ITM750_Chap12_Procurement
Procurement
Procurement
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Cartes-fiches
Acquiring goods and/or services from an outside source, used by governments
Acquiring goods and/or services from an outside source, used by private firms
Most widely used term for organization who provide procurement services( synonyme: vendor contractor, subcontractor, or seller)
About half of respondents also said that their companies focus too much on cost reduction instead of value creation
Application development used by 53% of the organizations
Disaster recovery services 50% of total IT outsourcing
A mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them
Includes the processes required to acquire goods and services for a project from outside the performing organization
Are contractors, suppliers, or providers who provide goods and services to other organizations
Organization decides if it is in its best interests to make certain products or perform certain services inside the organization, or if it is better to buy them from an outside organization
General management technique used to determine whether an organization should make or perform a particular product or service inside the organization or buy from someone else.
Is often cheaper on a short term but more expensive for long term needs
Involve a fixed total price for a well defined product or service,(= lump sum) provide lowest risk
Involve a fixed total price for a well defined product or service,(= fixed price) provide lowest risk
A bit more risk than a firm fixed price contract but still good. It includes a bonus for a delivery in time or something like that.
Cost at which the contractor assumes total responsibility for each additional dollar of contract cost. PTA = (ceiling price ? target price)/government share + target cost
Payment to the supplier for direct and indirect costs
Buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus
Buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based on a percentage of estimated costs
Buyer pays the supplier for allowable performance costs plus an award fee based on the satisfaction of subjective performance criteria.
Buyer pays the supplier for allowable performance costs along with a predetermined percentage base on total costs. Prohibited for US governance use but allowed for private firms ? least desirable for buyer ? highest risk
Hybrid of both fixed-price and cost-reimbursable contracts
Can also be used in various types of contracts to require the buyer to pay the supplier a predetermined amount per unit of product or service
A contract clause that allows the buyer or supplier to end the contract
Description of the work required for the procurement. It should be clear, concise, and as complete as possible.
If a SOW is used as part of a contract to describe the work required for that particular contract
Where the work must be performed
Specify when the work is expected to start and end, working hours, number of hours per week, where the work must be performed, and related schedule information
List specific deliverables, describe them in detail, and specify when they are due.
Any company or industry-specific standards that are relevant
Describe how the buyer organization will determine if work is acceptable
Special requirements such as hardware or software certification, minimum degree or experience level of personnel, travel requirements ?
Involves preparing the documents needed for potential sellers to prepare their responses and determining the evaluation criteria for the contract award.
Document used to solicit proposals from prospective suppliers.
Document prepared by a seller when there are different approaches for meeting buyer needs
Document used to solicit quotes or bids from prospective suppliers
Document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer
Is a meeting with prospective sellers prior to preparation of their proposals or bids. These conferences help ensure that everyone has a clear, common understanding of the buyer?s desired products or services.
Involves evaluating proposals or bids from sellers, choosing the best one, negotiating the contract, and awarding the contract
Best and Final offer after the RFP or RFQ
