Project risk & procurement management

COURSE OUTLINE
 Week 01 – Introduction
 Week 02 – Basic concepts and foundational elements
 Week 03 – Assignment, The environment in which projects operate
 Week 04 – The role of project manager
 Week 05 – Agile project management
 Week 06 – Case study
 Week 07 – Presentation
 Week 08 - Mid-term Examination
 Week 09 – Project Integration Management
 Week 10 - Project triple constraints
 Week 11 - Assignment, Project quality & resource management
 Week 12 - Project risk & procurement management
o Week 13 - Project communication & stakeholder Mgt.
o Week 14 – Discussion & revision
o Week 15 – Project Presentation
o Week 16 - Final Examination
PROJECT RISK MANAGEMENT

• Project Risk Management includes the processes of conducting risk

management planning, identification, analysis, response planning,
response implementation, and monitoring risk on a project

• The objectives of project risk management are to increase the

probability and/or impact of positive risks and to decrease the
probability and/or impact of negative risks, in order to optimize the
chances of project success
PROJECT RISK MANAGEMENT

• Risk management plan

Describes how risk management activities will be structured and performed

• Risk register
Captures details of identified individual project risks. The results of Perform
Qualitative Risk Analysis, Plan Risk Responses, Implement Risk Responses, and
Monitor Risks are recorded in the risk register as those processes are conducted
throughout the project

• Probability and impact matrix

Grid for mapping the probability of each risk occurrence and its impact on
project objectives if that risk occurs. This matrix specifies combinations of
probability and impact that allow individual project risks to be divided into
priority groups
PROJECT RISK MANAGEMENT

• Decision tree analysis

Used to support selection of the best of several alternative courses of action

• Strategies for risks

 Escalate
Threat is outside the project scope or proposed response exceeds the project manager’s authority
 Avoid/Exploit
Involves changing some aspect of the project management plan or changing the objective
 Transfer/Share
Involves shifting ownership of a threat to a third party to manage the risk and to bear the impact
 Mitigate/Enhance
Action taken to reduce/increase the probability of occurrence and/or impact of a risk
 Accept
Acknowledges the existence of a risk, but no proactive action is taken
PROJECT PROCUREMENT MANAGEMENT

• Project Procurement Management includes the processes necessary to

purchase or acquire products, services, or results needed from outside
the project team

• Project Procurement Management includes the management and control

processes required to develop and administer agreements such as
contracts, purchase orders, memoranda of agreements (MOAs), or
internal service level agreements (SLAs)

• The personnel authorized to procure the goods and/or services required

for the project may be members of the project team, management, or
part of the organization’s purchasing department if applicable
CONTRACT TYPES

• Fixed-price contracts
Fixed total price for a defined product, service, or result to be provided used when the
requirements are well defined and no significant changes to the scope are expected
 Firm fixed price (FFP)
 Fixed price incentive fee (FPIF)
 Fixed price with economic price adjustments (FPEPA)

• Cost-reimbursable contracts
Cost reimbursements to the seller for all legitimate actual costs incurred for completed work,
plus a fee representing seller profit. This type should be used if the scope of work is expected to
change significantly during the execution of the contract
 Cost plus fixed fee (CPFF)
 Cost plus incentive fee (CPIF)
 Cost plus award fee (CPAF)

• Time and material contracts

Hybrid type of contractual arrangement with aspects of both cost-reimbursable and fixed-price
contracts. They are often used for staff augmentation, acquisition of experts, and any outside
support when a precise statement of work cannot be quickly prescribed
PROJECT PROCUREMENT MANAGEMENT

• The procurement management plan

Contains the activities to be undertaken during the procurement process. It should
document whether international competitive bidding, national competitive bidding, local
bidding, etc., should be done

• Agreements
A contract is a mutually binding agreement that obligates the seller to provide the
specified products, services, or results; obligates the buyer to compensate the seller; and
represents a legal relationship that is subject to remedy in the courts

• Claims administration
Contested changes and potential constructive changes are those requested changes where
the buyer and seller cannot reach an agreement on compensation for the change or cannot
agree that a change has occurred. These contested changes are called claims