Conduct Procurement in Project Execution

1. Introduction

Most projects involve working with vendors and external contractors. The process of selecting a seller and awarding a contract occurs during the execution phase of the project, not during planning.

The Conduct Procurement process involves obtaining seller responses, evaluating proposals, and selecting a qualified vendor.

2. Understanding Conduct Procurement

A. Procurement Planning vs. Execution

• During Planning, procurement needs are identified, contract types are determined, and bid documents are prepared.
• During Execution, seller responses are received, vendors are evaluated, and contracts are awarded.
• Example: A construction company plans to outsource material supply. In execution, supplier bids are evaluated and one is selected.

B. Key Activities in Conduct Procurement

• Receiving seller proposals (bids, quotes, RFPs, RFQs).
• Analyzing vendor responses.
• Conducting bidder conferences (if required).
• Negotiating terms and selecting a seller.
• Awarding the contract (or agreement).

3. Key Elements in Conduct Procurement

Element	Description	Example
Procurement Documentation	Includes bid documents like RFPs, RFQs, and procurement statements of work.	List of required services for software development outsourcing.
Seller Proposals	Responses received from potential vendors.	Different price quotes from hardware suppliers.
Independent Cost Estimates	Estimates used to compare vendor pricing.	Budget estimates for server installation services.
Bidder Conference	A meeting to explain project requirements to potential vendors.	A government agency explaining bridge construction requirements.
Proposal Evaluation	Analyzing and comparing vendor responses.	Comparing software development firms for a mobile app project.
Contract Award	Signing an agreement with the selected vendor.	Hiring a security firm for an IT project.

4. Steps in Conduct Procurement

• Step 1: Receive vendor proposals after sending bid invitations.
• Step 2: Conduct bidder conferences (if applicable).
• Step 3: Evaluate proposals based on selection criteria.
• Step 4: Negotiate contract terms with selected vendors.
• Step 5: Award contract and establish agreement.

5. Example Scenario

Consider a government project to build a bridge:

• The government issues an RFP (Request for Proposal) for construction companies.
• Interested companies submit proposals detailing their cost estimates and timelines.
• A bidder conference is held to clarify project expectations.
• The government evaluates proposals based on cost, experience, and timeline.
• A construction firm is awarded the contract and work begins.

6. Summary

• Procurement planning determines what to procure and how.
• Procurement execution involves selecting a vendor and awarding a contract.
• Key documents include RFPs, RFQs, and procurement statements of work.
• Vendor selection may involve bidder conferences and negotiations.
• The final output is an awarded contract, allowing the vendor to begin work.

Effective vendor selection ensures successful project execution and quality delivery of outsourced work.