For those responsible for monitoring, evaluating, and reporting the status of the cost of a capital construction project, there will be several business processes that need to be managed. Those are the processes for a cost estimate, budget, budget adjustments and transfers, contracts, potential contract changes, contract change orders, interim payment certificates, miscellaneous invoices, journal entries, actual payments made against invoices, funding sources, funding requests, and funding authorizations. In addition, for projects that the revenue for work in place to be managed, there is a need to manage the business processes for revenue or income contracts, change orders, payment requisitions and actual payments received.
Nevertheless, one of the common practices on all capital construction projects is outsourcing part of or the complete project’s scope of work to third parties to reduce the project’s risk exposure. Therefore, a project owner will usually outsource the project’s scope of work to a design consultant, supervision consultant, project management consultant, contractors, and suppliers. On the other hand, if the project’s cost was managed from a contractor’s perspective, then the contractor will usually outsource part of the project’s scope of work to subcontractors, suppliers, and others.
Therefore, to complete the cost management reporting requirements, the business processes needed to outsource the project’s scope of work needs also to be monitored, evaluated, and reported on. Those will be the processes for defining the bid packages, bidding, bidding evaluation, and award. Of course, there are other business processes needed for procurement management like the prequalification of bidders and managing the bidding process but those although will be managed on the same PMWeb PMIS platform but will not be covered in this article.
For Project Stakeholders who have the requirement to monitor, evaluate and report on procurement management business processes, their top priority is how to have a trust-worthy real-time single version of the truth reports that fulfill this need without the need to wait for months to get what is needed. They need to be able to have this information as reports that they can review, comment, share, and report on.
The same PMWeb Project Management Information System (PMIS) solution used for managing the project’s budget, commitment contracts, revenue contracts, and cost estimates will be also used to ensure that the procurement management data to be reported on is trustworthy and comprehensive. This will be achieved by automating the procurement management process needed to manage a capital construction project by defining the input form and submitting, reviewing, and approving workflow for each process.
Those processes can be attached with all relevant supporting documents as well as linked with relevant records of other project management processes. The automation of procurement management processes will enforce the best practices of transparency and accountability that each project entity seeks to have.
This will also enable using PMWeb to immediately fulfill the procurement management monitoring, evaluating, and reporting requirements of the projects’ stakeholders. Using the PMWeb ready-to-use procurement management processes and the out-of-the-box stock of forms, reports, and dashboards, the needed reporting will become immediately available. Of course, those forms, reports, and dashboards can be fully customized and altered to fulfill any formatting or branding requirements when needed.
The first reporting requirement for procurement management would be to have a single version of the truth of the pre-bid packages that will be outsourced to third-party entities. Those pre-bid packages will be automatically generated from the approved cost estimate by grouping cost estimate line items with the bid package identification tagged to them. The form will include the bid package name and description, bid due date and time, contract type, list of bidders to be invited, line items for the bidders to quote, and other needed details.
The project stakeholder can have a report that will provide a list of all pre-bid packages to be released for tender. The list will include the project name, bid package description, status, type of contract, due bid date, and due bid time.
The pre-bid business process is optional as the company might elect to skip this business process and instead use the procurement business process directly. The procurement business process will be used to manage all outsourced scope of work, whether they were at the pre-bid, bidding, or bid award stage.
The report will group all bid packages by the project they are part of the bid package, the report will detail the project name, bid package description, bid category, cost estimate reference, due bid date and due bid time, workflow status, revision number, and revision date.
The PMWeb Items History report reader can drill down from this report, to have more details on each procured or yet to be procured bid package. For each procurement bid package, the form will detail the bid package name and description, bid due date and time, contract type, and list of bidders to be invited or invited and participated in the bid. Nevertheless, what is more, important in this form is that it shows the line items of the bid package which were extracted from the cost estimate along with the approved cost estimate amount and the quoted prices by each bidder. The form will also identify the bidder who has been awarded the contract.
PMWeb also allows to reader to drill down to the bid submission made by each bidder using the PMWeb online bid business process. The online bidding form will detail the quoted prices by the bidder and the details of the technical and commercial scoring for the submitted bid proposal along with all made notes. The form will also include details of the review and approval workflow tasks assigned to the online bidding business process.
Of course, there is also the option of having a report of all submitted online bids for all bid packages for the complete projects’ portfolio that the organization has. The report will detail for each project the procurement bid package, bid package category, cost estimate reference, bidder name and contact, bid due date and time, bid expiry date, and status.
All PMWeb out-of-the-box forms and reports can be saved in an MS Excel file in addition to other types of file types. This will enable the user to take advantage of the data saved in MS Excel by doing his/her analysis and reporting using business intelligence tools like MS Power BI. Of course, there is the option of reading PMWeb contracts procurement data from the PMWeb database if this is a requirement.
For example, a report can be created to analyze the bids submitted by the different companies invited to bid with the approved cost estimate. Another report could have also been created for the technical evaluation of the submitted bid proposals for which the data will be captured in the scoring table which is part of each online bid.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with 40-year service record providing project management, project controls services, and project management information systems to over 200 projects with a total value over the US $100 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment, Hospitality, and Shopping Malls, Oil and Gas Plants and Refineries, Telecommunication, and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training, and business development.
Bassam is a frequent speaker on topics relating to Project Management, Strategic Project Management, and Project Management Personal Skills. Over the past 40 years, he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe, and South America. He has written more than 300 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP), and Earned Value Professional (EVP) from the Association for the Advancement of Cost Engineering (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA, and London Business School, London, UK.