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Procurement Knowledge Area

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I'm Belinda Goodrich and today's learning point is on the procurement knowledge area. So, we have three procurement processes and those processes would come into play if we were
purchasing or acquiring goods or services external to our organization. First process that we're going to do is plan our procurement management, document what our approach is going to be to procurement and also do a make or buy analysis. Does it make sense for us to get it externally or do we have the resources that we need internally? Now keep in mind for all
of these procurement processes, we are always the buyer. We are
buying something for the benefit of our project and then the seller is going to be called a supplier, service provider, contractor, subcontractor, vendor. They could use any of those terms. So, we are always the buyer in these processes.

So, we plan that procurement right up front and part of that is understanding which contract types to use. Now if you're studying for your PMP or CAPM exam, make sure you're familiar with the contract types. We have fixed price
contracts, cost reimbursable contracts, and then a hybrid of the two, which we call a time and material contract. We have more videos on the contract types coming later. Then, we conduct our procurements. That is where we receive those seller responses, we evaluate them, select the seller and award the contract. This could be ongoing throughout your project as you find you have needs for more products or services. Finally we control our
procurements, ensuring that they are doing what they're supposed to be doing and we're doing what we're supposed to be doing per the terms and conditions of the contract.

Now of course, every organization has their set procurement policies, so you always want to align with what those policies and procedures are and work with your procurement office. Part of controlling your procurements would also be closing out those procurements with the vendors, making sure they've received their final payment, we've received their final goods or services and captured our lessons learned.

Three processes, very important, especially from a legal perspective. Again, make sure you know those contract types, because that's a big part of managing our procurements.

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