Plan Purchases and Acquisitions: Outputs
12.4 Select Sellers
The Select Sellers process receives bids or proposals and applies evaluation criteria, as applicable, to select one or more sellers who are both qualified and acceptable as a seller. Many factors such as the following can be evaluated in the seller selection decision process: • Price or cost can be the primary determinant for an off-the-shelf item, but the lowest proposed price may not be the lowest cost if the seller proves unable to deliver the products, services, or results in a timely manner. • Proposals are often separated into technical approach and commercial price sections, with each evaluated separately. Sometimes, management sections are required as part of the proposal and also have to be evaluated. • Multiple sources could be required for critical products, services, and results to mitigate risks that can be associated with issues such as delivery schedules and quality requirements. The potentially higher cost associated with such multiple sellers, including any loss of possible quantity discounts, and replacement and maintenance issues, are considered. The tools and techniques described here can be used alone or in combination to select sellers. For example, a weighting system can be used to: • Select a single seller that will be asked to sign a standard contract. • Establish a negotiating sequence by ranking all proposals by the weighed evaluation scores assigned to each proposal. On major procurement items, the overall process of requesting responses from sellers and evaluating sellers’ responses can be repeated. A short list of qualified sellers can be established based on a preliminary proposal. A more detailed evaluation can then be conducted based on a more detailed and comprehensive proposal that is requested from the sellers on the short list. A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 286 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 287 12 Figure 12-6. Select Sellers: Inputs, Tools Techniques, and Outputs12.4.1 Select Sellers: Inputs
.1 Organizational Process Assets The organizational process assets of the organizations involved in project procurement typically have formal policies that affect the evaluation of proposals. .2 Procurement Management Plan Described in Section 12.1.3.1. .3 Evaluation Criteria Evaluation criteria Section 12.2.3.2 can include samples of the supplier’s previously produced products, services, or results for the purpose of providing a way to evaluate the supplier’s capabilities and quality of products. Evaluation criteria also can include a review of the supplier’s history with the contracting organization and others. .4 Procurement Document Package Described in Section 12.3.3.2. .5 Proposals Seller proposals prepared in response to a procurement document package Section 12.3.3.3 form the basic set of information that will be used by an evaluation body to select one or more successful bidders sellers. .6 Qualified Sellers List Described in Section 12.3.3.1. .7 Project Management Plan The project management plan provides the overall plan for managing the project and includes subsidiary plans and other components. To the extent that other component documents are available, they are considered during the Select Sellers process. Other documents that are often considered include: • Risk register Section 11.5.1.2. • Risk-related contractual agreements Section 11.5.3.3.12.4.2 Select Sellers: Tools and Techniques
.1 Weighting System A weighting system is a method for quantifying qualitative data to minimize the effect of personal prejudice on seller selection. Most such systems involve assigning a numerical weight to each of the evaluation criteria, rating the prospective sellers on each criterion, multiplying the weight by the rating, and totaling the resultant products to compute an overall score. .2 Independent Estimates For many procurement items, the procuring organization can either prepare its own independent estimates or have prepared an independent estimate of the costs as a check on proposed pricing. This independent estimate is sometimes referred to as a “should-cost” estimate. Significant differences from these cost estimates can be an indication that the contract statement of work was not adequate, that the prospective seller either misunderstood or failed to respond fully to the contract statement of work, or that the marketplace changed. .3 Screening System A screening system involves establishing minimum requirements of performance for one or more of the evaluation criteria, and can employ a weighting system and independent estimates. For example, a prospective seller might be required to propose a project manager who has specific qualifications before the remainder of the proposal would be considered. These screening systems are used to provide a weighted ranking from best to worst for all sellers who submitted a proposal. .4 Contract Negotiation Contract negotiation clarifies the structure and requirements of the contract so that mutual agreement can be reached prior to signing the contract. Final contract language reflects all agreements reached. Subjects covered include responsibilities and authorities, applicable terms and law, technical and business management approaches, proprietary rights, contract financing, technical solution, overall schedule, payments, and price. Contract negotiations conclude with a document that can be signed by both buyer and seller, that is, the contract. The final contract can be a revised offer by the seller or a counter offer by the buyer. For complex procurement items, contract negotiation can be an independent process with inputs e.g., an issues or open items list and outputs e.g., documented decisions of its own. For simple procurement items, the terms and conditions of the contract can be fixed and non-negotiable, and only need to be accepted by the seller. The project manager may not be the lead negotiator on the contract. The project manager and other members of the project management team may be present during negotiations to provide, if needed, any clarification of the project’s technical, quality, and management requirements . A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 288 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USAParts
» Project Characteristics What is a Project?
» Projects vs. Operational Work
» Projects and Strategic Planning
» Introduction, defines key terms and provides an overview for the
» Project Life Cycle and Organization, describes the environment in
» Project Management Processes for a Project, describes the five
» Project Integration Management, describes the processes and
» Project Scope Management, describes the processes involved in
» Project Procurement Management, describes the processes that
» Project Management Body of Knowledge
» Application Area Knowledge, Standards and Regulations
» Understanding the Project Environment
» General Management Knowledge and Skills
» Interpersonal Skills Areas of Expertise
» Project Management Office Project Management
» What is Project Management? The Project Life Cycle 2.2 Project Stakeholders
» Organizational Influences Index of /misc
» Characteristics of the Project Life Cycle
» Characteristics of Project Phases
» Project Life Cycle and Product Life Cycle Relationships
» Project Stakeholders Index of /misc
» Organizational Structure Organizational Influences
» The Role of the PMO in Organizational Structures
» Project Management System Organizational Influences
» Project Management Processes Index of /misc
» Initiating Process Group Project management Process Groups
» Planning Process Group Project management Process Groups
» Executing Process Project management Process Groups
» Monitoring and Controlling Process Group
» Process Interactions Index of /misc
» Project Management Process Mapping
» Develop Project Charter – developing the project charter that formally
» Develop Preliminary Project Scope Statement – developing the preliminary
» Develop Project Management Plan – documenting the actions necessary to
» Direct and Manage Project Execution – executing the work defined in the
» Monitor and Control Project Work – monitoring and controlling the
» Integrated Change Control – reviewing all change requests, approving
» Close Project – finalizing all activities across all of the Project Management
» Develop Project Charter: Inputs
» Develop Project Develop Project
» Develop Preliminary Project Scope Statement: Inputs
» Develop Preliminary Project Scope Statement: Tools and Techniques
» Develop Preliminary Project Scope Statement: Outputs
» Develop Project Develop Project Management Plan
» Develop Project Management Plan: Outputs
» Direct and Manage Project Execution: Inputs
» Monitor and Control Project Work: Inputs Monitor and Control Project Work: Tools and Techniques
» Monitor and Control Project Work: Outputs
» Close Project: Inputs Close Project
» Close Project: Close Project
» Close Project: Outputs Close Project
» Scope Control – controlling changes to the project scope.
» Scope Planning: Scope Planning
» Scope Planning: Tools and Techniques Scope Planning:
» Scope Definition: Inputs Scope Definition
» Scope Definition: Tools and Techniques Scope Definition: Outputs
» Create WBS: Tools and Techniques
» Create WBS: Outputs Create WBS
» Scope Control: Inputs Scope Control
» Scope Control: Tools and Techniques
» Scope Control: Outputs Scope Control
» Activity Definition – identifying the specific schedule activities that need to
» Activity Sequencing – identifying and documenting dependencies among schedule activities.
» Activity Duration Estimating – estimating the number of work periods that
» Schedule Development – analyzing activity sequences, durations, resource
» Schedule Control Index of /misc
» Activity Definition: Inputs Activity Definition
» Activity Definition: Tools and Techniques
» Activity Definition: Outputs Activity Definition
» Activity Sequencing: Inputs Activity Sequencing
» Activity Sequencing: Tools and Techniques
» Activity Resource Estimating: Inputs
» Activity Resource Estimating: Tools and Techniques
» Activity Resource Estimating: Outputs
» Activity Duration Estimating: Inputs
» Activity Duration Activity Duration
» Activity Duration Estimating: Outputs
» Schedule Development: Inputs Schedule Development
» Schedule Development: Tools and Techniques
» Schedule Development: Outputs Schedule Development
» Schedule Control: Outputs Schedule Control
» Cost Estimating – developing an approximation of the costs of the resources
» Cost Budgeting – aggregating the estimated costs of individual activities or
» Cost Control – influencing the factors that create cost variances and
» Cost Estimating: Cost Estimating
» Cost Estimating: Tools and Techniques
» Cost Estimating: Outputs Cost Estimating
» Cost Budgeting: Inputs Cost Budgeting
» Cost Budgeting: Cost Budgeting
» Cost Budgeting: Outputs Cost Budgeting
» Cost Control: Inputs Cost Control: Tools and Techniques
» Cost Control: Outputs Cost Control
» Quality Planning – identifying which quality standards are relevant to the
» Perform Quality Assurance – applying the planned, systematic quality
» Perform Quality Control – monitoring specific project results to determine
» Quality Planning: Inputs Quality Planning
» Quality Planning: Tools and Techniques
» Quality Planning: Quality Planning
» Perform Quality Assurance: Inputs Perform Quality
» Perform Quality Assurance: Outputs
» Perform Quality Control: Inputs
» Perform Quality Control: Tools and Techniques
» Perform Quality Control: Outputs
» Human Resource Planning – Identifying and documenting project roles,
» Acquire Project Team – Obtaining the human resources needed to complete
» Develop Project Team – Improving the competencies and interaction of team
» Manage Project Team – Tracking team member performance, providing
» Human Resource Planning: Inputs
» Human Resource Planning: Tools and Techniques
» Human Resource Planning: Outputs
» Acquire Project Team: Inputs
» Acquire Project Team: Tools and Techniques
» Acquire Project Team: Outputs
» Develop Project Team: Inputs Develop Project Team: Tools and Techniques
» Manage Project Team: Tools and Techniques
» Manage Project Team: Outputs
» Communications Planning: Inputs Communications Planning
» Communications Planning: Tools and Techniques
» Communications Planning: Outputs Communications Planning
» Information Distribution: Inputs Information Distribution
» Information Distribution: Tools and Techniques
» Information Distribution: Outputs Information Distribution
» Performance Reporting: Inputs Performance Reporting: Tools and Techniques
» Performance Reporting: Outputs Performance Reporting
» Manage Stakeholders: Inputs Manage Stakeholders: Tools and Techniques
» Manage Stakeholders: Outputs Manage Stakeholders
» Risk Management Planning: Inputs
» Risk Management Planning: Tools and Techniques
» Risk Management Planning: Outputs
» Risk Identification: Inputs Risk Identification: Tools and Techniques
» Qualitative Risk Analysis: Inputs
» Qualitative Risk Analysis: Tools and Techniques
» Qualitative Risk Analysis: Outputs
» Quantitative Risk Analysis: Inputs
» Quantitative Risk Analysis: Tools and Techniques
» Quantitative Risk Analysis: Outputs
» Risk Response Planning: Inputs
» Risk Response Planning: Tools and Techniques
» Risk Response Planning: Outputs
» Risk Monitoring and Control: Inputs Risk Monitoring and Control: Tools and Techniques
» Risk Monitoring and Control: Outputs
» Plan Purchases and Acquisitions – determining what to purchase or acquire
» Plan Contracting – documenting products, services, and results requirements
» Request Seller Responses – obtaining information, quotations, bids, offers,
» Select Sellers – reviewing offers, choosing among potential sellers, and
» Contract Administration – managing the contract and relationship between
» Contract Closure – completing and settling each contract, including the
» Plan Purchases and Acquisitions: Inputs
» Plan Purchases and Acquisitions: Tools and Techniques
» Cost-Plus-Fee CPF or Cost-Plus-Percentage of Cost CPPC. Seller
» Plan Purchases and Acquisitions: Outputs
» Plan Contracting: Inputs Plan Contracting
» Plan Contracting: Tools and Techniques
» Plan Contracting: Outputs Plan Contracting
» Request Seller Responses: Inputs
» Request Seller Responses: Tools and Techniques
» Request Seller Responses: Outputs
» Select Sellers: Inputs Select Sellers
» Select Sellers: Tools and Techniques
» Select Sellers: Outputs Select Sellers
» Contract Administration: Inputs Contract Administration: Tools and Techniques
» Contract Administration: Outputs Contract Administration
» Contract Closure: Inputs Contract Closure
» Contract Closure: Tools and Techniques
» - Introduction Changes Contract Closure: Outputs
» - Project Life Cycle and Organization Changes
» - Project Management Processes for a Project Changes
» - Project Integration Management Changes
» - Project Scope Management Changes
» - Project Time Management Changes - Project Cost Management Changes
» - Project Quality Management Changes
» - Project Human Resource Management Changes
» - Project Communications Management Changes
» - Project Risk Management Changes - Project Procurement Management Changes
» Introduction Contract Closure: Outputs
» Project Life Cycle and Organization
» Project Management Processes for a Project
» Project Integration Management Contract Closure: Outputs
» Project Scope Management Contract Closure: Outputs
» Project Time Management Contract Closure: Outputs
» Project Cost Management Contract Closure: Outputs
» Project Quality Management Contract Closure: Outputs
» Project Human Resource Management
» Project Communications Management Contract Closure: Outputs
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