Procurement Tools and Techniques
According to Chapter 12 of the PMBOK® Guide, procurement management entails some processes to acquire goods and services outside that performing firm to meet the project scope. These processes include procurement and solicitation planning, solicitation, contract administration, and closeout, among others. Organizations usually procure services or goods when they lack in-house staff for those specific tasks. Procurement requires some tools and techniques for it to be successful. The methods include make-or-buy analysis, expert judgment, and contract type selection. The paper discusses the procurement techniques and tools and elaborates on how I apply the same tools to my projects.
Make-or-buy analysis is used to determine whether a particular product can be produced cost-effectively by the performing corporation and usually involves both direct and indirect costs. Expert judgment entails the use of trained personnel and professionals to analyze the inputs of the procurement process. It may be a consultant, industry group, or professional associations. Contract type selection is choosing the most appropriate contract for a specific purchase of a business. There are fixed-price or lump sum, cost-reimbursable, and Time and Material contracts as per the Guide.
I have used these techniques in my catering business. I used the Make-or-buy analysis when I started the business and wanted to rent a space in the local plaza in my town. I had the option of renting that space or buying a food truck and using this technique; I chose to buy the food truck, which proved to be less costly. I invited an accountant one time to help me calculate the input of my procurements. Throughout the business, I have used different contracts for my goods and services. One time when my aides surpassed the target sales for the day, I reimbursed them for their efforts, as we had agreed earlier. Hence I used the cost-reimbursable type of contract.
References
Guide, P. M. B. O. K. (2017). A Guide to the Project Management Body of Knowledge. Sixth Edit. Project Management Institute, Inc.