Organization, Procedures & Program

Procurement Schedules
Lecture #6
4/29/15

Impact of Division of
Responsibility
Which

products/services
furnished by owner
Which products/services
furnished by supplier/contractor
Specific requirements for
procurement activities

Project Organization

Project
Manager

Engineerin
g

Licensing

Procureme
nt

Constructio
n

Testing

Operations

Owner & Contractor Procurement

Organization
Project
Manager

Owner
Engineerin
g

Owner
Licensing

Owner
Procureme
nt

Owner
Constructio
n

Engineerin
g
Contractor

Constructio
n
Contractor

Contractor
Procureme
nt

Contractor
Procureme
nt

Owner
Testing

Operations

Procurement Department
Responsibilities
Awarding

and administering

contracts
Expediting processes
Shop inspection
Shipping
Material receiving
Warehousing/Storage
Inventory control

If Disposal
procurement department
is responsible
for all these
of surplus
materials
activities,
it is often referred as materials management

Materials Management
Organization

Materials
Manager

Purchasing

Shipping

Shop
Inspection

Warehousin
g & Storage

Expediting

Material
Receiving

Inventory
Control

Surplus
Material

No. Procurement Personnel

Procurement Group Project

Personnel

Project Percent Complete

7

Procurement Group Project

Organization
Project
Manager

Procureme
nt
Departmen
t Manager

Project
Procureme
nt Group

Procureme
nt
Departmen
t Personnel
8

PROCEDURES

Typical Procurement Procedures

Materials

Requisition Procedure
Qualified Bidders Procedure
Request for Proposal Procedure
Pre-Bid Meeting Procedure
Bid Opening Procedure
Bid Evaluation Procedure
Purchase Order & Contract Formation
Procedures
Contract Management Procedures
Contract Close-out Procedure
10

MANAGEMENT
PROGRAM

11

Typical Subjects in a
Management Program
Statement

of the Objectives of the

Procurement Process
Division of Responsibility for the
Project Procurement Description
Project Procurement Organizational
Structure and Group Responsibilities
Specific Procurement Project
Procedures
Procurement Quality Program
Requirements
12

Typical Subjects in a
Management Program (Contd)
Procurement

Cost Control
Requirements
Procurement Schedule Control
Requirements
Procurement Progress Reports
Procurement Process Training
Programs
Procurement Group Personnel
Qualifications

13

PROCUREMENT
SCHEDULES

14

Selection of Schedule Activities

Represent

significant amount of

work
Finite in scope clearly defined
beginning and ending
Steps are finite in nature and
logically related
Procurement activities integrated
with other project groups
activities
Critical procurement activities

15

Logical Relationships
Complete

Conceptual Design
Technical Specifications
Complete Division of Responsibility (DOR) for
Project Procurement
Select Bidders
Management Requirements
RFP Commercial Requirements
Complete RFP
Prepare Bids
Evaluate Bids
Prepare and Sign Contract
Manage Contract
Close Out Contract
16

Integration with other Schedules

Procurement

& Design Schedules

Procurement & Licensing Schedules
Procurement &
Construction/Manufacturing Schedules
Project Schedule Integration of
Procurement and Other Schedules
Integration of Supplier & Contractor
Schedules with the Project Schedules
Integration of Engineered Material and
Equipment Contractor Schedules
Integration of Contractor Schedules

17

Impact of Contract Pricing on

Activity Durations
Procurement Process
Activity

Fixed
Price

Cost
Plus
Incentiv
e Fee

Cost
Plus
Fixed
Fee

Prepare Technical Specifications

2
52+

2 26+

12

Prepare Management
Requirements

14

14

12

RFP Commercial Requirements

16

14

12

Complete RFP

13

12

12

Select Bidders

16

16

16

Prepare Bid Proposals

28

13

12

Evaluate Bid Proposals

15

13

12

Prepare & Sign Contract

1 6+

14

13

Administer Contract

4
52+

4 52+

4 52+
18

Contract Preparation Schedule

Technical

Specifications &

Drawings
Management Requirements
RFP Commercial Requirements
Complete RFP
Select Bidders
Prepare Bid Proposals
Evaluate Bid Proposals
Prepare & Sign Contract
19

Sample Supplier Contract

Schedule (Water Treatment
Equipment Contract)
ID

Task Name

Duratio
n

Start

Finish

Design System

30d

5/8/14

6/16/14

Fabricate & Deliver Pumps

60d

6/19/14 9/8/14

Fabricate & Deliver Tanks

45d

6/19/14 8/18/14

Fabricate & Deliver Filters

30d

5/8/14

6/16/14

Fab. & Del. Chlorination

Equipment

25d

5/8/14

6/9/14

Fabricate & Deliver Control

Panels

45d

6/19/14 8/18/14

Fabricate & Deliver Local

Instruments

25d

6/19/14 7/21/14

Fabricate & Deliver Piping

30d

6/19/14 7/25/14
20