10.3 Control Procurements - 10.3 Control Procurements
Control Procurements is a critical process in Project Procurement Management that involves managing and supervising the execution of contracts, as well as taking corrective actions when necessary. This process ensures that the project team receives the goods and services as per the contract terms and that any deviations are addressed promptly.
Key Concepts
1. Contract Administration
Contract Administration involves managing the relationship with the seller or supplier to ensure that both parties meet their contractual obligations. This includes monitoring the performance of the seller, ensuring timely delivery of goods and services, and resolving any disputes that may arise.
Example: In an engineering project, contract administration might involve regularly reviewing the supplier's progress reports, conducting site inspections, and holding weekly meetings to discuss any issues or delays.
2. Performance Reporting
Performance Reporting involves collecting and disseminating information on the seller's performance against the contract terms. This includes tracking key performance indicators (KPIs), such as delivery times, quality of goods, and adherence to specifications.
Example: For a construction project, performance reporting might include monthly reports on the supplier's compliance with safety standards, the quality of materials delivered, and the timeliness of deliveries.
3. Payment Management
Payment Management involves ensuring that payments to the seller are made according to the agreed-upon terms and conditions. This includes verifying that milestones have been met before releasing payments and managing any payment disputes.
Example: In an engineering project, payment management might involve releasing payments in installments based on the completion of specific project phases, such as design, manufacturing, and delivery.
4. Change Management
Change Management in the context of procurements involves handling any changes to the contract terms, such as scope, schedule, or cost. This includes assessing the impact of changes, obtaining approval from stakeholders, and updating the contract documents accordingly.
Example: For a software development project, change management might involve evaluating the impact of a request to add new features to the software, negotiating revised terms with the supplier, and updating the contract to reflect the changes.
5. Risk Management
Risk Management in procurements involves identifying, assessing, and mitigating risks related to the procurement process. This includes risks associated with supplier performance, contract compliance, and potential disruptions in the supply chain.
Example: In an engineering project, risk management might involve identifying potential risks such as supplier bankruptcy, material shortages, and regulatory changes, and developing contingency plans to address these risks.
6. Quality Management
Quality Management in procurements involves ensuring that the goods and services delivered meet the specified quality standards. This includes conducting inspections, testing, and audits to verify compliance with the contract requirements.
Example: For a construction project, quality management might involve conducting regular quality inspections of the materials delivered, testing the structural integrity of the components, and ensuring that all work is performed according to the project specifications.
Examples and Analogies
Think of controlling procurements as managing a partnership. Just as you would monitor and support a business partner to ensure mutual success, you need to manage your procurement contracts to ensure that both parties meet their obligations and achieve the project goals.
For instance, in an engineering project to design and build a new product, controlling procurements would involve regularly reviewing the supplier's performance, ensuring timely payments, managing any changes to the contract, and addressing potential risks. By effectively controlling procurements, the project team can ensure that the project stays on track and meets its objectives.