Bahria University

Karachi Campus

Name: Group 8

Members: Zaianb Hassan (02-398231-007)

Neha (02-398231-012)
Muhammad Taimoor (02-398231-33)
Sai fur Rehman (02-398231-013)
Program: MS (PM)

Section: 2A

Project Procurement & Contract

Course Title:
Management

Assignment Title: Assignment 1

Instructor Name: Muhammad Asghar Mughal

Assigned Date: 25th September 2023

Submitted Date: 01 October 2023

Assignment # 1
Please develop a team of two or three members for contract-sub-contract after choosing an
industry of your choice. Create total cost estimation of project procurement and allocate it for
purchases. Assign the cost of the purchase to each subcontractor for a complex and mega project.
What is the responsibility of the contractor and sub-contractor? Assuming being a project
manager you require goods and services at a short notice of time. Describe a procurement plan
(see attachment 1). The plan must include e-procurement and international contracts. Marks:20

Industry:
Technology/Health and Fitness

Project:
Health and Fitness Tracking App

Project Description:
Our project is to develop a Health and Fitness Tracking App, integrating wearable devices to help
users monitor physical activities, sleep patterns, and nutrition. The app will enable goal setting,
progress tracking, and personalized health tips based on user data. The team consists of a main
contractor overseeing the project and three specialized subcontractors focusing on app
development, health data analysis, and wearable device manufacturing. With a budget of
$3,000,000, our goal is to create a user-friendly and data-driven app, utilizing e-procurement and
international contracts for efficient execution

Project Team:
1. Zainab Hassan (Project Management Company): Responsible for overall project management,
coordination between subcontractors, quality control, and client communication.
2. Neha (App Development Company): Specialized in mobile app development, responsible for
developing the user interface, integrating wearable devices, and ensuring the app's functionality
and performance.
3. Muhammad Taimoor (Health Data Analysis Firm): Specialized in health data analysis,
responsible for implementing algorithms to process user data, generate insights, and provide
personalized health tips.
4. Saif ur Rehman (Wearable Device Manufacturer): Specialized in manufacturing wearable
devices and sensors, responsible for producing the wearable hardware components and ensuring
their compatibility with the app.

Total Cost Estimation:

The total cost estimation for the project procurement is $3,000,000

Allocation for Purchases:

1. Main Contractor: $500,000 (Project Management Fee)
2. Subcontractor 1 (App Development Company): $1,200,000
3. Subcontractor 2 (Health Data Analysis Firm): $600,000
4. Subcontractor 3 (Wearable Device Manufacturer): $600,000
5. E-procurement Tools and Services: $100,000
 6. International Contract Legal Services: $100,000

Assignment of Costs:
1. Main Contractor (Project Management Company):
2. Project management fee: $500,000
3. E-procurement tools and services: $50,000
4. International contract legal services: $50,000
5. Subcontractor 1 (App Development Company):
6. App development and integration: $1,200,000
7. Software licenses and development tools: $100,000
8. Subcontractor 2 (Health Data Analysis Firm):
9. Health data analysis and insights: $600,000
10. Data analysis software and tools: $50,000
11. Subcontractor 3 (Wearable Device Manufacturer):
12. Wearable hardware components: $600,000
13. Hardware procurement and manufacturing: $50,000
14. Other Costs (Shared):
15. Quality control and assurance: $100,000
16. Risk management contingencies: $100,000
Responsibilities:
Main Contractor:
 Overall project management and coordination.
 Quality control and assurance of the final app.
 Communication with the client and other stakeholders.
 Managing timelines and budgets.
 Ensuring legal and regulatory compliance.
 Procuring project management tools and services.
Subcontractor 1 (App Development Company):
 Developing the user interface and user experience of the app.
 Integrating wearable devices and ensuring data accuracy.
 Implementing app functionalities as per the project requirements.
 Testing and debugging the app for optimal performance.
 Providing technical support during and after the app launch.
 Procuring necessary software licenses and development tools.
Subcontractor 2 (Health Data Analysis Firm):
 Designing algorithms for data analysis and interpretation.
 Generating insights from user data.
 Personalizing health tips based on data analysis.
 Ensuring data security and user privacy.
 Collaborating with the app development team for seamless integration.
 Procuring data analysis software and tools.
Subcontractor 3 (Wearable Device Manufacturer):
 Manufacturing wearable hardware components and sensors.
 Ensuring compatibility and integration with the app.
 Quality control of hardware components.
 Procuring necessary hardware components and sensors.
  Meeting production timelines and ensuring supply chain continuity.
 Adhering to international manufacturing standards.

Project Procurement Management Plan

1. Introduction: The Project Procurement Management Plan outlines the strategy and processes for
procuring goods and services essential for the project's success. It is a subsidiary of the overarching
Project Management Plan and governs procurement activities throughout the project lifecycle.
2. Project Procurement Overview:
 Needs Assessment: Evaluate project requirements to determine the necessity of contracting.
 Contract Types: Define suitable contract types for the project.
 Scope of Procurement: Identify project aspects to be contracted out.
3. Contract Planning:
 Contract Management: Outline how each contract will be managed and monitored.
 Success Metrics: Establish key performance indicators (KPIs) for measuring contractor
performance.
 Seller Selection: Define criteria and processes for selecting sellers.
 Contract Administration: Describe contract administration during project execution.
4. Types of Contracts and Metrics:
 Contract Types: Utilize Fixed-Price, Cost-Reimbursable, and Time and Materials Contracts.
 Metrics: Measure contractor performance based on quality, schedule adherence, budget
compliance, and risk management.
5. Planned Delivery Dates:
 Specify delivery dates aligned with the project schedule for timely goods and services delivery.
6. Standard Documents:
 Use company-standard procurement documents, templates, contract forms, and guidelines to ensure
consistency and compliance.
7. Vendor/Contractor Management:
 Vendor/Contractor Selection: Employ a structured approach based on qualifications and
experience.
 Vendor/Contractor Performance: Monitor and evaluate their performance.
 Communication: Establish clear lines of communication.
8. Impact on Constraints and Assumptions:
 Assess and manage potential impacts on project constraints and assumptions due to procurement
activities.
9. Coordination with Project Schedule:
 Synchronize purchasing lead times with the project schedule to ensure timely availability of goods
and services.
10. Prequalified Sellers:
 Identify prequalified sellers based on prior experience and capabilities, if applicable.
11. E-Procurement:
 Utilize e-procurement platforms and tools for streamlined procurement, including supplier
research, contract negotiation, and order management.
12. International Contracts:
 Draft international contracts compliant with trade laws and regulations, covering product
specifications, quality standards, payment terms, and dispute resolution mechanisms.
13. Risk Management:
  Implement a comprehensive risk management strategy to identify, assess, and mitigate
procurement-related risks.
14. Quality Assurance:
 Implement quality control processes to ensure procured materials and services meet project
specifications and quality standards.
15. Timeline Management:
 Integrate procurement activities with the project schedule to avoid delays and ensure timely goods
and services delivery.
16. Budget Control:
 Continuously monitor procurement expenses to stay within the allocated budget while
implementing cost-saving measures without compromising quality.
17. Review and Approval:
 Review and approval by relevant stakeholders, including the project manager, procurement team,
and key project personnel.
18. Document Control:
 Maintain and update the plan as necessary throughout the project, documenting and communicating
any changes to relevant parties.

By following this comprehensive Project Procurement Management Plan, we will ensure efficient
procurement processes, minimize risks, and achieve the project's objectives while adhering to industry
best practices and company standards.