Procurement

and Contract
Management
Scope
What is included and what is not
included in the project?
Scope Components

• Product Scope: What and What not?

• Project Scope: How?
 PSOW

Project Charter (High Level)

Requirements Documentation

Requirements Traceability Matrix

Where to find Project Scope Statement
scope in PM? Scope Baseline

WBS Dictionary (most detailed)

Bill of Quantities & Specifications (BOQS)

Project Planning
• Project Charter
• Stakeholder Identification
• Collection of Requirements
• Definition of Scope
 • Based on objectives we formulate the Scope Statement
• It includes the overall scope of the project
Scope Statement • It includes the budget of the project
• It includes the major milestones of the project
Breakdown of
Scope
Breakdown of
Scope
Breakdown of Scope

Easy Management Project Status and

Deliverable based
and Control of Performance
Project Scope
Project reporting

Everyone knows You can check the Example of

the responsibility status Qurbani
 Basic Definitions

WBS explains/details the project scope WBS is created at the start of the project WBS represents a clear description of
and is Progressively Elaborated the project deliverables and scope

The “WHAT” of the Project

Work Breakdown Structure

Hierarchical decomposition of the total scope of work to be Each descending level of the WBS represents an increasing
carried out by the project team to accomplish the project detailed definition of the project work
objectives and create the required deliverables
WORK

• Sustained physical or mental effort,

exertion or exercise of skill to
overcome obstacles and achieve an
objective
• In case of WBS Work refers to the
work products or deliverables that
are the result of effort and not the
effort itself
STRUCTURE

• Something arranged in a definite

pattern of organization
WBS Characteristics

Supports the definition of all work required to Constructed to illustrate and define the Is linked to an objective or tangible result that
achieve an objective, tangible result hierarchy of deliverables. Organization into is refereed to as a deliverable
“Parent-Child” relationship
 WBS can be thought of as a “Deliverable”
breakdown structure
WORK
BREAKDOWN WBS is a deliverable-oriented hierarchical
decomposition of the work to be executed by the
STRUCTURE project team

WBS forms the foundation for

• Development of project schedules,

• Communications,
• Risk management plans
• Other key project elements
DELIVERABLE

Any unique and verifiable Product, Result or Capability External Deliverables

to perform a service that must be produced to complete
a process, phase or project
Any deliverable that is subject to approval by the project sponsor or
customer
ORIENTED

Aligned or positioned with Focused towards the

respect to a point or frame concerns and interests of a
of reference specific group
HIERARCHICAL
• Classified according to various criteria into successive levels or
layers
DECOMPOSITION

• Planning technique that subdivides the project

scope and project deliverables into
• Smaller, more manageable components
• More manageable components
• Until the project work associated with
accomplishing the project scope
DECOMPOSITION

• When is the decomposition

enough?
• Small enough to be estimated for time
and cost
• Project Team Members are satisfied
that the current level of detail provides
enough information to proceed with
subsequent project activities
OTHER DEFINITIONS
Task WBS Component WBS Element

• A term used for work • An entry in the WBS • Any single WBS
• Meaning and that can be at any Component and its
placement of the level associated WBS
word varies with attributes contained
application area, within an individual
industry and brand of WBS
project management
software
 WBS Levels

Depth of a WBS is
dependent upon
• The size of the project
• The complexity of the project
• Level of detail needed to plan and
manage it
Multi-level hierarchy The specific number of
describing the entire scope levels should be appropriate
to be accomplished by the for effective management of
performing organization the project
The 100% Rule

WBS includes 100% of the

work defined by the project
Core Haugan in 2002 gave the scope and captures all
Characteristic of the WBS
100% Rule deliverables in terms of work
to be completed, including
project management
The 100% Rule

The sum of the work at the “child” level must equal 100% of the work represented by the
“parent”

The WBS should not include any work that falls outside the actual scope of work, i.e., it
cannot include more than 100% of the work

100% rule applies to activity level: The work represented by the activities in each work
package must add up to 100% of the work necessary to complete the work package
The 100% Rule
Work Package
Planned work component
or deliverable contained in
the Work Package
Further divided into
activities and milestones
Work Packages can be
required for completion of
scheduled, cost estimated, Lowest Level of the WBS
the work package
monitored and controlled
component of work or
deliverable
Control Accounts
• Management Control Account
• Integration point for Scope, Budget, Cost and Schedule
• Management Control Point
• Shall include at least one Work Package
• Each Work Package is related to only one Control Account
• Provides structure for hierarchical summation
• Each Control Account is assigned to one element of the Organizational
Breakdown Structure
Control Accounts
ACTIVITIES AND THEIR TYPES

A DISTINCT, SCHEDULED WORK PACKAGE WORK PACKAGES DEFINE ACTIVITIES ARE THE SO PLANNED WORK IS
PORTION OF WORK DECOMPOSITION RESULT THE PROJECT AND ACTIONS TO COMPLETE CONTAINED IN THE
PERFORMED DURING THE IN ACTIVITIES THAT NEED PRODUCT DELIVERABLES THOSE DELIVERABLES LOWER LEVEL OF WBS
COURSE OF A PROJECT TO BE SCHEDULED (WHAT?) (HOW?) KNOWN AS WORK
PACKAGE AND DURING
SCHEDULING THESE
WORK PACKAGES ARE
FURTHER DECOMPOSE TO
ACTIVITIES
CONSEQUENCES OF A POORLY DEVELOPED
WBS

Often project failures are Incomplete Project Unclear work Scope Creep or
traced back to poorly Definition leading to assignments, goals, unmanageable,
developed or nonexistent ongoing project objectives or frequently changing
WBS extensions deliverables scope

Missed deadlines on Failure to deliver on

Unusable new product
Budget Overrun scheduled deliverables some elements of project
or feature
or timeline slippage scope
Work Breakdown Structure
Dictionary
Work Package Name: Code of Account:
Description of Work: Assumptions and Constraints:
Milestones: Due Dates:
1.
2.
3.

ID Activity Resource Labor Material Total Cost

Hours Rate Total Units Cost Total
                   
                   
                   
                   
Quality Requirements:
Acceptance Criteria:
Technical Information:
Agreement Information:
Types of Requirements

Operational requirements (needed to run day-to-day business)

Capital requirements
Types of Requirements

Production requirements (directly related to producing the goods

or services)

Non-production requirements
Purchase Specifications (Discussion Points)

Specifying the required product/service

Product specification VS service specification

Over- and under-specifying are equally bad!!!

Elements that are required to specify the
requirements

Functionality Design Capacity Performance Recyclability

Safety
Size Colour Durability Flexibility
requirements

Conditions of
Labeling ....
use
 Specification Type
Brand or trade name
Supplier/industry codes
Samples
Technical specification
Composition specification
Functional/performance specification
Where Appropriate
• For commonly used item.
• When related to a brand name will differentiate your product.
• When quality is more important than cost.
• For simple items.
• To facilitate purchases from a particular supplier.
• When it is difficult to assess quality prior to purchase.
• When showing what is required is easier than describing it in writing or otherwise
specifying it.
• When suppliers do not possess the required design expertise.
• Where the organization wishes to keep the design expertise in-house
• Where there are complex interfaces with existing equipment.
• Where the buyer is prepared to accept the risk of the design not resulting in the
required performance.
• For products as raw materials, commodities and food products.
• When safety or enviornmental considerations are critical.
• When performance depends on composition.
• When suppliers have greater expertise than the purchaser.
• Where innovation is valued.
• When technology is changing rapidly in the supplying industry.
Quantity Forecasting
Demand and Supply Forecasting
methodology: Qualitative

Expert opinion: Market testing

• Scenarios (best, • Sample of

worst and likely) population
• Delphi technique • Trial sales
Demand and Supply Forecasting
methodology: Quantitative

Use past demand data to generate a forecast -

Time series analysis works well for short-term forecasts.

Establishing a cause-effect relationship

Causal methods between independent variables and the demand
for a product. Linear regression!
Specifying delivery: Times & Schedules

When & where something is needed The lead-time available to the Reinforce through contractual terms
supplier & arrangements
Specifying delivery: Point of delivery

Full address Contact person Restrictions on deliveries Access to premises Supervision and
(timings, weight & size of confidentiality (services)
delivery vehicles and
packages)
Specifying delivery: Transport & packing

Consider damage, time Nature of packing Special transport

and cost required arrangements
Specifying supplier service & responsiveness
 Specifying supplier service & responsiveness

Supplier responsiveness Technical support Maintenance & repair

Levels of service Technical supervision/ assistance & Maximum time frames for repair &
training delivery of spare parts, etc.
Other information
Other information

Contact Basis for Background

Policies Legislation
information evaluating offers information
• Technical, • To help suppliers • Safety & • Information on • Requirements
purchasing & to optimize their environmental the buying related to
finance contact designs policies company hazardous goods,
persons • Scope of • Statement of health & safety,
supplier’s intent environmental
responsibilities protection,
import
restrictions...
Thank you