Project Procurement Management

1. Apply Contract andProcurement Procedures Introduction to ProcurementCertificate IV in Project Management 17871Qualification Code BSB41507Unit Code BSBPMG408A

2. Includes processes to purchase or acquire products or services from outside of the project team It also includes the contract management and change control processes required to develop and implement purchase orders and contracts The project procurement processes form the lifecycle of any contract that is established as part of that process A complex project can involve managing multiple contracts or subcontracts simultaneously Purchasing interactions with government departments and large organisations are often dictated by complex and formal procurement policies and procedures Project Procurement Management Adapated from PMBOK 4th Edition

3. Project procurements often involve a formal contract, contracts are legal documents between a buyer and a seller that are mutually binding Sellers are obliged to provide the specified products or services Buyers are obliged to provide monetary compensation Some contracts are extremely complex and others can be very simple Contracts will include terms and conditions specified by the buyer and negotiated with the seller Contracts normally require an extensive negotiation and approval process including expert assistance form procurement and legal proessionals Procurement Contracts Adapated from PMBOK 4th Edition

4. Procurement Approaches Quotation • Often requires three to five quotes and selecting the lowest or the one that best fits the requirements • Proposals are sought from a pre-selected group of potential suppliers • Proposals are sought from all potential suppliers • Recurring purchasing from a previously selected and well performing supplier • Pre-qualified list of potential suppliers for different categories of products or services Closed Tender Open Tender Previous Supplier Preferred Suppliers

5. Procurement processes for large organisations and government departments normally include some form of tender process Tender processes can be very complex and time consuming so they are normally reserved for major procurement, often over a particular monetary threshold There are different types of tenders available – open and closed There are many different potential steps that can be included in the tender process depending on the preferences and policies of the purchasing organisation Tenders result in a legally binding contract between the buyer and the seller Tender Process Adapated from PMBOK 4th Edition

6. Common Tender Process

7. Tender Definitions RFI – Request for Information • An open enquiry that spans the market seeking broad data and understanding RFQ – Request for Quotation • An opportunity for potential suppliers to competitively cost the final chosen solution(s) RFT – Request for Tender • An opportunity for potential suppliers to submit an offer to supply goods or services against a detailed tender

8. Tender Definitions RFP – Request for Proposal • An opportunity for potential suppliers to submit a detailed proposal on their ability to meet the requirements of the tender Supplier Briefings • Held by the buyer with all potential or short listed supplier to answer questions and clarify requirements EOI – Expression of Interest • An opportunity for potential suppliers to show interest in responding to a tender

9. Procurement Policies and Procedures • There are many excellent procurement related websites and resources available online – • www.tenders.gov.au – Federal government tenders • www.tenders.nsw.gov.au - NSW government tenders • www.tenders.vic.gov.au – VIC government tenders • www.vgpb.vic.gov.au – VIC purchasing board • www.finance.gov.au/procurement/ - Federal purchasing policy • www.apcc.com.au – AUS procurement and construction council • www.treasury.gov.au/procurement/ - Federal government procurement guidelines and information

10. Next Steps Please proceed to Procurement Processes in the Learning Program. Best of Luck!