Procurement Mgmt

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KaurP
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Posts: 94
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Procurement Mgmt

Postby KaurP Mon Aug 13, 2018 6:31 am

Six months after you formally closed an office relocation project, you receive a phone
call from a collection agency indicating that your company refuses to pay the invoices
of one of the vendors. What would be the best course of action for you to take?

A. Revisit the Close Procurements process of the project in question
B. Refer the collection agency to the accounts payable department
C. Forward the phone call to your company’s legal department
D. Refer to Close Project or phase process of the project in question
E. Inform the collection agency that as contract has been officially closed you cannot interfere anymore.

There can be some unsettled or disputed claims which may continue even after closing Procurements in Control Procurement process (PMBOK6). In Close project or phase-

Confirming the formal acceptance of the seller’s work,
Finalizing open claims,
Updating records to reflect final results, and
Archiving such information for future use.

CLOSED PROCUREMENTS
The buyer, usually through its authorized procurement administrator, provides the seller with formal written notice that the contract has been completed.Typically, all deliverables should have been provided on time and meet technical and quality requirements, there should be no outstanding claims or invoices, and all final payments should have been made. The project management team should have approved all deliverables prior to closure.

Please explain PM's role in such a case where claims may still remain open even after formally closing a procurement, followed by close project or phase
and how he should proceed in this case.

Thanks!
manishpn
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Joined: Sat Jan 04, 2014 3:55 pm

Re: Procurement Mgmt

Postby manishpn Mon Aug 13, 2018 10:17 am

KaurP wrote:Six months after you formally closed an office relocation project, you receive a phone
call from a collection agency indicating that your company refuses to pay the invoices
of one of the vendors. What would be the best course of action for you to take?

A. Revisit the Close Procurements process of the project in question
B. Refer the collection agency to the accounts payable department
C. Forward the phone call to your company’s legal department
D. Refer to Close Project or phase process of the project in question
E. Inform the collection agency that as contract has been officially closed you cannot interfere anymore.

There can be some unsettled or disputed claims which may continue even after closing Procurements in Control Procurement process (PMBOK6). In Close project or phase-

Confirming the formal acceptance of the seller’s work,
Finalizing open claims,
Updating records to reflect final results, and
Archiving such information for future use.

CLOSED PROCUREMENTS
The buyer, usually through its authorized procurement administrator, provides the seller with formal written notice that the contract has been completed.Typically, all deliverables should have been provided on time and meet technical and quality requirements, there should be no outstanding claims or invoices, and all final payments should have been made. The project management team should have approved all deliverables prior to closure.

Please explain PM's role in such a case where claims may still remain open even after formally closing a procurement, followed by close project or phase
and how he should proceed in this case.

Thanks!


There is no prescribed sequence of actions in such case, Idealy no claim should be open before project is formally closed. if PM knows of any outstanding invoice or any invoice that might come in future (some times invoice is linked to business benefit achieved etc, and project cant be kept open for so long, PM has to inform right stakeholders and agree with vendor on who will pay invoice in future)
in the question that you have posted, the first step for PM should be to verify if claim is proper or not, You dont need to revisit the process but can refer to the closure as first step to understand if there was any oversight or lapse, if the claim in genuine it has to be paid, if not the Legal department has to be involved.
So i will go with option D as best first choice.
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
KaurP
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Posts: 94
Joined: Wed Apr 04, 2018 4:08 am

Re: Procurement Mgmt

Postby KaurP Tue Aug 14, 2018 5:23 am

Hi Manish,

Can you please help me choose the right answer to this question-

Deliverables have been verified and accepted by the customer and now sponsor has asked the Project Manager to close the project. Project manager needs to ensure all the procurements are closed before he can start closing a project. Which statement best describe the difference between a Procurement closure and a overall Project closure?

A. Financial closure of Procurement is done in Control Procurement process and Administrative closure in Close Project process however for overall Project, financial and administrative closure happens in Close Project process itself.
B. Financial closure and administrative closure for procurements take place in Control Procurement process itself however for overall Project, financial closure and administrative closure take place in Close Project or phase process.
C. Financial closure and administrative closure for procurements take place in Control Procurement process itself however for overall project, administrative closure happens throughout the project lifecycle and financial closure in Close Project or phase process.

D. Financial closure and administrative closure for procurements are part of Control Procurement process. The final procurement documents become an input to Close Project or Phase for overall Project financial as well as administrative closure.

Thanks!

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