Control Procurements

00:01 Hello and welcome.

00:02 This module will focus on the control procurement process in the PMBOK guide. The difficulty and memorization are both regarded as low, like many of the other controlling processes, the exam importance as medium simply because it is a controlling process and it is important that you do monitor and control your procurement activities well.

00:29 The control procurement process is one of four processes in total in the procurement management knowledge area.

00:35 The focus of this module is the single monitoring and controlling process, the control procurement process.

00:43 And just like the other controlling processes, it's a process that examines what we plan to do and compares it to what we're actually doing in relation to procurement activities and whether we need to make some changes to make sure that those two things stay equal.

01:03 The particular domain task that this process helps us understand is the monitoring and controlling tasks given which says monitor procurement activities, according to the procurement plan, in order to verify compliance with project objectives.

01:23 So we're going to compare what we're actually doing, the procurement activities with what we plan to do with our procurement plan.

01:34 The key thing here is that we are checking that our procurement activities are performing as planned.

01:40 And if we discover variance between what's actually happening and what we plan to do, we make changes as appropriate.

01:52 The particular inputs that may be useful into this process include our project management plan particularly and quite obviously, our procurement management plan.

02:04 We may also want our procurement documents.

02:06 In fact, we will definitely need our procurement documents because they are going to describe the procurement decisions that we've made.

02:14 So will any agreements or contracts we've signed, particularly those contracts that we've signed because they sit out the terms that bind both buyer and seller.

02:28 Now, this process of control procurements should be and will be done by both buyer and seller in relation to these contracts.

02:37 All parties to a contract should at all times be checking that the contract terms are being followed and if they need to be changed, changing them, according to the agreed variations process.

02:52 You'll also have some approved change requests coming in here because they represent work to be done, particularly in this instance, work to be done as part of our contracts, so we'll need to check that they've been done correctly.

03:06 We'll need some work performance reports and some viable work performance data about what's actually happening with our procurement decisions and procurement work.

03:18 So remember, the control procurement process is done by both buyer and seller.

03:27 And what we're trying to do is answer that question.

03:31 Do the results we're achieving match the contractual terms asking ourselves these questions were the goods or service delivered as per the terms of the contract? Were they delivered on time as per the terms of the contract, where the right amounts invoiced or paid as per the terms of the contract? And were any additional conditions of the contract met? So you can see why both buyer and seller control procurements.

04:01 It's of interest to them both and affix them both.

04:06 The particular tools and techniques that we may choose to use include our contract change control system.

04:13 Now normally this would be specified in the contracts that we've signed.

04:17 In my experience, there's always a section in any signed contract that outlines how changes will be made to it.

04:26 But beyond that, you may also have a part of your own change control system, which outlines delegated authorities and responsibilities for approving changes to contracts.

04:38 Obviously, the project manager should have some delegated authority to make minor changes to contracts.

04:44 Any large ones, though, should be escalated to a change control board or project steering committee or project steering group and involve the project sponsor if they're large enough.

04:56 We'll also have some procurement performance reviews.

04:59 These are regular reviews that we carry out to see how both parties are carrying out their obligations that the contract set out.

05:07 And we're also here going to look at whether our procurement decisions are delivering the benefits, goods and services we expect of them.

05:15 We'll carry out inspections and audits.

05:18 And if you remember from quality management audits were used for assurance, quality assurance activity on processes.

05:26 Inspections were used during controlled quality for inspecting deliverables.

05:31 Here it's the same.

05:33 So we'll use inspection as a total technique to check the deliverables that the contracts are producing.

05:40 And we will use audits to check that the terms of the contract and any other agreements are actually being followed as outlined in those contracts or agreements. So remember that important distinction between inspections and audits. Well, carry out performance reporting ourselves in order to generate a performance report on how well our procurement activities are going. We'll also want access to our payment system.

06:08 This is our centralized organizational payment system that can tell us whether payments have been made on time as per the contractual conditions or payments have been received on time as per the contractual conditions claims administration as an interesting total technique. Claims in this sense refers to disagreements between parties to a contract.

06:36 So claims administration is that process you go through to resolve these disagreements. And in my experience, there's always disagreements with contracts.

06:45 So you need to have a process in place to handle these disagreements and small misunderstandings.

06:52 Obviously, claims can escalate very quickly.

06:56 And if so, you need to go through a process of negotiation, mediation, arbitration and finally litigation.

07:06 Try and avoid litigation if possible.

07:08 The only people who win in litigation are the lawyers.

07:12 You'll also need a robust records management system.

07:16 Many countries have statute of limitations laws about how long records must be kept for civil disputes.

07:25 And if so, for that reason only you'd need a robust records management system where you can store any and all documents that may be relevant to contractual negotiations for the required period of time.

07:38 But it's also not uncommon for organizations to have their own requirements for records management systems.

07:45 But a records management system is a place where you store all of the relevant contractual records and procurement records so that you can access them quickly.

07:55 And once they're closed, they can be archived and retrieved quickly as well. The particular outputs that you may produce.

08:06 From the control procurement process include relevant work performance information based on that work performance data, that was an input.

08:14 And this will be work performance information about how well your procurement process is working.

08:20 Were those make or buy decisions correct? Was the choice of contract the right one to use? Was your self-selection process the right one to use? Are both buyer and seller meeting the terms of the contract? Do you need to make any change requests because you found a variance between what you plan to do and what's actually occurring? And if so, those change requests go on to be inputs into the perform integrated change control process.

08:52 You may also choose to update aspects of your project management plan, particularly your procurement management plan.

09:00 But as a result of variances that you find, you may choose to make improvements to any of your other management plans as well.

09:09 You may also choose to make updates to your project documents, particularly those relating to your procurement processes, but also your lessons learned. And that also includes updating any relevant organizational process assets or parts of your project management methodology, particularly those relating to procurement.

09:33 So in summary, the controlled procurement process has been focused on checking that all of your procurement work is going as planned.

09:43 And you know this because you're comparing it to what's actually happening and looking for variance between the two.

09:51 It's also about making changes to your procurement work and also to contracts as necessary. But both in accordance with it, agreed change control process change does happen on a project and changes to contracts do happen.

10:06 But remember, contracts and other procurement agreements are legal documents.

10:13 You're ultimately answerable to the legal system in your country.

10:17 So make sure they're always fully documented, regardless of how small they are.

10:24 Take time to carefully document all changes to any contracts. Thank you very much.

10:33 This has been an overview and an introduction to the control procurement process in the PMBOK guide.