Tools and Techniques of Control Procurements process

Summary

In this video, the host provides an in-depth overview of the Control Procurement Process in project management. The video highlights key tools and techniques such as payment systems, records management, claims administration, performance reviews, and contract change management systems. These tools help manage complex procurement scenarios, from handling multiple vendors and their payment terms to resolving disputes through contract clauses. The host also emphasizes the importance of understanding these processes for the PMP exam and real-world project management success, while offering helpful resources for further study.

Takeaways

• 😀 Understanding the **Control Procurement** process is vital for managing procurement in projects.
• 😀 **Payment systems** are essential to manage large sums of money in B2B procurement, ensuring payments to multiple vendors across various projects.
• 😀 **Records management systems** help organize and store procurement-related documents like invoices, receipts, and contracts, ensuring they are accessible when needed.
• 😀 A **claim** in procurement is a dispute between the buyer and seller, and should be resolved through the dispute resolution procedure outlined in the contract.
• 😀 **Negotiation** is the preferred method for settling procurement claims, avoiding the need for third-party involvement and minimizing project delays.
• 😀 **Performance reviews** are essential for measuring and evaluating seller performance based on contract terms like quality, timelines, and scope.
• 😀 The **Contract Change Management System** handles changes to contracts, ensuring any modifications are properly managed within the framework of both parties’ procedures.
• 😀 Change management processes in contracts differ from general project change management processes, and may require separate systems for different vendors.
• 😀 Having multiple **contract change management systems** is possible if vendors have varying preferences for handling changes in their contracts.
• 😀 Understanding these procurement tools and techniques prepares project managers for real-world project management and is crucial for passing the PMP exam.

Q & A

What is the primary purpose of the Control Procurement process?

The Control Procurement process ensures that all procurement activities in a project are effectively managed and monitored. It focuses on managing vendor relationships, handling payments, addressing disputes, and ensuring contract compliance.

What is the role of payment systems in the Control Procurement process?

Payment systems are essential for managing payments to multiple vendors involved in a project. They ensure that payments are made according to agreed-upon terms, especially when there are multiple projects and vendors, each with different payment terms.

Why is a records management system important in procurement?

A records management system helps organize and store all procurement-related documents such as invoices, receipts, contracts, and correspondence. It ensures that these documents are accessible when needed for auditing, reference, or resolving issues.

How does the claims administration process work in procurement management?

Claims administration deals with disputes between the buyer and the seller. These disputes are often addressed through the procedures outlined in the contract. Typically, negotiation is used to resolve the issue, and the contract will specify how claims are to be handled.

What are performance reviews in procurement management?

Performance reviews assess a seller’s performance against the terms of the contract. Key metrics include timelines, quality, and scope of work. These reviews help project managers ensure that vendors are meeting their obligations and help identify areas for improvement.

What is a contract change management system, and why is it necessary?

A contract change management system handles modifications to contracts. It is separate from general project change management processes because it focuses specifically on contractual changes. This system ensures that changes are managed consistently across different contracts and vendors.

Can there be multiple contract change management systems in a project?

Yes, multiple contract change management systems can exist in a project, especially when different vendors have different preferences or requirements for managing contract changes. This flexibility ensures that the processes are tailored to each vendor’s needs.

Why is negotiation the preferred method for settling claims?

Negotiation is preferred because it helps resolve disputes without involving third parties, which could delay the project. It is generally quicker and allows the parties to find a mutually agreeable solution, adhering to the terms already set out in the contract.

What types of documents are typically managed by a records management system in procurement?

A records management system typically handles procurement-related documents such as contracts, invoices, receipts, memos, emails, and instructions. These documents are crucial for tracking the procurement process and resolving any disputes or issues that arise.

What role does the Accounts Department play in the payment system?

The Accounts Department is responsible for setting up and managing the payment system, ensuring that payments to vendors are made according to the agreed terms. The project manager generally does not deal with payment processing but needs to stay informed about payment statuses.