The procurement management plan includes the following:
Purpose: A brief introductory statement defining the purpose of the procure-ment manageprocure-ment plan, such as:
The procurement management plan describes the process used to deter-mine what to acquire, such as facilities, goods, materials, and external resources, based on product requirements and describes the contractual methods that will be used.
This plan should be prepared early in the planning process, as the procure-ment process is critical to program success and benefits realization. Careful planning and analysis are required and cannot be understated in order that funding is used in the most effective way. Although the plan is drafted early in the program, it is an iterative document that should be further refined as the program moves through the phases of the life cycle, as it may require updates, especially during monitoring and controlling. It also may require updates because of changes in organizational strategy or because of risk responses,
Procurement Management Plan
Program Management Life Cycle: Program Setup Update
Conduct Program Procurements
Conduct Program Procurements
Change Requests
Approved Administer
Program Procurements
Administer Program Procurements Plan Program
Procurements
Figure 5.13 Procurement management plan.
152 Implementing Program Management: Templates for Success
which may lead to make-or-buy decisions. This plan also does not replace the procurement management plans to be prepared by the project managers in the program for their specific projects.
In the Project Management Institute’s Standard for Program Management—
Second Edition (2008), the procurement management plan is an output of the plan program procurements process. It is in an input to the conduct pro-gram procurements and administer propro-gram procurements processes. It may be updated as a result of the administer program procurements process.
Procurement planning approach: This section describes how the program management team will determine which items—facilities, goods, materials, and external resources—should be handled through the procurement pro-cess. It describes the make-or-buy process to follow and the various items that should be considered. These include external factors, market conditions, regulations, budget, and available suppliers. It also states the organization’s capability to evaluate, procure, and then manage all items that are handled through procurements.
Required and available resources and sourcing decisions: This section describes the specific resources required for the program and whether or not they are available within the organization or need to be procured from exter-nal sources.
Required procurements: This section identifies the required procurements for the program. In preparing this section, planning is needed to ensure that there is an emphasis on shared resources across the program so that additional costs are not required later in the program life cycle.
Statements of work for each item to be procured: This section describes state-ments of work for each item to be procured. It is based on review of the program scope statement and the program work breakdown structure. It is noted that the statements of work are for items at the program level. It may be possible, and desirable, to group items to be procured as one procurement item in a single statement of work. These statements of work then guide the procurement process, as it may be different for the various items that will be procured. They serve to describe in specific detail the procurement item in order that prospective sellers can determine whether or not they can provide the required items. Information in the statement of work may include speci-fications, quantities required, quality levels, performance requirements, the period of performance, and other requirements as appropriate. This section also states how work will be managed for each item that is procured and whether the work will be done internally or externally.
Procurement documents: This section states the specific procurement docu-ments that will be used for each item to be procured, such as request for pro-posal, request for quotation, or invitation to bid. The purpose is to structure these documents in a way that prospective sellers can prepare an accurate and complete response, and the program management team can then evaluate the
The Program Setup Phase 153
responses easily. The documents should be ones that enable the prospective supplier to propose an alternative means of meeting the requirement if pos-sible to provide greater flexibility.
Contract types: This section defines and documents the specific contract types that will be used. They will vary based on the nature of the procurement. While fixed-price, cost-plus, and time and materials contracts are typical, other vehi-cles such as basic ordering agreements, other umbrella-type contracts, leasing, and integrated volume discounts should be considered as appropriate.
Qualified seller lists: In order to expedite the procurement process, qualified seller lists may be appropriate. This section describes how these lists will be developed—by others in the organization, such as members of the procure-ment departprocure-ment, or by the program manageprocure-ment team. It also states how information about qualified sellers will be obtained. A variety of tools and techniques can be used, such as requests for information, the Internet, adver-tising, directories, associations, and catalogs. This section also states whether on-site visits will be made as part of the process to develop these lists. It may be useful as well for the program management team to contact seller refer-ences to obtain information on past performance.
Proposals: This section describes the processes, procedures, and evaluation cri-teria that will be used to review proposals from potential sellers. It states who will be involved in evaluating the proposals that are received so that there is no bias in the process. The evaluation criteria may be limited to price for certain items or may be more complex for other items. If the latter, it is appropriate to consider whether prospective sellers understand the require-ments, the management approach to be followed, the overall cost, the techni-cal approach to be used, the people who will support the procurement, the schedule for deliverable items, the risk involved, past performance and refer-ences, intellectual property and proprietary rights, financial considerations, and warranties.
Approvals: This section contains the written approval of the procurement man-agement plan by the program sponsor, program manager, program manage-ment office, members of the program board or governance board, and other stakeholders.
Procurement Management Plan Template
<Insert Program Name>
Program Procurement Management Plan
Program name:
Program manager: PM’s email address here as a hyperlink
154 Implementing Program Management: Templates for Success
Program sponsor:
Actual start date:
Approved end date:
Program no.:
Revision history:
Business unit:
A. PurPoSe
A brief introductory statement defining the purpose of the procurement manage-ment plan, such as:
The procurement management plan describes the process used to determine what to acquire, such as facilities, goods, materials, and external resources, based on product requirements and describes the contractual methods that will be used.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
B. ProCureMenT PlAnnInG APProACh
This section describes how the program management team will determine which items are to be handled as procurements. It describes the make-or-buy process to follow and the various items that should be considered. It also states the orga-nization’s capability to evaluate, procure, and then manage all the items that are procured externally.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
C. requIreD AnD AvAIlABle reSourCeS AnD SourCInG DeCISIonS This section describes the specific resources required for the program and whether or not they are available within the organization or need to be procured from external sources.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The Program Setup Phase 155
D. requIreD ProCureMenTS
This section identifies the required procurements for the program.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
e. STATeMenTS oF Work For eACh ITeM To Be ProCureD
This section describes statements of work for each item to be procured. These statements of work guide the procurement process and describe in detail the specific procurement item. This section also states how work will be managed for each item that is procured and whether the work will be done internally or externally.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
F. ProCureMenT DoCuMenTS
This section states the specific procurement documents that will be used for each item to be procured.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
G. ConTrACT TyPeS
This section defines and documents the specific contract types that will be used based on the nature of the procurement item.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
h. quAlIFIeD Seller lISTS
This section describes whether qualified seller lists will be used and how they will be developed. It describes the process that will be followed to obtain infor-mation on each of the possible sellers to be on the list.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
156 Implementing Program Management: Templates for Success
I. ProPoSAlS
This section describes the processes, procedures, and evaluation criteria that will be used to review proposals from potential sellers. It states who will be involved in the evaluation process so there is no bias in the process.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
j. APProvAlS
This section contains the approval of the procurement management plan by the program sponsor, program manager, program management office, members of the governance board, and other key stakeholders.
SignatureSand date approval obtained
Program manager ____________________________________
Program sponsor ____________________________________
Program management office director ____________________________________
Governance board chairperson ____________________________________
Governance board member 1 ____________________________________
Governance board member 2 ____________________________________
Governance board member N ____________________________________
Stakeholder 1 ____________________________________
Stakeholder 2 ____________________________________
Stakeholder N ____________________________________