12.2 Plan Contracting |
| Inputs |  | Tools | | Outputs |
Procurement Management Plan
Contract Statement of Work
Make-or-Buy Decisions
Project Management Plan
- Risk Register
- Risk Related Contractual Agreements
- Resource Requirements
- Project Schedule
- Activity Cost Estimates
- Cost Baseline
| Standard Forms
Expert Judgment
| Procurement Documents
Evaluation Criteria
Contract Statement of Work (updates)
|
Plan Contracting is next step in procurement process after planning for purchase and acquisition (12.1 the previous process). For every company there will be few pre-defined forms or policies to acquire products/services or engaging vendors. Those “Standard Forms” will be used as “Tools” in this process. As usual Expert judgment will be counted for this process too.
The major outcome or the intent of this process is to generate Planning Documents and developing your own evaluation criteria. In de-centralized procurement organizations Project Manager (you) will directly engage vendors. So in this process you have to develop the evaluation criteria, measures to evaluate vendor responses.
Procurement Documents:
These documents are useful for the Buyer (You the Project Manager) to communicate the need in most possible efficient way to all prospective sellers. If Sellers can understand your needs, your process and clauses, they can clearly quote and meet your expectations.
Following are few documents you prepare:
- RFP (Request for Proposal) in this document you can ask for detailed plan for project execution and price. If it is a long term project and the scope is not developed completely you can use these types of documents.
- IFB (Invitation for Bid) or RFB (Request for Bid): You have developed the scope and you know the work and willing to get it done by vendor then you will use this type of documents
- RFQ (Request for Quotation): This is Price per item or hour labor.
In these procurement documents you can include
- Your company information
- Project information
- Criteria which are important for the project and on which you will evaluate
- Terms and conditions for the project, legal implications
- Contract terms
Other documents you will need to develop are:
NDA (Non-Disclosure agreement): To perform the Project work buyer has to disclose some confidential information to the sellers or even prospective sellers. Sellers/Prospective sellers are bound by this document to protect Buyers confidential information.
Letter of Intent: This document intention is to communicate that the buyer, you are intended to purchase services or products from the seller. But this document is not legally binding document, means you can even decline to purchase in future date based on your changing criteria.
Privity of contract: The doctrine of privity in contract law provides that a contract cannot confer rights or impose obligations arising under it on any person or agent except the parties to it. Privity of contract occurs only between the parties to the contract, most commonly contract of sale of goods or services. Horizontal privity arises when the benefits from a contract are to be given to a third party. Vertical privity involves a contract between two parties, with an independent contract between one of the parties and another individual or company. (From Wiki)
In a simple example: You hired a contractor A, and the contractor hires another sub-contractor B to deliver part of your work. Even though B is performing your work, he/she is contractually not bound to you, because B contractually bound to “A” only.