CONTROL PROCUREMENT
Control Procurement is the process of
Each is required to ensure that both parties meet their contractual obligations and that their own legal rights are protected.
Change Management:
Agreements can be amended at any time prior to contract closure by mutual consent, in accordance with the change control terms of the agreement. Such amendments are typically captured in writing.
No adhoc changes. If it is not in the contract then neither party should agree to do a change without following the prescribed change management process. The intent should be of collaboration, else it may lead to more negotiation and/or subsequent dispute resolution.
Control Procurement is the process of
- managing procurement relationships
- monitoring contract performance
- making changes and corrections as appropriate
- closing out contracts.
The key benefit of this process is that it ensures that both the seller’s and buyer’s performance meet the project’s requirements according to the terms of the legal agreement.
The legal nature of the relationship makes it imperative that the project management team is aware of the implications of actions taken when controlling any procurement.
Change Management:
Agreements can be amended at any time prior to contract closure by mutual consent, in accordance with the change control terms of the agreement. Such amendments are typically captured in writing.
No adhoc changes. If it is not in the contract then neither party should agree to do a change without following the prescribed change management process. The intent should be of collaboration, else it may lead to more negotiation and/or subsequent dispute resolution.
Procurement Audits:
The quality of the controls, including the independence and credibility of procurement audits, is critical to the reliability of the procurement system. The organization’s code of ethics, its legal counsel, and external legal advisory arrangements including any ongoing anti-corruption initiatives can contribute to proper procurement controls.
Financials or Payments:
Ensure that payment terms defined within the contract are met and that compensation is linked to the seller’s progress as defined in the contract. A principal concern when making payments is to ensure there is a close relationship of payments made to the work accomplished.
A contract that requires payments linked to project output and deliverables rather than inputs such as labor hours has better controls.
Resource responsible for Contract administration:
On larger projects with multiple providers, a key aspect of contract administration is
managing communication among the various providers.
Because of the legal aspect, many organizations treat contract administration as an organizational function that is separate from the project. While a procurement administrator may be on the project team, this individual typically reports to a supervisor from a different department.
The quality of the controls, including the independence and credibility of procurement audits, is critical to the reliability of the procurement system. The organization’s code of ethics, its legal counsel, and external legal advisory arrangements including any ongoing anti-corruption initiatives can contribute to proper procurement controls.
Financials or Payments:
Ensure that payment terms defined within the contract are met and that compensation is linked to the seller’s progress as defined in the contract. A principal concern when making payments is to ensure there is a close relationship of payments made to the work accomplished.
A contract that requires payments linked to project output and deliverables rather than inputs such as labor hours has better controls.
Resource responsible for Contract administration:
On larger projects with multiple providers, a key aspect of contract administration is
managing communication among the various providers.
Because of the legal aspect, many organizations treat contract administration as an organizational function that is separate from the project. While a procurement administrator may be on the project team, this individual typically reports to a supervisor from a different department.
