be performed or the products to be delivered.

From this document, suppliers will be able to understand the requirements and prepare their proposals. The development of the SOW must be meticulous, as any omissions or errors could become a threat risk for the project, as well as an opportunity risk for the supplier.

Criteria

The development of criteria to be considered during the evaluation of proposals also requires care. This is because they need to be adequate for the project's needs, or they may end up causing unnecessary price increases or prematurely eliminating potential proponents.

The criteria can be mandatory, meaning they are a disqualifying prerequisite, or optional and classificatory. They can be related to prices, delivery times, specifications, and qualifications for the product or service, among others.

Contract

The legal document between a buyer and a supplier is one of the main elements of procurement management. It describes a mutual agreement that creates obligations between the parties, which includes what is being acquired and the rights and duties of the client and the contractor.

The contract needs to be drafted to express the complexity of the deliverables and the effort required for them, with detailed terms and conditions in an objective, clear, and unambiguous manner.

As this document causes the parties to share potential risks, the contract must be approved and reviewed by specialists in legal and technical matters.

With these procurement management practices and good planning, it is possible to find higher quality suppliers and ensure your project is completed as planned.

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