Managing Projects with Complex Procurements

On projects with complex procurements within large organizations, the project manager needs to work closely with the Procurement department.

As The PMBOK ® Guide states (pg 462): “For more mature organizations, the actual procurement and contracting functions will be carried out by a separate department with the specific role to purchase, negotiate, and sign contracts (centralized purchasing).” 

I have found that procurement officials too often see their job as getting the lowest price possible from suppliers.  If other factors matter to you and your project, you need to find a way to check this behavioral tendency.  How?  Here are a few ideas:

  1. Include the procurement official on your project team, and establish a close working relationship with this person, so that you have the degree of influence needed over the procurement process.

  2. Write detailed specifications for materials and vendor qualifications.  To do this well, you really need to know your stuff — or enlist the help of qualified subject matter experts.

  3. Enforce these specifications and vendor qualification requirements like a tiger through careful review of submittals.

  4. If possible, design into the project a pilot phase, where you get to see the selected supplier perform, before committing to the larger project.

  5. Check past project references for the supplier carefully.

  6. Check your industry network for ‘war stories’ about the supplier.

  7. Conduct a bidder conference where you go over scope and expectations in great detail, and record it.  Then, when a contractor tries to submit frivolous change requests mid-project, you have ammunition locked and loaded to refute them.  Make a big deal out of the recording during the bidder conference, and this alone may chase away some of the low bidders who are planning to make their profit through change requests (a commonly played game).

If your procurement official has the capability to do all of this well… great — but don’t take it for granted.  Too often, that’s just not the case.  As project manager, you are ultimately accountable for the success of the procurement and for the project outcome, so you just can’t afford not to pay close attention to the risk of LBS (Low Bidder Syndrome).