12.3 Control Procurements

Description: the process of managing procurement relationships; monitoring contract performance, and making changes and corrections as appropriate; and closing out contracts.

The legal nature of the relationship makes it imperative that the project management team is aware of the implications of actions taken when controlling any procurement. Because of the legal aspect, many organizations treat contract administration as an organizational function that is separate from the project. While a procurement administrator may be on the project team, this individual typically reports to a supervisor from a different department.

Administrative activities may include:

• Collection of data and managing project records, including maintenance of detailed records of physical and financial performance and establishment of measurable procurement performance indicators;
• Refinement of procurement plans and schedules;
• Set up for gathering, analyzing, and reporting procurement-related project data and preparation of periodic reports to the organization;
• Monitoring the procurement environment so that implementation can be facilitated or adjustments made; and
• Payment of invoices.

Control Procurements has a financial management component that involves monitoring payments to the seller. This ensures that payment terms defined within the contract are met and that compensation is linked to the seller's progress as defined in the contract.

Key benefit: it ensures that both the seller's and buyer's performance meet the project requirements according to the term of the legal agreement.

Frequency: throughout the project.

Process / Asset group	Input	The Process	Output	Process / Asset Group
Project Management Plan	Requirements management plan	12.3 Control Procurements	Closed procurements	Procurement Documentation
	Risk management plan		Procurement documentation updates
	Procurement management plan		Work performance information	4.5 Monitor and Control Project Work
	Change management plan		Change requests	4.6 Perform Integrated Change Control
	Schedule baseline		Risk management plan	Project Management Plan
Project Documents	Assumption log		Procurement management plan
	Lesson learned register		Schedule baseline
	Milestone list		Cost baseline
	Quality reports		Lesson learned register	Project Documents
	Requirements documentation		Resource requirements
	Requirement traceability matrix		Requirements traceability matrix
	Risk register		Risk register
	Stakeholder register		Stakeholder register
4.6 Perform Integrated Change Control	Approved change requests		Organizational process assets updates	Enterprise / Organization
4.3 Direct and Manage Project Work	Work performance data
12.1 Plan Procurement Management	Procurement documentation
12.2 Conduct procurements	Agreements
Enterprise / Organization	Enterprise environmental factors
	Organizational process assets

12.3.1 Inputs

12.3.1.1 Project Management Plan

Include:

• Requirements management plan. How contractor requirements will be analyzed, documented, and managed.
• Risk management plan. Describes how risk activities created by sellers will be structured and performed for the project.
• Procurement management plan. Contains the activities to be performed during the Control Procurement process.
• Change management plan. Contains information about how seller-created changes will be processed.
• Schedule baseline. If there are slippages created by sellers that impact overall project performance, the schedule may need to be updated and approved to reflect the current expectations.

12.3.1.2 Project Documents

Include:

• Assumption log. The assumptions that have been made during the procurement process.
• Lessons learned register.
• Milestone list. When the sellers are expected to deliver their results.
• Quality reports. Can identify seller processes, procedures, or products that are out of compliance.
• Requirements documentation. May include:
  • Technical requirements the seller is required to satisfy, and
  • Requirements with contractual and legal implications that may include health, safety, security, performance, environmental, insurance, intellectual property rights, equal employment opportunity, licenses, permits, and other nontechnical requirements.
• Requirements traceability matrix. Links product requirements from their origin to the deliverables that satisfy them.
• Risk register. Each approved seller comes with its own unique set of risks, depending on the seller's organization, the duration of the contract, the external environment, the project delivery method, the type of contracting vehicle chosen, and the final agreed-upon price.
• Stakeholder register. Information about identified stakeholders, including contracted team members, selected sellers, contracting officers, and other stakeholders who are involved in procurements.

12.3.1.3 Agreements

Understandings between parties, including understanding of the duties of each party. The relevant agreements are reviewed to verify terms and conditions are met.

12.3.1.4 Procurement Documentation

Complete supporting records for administration of the procurement processes:

• The statement of work,
• Payment information,
• Contractor work performance information,
• Plans,
• Drawings, and
• Other correspondence

12.3.1.5 Approved Change Requests

Modifications to the terms and conditions of the contract, including

• The procurement statement of work (SOW),
• Pricing,
• Descriptions of the products, services, or results to be provided.

12.3.1.6 Work Performance Data

• Technical performance;
• Activities that have started, are in progress, or have completed; and
• Costs that have been incurred or committed.
• The seller invoices that have been paid.

12.3.1.7 Enterprise Environmental Factors

• Contract change control system
• Marketplace conditions,
• Financial management and accounts payable system, and
• Buying organization's code of ethics.

12.3.1.8 Organizational Process Assets

Procurement policies.

12.3.2 Tools and Techniques

12.3.2.1 Expert Judgement

• Relevant functional areas such as finance, engineering, design, development, supply chain management, etc.;
• Laws, regulations, and compliance requirements; and
• Claims administration.

12.3.2.2 Claims Administration

Claims - contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a change has occurred.

When they cannot be resolved, they become disputes and finally appeals.

Claims are documented, processed, monitored, and managed throughout the contract life cycle, usually in accordance with the terms of the contract. If the parties themselves do not resolve a claim, it may have to be handled in accordance with alternative dispute resolution (ADR) typically following procedures established in the contract.

12.3.2.3 Data Analysis

• Performance reviews.
  • Quality,
  • Resource,
  • Schedule, and cost.
• Earned Value Analysis (EVA).
• Trend analysis. A forecast estimate at completion (EAC) for cost performance to see if performance is improving or deteriorating.

12.3.2.4 Inspection

A structured review of the work being performed by the contractor.

12.3.2.5 Audits

A structured review of the procurement process. Rights and obligations related to audits should be described in the procurement contract.

12.3.3 Outputs

12.3.3.1 Closed Procurements

Requirements for formal procurement closure are usually defined in the terms and conditions of the contract and are included in the procurement management plan.

• All deliverables should have been provided on time and meet technical and quality requirements,
• There should be no outstanding claims or invoices, and
• All final payments should have been made.
• All deliverables should have approved prior to closure.

12.3.3.2 Work Performance Information

How a seller is performing by comparing

• The deliverables received,
• The technical performance achieved, and
• The costs incurred and accepted against the SOW budget for the work performed.

12.3.3.3 Procurement Documentation Updates

• Contract with all supporting schedules,
• Requested unapproved contract changes, and
• Approved change requests
• Any seller-developed technical documentation and
• Other work performance information such as
  • Deliverables,
  • Seller performance reports and
  • Warranties,
  • Financial documents including invoices and payment records, and
  • The results of contract-related inspections.

12.3.3.4 Change Requests

Change requests.

Requested but unresolved changes can include direction provided by the buyer or actions taken by the seller, which the other party considers a constructive change to the contract.

12.3.3.5 Project Management Plan Updates

• Risk management plan. Each agreement and seller has its own set of risks that may require updates to the risk management plan. If significant unexpected risks occur during the execution of the contract, the risk management plan may require updating. Specific risks are incorporated into the risk register.
• Procurement management plan. Contains the activities to be undertaken during the procurement process. Updates may be required depending on the results of the performance of the sellers during execution of the work.
• Schedule baseline. If there are significant schedule changes created by sellers that impact overall project schedule performance, the baseline schedule may need to be updated and approved to reflect the current expectations. The buyer should be aware of any cascading impacts of schedule delays created by a seller that impact other sellers.
• Cost baseline. Contractor and material costs can change frequently during the delivery of a project. These changes can occur because of fluctuating materials and labor prices created by the external economic environment and need to be incorporated into the cost baseline.

12.3.3.6 Project Documents Updates

• Lessons learned register. The lessons learned register can be updated with techniques that were effective in maintaining the scope, schedule, and cost of the procured items. Where variances occurred, the register should show the corrective actions that were used to respond to variances and how effective those actions were. If there are any claims, information should be documented to avoid recurrences. Additional information on how to improve the procurement process can also be recorded.
• Resource requirements. As the work progresses by the contractors, there may be changes to the resource requirements resulting from work being done that is not in accordance with the planned work schedule.
• Requirements traceability matrix. The requirements traceability matrix is updated with information on requirements that have been satisfied.
• Risk register. Each approved seller comes with its own unique set of risks, depending on the seller's organization, the duration of the contract, the external environment, the project delivery method, the type of contracting vehicle chosen, and the final agreed-upon price. Changes are made to the risk register during the execution of the project, as early risks may no longer be applicable and new risks occur.
• Stakeholder register. As the work progresses through the execution phase, the contractors and suppliers may change. These changes should be reflected in the stakeholder register.

12.3.3.7 Organizational Process Assets Updates

• Payment schedules and requests. All payments should be made in accordance with the procurement contract terms and conditions.
• Seller performance evaluation documentation. Seller performance evaluation documentation is prepared by the buyer and documents the seller's ability to continue to perform work on the current contract, indicates whether the seller can be allowed to perform work on future projects, or rates how well the seller is performing the project work or has performed in the past.
• Prequalified seller lists updates. Prequalified seller lists are lists of potential sellers who are previously qualified (approved). These lists will be updated according to the Procurement Control process outcomes because sellers could be disqualified and removed from the lists based on poor performance.
• Lessons learned repository. At the end of a contract, the actual results of the procurement are compared with the projected results in the original procurement management plan. These lessons learned state whether the project objectives were achieved and, if not, provides the reasons they were not.
• Procurement file. A complete set of indexed contract documentation, including the closed contract, is prepared for inclusion with the final project files.

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