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64 Cards in this Set

  • Front
  • Back
What is procurement?
Procurement is working with outside companies
Process - Plan procurement management
in the PLANNING process group; analyzing procurement /outsourcing needs
Process - Plan procurement management: inputs
project management plan; requirements documentation; risk register; activitiy resource requirements; project schedule; activity cost estimates; stakeholder register
Process - Plan procurement management: tools and techniques
Make-or-Buy Analysis; expert judgment; market research
Process - Plan procurement management: outputs
procurement management plan; procurement statement of work; source selection criteria; make-or-buy decisions; change requests
What is the procurement plan?
Formalizes types of contracts nad procurement documents; details procurement metrics, assumptions, constraints and risks; indicates if/when independent estimates will be used; designates any prequalified sellers; describes the manner in which multiple suppliers are managed; describes the manner which make-or-buy decisions are conducted; the manner in which the PM team will work with the procurement department; manner in which procurement is coordinated with other project processes like scheduling and reporting
What does the procurement plan help with?
determine make-vs-buy; establish procurement documents (RFP,RFQ,RFI); creates procurement documents for the project; run bidder conferences; address single source and sole source procurement; select vendors; establish contracts with vendors
what are make-or-buy decisions and considerations?
Make or buy considerations include: make criteria (buyer owns intellectual property and wants to maintain control of it; buyer has excessive qualified capacity), buy criteria (buyer doesn't possess the skills need to make; buyer doesn't possess the capacity to do the work)
What is the rent or buy calculation factors?
The rent vs buy factors are: Purchase cost and daily maintenance with the purchase option; daily (weekly or monthly) rental fees which typically include maintenance fees;
What is a contract?
A contract is a mutually binding legal agreement between the buyer and seller where the components are: capacity (competency, of legal age, and individual legal entities); consideration (items to change possession); Offer (proposition to exchange something for something); legal purpose (reason for contract is not illegal in nature); Acceptance (willingness of the buyer to accept the offer of the seller)
What are some buyer names?
client, customer, prime contractor, contractor, acquiring organization government agency, service requester, purchaser
What are some seller names?
Contractor, subcontractor, vendor, service provider, supplier
What are the four types of contracts?
Purchase order, fixed-price, time and materials, cost reimburseable
What is a purchase order (PO)?
A PO is a unilateral agreement requiring only one-party approval; buyer risk: neutral; seller risk: neutral
What is a firm fixed-price?
FFP or Lump Sum requires details for the seller to estimate accurately; details are required for a FP contract; buyer risk: minimal; seller risk: significant
What is a Fixed-Price incentive fee?
FPIF is fixed-price plus an added incentive fee to motivate the seller to exceed the minimum requirements; buyer risk: minimal; seller risk: significant
What is a Fixed-price economic price adjustment?
FP-EPA is a fixed-price with variability year-toyear on certain expenses of operating and/or production; buyer risk: minimal; seller risk: significant
What is a Cost plus fixed-fee?
CPFF is when knows the general need but lacks the necessary detail; includes fixed fee while covering seller costs; buyer risk: medium; seller risk: minimal
What is cost plus incentive fee?
CPIF covers cost and incentivises the seller to do better than certain goals (time or cost) with a special payment; buyer risk: medium; seller risk: minimal
What is cost plus award fee?
CPAF covers sellers legitimate costs but the majority of payment is relative to buyer satisfaction; buyer risk: minimal; seller risk: significant
What is cost plus percentage of cost?
CPPC or Cost plus fee (CPF) covers seller costs and an additional fee relative to a percentage of the costs
What is time and materials?
T&M is stypically staff supplementation or smaller initiatives
What is "share"?
Share is splitting any remaining money between the buyer and seller (often documented as a percentage: 60/40 share)
What is the "point of total assumption"?
The point of total assumption is the point at which the seller is responsible for all cost overruns associated with a Fixed-Price Incentive Fee (FPIF) contract
What is the point of total assumption formula?
PTA= [ {ceiling price (max percentage of the target cost: 140% of cost) - target price (total target value of the contract work: target cost + target profit) } / buyer share (% split) ] + target cost (expected cost of the work)
What is the contract scope of work?
Contract scope of work describes what the seller will do for the buyer
What is a "design" type scope of work?
Design type scope of work is when the buyer providers the seller with the exact details of what is required often affiliated with fixed-price contracts
What is a "functionality" type scope of work?
Functionality type scope of work is when the buyer details to the seller the functionality needed (higher level requirements) allowing the seller to propose solutions typically affiliated with Cost Plus contracts
What are four common procurement documents?
Request for information, request for quote, request for proposal, invitation for bid
What is a request for information procurement document?
RFI typically requests information to learn more about a company and their product or service
What is a request for quote procurement document?
RFQ tpically requests proposals for a small dollar amount or a known commodity-type product that does not require a lot of customization and has a standard price not typically ending with a negotiation (think "quote me a price")
What is a request for proposal procurement document?
RFP typically requests proposals for bigger, higher priced, customized product or service where the details are negotiated
What is a invitation for bid procurement document?
IFB sometimes called Request for Bid (RFB) typically a techniques used in sealed government contract bidding and is similar to an RFP
Process - Conduct procurements
in the EXECUTING process group; incorporates soliciting responses from sellers, selecting sellers and awarding contracts
Process - Conduct procurements: inputs
procurement management plan; procurement statement of work; source selection criteria; make-or-buy decisions; procurement documents
Process - Conduct procurements: tools and techniques
bidder conference; proposal evaluation techniques; expert judgment
Process - Conduct procurements: outputs
selected sellers; agreements; resource calendars
What is a qualified sellers list?
A qualified sellers list is a list that a buyer can use as a screening mechanism in the procurement process
What is a bidder conference?
A bidder conference allows sellers to ask buyers questions and questions and answers are provided to all sellers
What are two noncompetitive forms of procurement?
Sole Source and Single source
What is sole source procurement?
Sole source involves using a company that has no competition
What is single source procurement?
Single source involves selecting a prefered partner/vendor
What are incentive fees?
Incentive fees are fees used by the buyer to get the seller aligned to productivity standards
What are negotiations?
A negotiation is a deal reached between two parties, hopefully considered a win/win (meaning a win for the buyer and a win for the seller).
What are competition negotiation strategies?
A competitive negotiation strategy is using one seller against another to attain the best price or the best terms
What are deadline negotiation strategies?
A deadline negotiation strategy uses deadlines to attempt to get a party to sign a contract
What are "The Boss is missing" strategies?
A "The boss is missing" negotiation strategy keeps the key approver out of the negotiation room
What are agreements (previously called Contract awards)?
A negotiation agreement is the legally-binding procurement contract
What are standard terms and conditions?
Standard terms and conditions are typically common contract items
What are special provisions?
Special provisions are typically added to a contact to account for any terms and conditions that will not meet the needs of the work involved
What is contract interpretation?
Contract interpretation is understand what is and is not in the contract like: spelling out any numbers, verbally agreed to requirements, attach any reports and metrics and expectations
Process - Control procurements
in the MONITORING and CONTROLLING process group; administer procurement affiliations, track buyer and seller performance and make any necessary contract adjustments; focuses on managing interfacing points between buyer and seller(s); emphasises only paying for work that has been completed;
Process - Control procurements: inputs
project management plan; rocurement documents; agreements, approved change requests; work performance reports; work performance data
Process - Control procurements: tools and techniques
contract change control system; procurement performance reviews; inspection and audits; performance reporting; payment systems; claims administration; records management system
Process - Control procurements: outputs
work performance information; change requests; project management plan updates
Who is the contract administrator?
The contract administrator manages the contract(s)
Is the project manager the contract administrator?
No, the PM is not the contract administrator. They may be the same person, but they are not the same role.
What is centralized contracting?
In centralized contracting, the contract administrators have a lot of shared contract expertise and experience and support each others contracts
What is decentralized contracting?
In decentralized contracting, the contract admin is alone on a project without general contracting support
Process - Close procurements
in the CLOSING process group; validate that the contract terms and conditions have been met
Process - Close procurements
project management plan; procurement documents
Process - Close procurements
procurement audits; procurement negotiations; records management system
Process - Close procurements
close procurements; organizational process assets udpates
What is formal acceptance?
Formal acceptance involves the buyer agreeing that the work is complete as a key piece of the contract