Procurement Documents (bid documents)
The documents put together by the buyer to tell the seller its needs. Procurement documents may take one of the following forms:
- Request for Proposal (RFP, sometimes called Request for Tender) Requests a price, but also a detailed proposal on how the work will be accomplished, who will do it, resumes, company experience, etc.
- Invitation for Bid (IFB, or Request for Bid, RFB) Requests one price to do all the work
- Request for Quotation (RFQ) Requests a price quote per item, hour or foot
Procurement documents may include the following:
- Information for Sellers
- Background information
• Procedures for replying
• Guidelines for preparation of the response
• Form of response required
• Evaluation criteria (described later)
• Pricing forms
Contract statement of work
• Proposed terms and conditions of the contract (legal and business)
Note that the proposed contract is included in the procurement documents. Can you answer why? The terms and conditions of the contract are also work that needs to be done and have costs associated with them (warranties, ownership, etc.). The seller must be aware of all the work that needs to be completed to adequately understand and price the project.
Well-designed procurement documents can have the following effects on the project:
- Easier comparison of sellers’ responses
- More complete responses
- More accurate pricing
- Decrease in the number of changes to the project
You should understand that sellers could make suggestions for changes to the procurement documents, including the contract statement of work and the project management plan.
A trick for the exam is to realize that the choice of which procurement document to use depends on the form of contract statement of work and contract type selected. See the next exercise.
Exercise In the space provided below, write the contract type (FP, CR, T&M) that applies next to the procurement document, and the type of contract statement of work (Performance, Functional or Design) to be used.
Answer This is a general approach to promote understanding. In the world of contracts, an infinite variety of procurement documents and contract types exist. The exam keeps things simple.
This is an agreement between the buyer and any prospective sellers stating what information or documents they will hold confidential and control, and who in their organization will gain access to the confidential information. With a non-disclosure agreement in place, the buyer can talk more openly about its needs without fear that one of the buyer’s competitors will gain access to the information shared. Like any agreement, a non-disclosure agreement has consequences if violated.
Companies frequently have standard, preauthorized contracts for the purchase of goods or services. These types of standard contracts need no further legal review if used as they are. If signed without changes, they are legally sufficient. The exam requires that you understand standard contracts, but also realize the project manager’s role in special provisions (described next).
(Special Conditions) The project manager must be able to read and understand standard terms and conditions, and determine what needs to be added, changed or removed from the standard provisions, so that the resulting contract addresses the particular needs of the project. The project manager meets with the contract manager to discuss the needs of the project and determine the final contract terms and conditions.
These additions, changes or removals are sometimes called special provisions and are a result of:
- Risk analysis
- The requirements of the project
- The type of project
- Administrative, legal or business requirement