Project Success Through Excellence in Procurement & Contract Management
The Deputy Chair of the Contracts and Procurement SIG, Dr Jon Broome, gave an overview of the new APM Guide to Contracts and Procurement, which he also co-edited, on 6 March 2018, to members of the Midlands branch at the Hilton Garden Inn, Brindley Place, Birmingham.
Almost all project managers need to procure resources at some time, so using the 7-stage activity model would increase the chances of success – which, according to Jon, is essentially ‘small things done well, consistently’.
To start with, what exactly is procurement? Jon invited the members to think of it in terms of ‘the cards you deal yourself’. The sooner you get involved, the more influence you can exert. With 80-90% of a project spend often being outsourced, he argued that procurement should be tackled as a project in itself – i.e. creating something unique.
Developments since the last guide show a much broader appreciation of criteria over-and-above cost, including an increasing need for collaboration. Modern contracts are more relationship-based, with an emphasis on how parties work together. When situations change, Jon asked, how will the change be managed and evaluated?
The guide provides a new wider-ranging definition for procurement, including determining the Package Breakdown Structure (PaBS) and agreeing strategy, scope and the management of each task.
Project managers should be encouraged to be involved in all aspects of the procurement stage. Since the concept and feasibility of the procurement planning stage is essentially ‘the business’ case’, Jon argued, shouldn’t project and procurement managers be introduced from the start?
Jon described how agile could almost be seen as a number of small programmes taking you towards a ‘fuzzy’ goal, which becomes clearer in time. A drafting ‘philosophy’ should be agreed up-front to help reduce the risk of expensive oversights resulting from poorly briefed lawyers and/or technical consultants.
By ‘procuring at a higher level’, you can provide the reason ‘why’ (i.e. the business case) so that what’s being requested is what you get!
Jon also presented the Top 7 tips for drafting the contract, including making obligations clear and keeping it simple! During the ‘project’, the Deming/Shewhart PDCA cycle (Plan, Do, Check, Act) can keep the whole communication process moving, managed and improved upon.
The closing tip was to be completely clear when you are administering the contract – in which case you must act as an ‘impartial administrator’ - or managing it, when you can act and make decisions in your client’s best interests.
Adrian Turner, Midlands branch volunteer.
The APM Guide to Contracts and Procurement is available to buy.
The presentation also be viewed on the APM Slideshare page