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 Some Additional Remarks Concerning the Subject Procurement Management

• The Contract is the main concept of the Project Procurement Management processes: Contracts are "legal documents between a buyer and a seller": "A contract is a mutually binding agreement that obgligates the seller to provide the specified products, services, or results, and obligates the buyer to provide monetary or other valuable consideration"; it's a "legal relationship subject to remedy in the courts" (comp. PMBOOK3, pp. 270f):
  • The buyer can also be called "a client, customer, prime contractor contractor, acquiring organization, governmental agency, service requestor, or pruchaser"
  • The seller can also be called "bidder", "selected source", "contracted supplier" or "vendor". Here the change of the names follows the contract life cycle
  • A contract contains statements concerning at least five components for being a contract (comp. CROSSWIND7, p. 456):
    • Capacity
    • Consideration
    • Offer
    • Legal Prupose
    • Acceptance
• General Make or Buy Criteria (comp. CROSSWIND7, p. 455):
  • Make Decision Qualities: "The buyer owns the intellectual property [...] " and "[...] has excessive qualified capacity" to do the job"
  • Buy Decision Criteria: "the buyer doesn't posesses the skills [...]" or "[...] doesn't possess the capacity [...]" to do the job
• Typology of Procurement Documents (comp. CROSSWIND7, p. 462):
  • RFQ (= Request for Quote) "[...] requests a price for a standard item"
  • RFI (= Request for Information) "[...] requests information on the qualifications of a seller [...]"
  • RFP (= Request for Proposal) "[...] requests an approach, price, and significant detail about how the seller proposes to do the requested work"
  • IFB (= Invitation for Bid) is something like RFP but only used by the (USA) government
• Typology of Sources (comp. CROSSWIND7, p. 463)
  • Multiple sources allows to improve the act of selecting a seller
  • Sole Source is the choosen source without an alternative
  • Single Source is the choosen source without installing a competition
• Negotiation Strategies (comp. CROSSWIND7, p. 465)
  • Competition introduces a possibly fictive competitor
  • Deadline introduces a possibly fictive deadline
  • Missed Boss introduces a missed decider
  • ... and all the other tactics like Surprise, Limited authority, Fair and reasonable argueing, Withdrawal, Unreasonable, Fait accompli.
• Centralized versus Decentralized Contracting  (comp. RITA5, p. 368)
  • In a centralized contracting environment, there is a contracting department and a contract manager may handle contracts on many projects.
  • "In a decentralized contracting environment, a contract manager is assigned to one project full time and reports directly to the project manager"
• Sharing ratio is a special mode for constructing cost-plus-incentive-fee-contracts for generating win:win-situations: The Target fee is connected to conditions. If the conditions are fullfilled the target fee will be split following the sharing ratio; one part is for the buyer, the other for the seller (comp. RITA5, p. 376)