1. PROJECT PROCUREMENT ACTIVITIES 1
Project Procurement Activities
Loren Karl Schwappach
PM 610: Project Planning, Execution, and Closure
Colorado Technical University

2. PROJECT PROCUREMENT ACTIVITIES 2
Abstract
This discussion board introduces project procurement to include what project procurement
entails, the processes involved as outlined by the Project Management Body of Knowledge
Guide (PMBOK Guide), a recollection of my past involvement in procurement activities,
alternate procurement entities, expected procurement activities IRTC will engage in, and a list of
activates that will need identified and performed for successful completion of the IRTC project.

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Project Procurement Activities
The top four high level activities of a project manager should include setting clear and
achievable objectives, indentifying a project’s requirements, adapt the project to meet
stakeholder concerns, and balancing the needs of the project’s scope, schedule, and budget
(Smith, 2011). There are many times when the project management team needs to procure
resources to ensure the successful completion of a project within the previously mentioned
constraints. This paper specifically addresses project procurement to include what project
procurement entails, the processes involved as outlined by the Project Management Body of
Knowledge Guide (PMBOK Guide), a recollection of my past involvement in procurement
activities, alternate procurement entities, expected procurement activities IRTC will engage in,
and a list of activates that will need identified and performed for successful completion of the
IRTC project.
Project procurement management contains the procedures and processes required to
obtain resources, products, services, and / or results necessary to ensure a projects success. The
organization plays multiple roles in procurement activities and can alternate as the seller or buyer
of the results, services, or products (Global Standard, 2008, p.313). Project procurement
includes change control processes as well as contract management practices necessary to oversee
and expand purchase orders or contracts issued by the project management team (Global
Standard, 2008, p.313). Project procurement also involves the direction and control of any
contractual obligations developed by outside buyers, and administering obligations required by
the project management team as outlined by the contract (Global Standard, 2008, p.313).

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The Project Management Body of Knowledge Guide (Global Standard, 2008) outlines
four main areas of project procurement to include: procurement planning, procurement initiation,
procurement administration, and procurement closure.
Procurement planning involves the processes of documenting project purchasing
decisions, specifying the approach towards procurement activities, and the detection of possible
sellers. Before project procurement can be completed the project management team needs to
develop a baseline scope of the project, a detailed requirements identification document, a
project team and project stakeholder contractual agreement, a risk register and detailed risk
analysis, a project charter, a project schedule, project cost estimates, a knowledge of available
organizational assets, and the environmental factors that can affect the project. Project
procurement requires expert judgment, knowledge of contract types and a make-or-buy analysis.
Once procurement planning is completed the project manager should have a developed, clear and
accurate procurement management plan, procurement statements of work, make-or-buy decision,
and the procurement documentation, change requests processes, and selection criteria (Global
Standard, 2008).
Procurement initiation (conduct) includes the processes used for collecting seller
responses, the selection of a seller, and the final procurement contract award. Before
procurement initiation can occur the project manager should already have a detailed project
management plan, the procurement selection criteria, a list of qualified sellers, seller proposals,
knowledge of organizational assets and project agreements. Procurement initiation tools include
but are not limited to attending bidder conferences, proposal evaluations, independent contract
estimates, and seller negotiations. After the initiation phase is complete the project manager

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should have a seller selected, will update the project management plan, schedule, and resource
calendars, and will award a procurement contract (Global Standard, 2008).
Procurement administration includes the processes required for managing relationships,
monitoring contract performance, and enacting corrections and changes as required. In order to
complete procurement administration the project management team should have all applicable
procurement documents, procurement work performance information and reports, and a detailed
procurement contract with applicable change requests. Procurement administration involves
performing inspections and audits, managing procurement payment systems, and administering
the contract change control system (Global Standard, 2008).
Procurement closure involves the processes required to complete project procurements
such as settlement negotiations and organizational process asset updates system (Global
Standard, 2008).
It is often beneficial and / or essential for corporation to use procurement activities to
reduce corporate project expenses and increase resource availability. For instance a case study
completed by Kidd (2001) of [WHO] Ford motor vehicles, the second largest [WHERE] United
States automaker (fifth largest in the world) homed in Dearborn, Michigan was [WHEN]
completed in 2001 demonstrating the benefits of well thought procurement activities. [WHAT]
The case study showed that Ford motor vehicles spent an estimated fifteen and a half billion
dollars a year (in 2001) procuring common outside resources, goods, and services [HOW] using
an e-procurement (internet) solution in order to meet project cost constraints. Ford also utilized
procurement applications for processing more than a million yearly employee expense accounts.
[WHY] These products and services could not be obtained from within the organization and the

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associated procurement methods provided a tremendous competitive advantage and savings for
Ford in obtaining outside goods and services and in the development and accounting of corporate
expense reports (Kidd, 2001).
In my past employment with the United States Air Force as a satellite and wideband
communications expert and non-commissioned officer my experience in the realm of project
procurement is very limited and focused on setting up base communications on South Korean air
fields, and working with multiple outside agencies. Although I never held the title of project
manager, I was however involved in several large visibility and highly classified projects
throughout my military career. In order to complete many of these projects our communications
team needed to work with several outside agencies for resource/service procurement. For
instance on many occasions I had to procure satellite bandwidth/power/frequency/data
authorizations for use on restricted commercial satellites. This involved contractual obligations
between the customer, our squadron, the Bandwidth Management Center, other agencies, etc.
The procurement of non-US base resources (housing, land-usage, food, etc.) during my time
deployed also entailed organizational procurement activities. These were normally completed by
the squadron’s command staff.
Project procurement involves planning what to buy, figuring out where to buy it,
weighing the costs between building and buying, taking out a contract (fixed fee, time and
materials, unit price, cost plus, incentive fee), paying for the products/services, and constant
analysis of the procurements performance against a designated contract and therefore can often
involve leadership and managerial insight and approval above that of the project manager
(Phillips, 2011).

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Although the project manager is often the responsible for project procurement there is
often an organizational procurement manager and or procurement office that work towards
procurement efforts. The project manager needs to have a thorough understanding of the legal
obligations and requirements of project procurement contracting in order to guide the project
through initiation, planning, execution, monitoring, and closure (Kerzner, 2009). Whoever the
member for responsible for procurement is he / she needs to be socially responsible, use ethical
decision making and critical thinking, and ensure the procurement effort stays on track while
minimizing project costs, and schedule delays, while maximizing the projects value.
Some of the procurement activities expected for IRTC’s web-based billing system
upgrade include deciding how many and whether or not to procure vender business analysts,
technical architects, programmers or testers, instructional designers, trainers, and / or technical
writers. The project team will also need to decide whether or not to procure documentation and
training materials from the vender and whether or not to procure the vender’s additional software
add on.
Before procurement activities can take place however, the project team will need to
develop the projects scope, create a detailed requirements identification document, a contractual
agreement between the project team and stakeholders, a detailed risk analysis, a project charter, a
project schedule / deliverable estimate, cost estimates, and obtain greater knowledge of available
organizational assets, and environmental factors affecting the IRTC project.

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References
Global Standard. (2008). A Guide to the Project Management Body of Knowledge (4th ed.).
Newtown Square, PA: Project Management Institute, Inc.
Kerzner, H. (2003). Project management: A systems approach to planning, scheduling, and
controlling (8th ed.). Hoboken, New Jersey: John Wiley & Sons, Inc.
Kidd, P. (2001). Case Example: Ford e-procurement in a manufacturing company. Retrieved
August 19, 2011, from http://www.cheshirehenbury.com/emanufacturing/fordcase.html
Phillips, J. (2011). Real World Project Management: Procurement Management. Retrieved
August 19, 2011 from Project Smart Website: http://www.projectsmart.co.uk/real-world-
project-management-procurement-management.html
Smith, G. (2011, August 15). PM610 Live Chat Session 2 with Professor Gigi Smith [Online
Presentation]. Retrieved August 19, 2011 from Colorado Technical University Online
Virtual Campus, PM610-1103B-02: https://campus.ctuonline.edu