All projects, despite their size and duration, will have a completion date and eventually have to come to an end. As part of finalising the project, the project team must ensure that the goods and services that have been provided during the project and have met the required outcomes of the project. In this topic, we will examine the various administrative activities that must be completed in order to ensure that the procurement activities of the project are finalised.
By the end of this topic, you will understand:
- How to finalise the procurement activities
- Ways to determine the effectiveness of procurement activities and make changes if required.
As outlined in the previous topic, there are numerous procurement activities that are undertaken prior, during and at the completion of a project. The project procurement activities may vary according to the type, size and duration of the project.
As part of the finalisation of project procurement of activities, it is imperative that we commence with finalising aspects of the goods and services contract or terms and conditions. This includes ensuring the various terms and conditions have met the project objectives and required deliverables.
There are a number of tasks and steps that will need to be undertaken as part of the completion phase of contracting and procurement. This may include conducting various tasks such as:
Making sure all aspects of the project procurement activities have been undertaken as outlined in the procurement management plan
Including ensuring all documentation is updated, completed and securely stored and accessible in the records management system
Verifying and checking to see if all the materials, goods or services has been provided or completed to the required standard and quality requirements including ensuring that minor defects or problems are rectified, and any testing, inspections and certificates of completion are finalised
Final settlement of any claims, invoices, making final payments and completing financial and cost records
This includes writing to the contractor stating that the project is completed
Updating and archiving records following the organisational requirements is a very important step in case you or someone else in the organisation needs to monitor, review or simply revisit the procurement activities in the future.
Further Reading
- Read the following article on the Project Management Knowledge website about closing procurement: ‘Close Procurements’
- Read the following article on project closure by Stephanie Ray: ‘5 Steps to Project Closure (Checklist Included)’
A review of the effectiveness of contracting and procurement activities and performance should be conducted as part of the finalisation process. This includes capturing any lessons learned so they can be successfully applied and transferred to any future projects. Most organisations will have checklists, policies and procedures to guide the project team members through the finalisation process. The review should be focused on every stage of the contracting and procurement procedures and process. All team members and the relevant stakeholders should be involved in the review process and determining any adjustments.
The following aspects should be considered when reviewing the contracting and procurement process:
- The tendering process
- The selection and evaluation process of selecting suppliers
- The suppliers or contractor’s performance
- The various contractual documents
- The project team’s performance
- The effectiveness of the contracting and procurement process.
Most organisations will have processes in place for how to review the project contracting and the various procurement activities. This may include policies and procedures that outline how to conduct a review and how to record the findings of the review. It may outline pertinent questions that should be asked such as: What issues, difficulties or problems were identified in the review process?
There are various methods that can be used to conduct the review and they may include:
- Using a checklist to conduct an audit of the contracting and procurement process
- Undertaking an audit of the contractor performance using the quality standards as outlined in the terms and conditions
- A review meeting where the project team discusses any issues or problems that arose during the project
- Project team interviews
- Surveys of the effectiveness of procurement activities.
The following review checklist example could be used to review the contracting and procurement activities used in the project as part of procurement audits, review meetings, surveys and project team interviews.
| Procurement activity | Review date | Checklist review question | Y/N/comments |
|---|---|---|---|
| Procurement process | 10 Nov | Was the contracting and procurement process well planned and comprehensive? | |
| Project scope | 10 Nov | Was the project scope clearly written? | |
| Selection of supplier | 10 Nov | Was the evaluation criteria, weighting and scoring system clear to be able to select suppliers effectively | |
| 12 Nov | Were those involved in the selection process suitably informed, experienced or qualified people? | ||
| Tenders or request for quotation | 12 Nov | Were enough suppliers sourced? | |
| Suppliers | 14 Nov |
Did the products/services purchased meet the project objectives? Were the products/services purchased at the required standard and quality? |
|
| Contract management | 16 Nov | Was the contract effectively managed? |
Changes and improvements to determine effectiveness of procurement activities and procedures must include the feedback that has been received from the stakeholders and project team members during the review.
Changes may include:
- Improvements to tendering documents, process and advertising
- Changes to the selection and evaluation process for selecting suppliers
- Changes to documents including terms and conditions and contracts
- Adjustments to details of contractor’s performance
- Changes to project team’s roles and responsibilities
- Changes to document recording and storing processes
- Changes to procurement process including receiving goods
- Process of checking standards and quality of goods and services
- Improvements to invoicing and approvals processing
- Improvements to payment processing
- Process changes to OHS requirements or other legislative changes.
It is very important that any lessons learned from the review are identified and any recommendations are reported so that contracting and procurement activities and procedures can be improved for future projects.
Case Study
CBSA is a consultancy company. The following is extracted from their business plan: Our Target Audience Target market: Small, medium, and enterprise size organisations. Marketing strategy: Broad strategies of electronic, event based, and traditional advertising. Tag line: Your business expert CBSA has introduced a new procurement software package to assist with the management of project procurement and documentation. The software program was implemented to save on duplication of the various procurement documents such as quotations and invoices. It will also assist to streamline the process of storing and allowing easy access to procurement documents for the relevant project team members. A checklist was developed for use as part of the review of the implementation of the software program and the selection of the supplier.
Further Reading
Read the following article by Richard Willis on closing procurement activities of a project: ‘What Closing of Procurement Activities Must Be Conducted at Project Closure?’
Quiz
