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PROJECT PROCUREMENT MANAGEMENT CONTRACTING SUBCONTRACTING TEAMING PDF

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Project Procurement Management Contracting. Subcontracting Teaming project procurement management - pmstudy - •project procurement management has. Jul 8, Access eBook Project Procurement Management: Contracting, Subcontracting, Teaming By Quentin W Fleming KINDLE. PDF. Jul 1, Get Instant Access to Project Procurement Management: Contracting, Subcontracting, Teaming. By Quentin W Fleming #b9e8.


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Project Procurement Management - Contracting, Subcontracting, Teaming -C - Free ebook download as PDF File .pdf), Text File .txt) or read book online for. Project. Procurement. Management. Contracting, Subcontracting, Teaming. Quentin W. Fleming. •K; I. Project Management Institute. musicmarkup.info: Project Procurement Management: Contracting, Subcontracting, Teaming (): Quentin Fleming: Books.

MCI reaps the benefits of over 9, research and development engineers not on its payroll. MCI's Dick Liebhaber cites one of the more important reasons to buy scope: to quickly expand the intellectual base at his company. MCI finds that it is easier to obtain technical brainpower from other companies, than to attempt to recruit and add permanent employees. And there is also the opposite advantage: to be able to quickly downsize the company should that unpleasant task become a necessity. Companies can can- cel contracts much easier than to layoff a workforce.

MCI reaps the benefits of over 9, research and development engineers not on its payroll. MCI's Dick Liebhaber cites one of the more important reasons to buy scope: to quickly expand the intellectual base at his company. MCI finds that it is easier to obtain technical brainpower from other companies, than to attempt to recruit and add permanent employees.

And there is also the opposite advantage: to be able to quickly downsize the company should that unpleasant task become a necessity. Companies can can- cel contracts much easier than to layoff a workforce. But there are also other valid reasons for companies to follow such a policy. In addition to adding to its intellectual base, firms often find that relationships with suppliers will bring them resources, facilities, 1.

Alfred A.

Teaming subcontracting project pdf management contracting procurement

Knopf, Inc. The addition of suppliers to a project will often reduce the risks of a new venture by sharing the costs of the venture, and enhancing their chances of success.

This book is about project management. However, its primary focus is on that portion of the project which will be performed by another company.

It deals with the project work which is contractually procured and performed by people working for another company. Such transactions are sometimes called contracts, sometimes subcontracts, and sometimes teaming agreements. The key distinguishing ingredient: they are all procured under some type of a legal relationship. The purpose of this book is to describe the project procurement process in a meaningful way so as to help the project managers and their teams to better manage this critical work.

As our projects become increasingly more complex, more and more we will be finding that we must rely on people from other companies to help us perform our project work. The procurement of project scope whether it be done through teaming arrangements, contracting or subcontracting, will be progressively taking a larger share of our business.

Thus, we must perform this management process well, if we are to be successful on our projects. A basic premise of this book: Contracts or Subcontracts the pro- curements exist to support successful project management. Any contract or a subcontract a procurement placed on a project is merely a subproject of the total project.

Any contract or subcontract manager can best be thought of as being a surrogate extension of the project manager.

This book will emphasize the importance of managing project procurements well. It will not describe in great detail the legal or con- tractual issues, the terms and conditions, general or specific contractual provisions, except in a broad strategic way to keep the project team from making avoidable errors.

In most cases the project team will be supported by a procurement professional, a person loaned into the project team by an organization which exists under the title of purchasing, procurement, material, materiel, supply management, etc. What is Project Procurement Management 3 The main mission of these professionals is to support and improve the management of the project.

Such definitions have multiplied profusely with the expanded interest in project management which came into vogue in the s. One such definition somewhat different from the others is as follows: A project is a special kind of activity.

It involves something that is both unique and important and thereby requires unusual attention. It also has boundaries with other activities so that its extent is defined. And it has a beginning and an end and objectives whose accomplishment signal the end. Still another way to look at a project is to focus on who will be per- forming the actual work. One could easily separate a project into two distinct parts: that portion which will be done with your own company employees, and that portion which will be sent outside of your company for performance.

It is the external work from ones own company which is the theme of this book: the buy content.

This approach to subdividing a project into two generic parts is illustrated in Figure 1. Here the project is simply separated into two parts: the "Make" work and the "Buy" work. Even the big five project management books the big sellers do not address V 6 vi Project Procurement Management procurement management or even "make or buy" analysis.

Question: how could we adequately define the scope of work on a new project without also doing a make or buy analysis? The answer: not very well. Fact: it is common today for companies to procure major portions of their projects from other companies.

And to compound the issue further, often the items which are bought from other companies are the high-risk portions of the project. After it's over, when management assesses what went wrong with their project performance, they often will find that it was the work which was contracted or subcontracted to another company which adversely impacted their overall project performance. My conclusion: how well we manage other firm's performance to our projects will often determine how well, or how poorly we do on our projects.

One of my pet concerns with how well procurement management works on projects centers on the critical relationship of the project manager to the procurement people, typically called buyers. We must always keep in mind that it is the project manager who has the ultimate responsibility for the project's technical performance, the cost and schedule results.

By contrast those individuals who have their company's delegated procurement authority, the buyers, too often fail to recognize that their mission in life They buy things for projects within their established purchasing policies. Often on the major complex procurements the project manager will elect to appoint a technical specialist to manage a critical component, functioning as a team leader in an integrated project team environment.

In such cases the assigned buyer must become a subordinate, a critical deputy to the designated project team leader. The point that many of these professional individuals fail to realize is that they exist to support the projects, not to interfere in the management of the project.

Managing the project is the responsibility of the person carrying the title of project manager. It is often only an attitudinal issue, but one which can impede the maximum performance on projects. One additional important point. In our book, my son and I subdivided the project procurement activities into three distinct 7 Introduction vii processes: "planning", "procurement", and "performance.

In this landmark document which has since become the de facto world standard for project management, they elected to subdivide the project procurement effort into six distinct processes: B What we had called "planning" the PMBOK Guide broke into two processes described as "Procurement Planning" and "Solicitation Planning.

Thus, in this book I will follow the model of the PMBOK Guide and describe project procurement management as having six distinct processes. As I look back on my industrial career, every major subcontract I worked followed these six distinct processes. It was my distinct privilege to serve on the eight person core team which updated this document for the year edition. I was assigned responsibility by our project manager Ms. Cynthia A. In this book we will also use these same two terms.

Quentin W. It has been a successful series and has reached thousands of individuals, literally around the world. We have qualified six instructors to deliver this course.

Project Procurement Management Contracting, Subcontracting, Teaming,QuentinW. Fleming

Each of these individuals took time from their busy schedules to read my draft manuscript and provide their comments, concerns, and suggestions.

We need to give them a "special thanks" for their help. Fleming is a practicing attorney here in California and he reviewed the materials on the legal aspects of procurement. Thanks Shel. MCI reaps the benefits of over 9, research and development engineers not on its payroll Dick Liebhaber, MCI, from the Tom Peters bookliberation Management 2 T here are many reasons why it is a sound business practice to buy some part of a project's scope from another firm.

MCI's Dick Liebhaber cites one of the more important reasons to buy scope: to quickly expand the intellectual base at his company. MCI finds that it is easier to obtain technical brainpower from other companies, than to attempt to recruit and add permanent employees. And there is also the opposite advantage: to be able to quickly downsize the company should that unpleasant task become a necessity. Companies can cancel contracts much easier than to layoff a workforce. But there are also other valid reasons for companies to follow such a policy.

In addition to adding to its intellectual base, firms often find that relationships with suppliers will bring them resources, facilities, 1. Knopf, Inc. The addition of suppliers to a project will often reduce the risks of a new venture by sharing the costs of the venture, and enhancing their chances of success.

This book is about project management. However, its primary focus is on that portion of the project which will be performed by another company. It deals with the project work which is contractually procured and performed by people working for another company.

Management teaming pdf project procurement contracting subcontracting

Such transactions are sometimes called contracts, sometimes subcontracts, and sometimes teaming agreements. The key distinguishing ingredient: they are all procured under some type of a legal relationship. The purpose of this book is to describe the project procurement process in a meaningful way so as to help the project managers and their teams to better manage this critical work. As our projects become increasingly more complex, more and more we will be finding that we must rely on people from other companies to help us perform our project work.

The procurement of project scope whether it be done through teaming arrangements, contracting or subcontracting, will be progressively taking a larger share of our business. Thus, we must perform this management process well, if we are to be successful on our projects. A basic premise of this book: Contracts or Subcontracts the procurements exist to support successful project management.

Any contract or a subcontract a procurement placed on a project is merely a subproject of the total project. Any contract or subcontract manager can best be thought of as being a surrogate extension of the project manager. This book will emphasize the importance of managing project procurements well.

It will not describe in great detail the legal or contractual issues, the terms and conditions, general or specific contractual provisions, except in a broad strategic way to keep the project team from making avoidable errors.

In most cases the project team will be supported by a procurement professional, a person loaned into the project team by an organization which exists under the title of purchasing, procurement, material, materiel, supply management, etc. Such definitions have multiplied profusely with the expanded interest in project management which came into vogue in the s.

One such definition somewhat different from the others is as follows: A project is a special kind of activity. It involves something that is both unique and important and thereby requires unusual attention. It also has boundaries with other activities so that its extent is defined. And it has a beginning and an end and objectives whose accomplishment signal the end. Still another way to look at a project is to focus on who will be performing the actual work. One could easily separate a project into two distinct parts: that portion which will be done with your own company employees, and that portion which will be sent outside of your company for performance.

It is the external work from ones own company which is the theme of this book: the buy content. This approach to subdividing a project into two generic parts is illustrated in Figure 1. Here the project is simply separated into two parts: the "Make" work and the "Buy" work. What is the importance of this distinction? Simply put, the "Make" work will be authorized by the project manager with use of non-legal documents typically called work authorizations or budgets.

Most companies have internal procedures which cover this kind of activity. Question: what happens when the internal "Make" work effort 3. Arnold M, Ruskin and Mr. Likely such difficulties will be discovered in the periodic project status reviews that takes place within most companies.

And not surprisingly, most problems are quickly corrected by responding to the recommendations by the "big boss. However, let's now discuss what happens whenever the "buy" work fails to perform up to our expectations. What influence does our "big boss" have over the work we sent to another company for performance.

Answer: virtually nothing. Unless there is a special personal relationship between the big boss and the performing company, the work sent outside of the company will be governed strictly by the legal document the buyer has issued called the contract, or subcontract, or purchase order. If we failed to specify precisely what we wanted the other company to do for us, the big boss will be little help getting the 16 What is Project Procurement Management 5 other company to improve performance.

The safety wall for other companies is the precise language of our contractual document. The contract language has to be right. This is the key distinction between the make work versus the buy work. Senior management can and will often intercede with the internal make work. They will use their clout, and cause an improvement in performance.

Project Procurement Management - Contracting, Subcontracting, Teaming -C - [PDF Document]

But the buy work is a legal and binding formal relationship. In effect, the buy work is a "non-forgiving" relationship. If we made a mistake in defining what we wanted from the seller, an adjustment can be made The process of adjusting such work is called an "equitable adjustment", sometimes also called seller "claims.

They are responsible for everything that happens to their team, the good and of course the bad. It doesn't matter whether they can control these issues. Someone has to be held accountable and it is typically the Coach or the Project Manager who holds that position.

These two external company project relationships are depicted in Figure 1. Shown on the left side of the figure is the relationship between the project manager and the customer s. Often during the period of project performance the initial agreed to scope of work will need to be changed, for whatever reason.

It is critical that whenever the original scope of work changes, that the project's commitment to management also be changed, that it be expanded or decreased as may be the case. Often when the scope of work is altered there must be an adjustment in the authorized budget, or in the schedule commitment, or both.

What constitutes a customer can be internal company management on a 17 6 Project Procurement Management Figure 1. Many projects start out with a single customer from one source, but will later find that other entities become interested in their project. Thus it is not uncommon for the Project Manager to put other interested candidates on contract, to also sell them scope, most often with another separate contract.

In this role the Project Manager can be thought of as being the "seller" of project scope, and often this work is best described as that of contract management. Conversely, as shown on the right side of the figure, the Project Manager also assumes the role of the "buyer" of scope, from an external source. The Project Manager is essentially acquiring the performance of project scope from another firm.

This book will focus exclusively on the Project Manager as the buyer of project scope. However, it must be understood that the other role, that of the seller of project scope, is also an important duty for any Project Manager.

There are no formal rules, no procedures, no precedents to follow. However, as a new firm starts to mature, certain rules and restrictions begin to take over. Tasks previously allowed for employees are systematically declared to be off-limits by management.

One of the first things to be curtailed by a maturing company is the ability to "buy" things on behalf of the firm. It isn't necessarily that there is distrust in employees.

PDF Project Procurement Management: Contracting Subcontracting Teaming PDF Book Free

It is simply a fact, that one of the most judiciously guarded functions in any company is the ability to place orders legal agreements to buy something. This practice is called a procurement "delegation of authority" to buy, and such procurement DOAs come straight from the top person of any company. The top person in most organizations will go by various titles.

In the United States they are typically called the general manager.

Contracting management teaming subcontracting procurement pdf project

In Europe they are often call the managing director. Without being told, we instinctively know who they are, because they have the best office and the best parking spot in the organization. General managers are very careful about who is authorized to buy things on behalf of their company. They will carefully execute a memo giving a specific delegation of authority to buy things on behalf of their company.

13. Procurement Management

Such delegations will typically go to someone carrying the title of vice president of procurement, or purchasing, or supply management, or perhaps the Chief Procurement Officer CPO , etc. An important point: such authorities to buy will rarely ever be given to the project manager.

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Fact: project managers rarely have a delegated authority to buy on behalf of their companies. This revelation sometimes comes as a shock and a disappointment to project managers. However, if the procurement process is working well, and it generally does work well, it really doesn't matter. The vice president of procurement will assign someone a buyer or a subcontract manager 19 8 Project Procurement Management to the project manager to support the project effort.

The assigned buyer will do anything and everything the project manager asks them to do, but, always working within the formal procurement policies and procedures of the company. A professional buyer will not violate purchasing policy, even if directed to do so by a more senior project manager. The buyer subcontract manager will be required by policy to insist on for example a competition, if appropriate, and insist that everyone in the competition be treated equally.

These are reasonable requirements to impose on any project. One of the main purposes of company procurement policies and procedures is to prevent any project manager from taking short-cuts, perhaps in the best interests of the project, but not in the best long-term interests of the company and its relationship to the supplier base.

Companies have a strategic need for maintaining a viable supplier base to support the company over the long-term. Projects, because of their short term nature, will sometimes overlook the long-term needs of the company. This issue being described here is called "centralized" versus "decentralized" purchasing, and is illustrated in Figure 1. On the top of the figure is shown "centralized" purchasing procurement.

The authority to execute procurements on behalf of the company goes from the general manager, to the director or vice president of purchasing, who then assigns someone to support project buys. By contrast, shown at the bottom is "decentralized" purchasing, often commonplace with new start-up companies. Here the project manager is either given specific procurement authority, or perhaps most often, simply executes such legal purchase agreements without having a specific delegation.

Since most new companies often lack internal controls policies and procedures, the project manager gets away with it, for the time being.

Most mature companies do not give procurement authority to their project managers. Why, perhaps the chief executive of a major design construction management firm expressed it well when he was asked this very question: "do your project managers have procurement authority? There is just too much at stake, too many non-technical matters to know, which most project managers are typically not prepared to handle.

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Procurement authority must be restricted to people who are familiar with contracting terms, procurement regulations, funding and contractual compliance issues. We delegate procurement authority to only procurement people, but who are assigned to support the project manager. They operate in an environment referred to as "Centralized" purchasing or procurement. The role of the project manager is to define precisely the needs of the project, typically taking the form of a formal 4.

In most cases this process works well, as long as both the project manager and the assigned buyer have mutual respect for the other's position. Even the United States Government follows the practice of requiring a distinct separation of project responsibility from those individuals having procurement authority.

The Government will assign a project manager to all projects, typically carrying the title of Program Director, Program Manager, Project Manager, etc. However, these individuals, no matter what their rank may hold, will not possess the authority to execute contracts. The role of executing contracts is done on their behalf by a separate organization, by individuals who carry the title of Procurement Contracting Officer, Administrative Contracting Officer, etc.

This process works well with the United States Government. Before we leave this subject, one point needs to be mentioned. Most firms today, even the government, are finding it beneficial to issue personal credit cards to selected employees to allow them to efficiently buy routine, low-cost items.