This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
To overcome institutional inertia and enable strategic procurement, public institutions need to leverage the principles of project management at both the institutional and project levels. At the institutional level, public institutions need to execute a rapid action plan for embedding strategic procurement within their institutional business processes. In turn, these business processes need to enable strategic execution at the project level by leveraging project management principles in the designing and drafting of solicitation documents, in the bid evaluation process, and in the negotiation of contract awards.
Embedding a Project Management Culture
The end objective of an institutional procurement overhaul should be to rebuild purchasing business processes and embed a culture of project management in the front-end stages of the procurement process. From design-planning, through bid evaluations, to contract award negotiations, project management principles need to be deployed in a procurement-centric manner. As stated in the fifth edition of the Project Management Institute’s A Guide to the Project Management Body of Knowledge (known as the PMBOK Guide), project governance plays a key role in project success. The PMBOK Guide notes that “the alignment of projects with stakeholders’ needs or objectives…is critical to the successful management of stakeholder engagement and the achievement of organizational objectives”, and that project governance “enables organizations to consistently manage projects and maximize the value of project outcomes and align the projects with business strategy”. This in turn, “provides a framework in which the project manager and sponsors can make decisions that satisfy both stakeholder needs and expectations and organizational strategic objectives.” These principles need to be applied to the strategic design-planning discussions for a procurement project. Procurement departments need to be embedded within that process to apply project management discipline to the design and drafting of a solicitation document and to then carry forward those disciplines into the subsequent bid evaluation and contract award stages.
Empowering Project Managers
The PMBOK Guide also states that project governance “is an oversight function that is aligned with the organization’s governance model and that encompasses the project life cycle”. This provides the project with “structure, processes, decision-making models and tools for managing the project, while supporting and controlling the project for successful delivery.” The PMBOK Guide also stresses that “project governance is a critical element of any project, especially on complex and risky projects.” As the PMBOK Guide notes, the “structure and characteristics of a project team can vary widely, but one constant is the project manger’s role as the leader of the team, regardless of what authority the project manager may have over its members”. In fact, the front-end of procurement projects, from design-planning, through evaluations to contract award, should be divided into separate sub-projects and each sub-project should have a specific project manager who organizes that stage of the process.
The PMBOK Guide also stresses the importance of managing team resources and maintaining a scheduled management plan. This can become an acute issue in keeping projects on a critical path. The PMBOK Guide notes the importance of time management in project execution, stating that the critical-path method of planning “is used to estimate the minimum project duration and determine the amount of scheduling flexibility” available to the project team, noting that the “the scheduling flexibility is measured by the amount of time that a scheduled activity can be delayed or extended from its early start date without delaying the project finish date or violating a schedule constraint.” This scheduling flexibility is referred to as the “total float”, meaning the amount of time that is in reserve for delays before overshooting the end-date goal. The amount of time in the scheduling bank is referred to as the “free float”, since time is money and project teams cannot spend what they do not have without going into the red and overshooting their end-date. Project managers need to carefully plan their projects at the front-end of the procurement process to build in enough total float time to allow for unforeseen delays, while also carefully managing their critical path so that they manage their time wisely to preserve their free float.
The PMBOK Guide highlights the importance of project scheduling in co-ordinating the activities along the critical path, identifying the project team members required to perform those activities, and planning for external factors that may pose as obstacles on the critical path. The PMBOK Guide also recognizes the increasing use of virtual teams, noting that “the use of virtual teams creates new possibilities when acquiring project team members.” As the PMBOK Guide states, virtual teams are “defined as groups of people with a shared goal who fulfill their roles with little or no time spent meeting face to face”, and that the “availability of communication technology such as e-mail, audio conference, social media, web-based meetings and video conferencing has made virtual teams feasible.” This means that project managers in the front-end of the procurement process have an expanding series of tools available for enabling strategic execution. The first task should be putting those tools to use in executing a rapid action plan for integrating strategic procurement into their institutional practices. Once this is done, they can then leverage project management discipline to enable strategic execution at the project level.
