Procurement Management Knowledge Area

In the define scope process, all issues that should be included in the project were defined, the necessary resources, inputs, services were determined in the following processes. All projects need some goods and services such as materials, equipment, consultants, experts, training service, etc. At this point, what is left is whether we will actually provide these needs from within or outside the project. 

The word procurement refers to the official procedures that companies use when supplying products or services. The concept of procurement management covers., service or procurement contracts with sellers from outside the organization, management of products, processes and implementing change control, procurement orders generated by the project team, planning, management, and monitoring of procurements. In PMBOK 7 the processes of procurement management are now carried out as part of;
IN PMBOK 6 there are three processes in the procurement management knowledge area. These are;
  • Plan Procurement Management
  • Conduct Procurements
  • Control Procurements
At first glance procurement management knowledge area may seem rather easier compared to some other more complicated knowledge areas, however as a project manager, it sometimes may be the most terrifying knowledge area to perform. Because many project managers do not have former training in procurement procedures. A project manager does not have to be an expert in procurement, but he should be familiar with the topic enough to be proactive and keep the processes in control. 

In the majority of organizations, it will not be the project manager who will be authorized to sign legal agreements binding the organization. However especially in small-scale organizations without a procurement department, the authority to negotiate the contract terms and sign it may be given to the project manager. However, generally in bigger volume organizations, there is a centralized purchasing department that carries out these negotiations and formal procedures. However, even in that case, the project manager should be present in the negotiations to direct the conversations according to the technical aspects of the project.

In PM Exams, questions may come from both the perspective of buyer and the perspective of seller. Organizational process assets are especially important in this knowledge area because your organization very probably has an existing procurement procedure.

The application of the processes that belong to this knowledge area is quite simple. There is one process for each of the;
 In the plan procurement management process, as is the case for all other similar processes the main goal is developing a procurement management plan that will guide the project team to conduct and control procurements. Also in this process, the procurement documents will be created, a make or buy analysis is conducted for all needs of goods and services, the contract types will be determined and an applicable source selection criteria is defined. At the end of the process also we will have a procurement statement of work (SOW) that reflects the scope of the work which the seller will be obliged to complete.

Conduct procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract. The main output of the conduct procurements process is a contract between the buyer and the seller. In control procurements process, monitoring of the contract terms is done and change requests are created if necessary.

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