Estimate Project Cost

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Project Procurement

By Adrienne Watt and bpayne

The procurement effort on projects varies widely and depends on the type of project.

Often the client organization will provide procurement services on less complex projects.

In this case, the project team identifies the materials, equipment, and supplies needed by

the project and provides product specifications and a detailed delivery schedule. When

the procurement department of the parent organization provides procurement services, a

liaison from the project can help the procurement team better understand the unique

requirements of the project and the time-sensitive or critical items of the project schedule.

On larger, more complex projects, personnel are dedicated to procuring and managing the

equipment, supplies, and materials needed by the project. Because of the temporary

nature of projects, equipment, supplies, and materials are procured as part of the product

of the project or for the execution of the project. For example, the bricks procured for a

construction project would be procured for the product of the project, and the mortar

mixer would be equipment procured for the execution of the project work. At the end of

the project, equipment bought or rented for the execution of the work of the project are

sold, returned to rental organizations, or disposed of some other way.

More complex projects will typically procure through different procurement and

management methods. Commodities are common products that are purchased based on

the lowest bid. Commodities include items like concrete for building projects, office

supplies, or even lab equipment for a research project. The second type of procurement

includes products that are specified for the project. Vendors who can produce these

products bid for a contract. The awarding of a contract can include price, ability to meet

the project schedule, the fit for purpose of the product, and other considerations

important to the project.

Manufacturing a furnace for a new steel mill would be provided by a project vendor.

Equipment especially designed and built for a research project is another example. These

vendors’ performances become important parts of the project, and the project manager

Learning Resource

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assigns resources to coordinate the work and schedule of the vendor. The third

procurement approach is the development of one or more partners. A design firm that is

awarded the design contract for a major part of the steel mill and a research firm that is

conducting critical subparts of the research are examples of potential project partners. A

partner contributes to and is integrated into the execution plan. Partners perform best

when they share the project vision of success and are emotionally invested in the project.

The project management team builds and implements a project procurement plan that

recognizes the most efficient and effective procurement approach to support the project

schedule and goals.

Licenses and Attributions

Chapter 4: Framework for Project Management

(https://opentextbc.ca/projectmanagement/chapter/chapter-4-framework-for-project-

management-project-management/) by bpayne and Adrienne Watt from Project

Management is available under a Creative Commons Attribution 4.0 International

(https://creativecommons.org/licenses/by/4.0/deed.en) license. © 2014, Adrienne

Watt. UMUC has modified this work and it is available under the original

license. Download this book for free at http://open.bccampus.ca

(http://open.bccampus.ca) .

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