Pgmt 530 92spring 2020procurement Management Plan Scenario ✓ Solved

PGMT 530-92 Spring 2020 Procurement Management Plan Scenario · You are the project manager for a project chartered to develop an application for mobile devices. The app is designed to allow users to use mobile pay services to purchase fuel at gasoline pumps. · This project requires the integration of several types of programming your company does not normally do in-house. It may require the services of one or several vendors to provide technical support · The project also requires the delivery of an “on-pump†interface for mobile devices that your company cannot produce in-house. A subcontractor will be required to manufacture this device. OBJECTIVE · You and your team will prepare a procure management plan to describe how you will plan, administer, monitor and control, and close the various contracts required to execute the stated project plan. · The plan should be broad enough to facilitate any contract the project may require, addressing any known contracts that may be needed, as well as providing a provision for initiating new contracts for unforeseen subcontractor needs PMGT 530 Procurement Management Plan Template Procurement Management Plan <Project Name> Company Name Street Address City, State Zip Code Date Table of Contents 3 Introduction 3 Procurement Management Approach 4 Procurement Definition 4 Type of Contract to be Used 5 Procurement Risks 5 Procurement Risk Management 6 Cost Determination 6 Standardized Procurement Documentation 7 Procurement Constraints 8 Contract Approval Process 9 Decision Criteria 9 Vendor Management 9 Performance Metrics for Procurement Activities 11 Sponsor Acceptance 1.0 Introduction In this section, you are to explain the purpose of the Procurement Management Plan, the general requirements for the project and describe at a high level how it will be managed from developing procurement documentation through contract closure.

In this section, you should also describe the item(s) to be procured, the types of risks that may be encountered and your general risk management approach, explain in brief assumptions and constraints and the types of standard procurement documentation that will be used. In short, this section should provide a summary of the entire procurement management plan. 2. 0 Procurement Management Approach In this section, you are to clearly identify the necessary steps and responsibilities for project procurement from the beginning to the end. This should include the specific roles and responsibilities for each of the key players associated with each part of the procurement process.

You should describe in this section, how you as the project manager, will work with the project team, contracts/purchasing department, and other key players to manage the procurement activities. 2.1 Procurement Definition The purpose of this section is to describe, in specific terms, what items will be procured and under what conditions. Sometimes items which must be procured for a project can be made internally by an organization. Additionally, procurement deadlines are usually affected by the project schedule and are needed by certain times to ensure timely project completion. This section is where these items must be listed, justified, and the conditions must be set.

Any important technical information should also be included. This section shall also include individuals with authority to approve purchases in addition to, or in the absence of, the project manager. Item/Service Justification Needed By In addition to the above list of procurement items, the following individuals are authorized to approve purchases for the project team: Name Role 3.0 Type of Contract to be Used The purpose of this section is to describe the type of contract to be used, and why, so the contracts and purchasing department can proceed accordingly. There are many different types of contracts like firm-fixed price, time and materials (T&M), cost-reimbursable. Different procurement items may also require different contract types.

A well-defined product may be a firm-fixed price while a product which will require a research and development effort may be a T&M contract. In this section, you are also to explain the process (including roles and responsibilities) for defining the types, quantities, services, and delivery dates for the product or services to be procured. Additionally, you should identify which entity in the organization will solicit bids and on what basis the contract will be awarded to the successful bidder. The length and term of the contract to be awarded shall also be described in this section. 4.0 Procurement Risks The purpose of this section is for you to identify any potential risks associated with procurement for your project.

You should explain and list the specific risks that may be associated with your project. Depending on the contract type, items or services being purchased, vendor history, or uncertainties in the project’s scope, schedule, or budget, potential risks may require more detailed planning and mitigation strategies. For instance, if an organization has a close relationship to a particular vendor but there is a chance that vendor will no longer to be able to provide goods or services needed, this represents a significant risk to the project’s procurement activities that must be managed. 4.1 Procurement Risk Management The purpose of this section is to describe how risks related specifically to procurement activities will be managed.

In this section, you are also to describe the risk management considerations which are unique and apply only to your procurement. You are to include a description of the involvement of specific personnel in managing procurement risks and how approval on mitigation steps from management within the organization will be obtained. 5.0 Cost Determination The purpose of this section is to describe how costs will be determined and how they will be used as part of the selection criteria. For procurements seeking goods and/or services from an outside vendor, costs are usually provided in the vendor’s response to a Request for Quote (RFQ), or Request for Proposal (RFP). In this section, you are also to include a clear explanation of how you are requesting costs to be broken out (cost by task, costs by hours expended) by the vendor’s responding to your RFQ or RFP.

You should also address how you will handle any omitted or incomplete information. 6.0 Standardized Procurement Documentation The purpose of this section is to describe what standard procurement documentation will be used as part of your procurement. In addition to the documents that will be used, you should also include the entity within the organization who is responsible for managing the documents and provide an explanation about where they will be housed within your organization. 7.0 Procurement Constraints The purpose of this section is to describe any constraints which must be considered as part of your project’s procurement management process. These constraints may be related to such items as schedule, cost, scope, resources, technology, or buyer/seller relationships.

You should also explain if and how these constraints will be part of any solicitation and how they will be communicated to others in the project’s procurement process. 8.0 Contract Approval Process The purpose of this section is to define the process through which contracts must be approved. In this section, you are to clearly define the process within your organization and who is involved in the decision-making. Typically, large purchases follow an established bidding process and follow a formal selection and approval process. Smaller purchases can be less formal and can be approved by the Project or Program Manager.

This section should clearly identify these steps and the rules for all procurements within your organization. 9.0 Decision Criteria The purpose of this section is to define the criteria to be used to decide on what contract(s) to award. The criteria to be used can be in the form of bulleted list. 10.0 Vendor Management The purpose of this section is to describe the roles and actions the project team and purchasing and contracts department will take to ensure that the selected vendors provide all of the products/services agreed upon and that the appropriate levels of quality are maintained. In describing your specific actions to be undertaken (i.e. meetings), you shall explain the frequency, purpose, and proposed outcomes of each action you plan to undertake with respect to managing vendors.

11.0 Performance Metrics for Procurement Activities This section describes the metrics to be used for procurement activities associated with the project. These metrics may include but not be limited to: methods to ensure the project stays on schedule regarding procurement activities, and methods used to compile data on the performance of various vendors in order to assist with future procurement activities’. In this section, you shall also explain the rating scale to be used to judge the performance of the vendor(s). Vendor Description of Criteria 1 Description of Criteria 2 Description of Criteria 3 Description of Criteria 4 Description of Criteria 5 Vendor #1 Vendor #2 Criteria will be scored using the following formula: Sponsor Acceptance Approved by the Project Sponsor: Date: <Project Sponsor> <Project Sponsor Title> 7

Paper for above instructions

Project Name: Mobile Fuel Payment Application
Company Name: [Your Company Name]
Street Address: [Address]
City, State: [City, State]
Zip Code: [Zip Code]
Date: [Today’s Date]

Table of Contents

1. Introduction
2. Procurement Management Approach
1. Procurement Definition
3. Type of Contract to be Used
4. Procurement Risks
1. Procurement Risk Management
5. Cost Determination
6. Standardized Procurement Documentation
7. Procurement Constraints
8. Contract Approval Process
9. Decision Criteria
10. Vendor Management
11. Performance Metrics for Procurement Activities
12. Sponsor Acceptance
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1. Introduction

The purpose of this Procurement Management Plan is to sequentially outline the procurement needs essential for developing a mobile application that allows users to purchase fuel via mobile payment systems. Given that our project necessitates integration of technical support and manufacturing of an interface device, it is crucial to systematically manage procurement. The project requires us to acquire technical expertise and hardware that are unavailable in-house, hence the engagement of external vendors/subcontractors. This plan will guide us from the documentation phase through contract administration and closure, ensuring all requirements are met efficiently and effectively (PMI, 2021).

Items to be Procured:

1. Software development services for mobile payment integration.
2. Hardware manufacturing for the “on-pump” interface.
3. Ongoing technical support services.
Risks Encountered:
- Potential delays in hardware manufacturing.
- Incompatibility issues between mobile payment software and existing gasoline pump technology.
- Vendor performance variability.
Assumptions include the availability of reliable vendors with relevant experience, while constraints will likely involve budget restrictions, project timelines, and necessity for compliance with industry regulations (Kerzner, 2017). The primary standardized procurement documents will include Requests for Quotations (RFQs), Requests for Proposals (RFPs), and contracts.

2. Procurement Management Approach

The procurement strategy will follow a structured approach involving specific roles and responsibilities.
- Project Manager (PM): Oversees the entire procurement process, coordinates with the team, and provides final approvals.
- Project Team: Identifies specific procurement needs and assists in evaluating vendor proposals.
- Contracts/Purchasing Department: Issues RFQs and RFPs, negotiates terms, and establishes contracts with selected vendors.
To manage procurement effectively, the PM will ensure continuous communication between all parties and maintain a procurement timeline aligned with the overall project schedule.

2.1 Procurement Definition

The main items procured will include software and hardware not produced in-house due to lack of expertise. These procurements must be justified based on functionality, cost, and timeline:
Item/Service | Justification | Needed By
---|---|---
Software Development | Necessary for integration with mobile payment systems | [Specified Date]
Hardware Manufacturing | Required for creating the on-pump device | [Specified Date]
Approved individuals include the Project Manager, the Head of Purchasing, and the Chief Technology Officer.

3. Type of Contract to be Used

Given the nature of our project, a hybrid approach will be adopted based on different procurement items:
- Firm-Fixed Price (FFP) Contracts: For hardware manufacturing, as the scope is well-defined.
- Time and Materials (T&M) Contracts: For software development, where variability in effort must be accounted for.
The Contracts/Purchasing Department will manage the solicitation of bids, evaluating them based on quality, experience, and pricing terms. Contracts will typically span six months, with extensions based on project needs and vendor performance (Monczka et al., 2016).

4. Procurement Risks

Several procurement-related risks may impact project deliveries:
- Vendor Dependability: Reliance on a single vendor could halt progress if they fail to deliver.
- Market Fluctuations: Price changes in materials might affect contract costs.
- Miscommunication: Technical misunderstandings could lead to incompatible software or hardware.
Effective monitoring and evaluation will be required to mitigate risks.

4.1 Procurement Risk Management

This will involve continuous vendor performance assessments and ensuring that contracts contain specific clauses addressing performance benchmarks, timelines, and penalties for non-compliance (Chen, 2019). Approval routes for risk mitigation will involve the PM and the project sponsor.

5. Cost Determination

Vendor costs will be estimated via RFQs and RFPs, with requests that broke down costs into tasks and hours. In the event of incomplete information, an expedited clarification process will be initiated to ensure all proposals are adequately assessed before contract engagement.

6. Standardized Procurement Documentation

Standard documents to be utilized include:
- RFQs for hardware manufacturing.
- RFPs for software development services.
- Contracts detailing deliverables and penalties for non-compliance.
The Contracts Department will manage these documents, housed in the organization’s shared drive for access by authorized personnel only (Patterson et al., 2018).

7. Procurement Constraints

Constraints will include budget limitations, specified project timelines, and the need to adhere to industry standards and compliance regulations. Clear communication of these constraints will be part of all solicitation documents to prevent misunderstandings (Kliatchko, 2020).

8. Contract Approval Process

Contracts will undergo a multi-tier approval process:
1. Initial evaluation by the PM.
2. Review by the Procurement Department.
3. Final sign-off by upper management.
Larger contracts will require formal bidding processes, while smaller purchases may receive expedited approvals.

9. Decision Criteria

Decision criteria for selecting vendors will include:
- Price and cost breakdown
- Vendor experience and past performance
- Technical capability

10. Vendor Management

Regular engagement will ensure quality deliverables and alignment with project needs. Meetings will be scheduled bi-weekly to assess progress, address issues, and provide necessary feedback.

11. Performance Metrics for Procurement Activities

Key performance metrics will include timeliness of deliverables, quality of products/services received, and adherence to budget. Vendor performance will be evaluated on:
1. Delivery on schedule.
2. Quality of work.
3. Compliance with contract terms.
4. Responsiveness to issues.
Each vendor will receive a performance rating based on the above criteria.

12. Sponsor Acceptance

Approved by the Project Sponsor: [Sign/Date]
Name: [Project Sponsor Name]
Title: [Project Sponsor Title]
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References

1. Chen, K. (2019). Risk Management in Supplier Selection: A Framework. International Journal of Production Economics, 209, 193-205.
2. Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. John Wiley & Sons.
3. Kliatchko, J. (2020). Managing Procurement in Projects. Project Management Institute.
4. Monczka, R. M., Handfield, R. B., Giunipero, L., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.
5. Patterson, J. L. et al. (2018). Procurement Management: A Structured Approach. Springer.
6. PMI (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (7th ed.). Project Management Institute.
7. Turner, J. R. (2016). Gower Handbook of Project Management. Gower Publishing, Ltd.
8. Vining, A. R. & Globerman, S. (2021). The Economics of Public-Private Partnerships. Journal of Policy Analysis and Management, 40(1), 165-189.
9. Yang, J. & Wei, J. (2021). Integrated Risk Management in Collaborative Procurement. Supply Chain Management: An International Journal.
10. Zsidisin, G. A., & Ellram, L. M. (2016). An Analysis of Key Supply Management Issues. Journal of Purchasing and Supply Management.
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This Procurement Management Plan lays a comprehensive framework for approaching, evaluating, and managing procurements required for the projected development of the mobile fuel payment application. The structured methodology should lead to a successful project launch while mitigating risks associated with procurement activities.