If the procurement department doesn’t have a list of qualified sellers on the PMP Certification Exam, you might need to do some research to find candidates to send the procurement documents to. An Internet search or advertising in trade publications are common methods of generating interest in the bid process.
By law, all government agencies, as well as county, state, and federal governments, are required to publicize bids as well as the evaluation criteria used to award the contract. You can sign up to be notified of pending government bid opportunities.
Bidder conferences
A bidder conference — also known as a vendor conference or contractor conference — is a meeting between the buyer and the prospective sellers to ensure that everyone bidding has all the information needed to submit proposals.
Most times, bids are done in person at the seller’s site, a hotel, or conference center, or the site where the work will take place. However, it is becoming more common to hold bidder conferences virtually by using conference calls or web meetings.
The Code of Ethics and Professional Conduct has two standards that are applicable to bidder conferences:
We provide equal access to information to those who are authorized to have that information.
We make opportunities equally available to qualified candidates.
Apply selection criteria
For awarding a contract, the procurement management plan has the selection criteria, the contract type, and bonding and insurance requirements. The different types of contracts are
Firm fixed price (FFP)
Fixed price incentive fee (FPIF)
Fixed price-economic price adjustment (FP-EPA)
Cost plus fixed fee (CPFF)
Cost plus incentive fee (CPIF)
Cost plus award fee (CPAF)
Time and materials (T&M)
After the seller proposals come in, you apply the source selection criteria developed in the planning process. For complex procurements, you might have a source selection board that goes through all the proposals and applies the criteria.
The source selection board needs someone with the required technical expertise (“expert judgment” in PMP-speak) to read through the proposals and rate them from a technical perspective. Complex procurements may also use an independent estimate as a benchmark or a “should cost” estimate to evaluate proposals.
Negotiation of the contract
After the field is narrowed to one seller or a few potential sellers, the negotiations begin. You can negotiate everything. Here is a partial list of some items you might want to negotiate:
Price
Award structure
Schedule
Place of delivery
Terms and conditions
Authority to make changes
Technical solutions
Proprietary rights
Maintenance and support fees
Payment schedule
The Code of Ethics and Professional Conduct states that as professionals, you negotiate in good faith and that you respect the property rights of others. In addition, the cross-cutting skill of negotiating is likely to be integrated into questions regarding contract negotiation on the exam.
After everything is agreed to, you can put together the contract.
Because a contract is a legal document, it often takes a significant amount of time to finalize. In the meantime, both parties want work to start. You can use a letter contract to start work until the contract is signed.
A letter contract lays out the general agreement, but it specifies a time limit: usually, 30 days. The letter agreement states the work that will be done and outlines the payment structure for the time that the agreement is in place. This allows work to begin before the legal eagles are done dotting all the i’s and crossing all the t’s.
Before signing a contract you, or someone on your team with appropriate expertise, should review the potential vendor site to determine its readiness to perform the work. This can be called a “readiness review.” Common items to review include
Are the staff in place or available quickly to begin work?
Is all the necessary equipment maintained and operational?
Is there sufficient upfront funding to initiate operations?
Are all needed procedures, training, and processes in place?
Are a quality program, risk management process, and change control process in place?
Sometimes projects start late because the buyer assumes the items in the preceding list are in place and ready to go on Day 1, but the seller has those resources working on other jobs until the contract is signed.