Overview (10.0.P1)

Procurement refers to the aspects of project management related to obtaining goods and services from outside companies. This specifically refers to vendors and suppliers. It does not refer to other internal organizations within your own company. (For the purposes of this discussion, purchasing and procurement are equivalent terms.) This is an area that project managers definitely need to understand at some level, and it is an area into which the project manager will give input. However, in many, and perhaps most companies, procurement is an area that the project manager does not own. The project manager normally does not have the authority to enter into contracts on behalf of the company, and he normally is not asked to administer the contracts once they are in place.

If you are purchasing goods or services on your project, you should determine your project procurement strategy and plans. In some cases, you will simply follow the procurement contracts and plans that are already established by your company or your organization. For instance, you may purchase hardware from companies using a standard company contract. You may acquire contactors using your company’s preferred vendor list under prior master contractor agreements. In some cases, you will need to work with your Procurement Department to establish your own project-level vendor management plans.

Most project teams consider the vendor identification and vendor selection processes to be part of the actual execution of the project. In other words, they are done in the initial Analysis Phase after the project execution has started. However, there may be times when you need to perform these activities as a part of your up-front project definition process.