INTRODUCTION - TECHNICAL UNIVERSITY OF KENYA CONSTRUCTION...

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TECHNICAL UNIVERSITY OF KENYA CONSTRUCTION PROJECT MANAGEMENT YR 2015 PROCUREMENT MANAGEMENT BY: 112/01244 & 112/01220
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INTRODUCTION Procurement Planning Procurement Planning is the process of identifying which project needs can be best met by procuring products or services outside the project organization and should be accomplished during the scope definition effort. It involves considering whether to procure, how to procure, what to procure, how much to procure, and when to procure. Some Organizations Use Other Terms Procurement may also be called: Acquisition Buying Contracting Purchasing Project procurement management involves the following processes: Plan procurement Conducting procurements Controlling procurements Closing procurements Procurement processes involve the use of a contract document as part of the legal document that is a mutually binding agreement. 1. PLAN PROCUREMENT It involves the process of determining the products or services a project will need to procure from an external source. Thereafter the project manager will determine appropriate types of contracts to be used on the project. The processes requires the following inputs: Project management plan - it will contain relevant information such as scope statement, product description, acceptance criteria, key deliverables, project boundaries, assumptions, and constraints about the project. It will also contain the work break down structure (WBS) and WBS dictionary.
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Requirements documentation – requirements with contractual and legal implications include: Health and safety Security Performance Environmental Insurance Intellectual property rights Equal employment opportunities Licenses and permits Risk register – contains risks that are relevant to the procurement process. Activity resource requirements - will help answer the question of make or buy the items. Project schedule – it contains the duration and timing for the project work to be performed. Activity cost estimates - cost estimates are used to evaluate the reasonableness of the bids or proposals received from potential sellers. Stakeholder register - provide details on the project participants and their interests in the project. Enterprise environmental factors - they include procurement policies, procedures; guidelines as well as management systems that should be considered. There may also be a preferred pool of suppliers based on prior experience. Organizational process assets- they include standard terms and conditions, policies and procedures or guidelines, legal frameworks, procurement tools or lessons learned. CONTRACT TYPES These are several different types of contract that can be used, although the most common is the fixed – price type, which involves setting a fixed total price for a precisely defined product or service to be provided. Changes in scope can be accommodated, but generally at an increase in the contract price. Sellers under fixed- price contracts are legally obligated to complete such contracts,
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