Conduction and Closing Procurements

Conducting Procurements

Conduction of procurements refers to the process of finding out the responses of the parties involved in

a procurement contract, selection of a specific seller and the award of the contract (Westland, 2007).

The process is significant as it ensures that the purchase of goods and services by an organization or

individual aligns their expectations through defined agreements (Westland, 2007). The process of

conducting procurements entails various inputs, techniques, and tools that are employed in the contract

to bring about the predetermined output (Westland, 2007). It also entails the processes of planning

implementing, monitoring, and controlling all the tasks relating to the procurements (Westland, 2007).

This essay looks at the processes involved in conducting and closing procurements. The following is the

description of the process of conducting procurement.

Inputs

The background step of conducting procurements is to make a buy decision. The step is

dependent on the internal conditions of the organization as well as the external market

conditions such as delivery systems and cost overruns (Westland, 2007). The process considers

input factors that are required for the successful work-out of the contract. The process involves

the reception and analysis of seller proposals in order to judge them based on their source

criteria and past experiences with them if any (Westland, 2007).

In the process, the management prepares a procurement management plan that documents how

the processes would be managed until the project is closed (Westland, 2007). Procurement

documents are also analyzed and documented in a way that they are readily available to implore

proposals from different prospective sellers (Westland, 2007). At this step, the management also

selects the seller based on the source selection criteria. The criteria choose suppliers based on

their technical capabilities, their cost quotations, delivery dates and the life cycle costs of their

products (Westland, 2007). At the input step, important files regarding the contract such as the

seller proposals, project documents and the statement of work are also acquired (Westland, 2007).

The rationale behind the input step is to examine the past experience with sellers, selection

of the seller based on their qualifications and the signing of initial procurement agreements

(Westland, 2007).

Tools and Techniques

Following the input is the tools and techniques step. In tools and techniques, bidder conferences

clarify the specific requirement of the products that is in demand before potential sellers can

submit their proposals (Westland, 2007). Bidder conferences achieve that through the solicitation

of prequalified sellers by advertisements. What follows is the submission of proposals which

are then examined by independent estimates, expert judgment, and other proposal evaluation

techniques (Westland, 2007). The step entails the meeting between the prospective sellers and

the buyer identified as bidder conferences. In the meetings, the procurement policies of the

buyer are formally reviewed by the potential sellers before they can submit their proposals

(Westland, 2007). In response to proposals, the buyer can choose to employ different techniques

such as Expert Judgment, Independent Estimates and Analytical Techniques as mentioned

above (Westland, 2007).

Independent Estimates refers to the preparation of an estimator, either from within or outside

the buyer company to serve as a benchmark for the proposed responses (Cleden, 2012). Expert

Judgment, on the other hand, is a technique that is employed to evaluate the seller proposals

that have been submitted (Cleden, 2012). It entails the review of the proposals by different

disciplines that are part and parcel of the project with expertise based on the procurement

documents and the proposed responses (Cleden, 2012). Moreover, the process employs various

analytical techniques aimed at establishing the readiness of the prospective sellers in relation

to the urgency of the procurement. In the process, factors such as cost overruns are also

examined to get them adequately covered throughout the procurement process (Cleden, 2012).

The process also identifies the risks that should be monitored consistently during the process

to ensure its success.

After the identification of the interested vendors, the buyer publishes their names

in advertisements such as newspapers and trade publications (Cleden, 2012). The information

is also exported to the vendor community through online solicitations. The advertisement

process not only brings the procurement to the attention of all potential vendors but also

allows for them to submit their proposals before the choice of vendor is made (Cleden, 2012).

The buyer then organizes procurement negotiations in which the requirements of the products

are clarified to ascertain that, all the interested parties understand the purchase details before

a contract can be signed (Cleden, 2012).

Outputs

The last step of the detailed procurement process is the output step. After the vetting of

prospective sellers on all the grounds identified above, the buyer identifies the seller who

would be awarded the contract and who would sign a final agreement with the buyer to be

put in the procurement contract (Westland, 2007). It is ascertained that the selected vendor has

been subjected to all the judgments described above and has proved to be within the competitive

range with other prospecting suppliers (Westland, 2007). It is also proven that the selected seller

has negotiated and accepted the buyer's bid on the goods to be supplied. The buyer then updates

the resource calendars to account for the correct description of the products that would be

supplied by the selected vendor in terms of quality, brand, timing, availability, and quantity

(Westland, 2007). The updated agreement is used as the baseline for the procurement process

and as a checklist during the closure of the procurement. After that, the buyer and the seller

sign an agreement that explains in detail what the seller has agreed to supply to the buyer and

the terms and conditions that would be followed throughout the process (Westland, 2007). The

agreement is coupled with resource calendars that document when the supplies would be made

based on when the seller can access them in the required quantity as either active or idle. Since

the agreement and the resource calendar made and approved based on the initial management

plan corresponding to the contract, they are the determinants of the schedule for the delivery

of the contract (Westland, 2007).

There are instances in which the seller or buyer may wish to change the procurement project

baselines such as the scope, cost or time (Cleden, 2012). In such cases, the party communicates

the same to the other party and communications management plan is subsequently updated to

reflect the new agreement (Cleden, 2012). The process, however, must be coordinated between

the buyer and the seller appropriately. Also, any update on the contract agreement and the

resource calendar is evaluated and its risk analysis and stakeholder register updated in the risk

analysis report of the whole project (Cleden, 2012). When change requests are received, they

are considered like any other changes to the project which are subject to the Integrated Change

Control Process (Cleden, 2012). The changes may be based on costs, scope statement,

scheduled timeline or the procurement management plan. All those changes reflect the risk

requirements (Cleden, 2012).

The conduction of procurements require the documentation of every progress in relevant

documents such as the agreement, management plan, risk analysis and stakeholder register

(Cleden, 2012). Such files are important for the planning, monitoring and controlling of

the procurements (Cleden, 2012). Some of the documents are made available for both parties

for reference purposes and are upheld till the completion of the project (Cleden, 2012). After

the delivery of the procurements as aligned in the agreement, the project is marked as complete

and the process that follows is the closure of the contract as discussed below.

Closing Procurements

The closing of procurements is the process of ensuring all the deliverables procured to meet

the anticipated requirements according to their technical documentation test cases, merits, and

plan (Westland, 2007). It is one of the ways through which contracts end, while the other is on

a court (Westland, 2007). Closing a procurement requires the can be after the successful

completion of the project or prematurely when the seller and the buyer agree to close it

(Westland, 2007). The closure of procurements entails the following process.

The first process is the collection of all files and documents that are related to the contract

(Westland, 2007). They contain all the information that should be considered before

the determination that the project is completed successfully. The information would also be

useful for future reference and in the future management of similar projects (Westland, 2007).

After collecting all the files, the custodian then goes through all the files, the custodian then

goes through all of them carefully examining the terms of the contract, the schedules and cost

plans to ascertain that all of them were conducted in the right way (Westland, 2007).

The manager then settles issues with the other parties involved in the project contracts. The step

serves to ensure that all the deliverables related to the project have been settled before

the procurement is closed (Westland, 2007). The settlement of issues is carried out based on

the terms and conditions of the project that are documented in the contract terms, schedules,

cost plans and other agreements (Westland, 2007). In cases where issues pertaining to the contract

are settled, there are other progressively difficult methods of handling the same, which include

negotiation, mediation, arbitration and litigation (Westland, 2007). Except in negotiation, the rest

of the three processes involve a neutral third party which interferes to resolve the claim.

The settlement of issues in the process of closing procurements is based on the initial agreement

between all stakeholders at the time when the procurement was being conducted and

the introduction of a third party is an alternate way of resolving disputes when the baseline

method fails to satisfy both parties.

The last step towards the closure of procurements is the management of records and related

to the procurement (Westland, 2007). They are important as they serve not only as a reference

for future projects but also as evidence in case other parties involved in the contract may raise

claims concerning the project (Westland, 2007). The closure of procurements entails

the confirmation that all the artifacts delivered by the seller meet all the qualities and

expectations of the projects as agreed. The final step of closing procurement is the sending

of formally written notices to all or any participating parties to terminate the contract

(Westland, 2007). The notice formally relieves all parties of their obligations under the contract

except when the settlement process is not complete (Westland, 2007). Once the notice is

received and carried out by both parties, the procurement is considered closed.

External Factors

Procurement is affected by different external factors. The financial environment under which

the buyers operate regulates the quality and quantity of the products under procurement

(Cleden, 2012). Political changes though the government regulations and the economic

fluctuations affect both international and internal procurements through channels of taxation,

safety and quality control regulations (Cleden, 2012). The socio-cultural change also influences

the customer behavior and thus the expectations of the buyers in procurement. Finally,

the environmental fluctuations also challenges the supply chains based on natural disasters,

resource scarcity and other parameters (Cleden, 2012). Therefore, it is necessary for the

external influences to be involved in the procurement planning and analysis (Cleden, 2012).

The external factors influence the risk management process as they affect the channels and

schedules for the procurements. The risks that relate to the external factors have a significant

correspondence effect on the process as a whole thus should be involved in risk management

(Cleden, 2012).

In conclusion, the process of conducting and closing procurement is important in ensuring that

the purchase of goods and services by any organization or individual aligns with their

expectations through defined agreements as well as in accounting for financial management.

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References

Cleden, M. D. (2012). Managing project uncertainty. Gower Publishing, Ltd. Retrieved from:

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HCDK90uNqz6zEZD0ZBUtAwP21W4%3D&response-content-disposition=inline%3B%20filename

%3DManaging_Project_Uncertainty.pdf

Westland, J. (2007). The Project Management Life Cycle: A Complete Step-By-Step Methodology

for Initiating, Planning, Executing & Closing a Project Success. Kogan Page Publishers. Retrieved from:

https://s3.amazonaws.com/academia.edu.documents/45401792/feasibility_study_article.pdf?

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Ed7liJzE%2BuHE7YMamkgTpGqJQJ4%3D&response-content-disposition=inline%3B%20filename

%3DThe_project_management_lifecycle_a_compl.pdf