As a project manager, one of your roles in whichever project that you are working on within your team, could possibly be to write and administer contracts and maintain contractual relationships, in order to practice good procurement management. Contractual relationships are legal relationships that are subject to state and federal contract laws. Therefore, it is very crucial that you also include legal and contracting professionals in this process of writing and administering contracts. This goes for not only you but also for your project team, so that every member knows the potential legal problems that might arise due to not obeying or understanding a given contract. Although this may not seem like a serious issue, if you were a project manager on a team and your project contract included instructions on handling changes the particular project goes through, that you do not take the time to look and understand, you may mistakenly authorize decisions that may go against the contract specifications. These can include changes such as authorizing a contractor to do additional work at a greater cost, resulting in loss of funds for the project and/or failure of the project. This shows that change control is a major aspect of the contract administration process, within project management.
More specifically, you and your team members should look out for constructive change orders. These are acts or omissions by someone with authority that can be equivalent to a written change order. In a scenario, a team member can be looked at as an authority if they are a member of the buyer’s project team and has met with the contractor on a weekly basis for a couple months to write guidelines for doing certain work. Now, if that team member instructs the contractor to go over a part of an already delivered report and that has been accepted by the project manager, this particular action can be looked at as a constructive change order. This could mean that the contractor is legally allowed to bull the buyer for that amount of additional work. Similarly, if this team member further instructs the contracts to skip parts of a review meeting due to time contracts, this exclusion cannot be considered the contractors fault since the team member is the apparent authority in this case.
Nonetheless, there are some ways to ensure you follow good practices when it comes to project procurement management. The first good practice to follow could be to ensure that changes that have been made are documented in writing. It is important that all project team members document all meetings and calls. It can also be helpful to make sure that the changes made on any parts of a project are required to be reviewed, approved and documented by the same members, in the same method that was used to approve the original version of that plan. Another thing to note is that when you are receiving complex information systems, you and your team should stay on top of everything to ensure that the new system meets the business needs and works in an operations environment. More so, ensure that when a change is evaluated, it should include an impact analysis as well as a baseline to analyze the changes. Furthermore, remember that there are various tools that can be used to help in contract administration, such as inspections and audits, performance reports, payment systems, claims administrations, etc. And last but not least, remember to have backup plans in the event that the newly added system does not work like you planned.
Additionally, controlling procurement can also consist of the process of closing procurements or in other words, contract closure. This means the completion and settlement of contracts and resolutions on any items that are left open. You and your entire project team should make sure and decide that all the work that the contract requires is correctly completed. While you do this, it is also important that your team update your records to consider the final results and possibly use the information for future use. There are also some tools available to use in contract closures such as procurement audits, which identify the lesson learned in the entirety of the procurement process. You can also use a record management system to organize procurement-related documents.
In addition, procurement management can also be implemented in agile. This is called agile procurement. Although main concepts are basically the same, the key difference is that agile procurement can help strengthen the procurement strategies that you already use. Some benefits of agile procurement can include allowing businesses to move more quickly, position enterprises as strategic partners with negotiation room. More so, it makes basic changes to an organization's processes and technologies. And lastly, It enhances stakeholders usability and accessibility. Implementing an agile approach to project procurement management can be really beneficial given that agile is about speed and improving efficiency. It has become a recommended model due to its lean and fast approach. This meaning, it distinctively speeds up the entire process so that more attention can be paid to the actual work being done. The Agile Manifesto discusses valuing customer collaboration over contract negotiation, setting a key tone to procurement management in agile projects. This doesn’t mean that your agile projects don’t have contracts, it means that the buyer and seller should be working together to make products and forming that relationship instead of focusing on checking off items on a contract that could or could not be valuable to customers. One of the most important things to remember about agile is that instead of accepting the way things have always been done, agile strives to embrace change and innovations. Therefore, the agile principles can apply to procurements on agile projects.
Procurements within a project should typically end in an agreed arrangement amongst the buyer and the seller. If this is not possible, then some alternative should be used to dispute resolutions. All organizations should try to work on and improve on their business processes such as procurement management to make themselves more efficient and gain information for future use.
References
Layton, M. (n.d.). What’s Different about Agile Procurement? dummies. https://www.dummies.com/careers/project-management/whats-different-agile-procurement/
ProcurePort Blog. (2021, February 2). Agile Procurement: What It Is and How to Implement. ProcurePort. https://blog.procureport.com/agile-procurement-definition/
Schwalbe, K. (2018). InformatIon technology Project Management (9th ed.). Cengage.