Ryerson University Project Management Certificate

1
Ryerson UniversityProject Management Certificate

• Procurement and Contracts Overview
• presented to the
• PMI-ISLIG
• Nov 11, 2004
• by
• Desmond P. Alvares
• des_alvares_at_bcs.org.uk
• 416 258 7178

2
Introduction Who Am I

• Desmond P. Alvares B. Eng., MBA, MBCS CITP, CMA
• Degree in Mechanical Engineering - UK
• MBA at Schulich School of Business, York
  University
• Finance, Accounting and Strategy
• Certified Management Accountant - Ontario
• Chartered Information Systems Practitioner UK
  (2001)
• Chartered IT Professional UK (2004)
• 19 years Business Intelligence and Knowledge
  Management in Canada, UK, US, Switzerland and
  Caribbean
• 10 years Investment Banking (Brokerage Houses,
  Private Banking and Oil Gas trading)
• 6 years Retail Banking (Technology Business
  Management, Operational Risk, Electronic Banking
  and Mortgages, Finance and Treasury Systems)
• 3 years Property and Casualty Insurance (Finance
  and Actuarial Systems)

3
Introduction PM Background

• Financial Systems Implementations
• Business, Training, Finance and Treasury Projects
• Internal and Client Facing Projects
• Internal Providers and Integration of Vendor
  Solution
• Introduced and Developed Project Management
  Methodology UBS Private Banking (International
  locations base on Swiss framework) and CIBC
  Retail (PMP based on the PMI framework)
• Lecturer at Ryerson University Project
  Management Certificate (Construction, IT and
  Financial Service students) and Architecture
  specialization in Project Management.

4
Agenda

• Introduction
• The Certificate Program at Ryerson
• The Procurement Process
• Planning
• Solicitation
• Source Selection
• Contract Administration
• Close-out

5
Other Offerings of Project Management Courses

• Athabasca University
• Executive MBA in Project Management (on-line and
  residence)
• Centennial College
• Project Management Certificate (6 courses)
• Advanced Project Management Certificate (4
  courses)
• Durham College
• Intro, Scheduling Software, Statistics
• Humber College
• Project Management Certificate (4 courses, 45hrs)
• University of Toronto
• Project Management Certificate (4 courses, full
  day)
• York University
• The Graduate Certificate in Project Management (8
  courses)

6
The Ryerson Offer (8 Courses)

• Core Courses
• CKPM202 Fundamentals of Project Management
• CKPM203 Planning and Scheduling
• CKPM205 Procurement and Contracts
• CKPM209 Project Risk and Quality Management
• CKPM210 Project Leadership
• CKPM211 Project Cost Management
• Electives
• CKPM207 Project Management Systems
• CKPM208 Analytical Decision Making
• CCMN114 Short Management Reports
• CCMN432 Technical Communications
• CMHR405 Organizational Behaviour and
  Interpersonal Skills
• CQMS102 Business Statistics I

7
The Students View

• 570 surveys distributed to students, 271 returned
• 164 surveys to graduates, 24 returned
• Students select Ryerson first and then the
  Certificate Course 75 (Ryerson Website, Ryerson
  material)
• 44.6 in Project Manager or Project Coordinator
  positions
• Experience 80 (gt 5 Years), 25.1 (gt 15 Years)
• 85 interested in becoming professional in 2
  years
• 85.2 using certificate as preparation, but lack
  work experience
• Graduates (61.9 PMI members, 25 PMP), 75
  additional prep
• Risk, cost and planning / scheduling more
  theory than practice
• Interest in PMO, Leadership and Communication
• Common text book required, introduce PMP
  Preparation

8
Definition of the Procurement Process

• Objectives
• Technical Quality
• Schedule
• Cost

9
Basic Steps

• Define the Goods and Services to be procured
• Select bidders and Complete Request for Proposal
• Prepare Bids and Award Contract
• Contract Management
• Close out Contact

10
Other Aspects

• Role of Project Management
• Interfaces with Other Project Processes
• Importance of Management
• Ethical Practices
• Principle Types
• Standard, Material, Equipment Services
• Definitions of Common Terms

11
Organizations for Procurement

• Organization
• Project Managers responsibility
• Procurement department purchasing materials
• Responsibilities
• Staffing direct and matrix
• Procedures
• Requests, Qualified Bidders, RFP, Contact
  Management
• Management Program

12
Procurement Considerations

• What to Procure?
• How much to procure?
• When to procure?
• Selecting an appropriate method of procurement.
• Qualifying suppliers.
• Developing a contracting strategy.
• Establishing appropriate performance measures.
• Documenting the procurement project plan.

13
12.1 Plan Purchase and Acquisition(Procurement
Planning)
14
12.1 PLAN PURCHASE AND ACQUISITION
Tools Techniques Make-or-Buy Analysis Expert
Judgment Contract Types
Outputs Procurement Management Plan Contract
Statement of Work Make or Buy Decision Project
Management Plan (Updates)
Inputs Project Charter Project Scope
Statement Project Management Plan WBS and
Dictionary Environment and Organization
Factors Organizational Process Assets Risk
Register
15
12.1.1 Inputs to Plan Purchase and Acquisition

• .1 Project Charter
• Business needs
• .1 Project Scope Statement
• Project needs and strategies
• .2 Project Management Plan
• Overall plan for the project

16
12.1.1 Inputs to Plan Purchase and Acquisition

• .3 Work Breakdown Structure and Dictionary
• Relationship of all elements in plan
• .4 Environmental and Organizational Factors
• What is available in the marketplace?
• Procurement resources available

17
12.1.1 Inputs to Plan Purchase and Acquisition

• .5 Organizational Process Assets
• Informal and formal procurement processes
• .6 Risk Register
• Risks , categorization and their mitigation

18
12.1.2 Tools Techniques for Plan Purchase and
Acquisition

• .1 Make-or-buy analysis
• .2 Expert judgment
• .3 Contract type selection

19
12.1.2.1 Make or Buy Analysis

• Factors to analyze
• Cost (direct and indirect - lifecycle costs)
• Schedule
• Quality
• Capability availability of in-house resources
• Supplier skills and abilities
• Degree of control needed by the performing
  organization

20
12.1.2.2 Expert Judgement

• Other Departments
• Consultants
• Professional and Technical Associations
• Industry groups

21
12.1.2.3 Contract Types

• Three broad categories of contract type
• Fixed price or lump sum
• FFP
• FPPI
• Cost reimbursable
• CPFF
• CPPF
• CPIF
• Time and Materials (Unit Price)

22
Contract Type vs. Risk Allocation
Scope of Work Information
Very Little
Partial
Complete
Uncertainty
HIGH
MODERATE
LOW
Degree of Risk
HIGH
LOW
MODERATE
0
Buyer
100
Suggested Risk Allocation
0
Seller
100
Contract Types
CPPF
CPIF
CPFF
FPPI
FFP
CPPF Cost Fee
FPPI Firm Price Incentive Fee
CPIF Cost Incentive Fee
FFP Firm Fixed Price
CPFF Cost Fixed Fee
23
12.1.3 Outputs from Plan Purchase and Acquisition

• .1 Procurement management plan
• .2 Contract Statement(s) of work
• .3 Make-or-Buy Decision
• .4 Project Management plan (update)

24
12.1.3.1 Procurement Management Plan

• Defines procurement process
• Basic requirements
• Products/services list to procure
• Roles and responsibilities
• Budget
• Schedule
• Quality criteria
• Specifications
• Contract type to be used

25
12.1.3.2 Contract Statements of Work

• A narrative description of the product
• Clear, concise and as complete as possible
• Sufficient detail
• Allows prospective sellers to determine whether
  they are capable of providing the product
• Could be revised and refined throughout the
  procurement process

26
12.2 Plan Contracting(Solicitation Planning)
27
12.2 Plan Contracting

• Preparing the documents needed to support the
  solicitation process

28
12.2 PLAN CONTRACTING
Outputs Procurement Documents Evaluation
Criteria Contract Statement of Work (Updates)
Inputs Procurement Management Plan Contract
Statements of Work Project Management
Plan Make-or-Buy Decision
Tools Techniques Standard Forms Expert
Judgment
29
12.2.1 Inputs to Plan Contracting

• .1 Procurement Management Plan
• .2 Contract Statement(s) of work
• .3 Project Management Plan
• .4 Make-or-buy Decision

30
12.2.2 Tools Techniques for Plan Contracting

• .1 Standard forms
• Standard contracts, bid documents
• .2 Expert judgement

31
12.2.3 Outputs from Plan Contracting

• .1 Procurement documents
• .2 Evaluation criteria
• .3 Contract Statement of work updates

32
12.2.3.1 Procurement Documents

• Documents used to solicit proposals from
  prospective vendors
• Request for Proposal (RFP), Quote(RFQ) or Bid
  (RFB)
• Instructions (e.g. desired form of response)
• Blank contract form
• Product description or SOW
• Contractual provisions
• Terms and conditions

33
12.2.3.2 Evaluation Criteria

• Criteria used to create or score proposals
• Objective vs. subjective
• Weigh the criteria in terms of importance

34
12.3 Request Seller Responses (Solicitation)
35
12.3 Request Seller Responses

• Obtaining the information (bids and/or proposals)
  from the prospective sellers
• Most of the actual effort is done by the sellers

36
12.3 REQUEST SELLER RESPONSES
Inputs Procurement Documents Organizational
Process Assets
Tools Techniques Bidders Conference Advertisin
g
Outputs Qualified Sellers List Procurement
Document Package Proposals
37
12.3.1 Inputs to Request Seller Responses

• .1 Procurement documents
• .2 Organizational Process Assets

38
12.3.2 Tools Techniques for Request Seller
Responses

• .1 Bidder conferences
• Used to ensure that all prospective sellers have
  a common understanding of the procurement
• .2 Advertising
• Used to expand the list of potential sellers
• Sometimes required on public projects

39
12.3.3 Outputs from Request Seller Responses

• .1 Qualified seller lists
• Internally maintained lists
• List developed by the project team
• .2 Procurement Documentation Package
• .3 Proposals
• Seller-prepared documents that describe the
  sellers ability and willingness to provide the
  requested product

40
12.4 Select Sellers (Source Selection)
41
12.4 Select Sellers

• Receipt of bids or proposals
• Application of the evaluation criteria to select
  a provider
• Risk evaluation, lifecycle cost, independent
  estimates
• Contract negotiations
• Award the contract

42
12.4 SELECT SELLERS
Tools Techniques Weighting System Independent
Estimates Screening System Contract Negotiation
Inputs Proposals Evaluation Criteria Organizationa
l Process Assets Risk Register Risk-Related
Contractual Agreements Qualified sellers
List Procurement Document Package
Outputs Selected Sellers Contract Contract
Management Plan
43
12.4.1 Inputs to Select Sellers

• .1 Proposals
• .2 Evaluation Criteria
• .3 Organizational Process Assets
• .4 Risk Register
• .5 Risk Related Contractual Agreement
• .6 Qualified Sellers List
• .7 Procurement Documentation Package

44
12.4.2 Tools Techniques for Select Sellers

• .1 Weighing system
• Method for quantifying qualitative data
• Minimize the effect of personal prejudice
• .2 Independent estimates
• Procuring organization may prepare its own
  estimates as a check on pricing
• .3 Screening system
• Establishing minimum performance requirements for
  evaluation criteria

45
12.4.2 Tools Techniques for Select Sellers

• .4 Contract negotiation
• Involves clarification and mutual agreement on
  the structure and requirements of the contract
• Final contract to reflect all agreements reached
• Examples of subjects covered
  responsibilities authorities, terms and law,
  contract financing, price

46
12.4.3 Outputs from Select Sellers

• .1 Select Sellers
• .2 Contract
• Mutual agreement which obligates the seller to
  provide the specified product and obligates the
  buyer to pay for it.
• Legal relationship subject to remedy in the
  courts
• Contract agreementsubcontractpurchase
  agreementmemorandum of understanding
• .3 Contract Management Plan

47
12.5 Contract Administration
48
12.5 Contract Administration

• Ensuring that the vendors performance meets
  contractual requirements
• Application of project management processes to
  the contractual relationship
• Project plan execution
• Performance reporting
• Quality control
• Change control
• Communication management

49
12.5 CONTRACT ADMINISTRATION
Outputs Organizational Process Assets
(updates) Requested Changes Recommended
Corrective Actions Contract Documentation
Inputs Contract Approved Change Requests Work
Performance Information Selected Sellers
Tools Techniques Contract Change Control
System Buyer-Conducted Performance
Reviews Inspections and Audits Performance
Reporting Payment System Claims
Administration Records Management System
50
12.5.1 Inputs to Contract Administration

• .1 Contract
• .2 Performance Reports
• Which deliverables completed, not completed
• To what extent quality standards are being met
• .3 Approved Change requests
• Modifications to the terms of the contract or to
  the description of the product or service
• Contested changes where the seller and project
  management team cannot agree on compensation for
  the change are also called claims, disputes or
  appeals
• .4 Work Performance Information
• .5 Selected Sellers

51
12.5.2 Tools Techniques for Contract
Administration

• .1 Contract change control system
• the process by which the contract can be modified
• .2 Buyer-Conducted Performance Reports
• Information about how effectively the seller is
  achieving the contractual objectives
• .3 Inspection and Audits

52
12.5.2 Tools Techniques for Contract
Administration

• .4 Performance Reporting
• .5 Payments System
• .6 Claims Administration
• .7 Records Management System

53
12.5.3 Outputs from Contract Administration

• .1 Organizational Process Assets (updates)
• Correspondence
• Written documentation of certain aspects of
  buyer/seller communications
• Payment schedule and requests
• .2 Contract changes
• .3 Recommended Corrective Actions
• .4 Contract Documentation

54
12.6 Contract Closure
55
12.6 Contract Close-out

• Product verification
• Was all work completed correctly and
  satisfactorily
• Administrative close-out
• Updating records to reflect final results
• Archiving of information for future use

56
12.6 CONTRACT CLOSE OUT
Outputs Organizational Process Assets
(updates)
Inputs Contract Documentation Contract Closure
Procedure
Tools Techniques Procurement Audits Records
Management System
57
12.6.1 Inputs to Contract Close-out

• .1 Contract documentation
• Contract
• Supporting schedules
• Requested and approved contract changes
• Seller-developed technical documentation
• Seller performance reports
• Financial documents
• Results of contract related inspections
• .2 Contract Closure Procedure

58
12.6.2 Tools Techniques for Contract Close-out

• .1 Procurement audits
• Structured review of the procurement process
• Identification of successes and failures
• .1 Records Management System

59
12.6.3 Outputs from Contract Close Out

• .1 Organizational Process Assets (Updates)
• Contract File
• Documentation for Archives and Future Use
• Formal acceptance and closure
• Hand over of Project and acceptance by authorized
  authority
• Lessons Learned Documentation
• Process improvements recommendations

60
Procurement Management Plan

• The plan describes how the procurement process,
  from solicitation to contract close out, is
  managed. Included in this plan are
• The type(s) of contract(s) used.
• If independent estimates and cost proformas will
  be done and who will do them.
• If standard procurement documents will be used,
  and if so, who will prepare them.
• Who will manage coordinate the procurement of
  these goods, services or products.
• Authority of the people involved in the process
  and defined lines of communication.

61
Procurements and Contract Overview

• Thank You to PMI - ISLIG
• Any Questions?
• Desmond P. Alvares
• 416 258 7178
• des_alvares_at_bcs.org.uk