Procurement Management Plan Example

Procurement Management Plan

1.0 Introduction

The city of Ackland has contracted Hiflow Water Systems to design and build a water supply infrastructure that will provide water to a new housing development in the city. The project will involve laying a water main from the existing water treatment facility to the housing development and building an elevated storage tank and booster pumping station.

This Procurement Management Plan is relevant to the purchase and acquisition of all products, services, and results required to complete project objectives. This document is an informal plan, to be included within the Project Management Plan (PMP).

2.0 Supporting Documentation


All procurement is governed by the "Policy on Procurement of Goods and Services," which is owned by the Purchasing Department. All purchase orders, contracts, and other legally binding agreements with sellers must be reviewed and authorized in accordance with the guidance in this policy.

3.0 Description of Procurement Processes


The project manager, in collaboration with individual managers, will review the work packages and activities of the lowest level of the Work Breakdown Structure (WBS) and will arrive at make-or-buy decisions based on the availability of resources and project expertise. From this analysis, a list will be produced detailing the procurement requirements of the project.


From the aforementioned list and project specifications and drawings, the purchasing and accounts manager will prepare documents for a Request For Quote (RFQ). The PM, together with individual managers, will prepare a list of qualified sellers who, in their opinion, are most capable of performing the work. RFQs will be issued to sellers on the qualified sellers list.

4.0 Contract Conditions and Seller Communications


• A minimum of three responses or quotations must be obtained. The project manager, together with the purchasing and accounts manager, will generally select the lowest-cost quotation. However, where the lowest-cost seller is not selected, the reasons why it has not been selected will be formally documented.
• The purchasing and accounts manager, together with the project manager, will carry out negotiations and draw up the contract with the selected seller.
• Work carried out under contract will be subject to the same change management system as noncontract work.
• Work carried out under contract will be subject to quality inspection to verify that it meets the needs of the project.
• Work carried out under contract will be assessed for performance with respect to both cost and schedule.
• Completed contracts will be marked as completed and filed with quality and performance reports for the specified work.