Plan Contracting Process by Anticlue

Plan Contracting provides the time and place to craft the documents needed to support the Request Seller Response process and Select Sellers process. The Plan Contracting process provides the documents which enable requesting seller bids and determining which sellers to move forward with through the contracting phase.

As with most process, there are input needed to assure all necessary information is in place for a decision to be made. The inputs to Plan Contracting are:

• Procurement Management Plan - The Procurement Management Plan details how the procurement process will be managed. It covers all aspects from procurement documentation to contract closure. As a part of plan contracting, check out the components which detail contracting requirements, what type of information is to be shared with a seller, and what is the process for managing the contracts. Also take a long look for any pre-approved sellers, and what type of contracts which can be utilized.


• Contract Statement of Work (SOW) - The Contract Statement of Work (SOW) provides a very detailed description regarding the product, service, or result to be delivered under contract. Honestly in my experience, spend a lot of time here gathering the requirements and needs. Run it by all members of the decision making team to assure everything is captured before using it. The Contract Statement of Work should deadlines and product specifications. In addition it should have any service requirements, quality information, performance data and anything else relevant. Performance data is key, this has bitten me before with several of our purchased customized solutions.


• Make-or-buy Decisions - The make-or-buy decisions are a documented decision list of the items to be purchased and those items to be produced by the project team. The make-or-buy decisions are reviewed as the basis for knowing what will be contracted to external sellers.


• Project Management Plan – The Project Management Plan should be reviewed with a focus on scheduled delivery dates as the procurement documentation should be in line with those dates. Additionally check out the risk register for risk related contractual agreements. The risk related contractual agreements detail agreements for insurance, services, or other items which list each parties responsibility.

The Plan Contracting process is a review of what is to be purchased and acquired, and how to create the information for potential sellers to assure all requirements have been met.
Hopefully your organization has a standard process for preparing this documentation. If not quickly establish one. There are two tools and techniques used in the plan contracting process.

• Standard Forms - Organizations often create standard forms for use when choosing and working with sellers to ensure that documentation is consistent and meets organizational requirements. Standard forms can include:
  
  
  • Standard contracts – One common tactic my last employer used was having a master service agreement and all procured services as an addendum to that core contract.
  
  
  • Standardized descriptions of items to be acquired
  
  
  • Nondisclosure Agreements
  
  
  • Checklists for evaluation of proposals or bids
  
  
  • Templates for each required element of the procurement documentation.


• Expert Judgment – Expert Judgment should be used to verify and validate that the most informative information is provided to the seller. Have different experts can check for the correct use of technical jargon, legal issues, or areas where best practice or industry standards could be used.

Using standard forms and expert judgment allows project managers to have a systematic approach for developing information for sellers. Quality documentation goes a long way towards assuring the organization gets what it wants when it needs it.

After the completion of plan contracting, one should be able to provide potential sellers with the information they need to bid, tender, quote, or make proposals, use agreed-on criteria to assess the bids, tenders, quotes, and proposals supplied by potential sellers, and ensure that the work specified or requested accurately represents the needs required. This information is commonly found in the outputs of plan contracting.

• Procurement Documents - Procurement documents are used to seek bids, tenders, quotations, or proposals from prospective sellers. Procurement documents are prepared in accordance with the buyer's organizational requirements and usually include a description of how the seller should respond, the relevant Contract Statement of Work, and any contractual requirements. The documents should be comprehensive enough to allow sellers to provide a clear proposal or a quotation, but also provide flexibility for sellers to suggest new or adapted approaches where appropriate.


• Evaluation Criteria - Evaluation criteria are developed to rate or score proposals. Notice, this is done before any proposals are received. The criteria will be both objective and subjective. The criteria are often included within the procurement documents to allow sellers to ensure that they provide all of the information required by the buyer to make a decision. Some common evaluation criteria examples are:
  
  
  • Understanding of the need – How well does the seller address the contract statement of work?
  
  
  • Overall or life-cycle cost – Purchase plus operating cost
  
  
  • Technical Capability – The seller is expected to have or acquire the needed technical skills and knowledge
  
  
  • Production capacity and interest – The seller has the capacity to meet potential future requirements.
  
  
  • Business size and type
  
  
  • References
  
  
  • Intellectual Property Rights
  
  
  • Proprietary rights


• Contract Statement of Work (Updates) - The Contract Statement of Work describes the product or service to be acquired in enough detail to allow prospective sellers to determine if they are capable of providing it. During the Plan Contracting process, expert judgment and other considerations made during the development of documentation can result in modifications being made.

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