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To keep the procurement management process fair, transparent, and efficient, a good
understanding of the procurement process flow is key. Although the procurement process of
organizations differs from each other, the flowchart below sums up the important steps in a
procurement process.
During the project planning phase the procurement needs of the project are identified. For each
external vendor requirement, a Statement of Work is composed which is known by many names
(Terms of Reference, Scope Statement, etc.) but serves as a written statement of what work the
contractor will do. Procurement documents normally consist of a Request for Proposal,
Invitation to Tender, or the like, with the Statement of Work included as an attachment. Thus
it is the guiding document to the project team and the more specific it is, the better the
boundaries of each organization’s work is defined. Additionally, the procedures used to solicit
proposals and/or bids as well as the decision making criteria are determined at this stage.
Potential sellers are identified and preferred vendors might be contacted. All of this information
is compiled into a Procurement Management Plan, a subset of the overall Project Management
Plan.
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Once the procurement needs of the project are identified and procurement procedures are
determined, the procurements are executed. Requests for Proposal (RFP’s) or Invitations to
Tender are sent out, and responses are analyzed. Selection criteria should be determined in
advance. Agreements are signed and the project management plan is updated with the new
cost/budget and schedule information obtained from the vendor.
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1.3 Control Procurements
Poor subcontractor management can cause budgets and schedules to spiral out of control and
derail projects when everything else has been executed flawlessly. During regular project status
intervals, the project manager must review subcontractor agreements, progress updates, and
work performance information as necessary to ensure that subcontractors are on pace to meet
their budget and schedule commitments. It is not enough to assume that subcontractors are
“good at what they do” and will meet their contractual obligations. When subcontractors
mismanage their work, everyone loses, including the contracting organization. Thus, project
managers should be aware of the status of subcontractor work and make the appropriate change
requests and project management plan updates as early as possible.
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FORCE MAJEURE EVENT
Force Majeure may include, but is not limited to, exceptional events or circumstances of the
kind listed below, so long as conditions (a) to (d) above are satisfied:
(i) war, hostilities (whether war be declared or not), invasion, act of foreign enemies,
(ii) rebellion, terrorism, sabotage by persons other than the Contractor’s Personnel, revolution,
insurrection, military or usurped power, or civil war,
(iii) riot, commotion, disorder, strike or lockout by persons other than the Contractor’s
Personnel,
(iv) munitions of war, explosive materials, ionising radiation or contamination by radio-activity,
except as may be attributable to the Contractor’s use of such munitions, explosives, radiation
or radio-activity, and
(v) natural catastrophes such as earthquake, hurricane, typhoon or volcanic activity.
Certain events, beyond the control of the parties, may inhibit the parties from fulfilling their
duties and obligations under the project agreements.
To avoid the resultant breach of contract, parties may prefer to excuse contractual obligations
to the extent that they have been so inhibited.
Different legal systems have developed different theories in response to this need, including
the doctrines of impossibility and frustration in England and the United States and force
majeure in France. Under French law force majeure is an event that is unforeseeable,
unavoidable and external that makes execution impossible.
The Party (the “Affected Party”) prevented from carrying out its obligations hereunder shall
give notice to the other Party of an Event of Force Majeure upon it being foreseen by, or
becoming known to, the Affected Party.
If and to the extent that the Operator is prevented from executing the Services by the Event of
Force Majeure, whilst the Operator is so prevented the Operator shall be relieved of its
obligations to provide the Services but shall endeavour to continue to perform its obligations
under the Contract so far as reasonably practicable [and in accordance with Good Operating
Practices], [PROVIDED that if and to the extent that the Operator incurs additional Cost in so
doing, the Operator shall be entitled to the amount of such Cost.
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Optional Termination, Payment and Release
If the execution of substantially all the Works in progress is prevented for a continuous period
of 84 days by reason of Force Majeure of which notice has been given under Sub-Clause 19.2
[Notice of Force Majeure], or for multiple periods which total more than 140 days due to the
same notified Force Majeure, then either Party may give to the other Party a notice of
termination of the Contract. In this event, the termination shall take effect 7 days after the notice
is given, and the Contractor shall proceed in accordance with Sub-Clause 16.3 [Cessation of
Work and Removal of Contractor’s Equipment].
Upon such termination, the Engineer shall determine the value of the work done and issue a
Payment Certificate which shall include:
(a) the amounts payable for any work carried out for which a price is stated in the Contract;
(b) the Cost of Plant and Materials ordered for the Works which have been delivered to the
Contractor, or of which the Contractor is liable to accept delivery: this Plant and Materials shall
become the property of (and be at the risk of) the Employer when paid for by the Employer,
and the Contractor shall place the same at the Employer’s disposal;
(c) other Cost or liabilities which in the circumstances were reasonably and necessarily incurred
by the Contractor in the expectation of completing the Works;
(d) the Cost of removal of Temporary Works and Contractor’s Equipment from the Site and
the return of these items to the Contractor’s works in his country (or to any other destination at
no greater cost); and
(e) the Cost of repatriation of the Contractor’s staff and labour employed wholly in connection
with the Works at the date of termination.
It is most beneficial to hold pre-bid meetings prior to formally responding to the request for
clarifications, that way the responses to the request for clarifications can be sent along with the
results of the pre-bid meeting, including a copy of the minutes of the pre-bid meeting.
When a site visit is planned, the details of the date and time must be stated in the solicitation
documents. And the site visit should take place before (but not too far in advance of) the pre-
bid meeting. The results are also formally sent to all prospective bidders that expressed interest
in the requirement, by way of minutes of the site visit and pre-bid meeting, including
consolidated responses to request for clarifications, also from prospective bidders.
The pre-bid meeting is usually open to all interested prospective bidders; however, in cases
where pre-qualification or short-listing is carried out, only pre-qualified or short-listed bidders
are invited to attend the pre-bid meeting.
Site visits, as mentioned above, can and should preferable be held prior to the pre-bid meeting.
The reason for this preference is because after the site visit, bidders may have additional queries
and these can be addressed at the pre-bid meeting and formally sent (with the minutes) to all
prospective bidders that expressed interest in the requirement, or those that were short-listed
through a pre-qualification exercise or restricted bidding process. The time and venue of these
meetings are addressed in the solicitation documents, and attendance is usually not obligatory.
During the site visit the prospective bidders survey the site and ask questions to clarify any
doubts or information provided in the solicitation documents. Sometimes, as a result of the site
visit/pre-bid meeting there might be a need to extend the bid/proposal submission date by way
of Addendum to the solicitation documents to give bidders sufficient time to address any
changes made to the solicitation documents as a result of the site visit and/or pre-bid meeting.