procurement business plan sample

Procurement Management Plan Template to Boost Project Success

Procurement management is crucial for project success. Whether you’re an experienced pro or just starting out in project management, having a solid procurement plan is key. A well-crafted procurement plan helps you control costs, minimize risks, and maintain a good relationship with your suppliers. Plus, it establishes clear communication channels and effectively allocates your project resources.

In this article, we’ll explore the importance of a procurement management plan and introduce a comprehensive template for improving procurement success. We’ll discuss the template’s components, and key considerations, and provide practical insights on leveraging it effectively. Keep reading.

What is a Procurement Management Plan?

Importance of a well-defined procurement management plan, components of a procurement management plan template, how to create a procurement management plan, when to use a procurement management plan.

A procurement management plan is a comprehensive document that outlines the strategies, procedures, and guidelines for managing procurement activities within a project. It serves as a roadmap for procurement processes, ensuring that the right resources are acquired at the right time and cost. The plan is developed by the project manager in collaboration with relevant stakeholders and is an integral part of the overall project management framework.

The primary purpose of a procurement management plan is to provide a structured approach to procurement activities, from identifying procurement needs to contract administration and closeout. It serves as a central reference document for the project team, providing clarity on how procurement processes should be conducted, who is responsible for each task, and what procedures should be followed.

A well-defined procurement management plan is essential for ensuring successful procurement outcomes within a project. Here are several key reasons why a plan is crucial.

1. Streamlined Processes : The plan establishes a standardized approach, reducing errors and delays in procurement activities.

2. Clear Roles and Responsibilities : Clearly defined roles promote accountability and effective collaboration among stakeholders.

3. Risk Mitigation: The plan includes strategies to identify and manage procurement risks, ensuring proactive risk mitigation.

4. Cost Control : Effective procurement management controls project costs through estimation, budgeting, and monitoring.

5. Compliance and Legal Considerations : The plan addresses legal requirements, and facilitating contract compliance.

6. Stakeholder Satisfaction : Successful procurement meets project requirements, enhancing stakeholder confidence and project outcomes.

A procurement management plan Template consists of several key components that provide a comprehensive framework for managing procurement activities within a project. Below are the key elements of a procurement management plan template.

Project Details and Document Control

This section of the template captures essential information about the project, including the project name, description, objectives, stakeholders, and timelines. It serves as a reference point for understanding the context and scope of procurement activities within the project. Additionally, document control procedures are outlined to ensure proper management of procurement-related documents, such as contracts, proposals, and correspondence.

Procurement Design and Processes

In this section, the template focuses on the design phase of procurement. It includes a detailed analysis of procurement needs, requirements, and specifications. It outlines the strategies and methodologies to be employed for procuring goods, services, or works. The section may also cover make-or-buy decisions, vendor selection criteria, and the process of developing procurement statements of work.

Procurement Process

The procurement process section provides a step-by-step guide to executing procurement activities within the project. It encompasses planning and preparation, solicitation and evaluation of proposals, negotiation, and contract award, and contract administration and closeout. Each step is described in detail, including the necessary documentation, timelines, and key considerations.

Contract Types

This section explains various types of contracts that may be employed in procurement. It outlines the characteristics, advantages, and disadvantages of contract types such as fixed-price, cost-reimbursable, time and materials, and incentive-based contracts. This helps project teams select the most appropriate contract type based on project requirements, risks, and the nature of the deliverables.

Procurement and Contract Risks

Risk management is crucial in procurement. This section focuses on identifying and assessing potential risks associated with procurement activities and contracts. It provides guidance on developing risk mitigation strategies, contingency plans, and monitoring mechanisms to address these risks effectively. The section may also include considerations for managing intellectual property rights, quality control, and compliance risks.

Procurement Milestones

Procurement milestones are key events or deliverables that mark significant progress in the procurement process. This section outlines the important milestones throughout the procurement lifecycle, such as the completion of procurement planning, issuance of requests for proposals, evaluation, and selection of vendors, contract award, and contract closeout. Clear milestones help track progress, facilitate communication, and ensure the timely completion of procurement activities.

Integration of Procurement Activities

This section emphasizes the integration of procurement activities with other project management processes. It highlights the importance of collaboration and communication between procurement stakeholders and project teams. Integration of procurement activities addresses coordination with other project functions, such as finance, legal, quality assurance, and logistics, to ensure seamless integration and alignment of procurement efforts with the overall project objectives.

Performance Metrics

Performance metrics are essential for evaluating the effectiveness and efficiency of procurement activities. This section discusses the selection and tracking of metrics, such as cost savings, supplier performance, delivery time, and quality. It provides guidance on establishing benchmarks, collecting data, analyzing performance, and reporting on key procurement metrics to monitor progress and identify areas for improvement.

Roles, Responsibilities, and Sign-off Authorities

This section defines the roles, responsibilities, and authorities of individuals involved in the procurement process. It clearly outlines the duties of project managers, procurement officers, contract administrators, and other stakeholders. It helps ensure accountability, clarity, and effective decision-making by assigning specific responsibilities and sign-off authorities at various stages of the procurement lifecycle.

Assumptions and Constraints

In this section, project-specific assumptions and constraints related to procurement are documented. Assumptions are factors or conditions that are considered to be true but are not yet validated. Constraints are limitations or restrictions that may impact procurement activities. Identifying and documenting these assumptions and constraints help stakeholders understand the context and potential limitations of procurement planning and execution.

Legal Jurisdiction and Currency

This section addresses legal and jurisdictional considerations in procurement contracts. It specifies the applicable legal framework and jurisdiction for resolving contract-related disputes. It also outlines considerations for currency exchange rates, billing, and payment terms in international procurement scenarios. Compliance with legal requirements is crucial to ensure contractual validity and mitigate legal risks.

Independent Estimates

This section emphasizes the importance of independent cost and price estimates in procurement. It provides guidance on obtaining accurate and unbiased estimates from external sources to validate budgeting and negotiation processes. Independent estimates serve as benchmarks for evaluating vendor proposals, ensuring fair and competitive pricing, and minimizing the risk of cost overruns or inflated pricing.

Prequalified Sellers

This section focuses on the process of prequalifying sellers or vendors before engaging in procurement activities. It outlines the criteria, evaluation process, and registration requirements for prequalification. Prequalifying sellers ensures that only qualified and reliable vendors are invited to participate in procurement processes, reducing the risk of selecting unqualified or non-performing suppliers.

Creating the perfect procurement management plan involves careful planning and consideration of various factors. Here are the key steps to follow:

1. Understand Project Requirements : Thoroughly grasp project goals and stakeholder input to identify procurement needs and necessary resources.

2. Define Procurement Objectives : Clearly establish procurement objectives aligned with project goals, such as cost savings or quality improvement.

3. Identify Procurement Risks : Conduct a comprehensive risk assessment to identify potential risks and prioritize mitigation efforts.

4. Develop Procurement Strategies : Create strategies that align with project goals, considering factors like vendor selection and risk mitigation.

5. Establish Procurement Processes : Define step-by-step processes, outlining roles and responsibilities for needs assessment, negotiation, and performance monitoring.

6. Determine Contract Types : Select suitable contract types based on project requirements, complexity, and desired control.

7. Set Performance Metrics : Define metrics and KPIs to measure procurement effectiveness, such as cost savings and on-time delivery.

8. Assign Roles and Responsibilities : Clearly define roles and authorities for procurement planning, negotiation, and contract administration.

9. Incorporate Legal and Compliance Considerations : Address legal requirements, regulations, and ethical considerations in the procurement plan.

10. Review and Update : Regularly review and update the plan to adapt to evolving project needs, risks, and stakeholder feedback.

Interesting Read : Stakeholder Management Plan Templates

A procurement management plan should be used in any project that involves the acquisition of goods, services, or works from external sources. Here are some scenarios where a procurement management plan is essential:

1. Complex Projects : Projects with high complexity, large budgets, and multiple stakeholders often require a procurement management plan. It helps ensure proper planning, coordination, and execution of procurement activities to meet project objectives effectively.

2. Resource-intensive Projects : Projects that heavily rely on external resources, such as materials, equipment, or specialized services, require a procurement management plan. It enables efficient allocation and acquisition of resources to support project execution.

3. Regulatory Compliance : When projects must adhere to specific legal or regulatory requirements, a procurement management plan becomes crucial. It ensures compliance with applicable laws, regulations, and policies throughout the procurement process.

4. Risk Mitigation : Projects with significant procurement-related risks, such as supplier non-performance, cost overruns, or delays, benefit from a procurement management plan. It helps identify, assess, and mitigate risks associated with procurement activities, minimizing their impact on the project.

5. Cost Control : A procurement management plan is essential for projects with strict budget constraints. It provides mechanisms to control costs, negotiate favorable contracts, and monitor expenses throughout the procurement lifecycle.

6. Strategic Procurement : Projects that prioritize strategic procurement, such as sourcing innovative solutions, establishing long-term partnerships, or leveraging market opportunities, require a procurement management plan. It guides the strategic decision-making process and ensures alignment with project goals.

7. Collaboration with Multiple Stakeholders : Projects involving collaborations with multiple stakeholders, including suppliers, contractors, or subcontractors, benefit from a procurement management plan. It facilitates effective communication, coordination, and integration of procurement activities across different parties.

8. International Projects : When projects involve cross-border procurement, including global suppliers or multiple currencies, a procurement management plan is essential. It addresses international legal considerations, currency exchange, and cultural factors impacting procurement processes.

9. Project Continuity : A procurement management plan ensures continuity in procurement activities, even if there are changes in project team members or leadership. It provides a standardized approach that can be followed consistently throughout the project’s duration.

10. Best Practices Implementation : Organizations aiming to establish consistent and best practices in procurement can benefit from a procurement management plan. It serves as a framework for implementing standardized processes, roles, and responsibilities across projects.

Developing and implementing a well-structured procurement management plan is essential for ensuring the success of procurement activities within your project. By utilizing the comprehensive procurement management plan template provided, you can streamline processes, mitigate risks, and maximize value delivery to stakeholders. Each section of the template, from project details and document control to performance metrics and prequalified sellers, plays a crucial role in optimizing your procurement outcomes.

With this template as your guide, you have the tools and framework to enhance your project’s procurement success. Customize the template to align with your project’s unique needs and requirements. By doing so, you can create a tailored procurement management plan that will effectively manage procurement processes, control costs, and minimize risks.

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Software engineer turned tech evangelist. I handle marketing stuff here at Creately including writing blog posts and handling social media accounts. In my spare time, I love to read and travel.

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Procurement Management Plan template | FREE Download

In the Project Management Body of Knowledge (PMBOK) the procurement management plan is part of the project management plan . It sets out how all areas of procurement will be managed during the project. stakeholdermap.com

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Contract types

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• Milestones in the procurement process

Legal jurisdiction and currency

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The contents of the Procurement Management Plan Template

Field description and tips to complete, project details and document control.

• Project Name and Reference
• Document information: ID, owner, issue date, last saved date, file name or path
• Document history: version, issue date, changes.
• Document approvals: role, name, signature, date

Procurement Design and Processes

Procurement process.

Procurement and contract risks

Procurement milestones

Integration of Procurement Activities

Performance metrics

• Quantity ordered vs quantity received.
• Delivery on time.
• Ordered price versus invoiced price.
• Percentage of units/tests failing inspection vs. total inspected units/tests.
• Returns rate metrics.
• Order fill rate metrics.
• Lead-time variance metrics.
• Software downtime.

Roles, responsbilities and sign-off authorities

Assumptions and constraints

Independent estimates, prequalified sellers, procurement management plan template, procurement management plan template (word .doc), procurement management plan template (word .docx), procurement management plan template (pdf), procurement management plan template (.odt), more project templates to download.

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How to Make a Procurement Management Plan

Project management planning is made up of many parts. There’s the schedule, the stakeholder matrix, the managing of resources. Speaking of the latter, there’s the matter of how you’re going to procure resources that require vendors of goods and services. That’s procurement management.

The procurement management plan is part of the overall project management plan. Over the life cycle of a project there are likely to be many points where it will intersect with vendors. This process needs to be managed. To manage these relationships and keep the flow of those goods and services moving without interruption requires a procurement management plan.

If it seems like we’re going too fast, it’s because we are. The act of procurement, its management and planning are all deeply embedded in the methodology of project management. Let’s slow down and take a moment to unpack these terms.

What Is Procurement in Project Management?

To begin with, what do we mean when we say procurement? Procurement is when the project is working with outside suppliers to buy or rent goods and services for the project. These relationships are usually contractual to make sure that the goods and services work within the timetable of the project.

In project management, there is a process for project procurement, and it begins with planning. This is where you identify what resources outside of your organization will be needed for the project. These are collected in a statement of work.

Related: Free Project Plan Template

Bidding & Contracts

Once you have a list of what external resources you need, then you can start the work to acquire them. This is called the bidding process, where contractors bid for your work. Once you have some bids in-house, then they must be studied to determine which is the best fit for the project.

When you go into a contractual agreement with these suppliers, they require management just like every other aspect of the project. It’s crucial to the well-working of the project that these contractors are doing what they were contracted to do, on schedule and within the allotted budget .

Finally, once the procurement is done, the contracts must be closed properly. This is yet another process that makes sure everything has been delivered as stated in the contract before being signed off on.

Why Do You Need a Procurement Management Plan?

The importance of having a procurement management plan is that it defines what you need from the project that cannot be provided by the organization. This means that you have a greater understanding of planning the whole project. That includes managing the suppliers, who are key to keeping your project schedule .

Incorporates Stakeholders

Another positive is that a procurement plan can involve stakeholders and get their input in the process. Stakeholders are the reason for the project and their satisfaction is the measure of the success of that project. They can express the requirements they want for procurement. You can use a RACI chart to identify stakeholders and their involvement before contacting them about procurement needs.

Informs Strategy

Without a procurement management plan, there can be no procurement strategy and without a strategy, there can be no plan. They both inform the other and involve things like market surveys to better define the procurement necessary to fulfill the project.

What Does a Procurement Management Plan Do?

Obviously, the first and perhaps most important thing that a procurement management plan does is list all the procurements needed for the project and what requirements are expected to be associated with them. This is a key part of schedule development.  It creates timelines for implementing a procurement for the project and therefore helps with estimating the larger project schedule.

A procurement plan helps monitor the whole procuring process. When the project is executed, the actual procurement can be compared against the procurement plan to track progress. If there are discrepancies, then the procurements can be adjusted to right those wrongs.

Evaluating the success of your procurement plan is made significantly easier with the help of capable project planning software. Things like communicating with team members, tracking results, making adjustments and producing reports can all be automated with the help of the right software. Watch the video below to learn more:

Eight Steps for a Procurement Management Plan

The project manager is the project team member responsible for overseeing the procurement management plan, but it’s not a one-person job. Since the procurements will be project-wide, it’s important that everyone is on board with the process. Everyone should have some involvement in approving and even managing contracts.

The procurement management plan can be broken down into these eight steps.

1. Define Terms

To begin, start by defining the procurement terms. This means listing what you need to procure in detail: how many, what size, for how long, etc. Then you want to know what service is provided to the project and why this is important. Now add a date of use to each of these procurements and who on the project team is authorized to make these purchases. This information will be necessary when you’re ready to make a purchase order which specifies the price, quantity, delivery window and terms of payment of the goods/services you purchase. It’s a legally binding document that makes sure that you and your vendor are on the same page. Our purchase order template can help you create one that fits your project.

2. Outline Type of Agreement

The contract is how everyone agrees on the terms of service. There are different types of contracts, for instance, a fixed price and cost reimbursement are two. Therefore, the type of agreement must be decided on and how it will be managed.

3. Identify and Mitigate Risks

Risks are inherent in every part of a project process, and so they lie dormant in procurement until they show themselves. It is now time to figure out what those risks might be and list them. Once a thorough list has been collected, each must have a way to resolve them. It’s also good to assign a team member with the task of mitigating those risks, so they have the ownership to follow through on closing them. A risk register template can help.

4. Define Costs

What are the costs involved with the project procurements? Once those have been figured out, it is likely that a request for proposal will be issued, with the needs outlined and requesting bids from suppliers. Be thorough and note everything required. The suppliers will come back with their costs for products or services.

5. Identify Constraints

It helps to try and identify any project constraints before starting the project to avoid getting blindsided by unforeseen limitations during execution. Once this list is complete it can be looked at throughout the project phases. Constraints related to procurements include cost, scope, limited resources and technical specifications.

6. Get the Contract Approved

Review the bids and do a service and cost analysis. Then have a list of who the decision-makers are in the project group and pass the bids on to them for review (a DACI framework can help identify decision-makers). This process makes sure that everyone who needs to oversee the contract approval is involved and can provide input.

7. Make a Decision Criteria

You have a workflow, but now you need criteria by which to decide on which bid to go into contract with. Every person who reviews the bid should have these criteria at hand to measure their response.

8. Create a Vendor Management Plan

Once a contract is signed, the procurement management plan will segue into a vendor management plan . The terms of the contract must be met. And, to make sure that happens, a management plan surrounding the suppliers will help ensure that goods and services are delivered as specified and on time. It is a good idea to add a performance metric to rate how well each supplier does their job, so you can improve relations on the next project and know who is worth contracting with again.

ProjectManager Helps with Procurement Management

Each procurement is a project or a subset of the larger project. Therefore, each procurement can be planned, tracked and reported on just as you would the larger project. ProjectManager is an online project management software that can make that process easy and effective.

Procurement management can feel overwhelming. ProjectManager helps with executing your procurement plan with its kanban boards, Gantt charts, dashboards and other project management features.

Using Kanban for Procurement Management

By making each supplier a project on a kanban board , you can then track what stage their inventory is in and not get any unpleasant surprises. ProjectManager has customizable columns, so you can name them ordered, shipped, stocked and need to reorder. This way you’re always on top of your resources. Plus, you can add tags and priority levels to make sure everything is well-organized and tracked.

Gantt Can Link Tasks and Make Timelines

Sometimes procurement is dependent on other tasks. Maybe the visual kanban doesn’t give you the control you need. No problem, switch over to the Gantt view . Now you can link dependencies and see timelines. Timing is important of course. If your resource isn’t here on time, then the whole project can be delayed!

They say, “Don’t put all your eggs in one basket.” But in project management software you want to have all your tools in one place. ProjectManager keeps you organized, so you can work better.

ProjectManager is a cloud-based project management software that helps control procurement throughout the project phases. Workload and resource management features keep track of supplies and calculate planned versus actual costs. ProjectManager assists project managers with planning, monitoring and reporting projects. Team members get a collaborative platform to work together more productively. Try it today with this free 30-day trial .

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The ultimate guide to crafting an effective business plan for procurement success.

Welcome to the ultimate guide on crafting an effective business plan for procurement success! Whether you’re a seasoned entrepreneur or just starting out, having a well-thought-out business plan is essential for driving your procurement endeavors in the right direction. In this comprehensive post, we will delve into the ins and outs of creating a winning business plan that not only showcases your vision but also acts as a roadmap to achieving your procurement goals . So, grab your pen and paper (or open up that trusty word processor) because it’s time to dive into the world of strategic planning and unlock the potential of your procurement operations!

What is a Business Plan?

A business plan is like the blueprint for your procurement success story. It’s a comprehensive document that outlines your goals, strategies, and tactics for achieving them. Think of it as a roadmap that guides you through the twists and turns of the procurement landscape .

At its core, a business plan communicates your vision to potential investors, partners, or even internal stakeholders. It provides clarity on how you intend to operate and grow your procurement activities in order to achieve sustainable success.

But it’s not just about impressing others; a well-crafted business plan also serves as an invaluable tool for yourself and your team. It helps align everyone’s efforts towards common objectives while providing clear guidelines on how to navigate challenges along the way.

A good business plan should include key elements such as an executive summary, market analysis, competitive intelligence, financial projections, operational strategies, and more. These components work together harmoniously to paint a holistic picture of where you currently stand in the market and where you aim to be in the future.

In essence, a business plan is more than just another document gathering dust on your shelf – it’s a living embodiment of your aspirations and strategic thinking that drives every decision within your procurement operations . So take the time to craft one carefully because with this powerful tool by your side, there are no limits to what you can achieve!

The Importance of a Business Plan for Procurement Success

A business plan serves as a roadmap for any organization, and when it comes to procurement, having a well-crafted plan is crucial. It not only outlines your goals and objectives but also helps you strategize and achieve success in the ever-evolving world of procurement .

A business plan provides clarity. By clearly defining your procurement goals , strategies, and key performance indicators (KPIs), you can align your team’s efforts towards achieving them. This ensures everyone is on the same page and working towards common objectives.

A business plan aids decision-making. With an effective plan in place, you can identify potential risks or challenges that may arise during the procurement process and develop contingency plans to mitigate them. Additionally, it allows you to analyze market trends and make informed decisions about suppliers, pricing structures, inventory management techniques, and more.

Furthermore, a business plan enhances communication both internally within your organization as well as externally with stakeholders such as suppliers or vendors . It provides clear guidelines for collaboration with suppliers while fostering transparency throughout the procurement process.

Moreover,a well-crafted business plan serves as a tool for monitoring progress.

It enables tracking of key metrics,such as cost savings achieved,time taken per transaction ,and supplier performance.

Through regular monitoring,you can identify areas where improvements are needed,and take proactive measures accordingly.

In conclusion,having an effective business plan is essential for successful procurement operations .

It brings clarity,strategic direction,enables sound decision-making,fosters enhanced communication,and facilitates ongoing monitoring.

Without one,your organization may be left adrift in the complex landscape of modern-day supply chain management .

So,take the time to craft an impactful usinessplan,and set yourself up for long-term success in procuring goodsand services.

Optimize this vital document by incorporating industry best practices,and watch how it propels your organization forward!

How to Write an Effective Business Plan

Writing an effective business plan is crucial for the success of your procurement efforts. It serves as a roadmap, outlining your goals and strategies to achieve them. But how do you write a business plan that truly stands out and gets results? Here are some key steps to follow:

1. Start with a clear executive summary: This section gives readers an overview of your entire plan. Keep it concise and compelling, highlighting the unique value proposition of your procurement strategy.

2. Define your objectives: Clearly outline what you aim to accomplish through procurement . Are you looking to reduce costs , improve supplier relationships, or enhance operational efficiency? Be specific about your goals.

3. Conduct market research: Understanding the industry landscape and competitive landscape is vital for developing an effective procurement strategy. Identify trends, potential risks, and opportunities that may impact your operations.

4. Develop a detailed action plan: Break down the steps required to achieve each objective in measurable terms. Include timelines, milestones, and responsible parties for accountability.

5. Analyze financial projections: Your business plan should include realistic financial forecasts based on thorough analysis of costs, revenue projections, and cash flow management strategies.

6. Consider risk management: Procurement involves dealing with suppliers, contracts , regulations, and other potential risks. Outline how you will mitigate these risks effectively.

Assess resource requirements: Determine what resources will be needed (human capital, technology)and how they align with achieving objectives outlined in previous sections

Write clearly & concisely : Use simple language avoids jargon while explaining complex concepts

What to Include in Your Business Plan

When it comes to crafting a business plan for procurement success, there are several key elements that you need to include. These components will help guide your organization’s procurement strategy and ensure that you have a clear roadmap for achieving your goals.

First and foremost, your business plan should outline your overall procurement objectives . This includes clearly defining the goods or services that you need to procure, as well as any specific targets or metrics that you want to achieve.

Next, it is important to identify the key stakeholders in the procurement process. This includes both internal stakeholders within your organization, such as department heads or budget managers, as well as external stakeholders such as suppliers or vendors.

A thorough market analysis is also essential in your business plan. This involves researching current market trends and conditions relevant to the goods or services you are procuring. It is important to understand factors such as pricing, availability, and potential risks associated with sourcing these items.

In addition, your business plan should detail how you will select suppliers and manage supplier relationships . This may include outlining criteria for evaluating potential suppliers, negotiating contracts and pricing terms, and establishing processes for ongoing supplier performance monitoring.

Financial projections are another crucial component of a comprehensive business plan. You should include projected budgets for procurement activities along with any anticipated cost savings or efficiencies that may be achieved through strategic sourcing initiatives.

Lastly but importantly is risk management planning. Your business plan should address potential risks related to procurement activities such as supply chain disruptions or regulatory compliance issues. It’s important to outline strategies for mitigating these risks and maintaining continuity of operations.

By including all of these elements in your business plan for procurement success,you can set yourself up for success by having a clear vision,strategic approach,and effective guidelines.

Incorporating these components into an actionable document will not only enhance decision-making capabilities,but also provide a solid foundation from which successful procurements can be executed

Tips for Writing an Effective Business Plan

1. Clearly define your goals and objectives: Before you start writing your business plan, take the time to clearly define what you want to achieve with your procurement strategy . Are you looking to reduce costs, improve supplier relationships, or increase efficiency? By setting clear goals and objectives, you can tailor your plan to meet these specific needs.

2. Conduct thorough market research: To create a successful business plan, it’s crucial to have a deep understanding of the market landscape. Conducting thorough research will help you identify potential opportunities and challenges that may arise in the procurement process . This knowledge will allow you to make informed decisions and develop effective strategies.

3. Identify key stakeholders: In order for your procurement initiatives to be successful, it’s important to involve all relevant stakeholders from the beginning. This includes internal teams such as finance, operations, and legal departments, as well as external partners such as suppliers and customers. Engaging these key stakeholders early on will ensure their buy-in and support throughout the process.

4. Develop a detailed budget: A well-defined budget is essential for any business plan. It helps ensure that resources are allocated appropriately and allows for effective cost management throughout the procurement process.

Trim down unnecessary details: While it’s important to include all necessary information in your business plan, avoid getting bogged down by unnecessary details or jargon that may confuse readers or detract from your main points.

Focus on communicating key information concisely yet effectively.

Establish measurable targets: To track progress towards achieving your procurement goals ,it’s vital establish measurable targets.

These targets could include metrics like cost savings percentage, increase in supplier diversity ,and overall customer satisfaction.

Having measurable targets not only provides focus but also enables performance evaluation at various stages of implementation

Flexibility & adaptability : Keep in mind that a good business plan should be flexible enough.

It should adapt changing circumstances.

Whether there are shifts in market dynamics, regulatory changes, or unforeseen events,you need to be

How Often Should You Update Your Business Plan?

Updating your business plan is crucial for staying on track and adapting to the ever-changing business landscape. But how often should you update it? The answer may vary depending on various factors, but here are some guidelines to consider.

It’s important to note that a business plan is not a static document. It should be seen as a living blueprint that evolves with your business. As such, regular updates are necessary to ensure its relevance and effectiveness.

One common rule of thumb is to review and update your business plan annually. This allows you to assess your progress over the past year, reevaluate goals, and make any necessary adjustments moving forward.

However, certain circumstances may warrant more frequent updates. For example, if there are significant changes in the market or industry trends that impact your procurement strategies , it may be wise to revisit and revise your plan sooner.

Additionally, major events within your organization can also trigger the need for an immediate update. These could include mergers or acquisitions, changes in leadership or key personnel, or shifts in overall company strategy.

It’s worth noting that even if there haven’t been any major changes externally or internally since you last updated your plan; periodic reviews can still provide valuable insights into potential areas for improvement.

The frequency of updating your business plan will depend on factors unique to your organization. Regular monitoring of key performance indicators (KPIs) can help determine when an update is needed based on actual data rather than arbitrary timelines alone.

In conclusion

Crafting an effective business plan is crucial for procurement success. It provides a roadmap for your procurement activities, helps you make informed decisions, and ensures that you stay on track toward achieving your goals. By following the steps outlined in this ultimate guide, you can create a comprehensive and compelling business plan that sets your procurement efforts up for success.

Remember, a good business plan goes beyond just describing what you intend to do. It should also outline how you will execute your strategies, measure performance, and adapt to changing market conditions. Regularly reviewing and updating your plan is essential to ensure it remains relevant and aligned with your objectives.

Invest time and effort into developing a well-crafted business plan, incorporating all the necessary elements like an executive summary, company overview, market analysis, procurement strategies, financial projections, risk management plans etc. This will not only help attract potential investors or stakeholders but also serve as a valuable tool to guide your procurement team towards achieving long-term success.

So take the first step today – start crafting an effective business plan tailored specifically for procurement success! Remember that planning is key to overcoming challenges and seizing opportunities in the dynamic world of supply chain management.

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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Procurement Plan – 10 Easy Steps to Create One Yourself

Table of content

• Procurement Plan
• How to Write your own?
• The Importance
• What should be included?
• The Benefits
• Procurement Expert’s Advice
• Frequently Asked Question

Key takeaways

A procurement plan is essential for efficient procurement processes, outlining key steps, roles, and responsibilities.

Successful procurement planning leads to cost savings, optimized timelines, and effective stakeholder collaboration.

Key elements of a good procurement plan include contract types, performance metrics, and vendor management techniques.

Do you have a procurement plan ready? As a procurement manager, it’s your job to always create a good procurement plan and to have it ready and up to date all the time.

And so, we are going to discuss just that. We are going to learn about the procurement plan and how to create one using simple yet proven effective steps.

Once you’re done with this article, you will be able to write your own procurement plan and your team can start calling you “The King of Procurement Plans.”

What is a Procurement Plan?

A procurement plan, also known as a procurement management plan, is a document that is used to direct the process of selecting and finding a supplier. 

It justifies the necessity for an external supplier and describes how the process of finding a supplier will be done.

The objective of a procurement plan is to improve the efficiency, transparency, and effectiveness of the procurement process. 

It explains how products or services are acquired and how the suppliers will be supervised during the project. 

The plan includes the types of contracts that will be utilized, terms of delivery, metrics used to evaluate supplier’s performance, and how the procurement process will commence.

How to Write Your Own Procurement Plan

Writing the procurement plan may sound like a big task, but if you have everything that is needed right, then you should have no problems writing and building the plan.

1. Explain the procurement process

This is where you provide a section of the procurement plan that needs to be taken to get the needed products or services from a supplier. There should also be an explanation of what must be done to manage the process

Featured Download : Enjoying this article? If so, click here to accelerate your career: Here is Sourcing Calendar Template to help you plan your procurement activities.

2. Identify roles and responsibilities

This section is where you identify the different people who are working on the project and all stakeholders who will be affected by the project. The different roles involved in the procurement process should include:

• Technical managers who create the statement of work and oversee the technical vendor requirements.
• Project managers monitor the process and control the budget, schedule, and project risks.
• Contract managers who provide advice and documentation related to the project’s contract requirements.
• C-level executives who provide services on a contract and make decisions related to the contract. These executives are responsible for reviewing and approving the final contract agreements.
• Lawyers who help with the creation of the contracts and provide advice for any related legal requirements.

3. Identify the procurement needs and requirements 

The first section of the procurement plan should describe the services or products the company is looking to buy. It should also have an explanation and justification for why the products or services are brought from an external supplier.

4. Define the procurement timeline

This section is all about the timeline for the project and it describes the timeframe in which the services or products are needed. This section helps procurement teams better by understanding when the procurement process should be started and when it needs to be completed.

5. Define change approval processes

This part is where the company’s change management processes, specifically how changes can be made to the procurement processes and documentation. The section should include an explanation of how to ensure the changes are necessary, understood, and approved by the right people.

6. Identify vendor management techniques

This section of the procurement plan should explain the techniques used to manage vendors once they have signed the contract. The goal of this area in the procurement plan should be to ensure vendors must fulfill their side of the deal and provide the company with the products or services they requested at the quality that the company expects. 

Vendor management should include the following:

• Creating an SOW that outlines the project timeline, deadlines, and compliance requirements.
• Detailing vendor selection criteria that are based on cost and risk analysis.
• Using key performance indicators (KPIs) to measure the product or service quality.
• Conducting regular meetings.
• Requiring the vendor to provide the project owner with regular project updates.

7. Define relevant legal jurisdiction

Legal requirements for the procurement process must be identified to ensure the company and vendor follow the law.

Legal requirements must also be identified to ensure all stakeholders are aware of the laws and that they do not violate the legislation.

8. Identify payment methods

This section of the procurement plan identifies the different payment methods and currencies that will be used and accepted during the procurement process.

If payments are to be made periodically, such as monthly or annually, then the terms for these payments must be detailed to ensure that there is no conflict between the company and the vendor regarding payments.

9. Explain risk management processes

Working with an external supplier can expose you to new risks to a procurement process that would not be relevant if the process was internally sourced . This section of the procurement plan should explain the risks of the project, including:

• Risk tolerance
• Risk probability
• Risk severity
• Types of contracts used
• Policies and procedures outlined in the contracts
• Review and approval processes for requirements

The statement of work is an important element of an organization’s risk management processes. The SOW defines the necessary project activities, deliverables, and timelines that the vendor needs to follow to fulfill half of the deal. Giving vendors a SOW reduces risk by ensuring that the supplier knows exactly what is expected of them.

10. Identify project constraints and limitations

A procurement process is not one without limitations and constraints. This section provides all the constraints and limitations that the procurement team and vendor must deal with. It can include the following:

• Legal compliance
• Budget restrictions
• External stakeholders
• Scheduling limitations
• Geographic restrictions
• Security requirements
• Specifications and standards

Procurement Planning:  The Basics 

Procurement planning is the process of consolidating and identifying requirements and determining the timeframes for procurement to have them as and when they are required. 

To put it into simple terms, procurement planning is about creating a schedule of when and where the procurement will happen . The planning also includes making sure that the items or services procured are in good condition and exactly what you are looking for.

In order to plan for procurement, it is essential to have a comprehensive understanding of all the elements involved in producing your company’s goods and services.

This includes being knowledgeable about material utilization rates, skillful negotiation techniques for securing favorable pricing, efficient coordination of transportation and supply chain processes, and the ability to address and minimize the impact of potential challenges. Additionally, incorporating a supply and demand analysis into the planning process can be beneficial.

Procurement Planning: The Importance 

Creating a procurement plan is a must. It’s not just because a company demands a plan must be made, but because the law also in some areas requires the creation of a procurement plan:

1. Aggregating Requirements

The plan aims to consolidate and streamline requirements within procuring entities and the organization itself. This approach helps optimize procurement processes, ensuring value for money and reducing overall procurement costs.

2. Utilizing Rate or Running Contracts

The plan encourages the use of rate or running contracts when necessary. These contracts offer an efficient, cost-effective, and flexible means of purchasing the necessary supplies for the company’s ongoing operations.

3. Integrating with Expenditure Program

A well-designed procurement plan integrates seamlessly with the expenditure program of the company. This alignment ensures that procurement activities are in line with the broader financial goals and objectives of the organization.

4. Avoiding Procurement Splitting

The plan addresses the issue of splitting procurement to deal with a larger procurement concern. By avoiding such practices, the company can maintain transparency , fairness, and efficiency in its procurement processes.

What to Include In a Procurement Plan

As stated, the procurement plan is an important tool for the procurement manager. You need it. You can’t start the procurement process without it. You and your procurement team should build a concrete procurement plan to buy the supplies needed in a timely and orderly fashion.

The procurement plan should always have the following elements for it to be efficient:

• Identification of the type of contract that will be used in the deal.
• An explanation of the metrics that will be used to judge the supplier’s performance.
• Identification of the organizational standards that must be followed.
• Planned delivery or implementation dates for the products or services being provided.
• The number of suppliers involved and an explanation of how they will be managed.
• An explanation of how acquiring the new services or products will affect the constraints and limitations of the project plan.
• Identification of all vendors who have prequalified for the project.
• An alignment of lead times with the project schedule.

The Benefits of a Good Procurement Plan

Procurement plans provide documentation for the whole procurement process, which is very valuable to all procurement teams in any company. They can use the procurement plan as a reference or guide if there is a need for a procurement project once again.

Other benefits of having a procurement plan include:

1. Help consolidate similiar requirements under one contract

By grouping similar requirements for goods or services together and awarding them under a single contract, organizations can benefit from bulk purchasing power.

This approach often leads to more favorable terms with suppliers, lower unit costs, and reduced administrative overhead. Moreover, managing fewer contracts simplifies the procurement process, making it more efficient and easier to monitor.

2. Divide complex requirements into multiple contract packages

When faced with complex procurement needs, dividing them into smaller, manageable contract packages encourages a broader pool of suppliers to participate. Increased competition drives suppliers to offer more competitive bids, potentially lowering costs.

Breaking down large projects also allows for more targeted supplier expertise and facilitates better risk management, as smaller contracts are generally easier to monitor and control.

3. Assess additional staffing needs

Developing a procurement plan involves evaluating the scope and volume of anticipated procurement activities. Based on this assessment, organizations can identify whether they require additional procurement staff or resources to efficiently manage the workload. Adequate staffing ensures that the procurement process runs smoothly and can meet deadlines effectively.

4. Optimize cost savings

Aggregating similar requirements leads to economies of scale, reducing costs per unit. Additionally, breaking down complex requirements into smaller contracts promotes competition among suppliers, driving down prices and achieving cost savings. This strategy also provides flexibility, allowing companies to negotiate more tailored terms and conditions with suppliers.

5. Facilitate stakeholder collaboration

Engaging stakeholders throughout the procurement planning process ensures that the needs and preferences of various departments and individuals are considered. This collaborative approach helps avoid potential misunderstandings, enhances the accuracy of requirements, and increases stakeholder buy-in, fostering a smoother procurement process.

6. Estimate procurement timelines

Developing a clear timeline for each procurement activity helps project managers and teams plan their tasks effectively. It allows for better resource allocation, monitoring progress, and meeting critical project deadlines. Timelines also help anticipate potential delays or bottlenecks, enabling organizations to take proactive measures to address issues and ensure a timely and successful procurement process.

Procurement Expert’s Advice on Procurement Plan

For this article, we asked a seasoned procurement professional to share his insights regarding procurement plan.

Sjoerd Goedhar t Owner, Goedhart Interim Management & Consultancy

LinkedIn Profile: https://www.linkedin.com/in/sjoerdgoedhart/

1. What should readers know about procurement plan?​

“The procurement plan is an important tool for the procurement manager. A procurement manager can’t start the procurement process without a procurement plan. He and his team should build a concrete procurement plan to buy the supplies needed in time.”

Follow-up Question: In your experience, what are some challenges or obstacles that organizations may face when attempting to create or implement a procurement plan?

“Organizations often face challenges in creating and implementing a procurement plan due to competing priorities, limited time, and workload constraints. The importance of procurement may be overshadowed by other urgent matters, leading to insufficient attention and resources allocated to this critical aspect of business operations.”

2. What is the biggest misconception about procurement plan? What do most people get wrong about this topic?

“Creating a procurement plan is not something you just do. You do this not only because the company wants it, but in some areas, this is even legally required. Without a good procurement plan, there will be no good result.”

Follow-up Question: How about in a startup or small business, is a procurement plan still needed when acquiring goods or services?

“Yes, a procurement plan is essential for startups and small businesses when acquiring goods or services. Even for a digital marketing agency, purchasing services requires strategic planning. Prioritizing procurement, especially in less mature organizations, is crucial for efficient operations and growth. It’s advisable for founders to invest in expertise if they lack it, as strategic planning can significantly impact business outcomes.”

3. What are the essential elements of a comprehensive procurement plan?

“Essential elements of a comprehensive procurement plan include:

• Type of contract used in the tender.
• Metrics for evaluating supplier performance.
• Organizational standards to be followed
• The number of suppliers involved
• Planned delivery or implementation dates for products or services.
• An alignment of lead times with the project schedule”

Follow-up Question: How often should procurement plans be reviewed and updated, and what factors might prompt revisions to the plan?

“Procurement plans should be reviewed and updated annually, with the frequency of adjustments based on business priorities. Factors prompting revisions include changes in purchasing strategies, market conditions, and business requirements.”

4. How should a procurement plan be adapted to respond to changing market conditions and business needs?

“The business environment and market conditions are always changing, so the strategy should be adaptable. Continuous improvement is key to maintaining relevance and effectiveness. This can be done by:

• Periodically review your procurement strategy to ensure it aligns with current business goals and market conditions.
• Integrate feedback mechanisms within your organization and with suppliers.
• Be updated about market trends, new technologies, supplier landscape shifts, and best practices.
• Invest in training and development for your team
• Use data to gain insights into your procurement processes. Data can reveal trends, inefficiencies, and opportunities for cost savings.”

5. Up to what extent should stakeholders be involved in the development of the procurement plan?

“Engaging with your stakeholders can be challenging, but it’s one of the most critical contributors to your organizational success. Stakeholders must be involved from start to finish. Depending on which type of stakeholder, stakeholders will need to be involved in each phase of the process. The most important stakeholders will have to be involved in the entire process.

Interacting and communicating with crucial decision-making stakeholders helps your organization strategize its short and long-term goals.”

6. When should procurement professionals take into consideration when making a procurement plan?

“The procurement process is fundamental for ensuring that an organization operates efficiently and effectively. It’s necessary for several reasons:

• Strategic Alignment
• Compliance and risk management
• Cost efficiency
• Quality assurance
• Supply chain reliability
• Innovation and improvement”

Frequently asked questions

What is a procurement plan.

A procurement plan is a detailed walkthrough of how the procurement process should go from start to finish.

How to make a procurement plan?

To make a procurement plan, you need to have all details fleshed out. Details include vendors selected for the procurement, the budget allocated, and contracts used for the procurement.

How do you plan the procurement process?

To plan the procurement process, you and the team must discuss how the procurement should start, how to source vendors, make sure the contracts follow the law, and that the supplies procured are in good condition.

About the author

"> "> My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

• Sunday, April 14, 2024
• Procurement

Procurement Plan: A comprehensive checklist

As a business owner or procurement professional, you know just how much a well-crafted procurement plan matters to the success of your supply chain. But with so many moving parts, knowing where to start can be challenging or confusing. That’s why we’ve compiled a list of expert tips to help you develop an effective procurement plan.

Every operation needs a good plan, and procurement is no exception.

Introduction

Procurement is an important process that can make or break your business or supply chain. A well-planned procurement strategy can help you achieve financial goals and reduce operational costs in your supply chain. 

However, considering all the factors involved, developing a procurement plan that aligns with your supply chain goals can be tedious. Numerous elements or factors are involved in the procurement process, from identifying suppliers to negotiating contracts. 

As a supply chain manager with many years of experience, I understand the importance of developing a procurement strategy that meets your supply chain goals. In this article, I will provide expert tips on developing a procurement plan that aligns with your organization’s objectives and helps you achieve your financial targets.

What is a procurement plan?

A procurement plan is a document that outlines the process of acquiring goods or services from external stakeholders such as suppliers. It includes all the steps in the procurement process, from identifying the need for a particular product to the delivery and payment of the purchased items.

The procurement strategy is essential to any supply chain’s strategy as it sets the framework for the procurement process. A great procurement plan is developed based on your specific needs and requirements. 

Your procurement strategy should outline your objectives, the goods or services required, the budget, and the procurement schedule. The plan should also identify all the stakeholders (external and internal) involved in the procurement process and their roles and responsibilities.

Why is a Procurement Plan Important?

A well-crafted procurement scheme is essential for any business or supply chain because it streamlines the procurement process and ensures your organization gets the best value for its money. 

A procurement strategy can help with the following:

– Ensuring that the procurement process is efficient and effective.

– Establishing a clear framework for the procurement process.

– Reduce the risk of procurement errors and delays 

– Ensure the business gets the most value for its money

– Promote transparency and responsibility in the procurement process

– Ensure compliance with procurement legislation and policies

Key elements of a procurement plan

A good procurement plan should include the following key elements:

# Procurement Objectives

The procurement objectives should clearly define and match your business’s broader aims and objectives. These objectives should be specific, measurable, attainable, relevant, and time-bound. The procurement targets should also be reasonable and based on the budget and resources of the organization.

# Goods or Services Required

The procurement scheme should explicitly specify the items or services requested. The goods or services amount, quality, and specifications are all included. Any particular requirements or standards that the goods or services must meet should also be specified in the procurement plan.

The procurement budget should be explicitly stated in the procurement strategy. This comprises the entire acquisition cost, including taxes, tariffs, and shipping charges. The budget should be reasonable and based on the business’s financial resources.

# Procurement Schedule

The procurement strategy should specify the procurement schedule. This comprises the timeframe for each stage of the procurement process, such as the bid or proposal deadline, the assessment period, and the delivery date.

# Stakeholders

The procurement plan should identify the parties involved in the purchase process. This includes the procurement team, end-users of the goods or services , and any other stakeholders involved in the procurement process. Their tasks and responsibilities should also be specified in the procurement plan.

Steps to Creating a Successful Procurement Plan

Creating a successful procurement plan involves the following steps:

# Step 1: Identify the Need

The first stage in developing a procurement strategy is determining the requirement for the specific good or service your supply chain needs. This entails doing a requirements assessment to evaluate the goods or services required to achieve the goals and objectives of the organization.

# Step 2: Establish Procurement Objectives

The procurement objectives should be defined once you have identified the requirement. You must set clear and quantifiable goals connected with your organization’s objectives.

# Step 3: Identify the Required Goods or Services

The needed goods or services, including quantity, quality, and specifications, should be explicitly described. This process involves conducting market research to find possible vendors and their offerings.

# Step 4: Establish a Budget

Your procurement plan should include a budget for the procurement exercise. It should be based on the financial resources of your organization. Estimating the whole cost of the procurement, including any taxes, tariffs, or shipping fees, is required.

# 5: Locate Potential Suppliers

Chose potential suppliers based on their capacity to meet your organization’s needs and their track record of supplying comparable goods or services.

# Step 6: Create a Procurement Schedule

Build the procurement schedule around the timelines for each stage of the procurement process, such as the deadline for submitting bids or proposals, the review period, and the delivery date.

# Step 7: Create your Procurement Plan

The procurement strategy should be built on the important elements discussed before. The procurement objectives, the goods or services required, the budget, the procurement timetable, and the stakeholders engaged are all included.

Best practices for procurement planning

To ensure that your procurement plan delivers real results, it is essential to follow these best practices:

# Involve Key Stakeholders

Include all relevant stakeholders in the procurement process to ensure you properly consider all their needs and requirements.

# Conduct Extensive Market Research

Conduct extensive market research to find possible suppliers and their products and services.

# Establish Specific Procurement Goals

Create specified, measurable, attainable, relevant, and time-bound procurement objectives (SMART).

# Make a Realistic Budget

Create a realistic procurement budget based on the organization’s financial resources.

# Create a detailed procurement schedule.

Create a detailed procurement schedule, including the timetable for each stage of the procurement process.

# Evaluate Bids or Proposals Using Defined Criteria  

Evaluate all bids or proposals using the defined criteria to ensure that the selected supplier meets the organization’s needs.

Tools and resources for creating a procurement plan

Several tools and resources are available to help you create a procurement plan. These include:

# Procurement Templates

Procurement templates are guides which can be manipulated to match the needs and specifications of the organization.

# Procurement Software

Procurement software aids you in automating and streamlining the procurement process.

# Procurement Training

Procurement training will assist you and other procurement professionals in developing the necessary skills and knowledge to develop successful programs.

FAQs on Procurement Plan

1. How often should I review or update my procurement plan?

Evaluate and modify your procurement plan regularly throughout the supply chain or organizational lifecycle. Changes in the scope, budget, or supply chain requirements may necessitate changes to the procurement strategy. Periodic reviews also aid in assessing the efficacy of procurement methods, identifying areas for improvement, and incorporating lessons learned.

2. Can I modify my procurement plan during the procurement process?

Yes, if circumstances change, you can update or change your procurement plan during the procurement process. However, modifications should be controlled and transparent. There should also be sufficient documentation and stakeholder involvement. Any changes should be in accordance with procurement standards and ensure fair and equal treatment of suppliers.

3. Can my procurement plan be used for a different supply chain or organization?

While procurement plans for different supply chains or organizations may have similarities, adjusting the plan to each case’s demands and objectives is critical. Project scope, budget, and procurement requirements may all differ, prompting customization of the procurement strategy to ensure its efficacy and applicability.

Developing a well-thought-out procurement plan is critical for any organization to streamline its procurement process, cut costs , and achieve better results. Create a strategy that produces genuine results by following the expert advice in this article. 

Remember to involve key stakeholders, perform thorough market research, make clear procurement objectives, design a realistic budget, create a clear procurement timetable, and analyze bids or proposals based on the defined criteria. With these best practices in mind, you can develop a procurement strategy to help your supply chain succeed.

Obinabo Tochukwu Tabansi is a supply chain mastro and writer with a decade of experience working in different facets of the supply chain. Today he is living his passion for writing on all things supply chain. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the supply chain complexities on the continent.

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How to Create a Procurement Plan in 9 Simple Steps

It can be devastating to hear when a key vendor goes bankrupt. Unfortunately, vendors may shut down for various reasons, which can hamper your own operations.

The next immediate step then is to find another vendor.

But do you have a process in place to source vendors? Does the purchasing team know what their roles and responsibilities are?

To ensure minimal disruptions to your operations, you need to plan for contingencies like vendor bankruptcies.

This is where a procurement plan comes in.

In this article, we’ll explain what a procurement plan is and why you should create one. We’ll also cover the steps to creating one for your company. Finally, we’ll look at how you can automate your purchasing processes with frevvo’s procurement automation software .

Click the links below to head to the section you want to learn more about:

What Is a Procurement Plan?

Why do you need a procurement plan.

• How to Create a Procurement Plan

Automate Your Procurement Process With frevvo

A procurement plan is a document that details the entire procurement process — the steps that companies follow to procure the goods and services they need to operate.

It also outlines roles and responsibilities for your purchasing team, defines vendor selection criteria, establishes the types of contracts you’ll use, and more.

The goal of a procurement plan is to streamline the procurement process. Instead of starting from scratch each time, you can simply pull up an approved plan and adapt it accordingly.

Procurement plans typically include the following details:

• Roles and responsibilities
• Needs and requirements
• Project timelines
• Project constraints
• Vendor selection criteria
• Contract types
• Payment terms and methods
• Risk management

We’ll dive into each of these in a later section. For now, let’s take a look at why you need a procurement plan if you don’t already have one. 

Prefer to see and hear it rather than read about it? Let us show you how easy it is.

Creating a procurement plan can help standardize your purchasing processes and even benefit your bottom line. 

Here’s how.

Reduces Supplier Risks

Managing supply chain volatility is one of the biggest challenges that many companies face. In fact, 56% of chief procurement officers have said that key suppliers have either gone bankrupt or have been severely hampered.

Creating a procurement plan to source and select vendors can help you reduce supplier risk. If a key vendor goes bankrupt or is unable to meet its obligations, your purchasing team can refer to the procurement plan to quickly find a suitable replacement.

Enhances Transparency

90% of business executives say that increased transparency leads to better decision-making across the organization. This also applies to purchasing. 

Without transparent processes, mistakes are bound to happen — employees may duplicate orders or make purchases using non-approved vendors. This can lead to overspending and even delayed projects.

A procurement plan makes the procurement process more transparent. And when you use procurement automation software , your purchasing team will be able to track each step of the process from one central location.

Helps Ensure Compliance

Creating a procurement plan can help ensure compliance with established policies.

Why is this important?

Aside from reducing the risk of errors, a procurement plan can prevent instances of maverick spending — when employees purchase goods or services outside of established policies.

Maverick spending can negatively impact your bottom line. In fact, companies lose as much as 16% of negotiated savings when purchasing teams don’t use preferred vendors. 

Enforcing a procurement plan can help ensure that all purchasing decisions comply with company-approved policies and vendors.

Lowers Procurement Costs 

With a comprehensive procurement plan, your company can source vendors faster, speed up negotiations, and pay invoices more quickly — all of which can help lower procurement costs.

In short, creating a procurement plan is extremely beneficial for your bottom line. It provides purchasing teams with everything they need and sets clear expectations.

Now, let’s look at how you can create a procurement plan.

How to Create a Procurement Plan 

Procurement varies from organization to organization. 

For example, large retailers will likely have different purchasing requirements than manufacturing facilities. However, there are certain details that every procurement plan should include.

Let’s take a closer look.

1. Describe the Procurement Process

In this step of the procurement plan, you’ll provide a complete breakdown of the procurement process starting from requisition to paying the vendor.

A typical procurement process involves the following steps:

• Identifying internal needs
• Evaluating vendors
• Negotiating contracts
• Approving an internal purchase requisition
• Releasing a purchase order
• Receiving and reviewing an invoice
• Confirming and auditing delivery
• Completing payment
• Maintaining records

No matter what products or services you’re procuring, having a formalized purchasing process is key to creating a procurement plan. Work with your purchasing team to detail each step.

2. Outline Roles and Responsibilities

The next step to creating a procurement plan is to establish the parties involved in the purchasing process, along with their roles and responsibilities.

Here are some of the key functions of purchasing departments:

• Identify internal needs for goods and services
• Source reliable suppliers to meet requirements
• Negotiate prices and delivery terms
• Coordinate deliveries and shipments
• Run quality control and product testing 
• Ensure compliance with all regulations
• Manage budgets and maintain accurate records 
• Manage relationships with vendors

The purchasing team will consist of various professionals who are responsible for overseeing these tasks. These include a purchasing manager to supervise procurement-related activities, purchasing agents to evaluate suppliers, and a contract manager to prepare contracts.

Make sure that you outline the roles and responsibilities of your purchasing team. You should also specify who can make and approve changes to any procurement documentation.

3. Determine Needs and Requirements

This section of the procurement plan describes the goods and services that your company is looking to procure. It can include tangible goods like office equipment or raw materials and intangible goods like software licenses.

Regardless of what you need to procure, you should include all pertinent details — sizes, quantities, technical requirements, etc.

Make sure to also include a statement that justifies why you’re purchasing certain goods or services from external suppliers instead of sourcing internally. 

4. Define a Project Timeline

The next step is to set a project timeline. This is important because procuring goods before you actually need them will only take up valuable space.

An efficient procurement plan will include specific timeframes to minimize holding costs. This will also give your purchasing team deadlines for when they need to start and complete certain tasks.

5. Determine Project Constraints

Every project has constraints and limitations that it must abide by. Cost constraints are the most obvious example, as you may have a limited budget for purchasing goods and services.

Other types of project constraints include:

• Quality specifications
• Scheduling limitations
• Scope and deliverables
• Security requirements
• Industry regulations

Make sure that you detail any project constraints and limitations in your procurement plan.

6. Define Vendor Selection Criteria

In a typical procurement process, the purchasing department will issue a request for proposal (RFP) and vendors will respond with proposals or bids.

Then once the solicitation process begins, your team can collect proposals and evaluate each one. Defining vendor selection criteria can help you narrow down your choices.

Selection criteria can include:

• Costs: If a proposal doesn’t fit within your budget, you could either move on to the next one or enter into negotiations with the vendor.
• Delivery: If a vendor can’t deliver goods or services within your desired timeline, then look for one that can.
• Quality: Vendors must be able to meet certain quality standards before you can consider their proposals.

Establish selection criteria to find the right vendors. In this section, you should also specify who will make the final decision. You can also establish a small selection committee whose purpose is to evaluate and select vendors.

7. Select a Contract Type

Vendor contracts or vendor agreements are legally binding agreements in which both parties agree to exchange goods or services for compensation. 

However, there are different types of contracts that you can use. Common vendor contracts include:

• Fixed price contract: An agreement in which the buyer and seller agree to a fixed price regardless of other factors. 
• Fixed price plus incentive contract: An agreement in which you agree to pay a fixed price and an extra bonus if the seller delivers earlier than expected.
• Cost-reimbursable contract: An agreement in which a contractor receives a standard fee and reimbursements for any costs they incur on the job.
• Time and materials (T&M) contract: An agreement in which your company pays a contractor for their time and the materials used. These contracts are typically used in instances when you can’t estimate the size of a project upfront.

When preparing a procurement plan for any purchases, make sure that you select the right type of contract and get it signed.

8. Determine Payment Terms and Methods

This section of the procurement plan details the payment terms that you and a vendor have agreed upon.

It includes:

• Total costs
• Expected deliveries
• Payment methods

Some vendors may require advance payment, while others may offer more generous terms like net 30 or net 60. If you’re making stage payments over a period of time, make sure to specify exact payment dates to avoid any confusion.

9. Identify Potential Risks

There’s always a degree of risk when working with external suppliers. In this section of the procurement plan, identify any risks and outline specific strategies to mitigate them. 

For example, let’s say that a contractor fails to meet their deadlines. What impact would it have on your project timeline? In this case, you could either extend the deadline (and risk upsetting your customers) or hire an alternate contractor.

Follow the steps above to put together a procurement plan that you can use.

With procurement software like frevvo, you can automate business processes like purchase requisitions, purchase orders, invoicing, and more.

The software includes pre-built templates and drag-and-drop tools, so you can easily customize your forms and workflows — without writing a single line of code.

Of course, any forms that you create for your purchasing processes will typically have to go through multiple parties for approval.

With the no-code workflow builder, you can incorporate dynamic routing into your workflows and ensure that your forms reach the right approvers.

Here’s an example of an automated purchase order workflow :

Once an employee creates and submits a purchase order, the system automatically routes it to their manager for further review.

Your forms and workflows are mobile-friendly out of the box, so your purchasing managers will be able to approve documents like contracts either from the office or on the go from a mobile device.

Start Automating Your Procurement Processes Today

Procurement plays a critical role for any business. 

However, purchasing the goods and services that your company needs to operate is a complex process. Missing any key information can result in delayed projects.

Creating a procurement plan can help you manage the purchasing process, from outlining roles and responsibilities to establishing vendor selection criteria and more. 

It can also make your purchasing process more efficient. If a vendor goes bankrupt, you won’t have to start from scratch to find an alternate vendor. You can simply pull up a procurement plan you’ve already created to speed up the process.

Of course, creating a procurement plan is only one aspect of purchasing. There are numerous steps involved between issuing a request for proposal and making a payment. Performing these steps manually will only slow down your purchasing process.

Fortunately, automation tools like frevvo make it easy for you to automate your purchasing processes. You don’t need a large budget or a team of developers either. The software is fully visual, so you can create your own automated workflows without coding.

Ready to get started? Sign up for a free 30-day trial to try frevvo’s procurement automation software for yourself.

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Business Plan Template for Purchasing Departments

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Purchasing departments play a crucial role in the success of any business. But without a solid plan, it's easy to get lost in the world of procurement, cost management, and supplier relationships. That's where ClickUp's Business Plan Template for Purchasing Departments comes in!

With this template, you can:

• Strategically outline your department's goals, objectives, and strategies
• Streamline your procurement processes for maximum efficiency
• Effectively manage costs and optimize your budget
• Foster strong and productive relationships with suppliers
• Drive overall operational excellence within your department

Don't let your purchasing department run on autopilot. Take control with ClickUp's Business Plan Template and achieve procurement success like never before!

Business Plan Template for Purchasing Departments Benefits

A business plan template for purchasing departments can provide numerous benefits to businesses, including:

• Streamlining procurement processes and ensuring efficient purchasing practices
• Optimizing cost management strategies to maximize savings and minimize expenses
• Improving supplier relationship management for better collaboration and negotiation
• Enhancing overall operational excellence by aligning procurement goals with the overall business objectives
• Providing a strategic roadmap for the purchasing department to achieve long-term success
• Facilitating effective communication and alignment between different stakeholders involved in the procurement process
• Enabling better risk management and contingency planning for potential disruptions in the supply chain
• Enhancing transparency and accountability in purchasing decisions and processes
• Supporting data-driven decision-making through the collection and analysis of relevant procurement metrics
• Promoting continuous improvement in procurement practices through regular reviews and updates of the business plan.

Main Elements of Purchasing Departments Business Plan Template

ClickUp's Business Plan Template for Purchasing Departments is perfect for organizing and streamlining your procurement processes. Here are the main elements you'll find in this template:

• Custom Statuses: Track the progress of your purchasing department's tasks with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Save important information about your business plan such as Reference, Approved, and Section, making it easy to categorize and search for specific details.
• Custom Views: Access different views like Topics, Status, Timeline, Business Plan, and Getting Started Guide to visualize your purchasing department's goals, objectives, and strategies from various angles.
• Task Management: Utilize ClickUp's powerful task management features, including assignees, due dates, subtasks, and attachments, to keep your team aligned and efficient.
• Collaboration: Collaborate seamlessly with your team using @mentions, comments, and notifications, ensuring everyone is on the same page throughout the business planning process.

How To Use Business Plan Template for Purchasing Departments

If you work in a purchasing department and need to create a business plan, the Business Plan Template in ClickUp can help streamline the process. Follow these steps to effectively utilize the template and develop a comprehensive plan for your department:

1. Define your objectives and goals

Start by clearly defining the objectives and goals of your purchasing department. What do you aim to achieve? Are you looking to optimize procurement processes, reduce costs, or improve supplier relationships? Defining your goals will help you structure your business plan and set the right priorities.

Utilize Goals in ClickUp to set and track your department's objectives and align them with the overall company goals.

2. Assess current processes and identify areas for improvement

Take a close look at your current purchasing processes and identify any inefficiencies or areas for improvement. Are there any bottlenecks, redundancies, or manual tasks that can be automated? Analyze your data and metrics to gain insights into your department's performance and identify key areas where changes can be made.

Use the Gantt chart in ClickUp to visualize and analyze your processes, identify dependencies, and plan improvements.

3. Analyze supplier relationships and procurement strategies

Evaluate your current supplier relationships and procurement strategies. Are you getting the best value for your money? Are there opportunities to negotiate better terms or explore new suppliers? Analyzing your supplier relationships and procurement strategies will help you optimize costs and ensure a reliable supply chain.

Create tasks in ClickUp to assess and evaluate your supplier relationships, track negotiations, and document important information.

4. Develop a budget and financial forecast

Create a budget and financial forecast for your purchasing department. This will help you allocate resources effectively and ensure that your purchasing activities align with the overall financial goals of the organization. Consider factors such as procurement costs, inventory management, and potential cost savings through strategic sourcing.

Utilize the custom fields in ClickUp to track and manage your budget, expenses, and financial forecasts.

5. Implement and monitor your plan

Once your business plan is complete, it's time to put it into action. Assign responsibilities and tasks to your team members, and establish clear timelines and milestones. Regularly monitor and review the progress of your plan, making adjustments as needed to ensure that you stay on track towards achieving your goals.

Use Automations in ClickUp to streamline workflows, automate repetitive tasks, and keep everyone accountable.

By following these steps and utilizing the Business Plan Template in ClickUp, your purchasing department can develop a strategic and effective plan that aligns with the overall objectives of your organization.

Get Started with ClickUp’s Business Plan Template for Purchasing Departments

Purchasing departments can use this Business Plan Template for Purchasing Departments to strategically outline goals, objectives, and strategies for efficient procurement processes and supplier relationship management.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to streamline your purchasing processes:

• Use the Topics View to categorize different sections of your business plan, such as procurement strategies, cost management, and supplier relationship management
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• The Timeline View will give you a visual representation of your business plan, with start and end dates for each section
• The Business Plan View will provide a comprehensive overview of your entire plan, including goals, objectives, and strategies
• The Getting Started Guide View will help you navigate through the template and provide tips and best practices for creating an effective business plan
• Utilize the custom fields Reference, Approved, and Section to add additional information and categorize your plan
• Update statuses and custom fields as you make progress and receive approvals
• Monitor and analyze your plan to ensure alignment with your purchasing department's goals and objectives
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Top 10 Procurement Management Plan Samples with Templates and Examples

Taranjeet Singh

Can you run businesses without buying adequate resources? Can you operate a manufacturing company without buying equipment for it? The answer is simple: no. But why? Organizations need resources to run their operations, and when resources are not procured at the right time, it tends to create hindrances to business operations.

Therefore, efficient procurement management is vital for organizations striving to streamline operations, optimize costs, and enhance productivity. 

A well-defined Procurement Management Plan is a strategic roadmap that helps businesses through the complex process of sourcing, acquiring, and managing resources essential for their operations. At SlideTeam, we offer a comprehensive range of Procurement Management Plan Templates designed to assist businesses across diverse industries with the tools they need to excel in procurement management.

Enhance your IT business operations with our top templates for IT asset management .

The Importance of Procurement Management Plan in Business

Procurement management helps organizations procure goods and services in a cost-effective, timely, and quality-conscious manner. A robust plan allows businesses to mitigate risks, maintain transparency, and adhere to regulatory requirements. Organizations can enhance operational efficiency and drive sustainable growth by establishing clear guidelines for vendor selection, contract negotiation, and supplier management.

Turn ambitious goals into achievable roadmaps with our action plan management templates .

Achieve predictable project outcomes with our business project management templates .

Let’s begin!

Template 1: Project Procurement Management Plan PowerPoint Deck

Do you want to sort your project procurement process and look for a robust solution to enhance your procurement management strategy? We would like you to explore our PowerPoint Deck, which provides comprehensive slides designed to address these issues head-on. It consists of several slides, such as project procurement planning and management processes, vendor selection strategies, and procurement cycle management, which help you optimize your procurement workflows. Our PowerPoint deck lets you communicate your procurement plans and strategies transparently, from project procurement dashboards to detailed vendor management plans. Download our PowerPoint deck today.

Download Now!

Template 2: Project Procurement Planning and Management Process PowerPoint Theme

Businesses are always looking for solutions to streamline their project procurement planning and management process. They require a complete solution providing a roadmap for needs assessment, supplier selection, scheduling, control, and tracking. Explore our PowerPoint template, which offers a detailed overview of the entire procurement process, ensuring you can efficiently manage your project procurement from start to finish. This template allows you to optimize your procurement strategies, enhance supplier relationships, and achieve cost savings. Upgrade your procurement game by downloading our PPT template now!

Template 3: Project Procurement Planning and Management Cycle PowerPoint Preset

There are many complex challenges in the business with complex procurement processes. Sometimes, managing procurement cycles becomes challenging. What is the solution now? Our PowerPoint Template covers every aspect of the procurement cycle, from meticulous planning to formulating bidding documents, prequalification, bid evaluation, and setting timelines and schedules. With this PowerPoint template, you can efficiently manage your procurement projects, ensuring smooth operations and timely delivery. Say no to procurement complexities by downloading our PPT framework today!

Template 4: Project Procurement Management Plan Evaluation Components PowerPoint Theme

This dynamic PowerPoint theme will streamline your procurement process by showcasing quality, inventory management, delivery optimization, and cost-saving strategies. Our PowerPoint template will help you quickly go through the procurement challenges, presenting your plans with confidence and clarity. Furthermore, it will help achieve successful procurement with maximum efficiency and minimize risks. Conquer the procurement challenges by downloading our PowerPoint framework.

Template 5: Quarterly Procurement Management Plan Key Requirements PowerPoint Framework

Businesses need to align their procurement management plan with quarterly requirements, and to perform this step, they require a comprehensive solution to streamline their procurement process and ensure seamless operations. Our PowerPoint Template is a power-packed template featuring a detailed breakdown of item specifications, units of measure, quantity requirements for each quarter (Q1, Q2, Q3, Q4), and the total amount. It helps you to make informed decisions, optimize resource allocation, and leave your competitors behind by showing quarterly procurement needs, identifying cost-saving opportunities, and driving profitability. Download our PPT today!

Template 6: Project Procurement Risk Management Plan PowerPoint Theme

Several procurement risks need to be identified and managed in your projects. Therefore, our PowerPoint Template assists you through the challenges of procurement risk management. This template helps you with the essential inputs, tools, and techniques to identify, assess, and reduce procurement risks. You will witness a strategic approach that ensures your work stays on track and within budget. Additionally, you can proactively address potential risks and optimize your procurement processes. End all of your procurement risks by downloading our PPT framework today!

Template 7: Project Procurement Management Planning Chart PowerPoint Template

Show your organization's true potential and efficiency with our PowerPoint Template, designed to manage your procurement process. It provides a clear and concise overview of essential project details. Furthermore, this PowerPoint template shows significant project elements, including project name, updated by, scope, project justification, project manager, and date, in a structured format that enhances clarity and understanding. Additionally, a separate table efficiently captures key procurement details such as description, request date, requested by department, procurement techniques, action date, delivery date, and status. Make better decisions by downloading our PPT theme today!

Template 8: Procurement Management Plan PowerPoint Template

Our PowerPoint template is designed in such a way as to ensure efficiency and cost-effectiveness at every step. This template helps you drive the success of your procurement initiatives with strategic planning tools. It offers an overview of your procurement management plan, including detailed descriptions of key processes and timelines. It provides a clear roadmap for implementation, helping you stay on track and achieve your procurement goals. Download the PowerPoint PPT now!

Template 9: Procurement Value Management and Planning Report PowerPoint Template

This comprehensive PowerPoint theme helps you visualize critical data, including date, order quantity, supplier, mode, cost, dispatch quantity, and arrival, to make informed decisions that drive efficiency and savings. This PowerPoint template shows a transparent overview of your procurement pipeline, even if you manage procurement for a small team or a large enterprise. Furthermore, it assists your team to optimize procurement strategies and maximize value. Take control of your procurement process by downloading our PowerPoint theme today!

Template 10: Project Procurement Quality Management And Planning Dashboard PowerPoint Preset

Does your business undergo a complex procurement project with multiple suppliers and critical quality standards? Then, you need a solution ensuring meticulous quality management without compromising time or resources. Therefore, explore our PowerPoint Template, which provides a comprehensive dashboard displaying key performance indicators (KPIs) for quality, return rejection analysis, quality score tracking, and spend analysis. Show your procurement data with 100% transparency, enabling swift decision-making and proactive quality management. You can monitor and optimize your procurement processes, ensuring adherence to quality standards, reducing rejection rates, and maximizing cost-effectiveness. Download our PPT template today!

Manage Your Procurement Operations with Our PowerPoint Templates

Investing in our Procurement Management Plan Templates can significantly enhance your organization's procurement capabilities. Our PowerPoint templates allow you to sort your procurement processes, mitigate risks, and achieve more significant sourcing and vendor management efficiency. Furthermore, they offer a cost-effective and time-saving solution, allowing you to concentrate on primary business activities while ensuring that your procurement practices adhere to the highest standards. Ultimately, businesses that want to optimize their procurement operations and drive sustainable growth can use our templates.

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Procurement Management Plan Template [Free Download]

Editorial Team

Download this free Procurement Management Plan template and use it for your new project. Scroll down to the bottom of the page for the download link.

1          Introduction

The purpose of the Procurement Management Plan is to define the procurement requirements for the project and how it will be managed, from developing procurement documentation through contract closure.  The Procurement Management Plan should be in compliance with the State Central Procurement Office (CPO) rules and regulations.  The Procurement Management Plan should define the following:

• Procurement definition
• Market/Solution research to be conducted and results
• Type of contract – firm-fixed price, time and materials (T&M), cost-reimbursable
• Approach — custom development, custom off the self (COTS), software as service
• Identifying potential bidders
• Establish General Requirements and Detail Technical Requirements 
• Required deliverables
• Oral presentation requirements
• Software demonstrations requirements
• Evaluation criteria (weighting of requirements)
• Establishing contract deliverables and deadlines
• Cost methodology and statistics
• Estimated volumes from the current environment and technical infrastructure
• Service Level Agreements, Performance Bonds, Liquidated Damages
• Vendor Management/Oversight
• Performance metrics for procurement activities

This Procurement Management Plan sets the procurement framework for [Project Name].  It will serve as a guide for managing the procurements throughout the life of the project and will be updated as acquisition needs change.  This plan identifies and defines the items to be procured, the types of contracts to be used in support of this project, the contract approval process, and decision criteria.  The importance of coordinating procurement activities, establishing firm contract deliverables, and metrics in measuring procurement activities is also included.

2            Procurement Management Approach

The Procurement Management Plan should be defined enough to clearly identify the necessary steps and responsibilities for procurement from the beginning to the end of a project.  The Senior Project Director must ensure that the plan facilitates the successful completion of the project and does not become an overwhelming task in itself to manage.  The Senior Project Director will work with the project team , CPO, and other key players to manage the procurement activities.

The Senior Project Director will provide oversight and management in concert with appropriate agency procurement and management staff for all procurement activities under [Project Name].  The Senior Project Director will work with the project team to identify all items to be procured for the successful completion of the project.  The Senior Project Director will then review the procurement list with the Project Steering Committee (PSC) for approval.  The process involves determining whether to acquire outside support and, if so what to acquire, how to acquire it, how much is needed, and when to acquire it.

3          Procurement Definition

The purpose of procurement definition is to describe, in specific terms, what items will be procured and under what conditions.  Sometimes items which must be procured for a project can be developed internally by an organization.  Additionally, procurement deadlines are usually affected by the project schedule and are needed by certain times to ensure timely project completion.  This section is where these items must be listed, justified, and the conditions must be set. Any important technical information should also be included. Individuals may also be listed with authority to approve purchases.

The following procurement items and/or services have been determined to be essential for completion and success of [Project Name].  The following list of items/services, justification, and timeline are pending PSC review for submission to the CPO:

Table 1 Procurement items

In addition to the above list of procurement items, the following individuals are authorized to approve purchases for the project team:

                Name                                     Role

                John Smith                          Senior Project Director

                Jane Doe                              Lead Engineer

                Bob Jones                           Design Technician

4          Contract type

The purpose of this section is to describe the type of contract to be used so the Senior Project Director and project team can proceed accordingly.  There are many different types of contracts such as: firm-fixed price, time and materials (T&M), cost-reimbursable, and others.  Different procurement items may also require different contract types.   

All items and services to be procured for [Project Name] will be solicited under firm-fixed price contracts.  The project team will work with the Agency Fiscal Office and Procurement staff to define the item types, quantities, services and required delivery dates.  The Request for Proposal (RFP) Coordinator will then solicit bids from various vendors in order to procure the items within the required time frame and at a reasonable cost under the firm fixed price contract once the vendor is selected.

5          Procurement Approval Process

The purpose of this section is to define the process through which procurements and their resulting contracts must be approved.  It is important to define the process within the organization and understand who is involved in the decision-making.  Typically large purchases follow an established bidding process and follow a formal selection and approval process.  Smaller purchases can be less formal, and in some cases may be approved by the Agency.  This section should clearly identify the rules for all procurements within your organization.  Seek approval from the CPO regarding the latest procurement requirements.

The Senior Project Director along with Agency staff will meet with the CPO office to determine the type of procurement model that best meets the need of the project.  If necessary, a Request for Information (RFI) may be released as a first procurement step to gather information.  Based on the Vendor responses to the RFI, the CPO office and the Agency will determine the procurement process that must be followed, such as non-competitive contract request, competitive negotiation, alternative procurement, RFP cost only or RFP.  

The procurement documents must be submitted for OIR endorsement for all technology projects, the Department of Human Resources must approve training for State employees, and the CPO and Comptroller offices must provide the final approval. 

6          Decision Criteria

The purpose of this section is to define the criteria used by the CPO to decide on what contract(s) to award.  Again, these criteria may vary between organizations but must be defined as part of the Procurement Management Plan.

The criteria for the selection and award of procurement contracts under this project will be based on the following decision criteria:

• Comparison of outsourced cost versus in house sourcing
• Mandatory Requirements
• Vendor financial documentation
• General Qualifications & Experience (vendor and proposed staff)
• Past performance Technical Qualifications
• Ability of the vendor to provide all items by the required delivery date
• Software Demonstration and/or Oral Presentation
• System Infrastructure Impact

These criteria will be measured by the Agency Evaluators, Agency RFP Coordinator, and Subject Matter Experts (SME), and the Senior Project Director.  The final decision will be made based on these criteria as well as available resources.

7          Vendor Management

The purpose of this section is to describe the roles and actions the project team and purchasing and contracts department will take to ensure that the selected vendors provide all of the products/services agreed upon and that the appropriate levels of quality are maintained.

The Project Director is ultimately responsible for managing vendors.  In order to ensure the timely delivery and high quality of products from vendors, the Project Director or his/her designee will meet weekly with the purchasing and contracts department along with each vendor to discuss the progress for each procured item.  The purpose of these meetings is to review all documented specifications for each product as well as to review the quality test findings.  This forum will provide an opportunity to review each item’s development or the service provided in order to ensure it complies with the requirements established in the project specifications.  It also serves as an opportunity to ask questions or modify contracts or requirements ahead of time in order to prevent delays in delivery and schedule.  The Project Director will be responsible for scheduling this meeting on a weekly basis until all items are delivered and are determined to be acceptable.

Click  here  to download Procurement Management Plan template.

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Procurement Management Plan

Procurement, by definition, is the process of acquiring materials, suppliers, or services that a company or a project needs in order to successfully operate. In connection, a procurement strategy plan would refer to the systematic approach of cost-effectively purchasing the company’s required supplies, taking into consideration a variety of elements and factors such as the timeline for procurement, the funding and the budget, and the projected risks and opportunities. You may also see  management plan examples .

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Before you can develop an effective procurement strategy, it is important for you to first sit down and assess the details that you have to work with, such as the project’s objectives, the available and existing resources and supplies at your disposal, and the budget and project timeline. By assessing these elements, the team will be able to start planning for an effective procurement strategy plan that would be specially designed according to the goals of the project. You may also check out here  performance management plan examples .

Procurement Management Plan Example

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Procurement Management Plan Template

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The Procurement Management Plan

The purpose of a project procurement management plan is to successfully establish and maintain relationships with vendors of goods and services during the project life cycle, which is an essential part of every project management chain process. It is concerned with overseeing designated sets of temporary operations. Project management for procurement is usually divided into four major processes: planning, selection, administering, and closing procurements. You may also see  quality management plan examples .

The Planning Process

The first part of the process involves planning. Here is where the creation of the official procurement management plan will start. The decisions made will involve which items will be internally procured and which items will be externally outsourced. This information will heavily impact the project’s budget and financial scope.

Sample procurement documents will be prepared and criteria framework will be developed to create a selection of potential vendors who can answer to the project’s needs and the company’s expectations. This selection matrix will be based on the project’s scope, schedule, and requirements, while also taking into consideration risk factors and budgetary constraints. You may also check out here communication management plan examples .

The Selection Process

The selection process will involve comparing and contrasting the vendors among each other to understand the advantages, disadvantages, and contractual offerings of each one to see who should be chosen for the project. Standard tools and techniques are used to select procurements, such as video conferences with bidders that will allow for the understanding of the project requirements and for asking questions.

Procurement contracts are decided and awarded through collaborations between various managers. Resource calendars will then be created with details on when, where, and how the resources will be used and managed. The corresponding project management plan  will be adjusted according to resource calendar updates.

All of the proposals from the competing vendors will be carefully evaluated. However, if there are no satisfactory bids available, the procurement management team may feel the need to utilize online advertisements and other tools in order to solicit new bidders.

The Administration Process

The third major step, which is the administration process, refers to the tools and processes that will be used to manage the developing relationship with the vendors. The administration phase will result in the continued creation of procurement documents and spreadsheets that may help drive project changes.

A centralized system of contract change monitoring and control will be used to evaluate and determine whether potential changes to contracts are needed. There are formal physical inspections, internal audits, and reviews of procurement operations in order to generate synthesized performance reports that provide real-time feedback. The administration process is extremely important, which is why it’s usually managed through a supply chain or a project management process. You may also see change management plan with examples .

The Closing Process

The closing process will involve more than simply ending the procurement process by accepting proposals and signing contracts. It’s also about looking at weaknesses, documenting successful processes, and summarizing the project for future needs. Some companies even prefer to conduct simple audits using a performance matrix in order to grade the overall project.

Documentation is of utmost importance to be used for reference for future projects, which may already involve different teams in new locations. During the closing process, negotiations may be necessary to resolve contract disputes. Ideally, potential issues will be noted during the administration process in order to begin the mediation process early on. You may also check out here scope management plan examples .

When it comes to project procurement management, there are certain standards and functions. For example, most companies would prefer to use a smaller number of suppliers with long-term relationships instead of opting for a group of suppliers to outbid each other for the lowest price.

Establishing and nurturing relationships with suppliers is important because this can open opportunities for supply chain partners and shareholders to work closely together on improvement and coordination activities.

Procurement Management Plan Cover Page Example

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Procurement Management Plan Document Example

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Project Management Planning

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Four Steps in Designing a Procurement Management Plan

When you are working on a project, it’s not uncommon for you to need certain materials or services in order to successfully execute the tasks necessary for the project’s completion. But, of course, you can’t simply purchase resources as the need arises for them. There is a budget and a timeline you need to consider.

To make sure that you don’t spend too much project money just to purchase the materials you need, and to make sure that the project will be delivered on time, you will need to develop a plan for fulfilling those needs. Your best option is to use a systematic process for developing a procurement plan that can easily be transferred to a simple project management software. You may also see data management plan examples .

Step #1: Decide what to procure.

Often, the decision about which materials you need to procure is made for you. For example, you need a product or service in order to finish a job, and you simply do not have the assistance for it in-house. All you need to do is to identify the resources you lack and look for an outsource who can provide it for you.

But there will also be times when the decision doesn’t always come clear to you. Perhaps the necessary parts that you need can be produced in-house, but at increased cost; or maybe the service can be provided by your employers, but the key personnel who is perfect for the job is on vacation, or lacks the technical knowledge necessary to get the job done.

While designing your procurement management plan, you will have to look carefully at all of these issues and decide which items or services need to be procured from outside your organization. A good plan will require more than simply stating that you need what, and expecting it to be automatically purchased for you. You may also see debt management plan examples .

While making your list, consider the justification for the procurement, the expected cost, and the deadline, and incorporate all of that information into your plan. In addition, consider alternatives to the items you don’t have on hand. In certain cases, the plan can be adjusted or additional personnel or items can be utilized to eliminate the need for procurement or to lower the costs when making it.

Step #2: Choose your vendors.

Choosing your vendors is an important part of the procurement process. You don’t just want to pick the first supplier you find, you want to make sure that their products are quality-made and that they are cost-effective. Think of these materials and supplies as your investment. Naturally, you would want to put your money, not to mention your trust, where you can get something out of it in the long run. You may also see effective classroom management plan examples .

Many organizations choose vendors with whom they have an existing relationship with. A good experience with a supplier is a perfectly reasonable excuse for collaborating with them again. Sometimes, though, companies choose vendors who offer the lowest prices without actually making sure that the vendor meets the needs of their project.

Whatever your reason is for choosing your vendor, the most important thing is that it will help you achieve your end product. Once you have a comprehensive list of what needs to be procured, begin the vendor selection process. Although price and costs will always be a top concern, you also need to consider whether the vendor can deliver the product or service within the required time frame, whether they can give your quality, and whether their cost and reputation are in line with your needs.

In some cases, you may find that the vendor offering the lowest price can’t meet your deadline, or they may be offering a product that doesn’t meet your quality standards. Which is why you need to be smart in choosing. If you can’t get all that you are looking for from one vendor, make sure you arrive at a deal that will not hold you at a disadvantage, especially money-wise. You may also see behaviour management plan examples .

When you have selected a vendor, it’s important that the project manager, or his representative, stays in contact with the vendor and ensure that the product or service is on track for the agreed upon delivery date. It is a part of the procurement process for this responsibility to be assigned to someone trustworthy, who will also develop contingency plans should something go awry.

Step #3: Assign roles and responsibilities.

Beyond determining who will manage the relationship with vendors, it’s important to determine other team members’ roles and responsibilities within the procurement process. For example, one team member may be responsible for working with an outside contractor to manage the workflow or for researching potential vendors for a part or service that has never been procured before. The procurement plan must specifically outline these responsibilities, including deadlines. You may also see risk management plan examples .

Step #4: Layout contract requirements.

Once you have settled all the materials that you need and the people responsible for procuring them, the finals step is to lay out the contract requirements for the vendors. These requirements may be determined by the company’s policy, especially in terms of payment and invoicing.

In any case, the contract requirements section of the procurement plan should outline which contracts are to be used and any other important information required for managing the procurement process.

Developing a procurement plan early in the project management process is a vital step in ensuring that your project proceeds in a timely manner and that there will be no unpleasant surprises along the way. While no plan is entirely foolproof and accidents are bound to happen, taking steps to account for and address those circumstances ahead of time keeps everyone on the same page and increases the likelihood of a successful project. You may also see emergency management plan examples .

Project Management Planning Format

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Project Management Communication Plan Template

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Project Planning Management Checklist

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The Benefits of Effective Procurement Planning

Procurement planning is a process whereby procurement practitioners sketch out in advance an arrangement which diagram a plan as to what, which, when, and how purchases are to be conducted in a given period. This plan considers what is to be procured, which methods of procurement to be used based on regulated thresholds, and when and how the processing steps will be conducted. You may also see cost management plan examples .

Effective procurement planning is essential for all procuring entities in the implementation of the purchasing objective for the following reasons:

• An effective plan can help you save money.
• An effective plan serves as a conduit to achieving the company’s objectives.
• An effective plan ensures compliance with regulatory policies.
• An effective plan provides a framework to guide procurement officers in the achievement of their tasks and duties.

When procurement practitioners outline their procurement activities prior to the beginning of a fiscal year, this process provides an organized means whereby time and money are saved. This happens when timelines are followed in the procurement of contract packages and when patience is exercised in the use of the right procedures enshrined by law to ensure transparency and competitiveness.

Imagine conducting the process of procurement in a hasty manner disregarding the processing steps required and ended up with items that are undesirable, unreliable, nondurable, and costly. This would result in a massive loss of collateral, and probably even repurchase of similar items in the not so distant future to compensate for the low-quality items purchased already, thus consuming your precious time and resources. You may also see waste management plan examples .

An entity’s procurement objectives are achieved when an effective procurement plan is utilized. Each contract package procured has a direct or indirect effect on the general aims and objectives of the procuring entity. With this in mind, when a procurement plan is being prepared, practitioners must consider the impact that these purchases will have on the users of these goods, works, and services.

Project Management Plan

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Procurement Management Plan Approach

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Procurement Management Plan Template Sample

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The procurement cycle begins with the identification of a need and ends with the award of a contract. A clearer understanding is gained once the goal of procurement is understood.

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How to do a MoSCoW Analysis and prioritise requirements in a complex environment?

How to do a MoSCoW Analysis and prioritise requirements effectively in a complex environment?

As a Business Analyst, the question of how to prioritise requirements may seem like an easy question to answer but it can also be wrought with a variety of complications and interesting complexities. Once you have overcome these potential complexities which can come with requirements prioritisation, the most relevant Business Analysis technique to apply is what is known as the MoSCoW Analysis.

This blog article will cover both how to apply the MoSCoW Analysis for requirements prioritisation as well as the considerations and complexities for a Business Analyst to understand about their environment before attempting to prioritise requirements.

So let’s start by talking about some of these complexities that can face a Business Analyst when it comes to requirements prioritisation.

#1: Different perspectives on what is important

#2: Lack of leadership

This factor walks hand in hand with the previous factor (and is most likely the cause of it!) where people have different perspectives on what takes priority. A lack of leadership in the project or initiative team causes confusion around what is important and this is when people will end up providing their own perspective around priorities rather than following business priorities or guidelines. This causes problems in various ways and can put the Business Analyst in a very awkward position. Sometimes this lack of leadership can mean that a stronger or more senior stakeholder might get the requirements prioritised according to his/her team’s preferences due to his/her position and level of influence in the organisation rather than it being the true priorities for the good of the organisation. This leads to requirement priorities which is not necessarily being implemented in the most valuable or efficient manner and consequently reflects badly on the project as a whole.

It is imperative for a Business Analyst to receive clear direction from their project manager or project steering committee about what are the clear business objectives (with their relative priorities outlined) that requirements must deliver against so that the Business Analyst can use these business objective priorities to guide the conversations when requirement prioritisation activities take place.

#3: Not prioritising requirements

In some organisations or projects there is simply no formal and explicit effort undertaken to prioritise requirements at all. This doesn’t mean requirements are not in some sort of priority, it simply means that the requirements are not prioritised in a structured and collaborative way. This type of approach can cause problems when expectations are not managed about what will be delivered by when but it can also be that prioritising the requirements are very clear cut in a particular type of project and hence this informal way works in those circumstances. So although the Business Analyst must be very careful when choosing to not formally go through a requirements prioritisation activity, it can be the most logical and suitable approach for certain types of projects.

#4: Priority levels are not well defined

The last complexity or consideration for the Business Analyst to pay careful attention to before embarking on requirements prioritisation activities are simply the definition of the priority levels and what each priority means. Many organisations have adopted a method or set of priority levels which they are used to using without it necessarily being the most effective way to prioritise.

So now that we have discussed some of the common complexities in projects and organisations that make requirements prioritisation somewhat tricky for the Business Analyst lets now look at the MoSCoW Analysis technique and how best it can be applied.

The MoSCoW Analysis Technique

The MoSCoW Analysis is a very common and effective requirements prioritisation technique because it allows not only for three clear priority levels but also covers the requirements that will end up not being included in the currently delivery or project at all. This works very well because it allows people to explicitly agree the different priorities including the requirements, which will be excluded or referred to a future release.

Let’s have a look at how this prioritization technique works:

MoSCoW is an acronym.

M = Must ‘Must’ level requirements are those requirements which will definitely be included to be delivered. There is no negotiation around whether they will be delivered and are considered mandatory requirements.

S = Should ‘Should’ level requirements are those requirements which should be included if at all possible. If the project have capacity and time and it will not jeopardise any of the “Must” requirements, then these requirements should be delivered or included in whatever the prioritisation is done for.

C = Could The ‘Could’ level requirements are the requirements which could be included if it doesn’t have any impact on any of the ‘Should’ or ‘Must’ requirements.

W = Won’t The ‘Won’t’ level requirements tend to be the requirements which will not be included to be delivered or implemented this time but are requirements that would be favoured for a future delivery or implementation.

In Conclusion

As a final point to make, it is important that although the Business Analyst uses a best practice requirements technique , the outlined complexities listed here should be addressed as much as possible prior to embarking on a requirements prioritization activity to ensure a successful and accurate outcome.

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Moscow International Business Centre (MIBC)

The Moscow International Business Centre (MIBC) is an ambitious engineering project in the centre of Moscow. The site is

Estimated Investment

$12 billion

Construction Started

Moscow, Russia

Project Type

Business complex (city within a city)

CITY JSC, Moscow City Government

The Moscow International Business Centre (MIBC) is an ambitious engineering project in the centre of Moscow. The site is on an old urban area near the river embankment. The goal of the project is to create a new business district within the city.

The whole complex is to be built on a 100ha site (divided into 30 plots) designated for new development on the Krasnopresnenskaya embankment. The management company for the project is CITY Joint Stock Company (CITY JSC), a company first set up in 1992 as a collaboration between the Russian government and private investors.

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The project was first launched in the early 1990s but has been stalled for much of the last 10 years due to a lack of investment. In 2003 the project started to attract investment again and has been gaining momentum ever since.

PLOT 1: BAGRATION BRIDGE AND TOWER 2000 OFFICE COMPLEX

The first major building constructed in the MIBC project on Plot 1 was the Bagration Bridge (pedestrian bridge) and mall, completed in 1999. The second project was the Tower 2000 office complex, a multi-use business complex begun in 1996 and completed in 2001. The building is 106m high and has 30 storeys above ground and four storeys below. The total floor area of the complex is 60,000m².

The underground area contains parking garages, restaurants, retail areas and a fitness centre. Floors 3–15 and 17–26 are business offices while floors 8 and 27 have a media centre, large exhibition hall and piano bar.

The business areas are served by structured cable network, fibre optic cable, satellite broadcasting, Wi Fi and ADSL Internet access, automatic digital telephone exchange with integration of services, local broadcasting system, municipal broadcasting network, electric timing system, data collection and processing system, audio and video systems, simultaneous interpreting system, conference system, video projection system and security systems including biometric access control and a monitoring system.

The tower also has a central air conditioning system, auxiliary exhaust ventilation system, cooler and heat supply systems, Uninterruptible Power Supply system (UPS), automatic fire security system, automatic volumetric fire-fighting system, sprinkler system and automatic smoke removal system.

The general contractor for the tower was Promstroytechnologia-M Company Ltd. The facade of the tower, which is made of glass and structured concrete, was constructed by Transwall Technology. The tower is equipped with 17 computerised rapid elevators, supplied and installed by Schindler Aufzuege AG, and an outer panoramic elevator, supplied and installed by Kone Lifts. The exterior lighting equipment was supplied and installed by Thorn.

PLOTS 2 AND 3: MOSCOW WEDDING PALACE AND CITY SQUARE

The sites designated by plots 2 and 3 are now to be developed as the Moscow Wedding Palace and City Square. This will include a city square, an underground retail complex and a 14 storey multipurpose complex, which will include the Wedding Palace, banquet halls, restaurants, shops and a hotel.

The developer is Capital City Developments. The architect is Mosproject – 2. The construction started in 2005 and is scheduled to be complete by the end of 2007.

PLOT 4: AQUAPARK

The Aquapark leisure complex was started in 2002 and was completed in 2005. The site occupies a 1.74ha area adjacent to Krasnopresnenskaya embankment. It includes:

• Complex of swimming pools, water mountains and leisure attractions, restaurants and cafes and retail areas (24,352m²)
• Five-star, 30-storey hotel complex (54,640m²) built on a six-storey podium containing retail areas, restaurants and nightclubs
• Parking to accommodate 425 vehicles (13,050m²)
• The aqua park will be connected with a mooring on the Moscva River

The developer of the complex was Aqua-City Palas Company Ltd. The project required an estimated investment of $230 million. The general contractor was Liard Stroy Ltd and the designers were Mosproekt-2 of Russia and Tkhomesto Engineering of Finland.

PLOTS 6, 7 AND 8: UNDERGROUND MALL AND METRO STATIONS

A large underground complex containing the central core of the MIBC, an underground mall and two metro stations is located on these plots. Construction started in late 2001 on the 5.1ha site and was completed in mid-2004. The complex has a total floor area of 150,000m² and includes:

• 35,000m² shopping mall
• 20,000m² multi-purpose performance complex
• 10,000m² dancing complex
• 15,500m² sports and leisure complex
• 30,000m² ‘Wonderful World of Entertainment’ theme park
• 7,000m² restaurant complex
• 30,000m² hotel

The complex developer was CITY JSC and the designers were Mosproekt-2. The construction engineers were Bovis Europe and Jones Lang Lassale of the UK.

PLOT 9: CAPITAL CITY PROJECT

This project involves the construction of two connected tower blocks and a dome. The towers will be of 73 and 62 storeys high, with a 16-storey domed building containing an atrium. Connecting the buildings will be a podium building with three storeys above ground and 4–6 below ground.

The lower levels of each tower will be for office space (200,000m²), while the upper levels (above 80m) will be residential and the dome will be used as a retail area. The investment for the project is $250 million.

The developer is Capital Group; the construction engineers are Bouygues Construction and the architects are Erick van Egeraat Associated Architects of Holland. Construction has been underway since 2005 and the project is scheduled for completion in mid-2007.

PLOT 10: NABEREZHNAYA TOWER

This project involves the construction of a new office and apartment complex consisting of three A-Class buildings 16 (86m), 27 (135m) and 52 (250m) storeys high, with a total floor area of 220,000m². The construction began in mid-2003 on the 2.55ha site with the smallest of the three buildings.

The first building was completed in autumn 2004. Enka, a Turkish construction company , is carrying out the development and construction. Enka has invested a total of $150 million so far. Work is continuing on the other two buildings with completion expected in 2007.

PLOTS 11 AND 12: MIXED-USE TOWER BLOCK

The major project on these plots will be a 300m, 75-storey, mixed-use tower block with over 204,000m² of floor space. The facilities will include commercial and government offices, residential areas, retail space, leisure and health centres and a four-star hotel.

Offices will occupy the floors 4–45, while apartments are on floors 48–66. The building was designed as a two-tier skyscraper, 30 floors in the first tier and 37 in the second one. The second floor of the building will be occupied by a casino. The 47th floor will be occupied by a gymnasium.

The designers for the project are Swanke Hayden Connell Architects and the investors are Techinvest, who are investing $270 million. The contractors for the construction are Summa, a Turkish development company. Groundwork was carried out by Kaskatas. Construction on the building started in the third quarter of 2004 with completion scheduled for late 2006.

PLOT 13: FEDERATION OFFICE COMPLEX

The Federatsiya (Federation) office complex is to consist of two towers, one 57 storeys high and the other 87 storeys (345m), and a podium. The 87-storey tower will hold offices and the 57-storey tower will include residential apartments and a hotel. The total floor area of the complex will be 240,000m².

The podium will have three to five levels and 30,000m² of floor space and will contain retail areas, banking facilities, cafes, restaurants and leisure facilities. The complex will have 14 lifts built between the two towers, including four ‘Shuttle’ round-observation lifts.

Stroimontage and NIKoil Financial Group will invest more than $500 million in the project. The architects for the project are P Schweger, S Tchoban and A Asadov of Germany. Stroimontage is the general contractor for the project. Construction started in April 2004 and the complex is scheduled for completion by 2008.

PLOT 15: CITY HALL AND DUMAS

Plots 2 and 3 are owned by the Moscow City Government and original plans were for the new City Hall and Dumas (Parliament) buildings to be located there. However, these buildings will now occupy Plot 15.

The construction on Plot 15 consists of four 70-storey interconnected 308.4m buildings. The project started in November 2005 and will be finished by the end of 2007.

It is expected that all government administration will be accumulated in the new complex to provide better organisation, allowing the buildings currently in use to be sold.

The four skyscrapers will be connected by several two storey bridges between towers and eight storey bridges at the top. The highest bridges will be built in shape of letter ‘M’ for ‘Moscow’.

PLOT 16: RUSSIA TOWER

Plans for a 600m-tall tower to be built in Moscow to designs by British architect Sir Norman Foster were released in March 2006. ST Towers is the developer behind the project and is part of the ST Group.

The Russia Tower will be more than 50% higher than the Empire State Building and is to be built within the Moskva-City development on Plot 16 near the site’s border with the Third Ring Road. It will overshadow the 430m Federation Tower under construction at Moskva-City, which developers say will be the tallest building in Europe when it is completed in 2008.

The 420,000m² tower is a striking design comprising three blade-like structures arranged in a trefoil-like plan around a central core and tapering sharply toward the top, with part of the steel structure exposed on the outside like an exoskeleton.

Described by the architect as a vertical city, the tower is to house parking and retail space on nine underground levels, a public ice rink on the first floor under a spacious, pyramidal atrium, a hotel with serviced apartments above, 24 floors of office, high-end apartments on the top levels and a public observation deck at the very top. The resident population of the tower could be 25,000.

The Russia Tower is billed as an environmentally friendly project, maximizing natural ventilation and lighting, with solar cells, the collection of rainwater and snow to reduce water demand and the recycling of energy between areas with varying levels of demand. In addition, atria several floors high are to be spaced throughout the building’s central core and decorated with plants, providing the luxury apartments on the upper floors with private gardens in the sky.

The construction of the tower is expected to cost about $1.5 billion; of this about $150 million to $200 million would be supplied by ST Towers. Plans for the tower have been approved and it should be finished by about 2010. Construction has not yet started.

PLOT 17 AND 18: MULTI-PURPOSE OFFICE-HOTEL COMPLEX

The multipurpose complex will include two towers (80 and 78 floors), with a common underground space for parking. The high tower will contain office premises and the second tower will be a hotel.

The complex will also contain a roof-top restaurant with a panoramic view, cafes and bars, conference halls and billiard club. The architect is Skidmore, Owinds, and Merrill LLP. No dates have yet been announced.

PLOT 19: NORTHERN TOWERS

An office complex is being developed on this plot by ZAO Severnaya Bashnya. The Northern Towers will consist of three buildings – two 12-storey and one 29-storey. These will contain 135,000m² of floor space.

The architect is Project Institute 2 and the construction engineer is Bau Holding Strabag AG (Austria). Interior design in the building will be carried out by ABD Limited, and legal services with regard to lease documents are provided by PricewaterhouseCoopers.

The first phase of Northern Tower is scheduled for shell and core delivery by the fourth quarter of 2006. The marketing and leasing campaign has already started. Raiffeisenbank has agreed to become the first tenant of the complex.

Northern Tower will feature spectacular atriums, prime office premises and a multi-level parking for 688 cars. There will also be a multi-functional conference hall for up to 200 people, banking premises, restaurants and cafes, a fitness centre with a swimming pool operated by Reebok, a professional dental clinic and a beauty parlour.

POWER PLANT CONSTRUCTION

The power supply for the new MIBC has been a subject of much contention among foreign investors. The complex requires an efficient power distribution system operating at 20kV rather than the more typical 10kV.

CITY JSC and power supplier Mosenergo JSC put forward a proposal in 1999 to the Moscow City Government to develop a new power network for the MIBC, mini-metro, metro junction core, Eurostation and Sheremetyevo-Moscow Rapid Transit System.

The power and heat supply for the MIBC will be provided from three sources: the Mosenergo power station ‘SS-CITY-1’; the district heat and power station ‘Krasnya Prsnya’; and the MIBC power plant on Plot 7A, which entered its first phase of construction in 2002–2003 and is now well into its second phase with completion expected in 2006.

Having established the power supply sources, the next part of the project was the bulk power and distribution network to support the MIBC. Phase 1 of the MIBC power plant has seen the construction of a Gas Turbine Unit (GTU) and Heat and Power Plant (HPP) with a capacity of 50MW and a substation with two transformers for 110V from 20kV and 110V from 10kV and two 63MVA distribution units. The next phase will see an increase of capacity up to 100MW.

The developers of the power plant are CITY JSC and CITY-ENERGO Company Ltd. The contractors for the project are Liard-Stroy Ltd and the designers of the plant were Mosproekt-2 and VNIPI Energoprom.

TRANSPORTATION CONSTRUCTION

The Moscow–Sheremetyevo line is the first phase of the RTS to connect the three satellite airports to the centre of Moscow. This first line, 34.3km in length, will provide interconnectivity between the airport, regional centres and urban junctions and also interconnect with the existing municipal transport system. The project was started in 2001 and eight stations were planned. This stage is now complete.

The developer for the RTS is CITY JSC in collaboration with the City of Moscow; the designer is SNC Lavalin of Canada. The Phase 2 section of the project to extend the line to cover Vnukovo Airport was started in 2004 and is now nearing completion (scheduled to open in 2007).

The RTS development not only concerns rail links to the new commerical centre of Moscow but it is also a development in its own right. The Plot 11 development will include the construction of the new Moscow transport terminal uniting the RTS, three lines of the underground and the intercity bus terminal.

The complex will include transport stations with waiting rooms, boarding areas for VIPs, a hall of customs inspection, left-luggage offices, a 342 room hotel and ticket offices.

For this section of the development Citer Invest B.V. of the Netherlands is the developer, Behnish and Behnish Architekten of Germany are the architects. The investment is $200 million and construction is underway with an expected completion in 2007.

MINI-METRO LINE

A mini-metro line was also constructed to provide transportation within the MIBC and to connect with the historical centre of Moscow. There are three stations, one constructed in Phase 1 of the project and two in Phase 2. The three stations are Dorogomilovskaya, International and Moscow – City.

The length of the line is 5.85km. The engineering and transport contractors were Metrogiprotrans JSC. The line along with the International and Moscow – City stations came into operation in September 2005.

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