Agile Procurements 101

INTRODUCTION

Hello, fellow project managers! As all of you already know, Agile projects require a solid grasp of conducting and controlling procurements is essential. For project managers, navigating this terrain effectively is essential. This guide simplifies complex processes, offering insights into vendor selection, contract management, and closure. We will break down the key elements, demystifying Agile procurement with practical strategies that resonate across diverse projects. Join us on this journey to enhance your Agile project management skills, as we explore the intricacies of procurement and empower you for success in every project endeavor.

Initiating Procurements

When a project kicks off, there is a crucial step called conducting procurements that takes the spotlight. Think of this like the phase where you choose your project partners. You start by talking to potential buddies, sharing important project info with them, getting their offers, and finally picking the best match. It's like shopping around for the right teammate. Organizations can either directly talk to their favorite buddy or open it up to everyone, creating a bit of healthy competition.

Now, let's talk about a get-together called a bidders' conference. According to Kathy Schwalbe's [1], it is like a big meeting where everyone who might help out gets together. This helps make sure everyone is on the same page about what needs to be done. After that, it is time to look at the offers. You check them based on different things, like if the buddy knows their stuff (technical), how they plan to do the work (management), and how much it will cost. To make it easier, we use a scoring system, a bit like giving grades in school. This helps us narrow down the options. Then comes the negotiation part – deciding on the best buddy for the job.

Think of competitive bidding like a big online marketplace. Organizations put out what they need, and different sellers from around the world can bid to provide it. This way, you can find the best help at the best price. It is like finding the perfect product with the right features and the right cost. As you go through this process, you create a shortlist of the best options. To make things fair, we use sheets to evaluate the proposals. These sheets help us compare different options without focusing too much on just one thing. After the shortlist, we dig deeper into each option, refining our criteria and giving points to different factors. The one with the most points becomes our top choice. The final step is negotiating the deal, making it official who is going to help, what they'll do, and how much it will cost. This sets the stage for a successful project – like building a team where everyone knows their role.

Managing Procurements

Ensuring your project sails smoothly requires understanding the legal side of procurement. Controlling procurements ensures the seller meets the contract, a legal pact subject to state and federal laws. Involving legal professionals is crucial, but ideally, project managers and team members should also grasp the contract's importance. Lack of understanding can lead to unintended costs, especially with changes. Not comprehending the contract might unknowingly authorize extra work, costing more. Watch out for constructive change orders; oral or written acts, even apparent authority, can impact costs. In essence, understanding the legal landscape is vital for a project's financial safety.

In addition to legal considerations in project procurement is essential:

• Review, approve, and document changes to any project aspect using the same approval process as the original plan.

• Conduct an impact analysis for every change, assessing how it will influence scope, time, cost, and the quality of goods or services. Establish a baseline for understanding and analyzing changes.

• Document all changes in writing, ensuring that important meetings and telephone calls are thoroughly documented by project team members.

• For the procurement of intricate information systems, project managers and their teams should stay closely involved to ensure the new system aligns with business needs and functions well in an operational setting. Avoid assuming smooth sailing simply because a reputable supplier is involved; the buying organization should contribute expertise.

• Develop backup plans in case the new system encounters issues and doesn't perform as expected.

• Utilize various tools and techniques for effective contract administration, including a formal contract change control system, buyer-led procurement performance reviews, inspections and audits, performance reporting, payment systems, claims administration, and records management systems.
  
  

As you near the finish line of project procurements, the critical step of closing contracts, also known as contract closure, comes into play. This phase encompasses completing and settling contracts, resolving any lingering issues. The project team must meticulously assess if all contract requirements were met satisfactorily. Peter Landau [2] highlights that a formal acceptance and closure procedure should be outlined within the contract, accompanied by record updates reflecting the final results. Tools facilitating this closure include procurement audits, negotiated settlements, and a records management system. Ideally, procurements conclude with a negotiated settlement, fostering a collaborative end. However, alternative dispute resolution methods like mediation or arbitration can step in if negotiation proves elusive. Archiving information, particularly in an automated system, becomes a cornerstone for future process enhancements in procurement management.

Conclusion

In the intricate journey of project management, mastering the art of procurement is akin to navigating uncharted waters. From vendor selection to contract closure, each step demands a vigilant approach.
Remember, collaboration, adherence to legalities, and meticulous record-keeping are the anchors steering your project towards successful procurement. As you set sail into future projects, leverage these insights to chart a course of efficient and effective procurement management. Until next time!

References 

[1] Schwalbe, Kathy. Information Technology Project Management, 9th Edition.

[2] Landau, Peter. “Project Procurement Management: A Quick Guide”
      projectmanager.com, link to the article.

Graphic References

[Figure 1] Illustration of project procurement management, link to the graphic.

[Figure 2] Example proposal assessment form
  Page 526, Schwalbe, Kathy. Information Technology Project Management, 9th Edition.