Conducting and Closing Procurements
Conducting and Closing Procurements
Conducting and closing procurements is basically the whole process that an organization does when acquiring new or external things. Different organizations have different means and methods but all have a common ground where the products to be acquired and any other things involved are done professionally. This is basically to ensure that all the stake holders are involved and the process is documented. This process is very crucial to the company and any other person involved since it will affect the whole output of the whole company or organization. It is therefore very important to ensure that the process is done professionally. Some companies go a step ahead and involve a third party to ensure that all their processes and activities are transparent and fair to everyone (Heldman, 2013). After procuring, closing the deal comes in where the whole course is finalized after the best and quality seller has delivered. This takes into account that the rightness of the deal and the final payment as agreed by the parties involved.
When it comes to high-level process steps for conducting project procurements, there are normally five steps involved in it. (Becker, 1977) asserts that all these steps are very crucial. The first step is specification where the project purchasing department makes a communication of a list of all the items that need to be acquired or purchased for the project. The second step is the selection process. This is a process where the purchasing department look for potential suppliers and look for the best I terms of pricing and quality according to the specifications indicated in the list. The third step is the contracting process. This is a stage where the purchasing department makes a communication to the contractor on the dates to be delivered and the schedule that should be followed. The fourth crucial process is the control. This is a crucial process since it determines the success of the project. The purchasing department tracks the delivery and frequent meeting with the contractors and other stake holders involved to ensure that everything is done and delivered according to schedule to ensure success. The fifth and final step is the measurement. This a step that determines the effectiveness of the procurement using the metrics and system indicators involved. This could be the time kept in delivery, price and the reliability for record keeping and other activities that pertains the procurement process.
Contract administration policies and procedures normally involve the administration management and the policies and the procedures involved in the contract. The management must follow the laid down procedure s and the rules that are involved in any requirement. These include; identifying procedures and requirements of the contract, optimize the scope for potential vendors, negotiate contracts, draft contract and amendments with vendors, interpret contract provisions, identify the unique requirements of the project, formulate the appropriate contract policies and procedures, describe and ensure that the contract in in line with the government policies, identify the ethical issues in the contract, respond appropriately and relevantly to the employees and everyone that might be involved in the contracting process, maintain a database of all the contracts ,maintain the contract language and finally develop the service and standards for the project. All these are the responsibilities and the policies of contracting (Fleming & Koppelman, 2010).
There are various tools and techniques for contract administration. They include change and control system which is a set of rules and procedures which a project can be modified. Procurement performance reviews is the seller’s structured review based on the quality verses the quantity delivered cost and schedule compared to the contract. Inspections and audits basically as it is involve the buyer and the seller thoroughly going through it and checking it. Performance and reporting makes the base for judging whether the contactor can fulfill the requirements. A payment system is well agreed upon so that any kind of conflict and strains can be avoided by all cost. Record management system is a system where the contact managers store the records and all other documents related to the contract. It is important in maintaining index and contact correspondences and also assists in documentation and archiving that documentation. Using information technology also enhances the record keeping and management at the end of it all.
In any kind of undertaking where several people are involved, there are normally disputes that might arise. Resolving them is thus very important before it escalates to unmanageable levels (Lansford, 2008). In a contract, it is thus very important to achieve its success intended success of the project. Adopting the best conflict resolution techniques is thus the best. The first step in resolving any conflict and is not limited to contractual kind of conflict is to understand the conflict. The management, procurement manager, should come in and try to understand the causes of the conflict and what led to the conflict in question. They have the responsibility if identifying the prosecutor, victim and the rescuer. This will enable them carefully handle the conflict in a more professionally and thus leading to a conclusive conclusion. The second step after understanding the conflict is to approach to resolve the conflict. After identifying the conflict the task at hand is to ensure that the parties involved come to the understanding that the projects needs them more and they cannot stop the project if the conflict is personal. The resolution should be a win-win situation. No bias and conclusive resolution. The steps can be generalized as identification of the Conflict Domain, Generation of Conflict Cases, Exercise of Judgment, and Analysis of the Results Communication of the Judgment Differences (Cognitive Feedback) Negotiation among Conflicting Parties.
The first step in closing procurement is outlining the procedure to help in closing the project easily. The second is completing the contract closure according to (Sollish & Semanik, 2007). The next is the confirmation of the work requirements. Ensure that the work is completed before you close the project. Gaining formal acceptance is the next step to this gaining the formal acceptance from the stake holders that are involved in the project at hand. Final report performance, Index and archive the reports easily so that they can easily be accessed, Document the lessons learnt, hand the completed product or project to the required stake holder and finally release resources to the functional managers. All these are the steps that are involved and taken in project procurement.
Closing a project and procurement accounts is very important. There are very many reasons and advantages to this. The first advantage is that all the parties get to come together and resolve everything and document the entire project. As earlier mentioned, documentation has its own several advantages. The second advantage is that all the stake holders come and complete their payment is it was agreed that it will be paid at the end. Moderations and other requirements are also discussed at this point. Possibilities of working and cooperating in the future also form part of the major advantages.
There are several external factors that affect the procurement and many risks involved. First, there are the regulatory changes. Governments keep changing and updating their policies to suite several conditions that they deem necessary. This could include tax and other requirements that will affect the organization in some way or the other. This could lead to increase of the prices of goods and thus change in the projects budget at the end of it all. Political environment could drastically change and finally affecting the procurement or event complete termination of the procurement. This is mostly when political temperatures escalate and become very unpredictable. Economic conditions like recession could heavily affect the procurement in terms of prices and value for money. Continuing with the acquisition process might not be viable at this process (Heldman, 2013).
There are many relationships between risk response plan and external influences. Risk response plan in an organization are normally meant to cater for the unexpected and external factors is among them. For an instance where there are high political temperatures and the future doesn’t seem uncertain, the risk response plan can come in and determine if the procurement is worth undertaking or leaving it is the final issue. Risk response can be included or sorted after if the economic conditions of the people are not good. The risk assessment team might come and determine if the whole course is worth undertaking according to (Becker, 1977). For the changes I policy, the exact causes and risks involved will be determined by the risk response plan team so that they can advise the team on what to do.
Becker, J. (1977). The Eisenhower administration project. Glen Rock, N.J.: Microfilming Corp. of America.
Fleming, Q. W., & Koppelman, J. M. (2010). Earned value project management (4th ed.). Newtown Square, Pa.: Project Management Institute.
Heldman, K. (2013). PMP Project Management Professional exam study guide, seventh edition (7th ed.). Indianapolis, Ind.: Sybex.
Lansford, T. (2008). Conflict resolution. Detroit: Greenhaven Press.
Sollish, F., & Semanik, J. (2007). The procurement and supply manager’s desk reference. Hoboken, N.J.: John Wiley & Sons.