Procurement Risk Management

This section describes methods to protect the company s investment and

ensure adequate contractor performance. Protections might include:
1. Payment holdbacks
2. Performance bond requirements
3. Warranty provisions
4. Liquidated damage provisions
Like anything else in project management, procurement risks must be
managed. One of the most popular techniques is to include language in
the statement of work (SOW) requiring that the acceptance of deliverables
for the company will pay the vendor s invoice. The vendor should be
required to take timely and appropriate measures to correct or remediate
the reason(s) for nonacceptance and demonstrate that the vendor has successfully
completed the scheduled work for each deliverable before payment
is made.
Contract Management Approach
In this section of the procurement plan, the project s specific approach,
tools, and processes should be described, including:
1. Contract-management plan
2. Issue and action-item process
3. Problem-tracking process
4. Status-reporting process
5. System-acceptance process
6. Invoice process
7. Deficiency-management process
8. Dispute-resolution process
9. Deliverables-management process
Describe the tools used to manage the contract, contractual requirements,
and deliverables. The status-reporting approach, including
written reports and meetings, should also be documented. Discuss
how meetings minutes, issues, and action items are recorded, tracked,
and resolved.