Frame Work

OPM is a strategy execution framework utilizing project, program, and portfolio management
as well as organizational enabling practices to consistently and predictably deliver organizational
strategy producing better performance, better results, and a sustainable competitive advantage.
OPM advances organizational capability by linking project,program, and portfolio management
principles and practices with organizational enablers (e.g. structural, cultural,technological, and
human resource practices) to support strategic goals.
An organization measures its capabilities,then plans and implements improvements towards the
systematic achievement of best practices.
Portfolio management aligns with organizational strategies by selecting the right programs or
projects, prioritizing the work, and providing the needed resources,
Program management harmonizes its projects and program components and controls
interdependencies in order to realize specified benefits.
Project management develops and implements plans to achieve a specific scope that is driven
by the objectives of the program or portfolio it is subjected to and, ultimately, to organizational
strategies.
A project management office (PMO) is a centralized management structure that standardizes
the project-related governance processes and facilitates the sharing of resources, methodologies,
tools, and techniques.
The responsibilities of a PMO can range from providing project management support functions
to actually being responsible for the direct management of one or more projects.The PMO
integrates data and information from corporate strategic projects and evaluates how higher level
strategic objectives are being fulfilled. The PMO is the natural liaison between the organizations
portfolios,programs, projects, and the corporate measurement systems.
The projects supported or administered by the PMO may not be related, other than by being
managed together.
A primary function of a PMO is to support project managers in a variety of ways as below
Managing shared resources across all projects administered by the PMO;
Identifying and developing project management methodology, best practices, and standards;
Coaching, mentoring, training, and oversight;
Monitoring compliance with project management standards, policies, procedures, and templates
by means of project audits;
Developing and managing project policies, procedures, templates, and other shared
documentation (organizational process assets); and Coordinating communication across projects.
Differences between the role of project managers and a PMO may include the
following:
The project manager focuses on the specified project objectives, while the PMO manages major
program scope changes, which may be seen as potential opportunities to better achieve business
objectives.
The project manager controls the assigned project resources to best meet project objectives,
while the PMO optimizes the use of shared organizational resources across all projects.
The project manager manages the constraints (scope, schedule, cost, quality, etc.) of the
individual projects, while the PMO manages the methodologies, standards, overall
risks/opportunities, metrics, and interdependencies among projects at the enterprise level.
Operations management is responsible for overseeing, directing, and controlling business
operations as production operations, manufacturing operations, accounting operations, software
support, and maintenance. Organizations sometimes change their operations, products, or
systems by creating strategic business initiatives that are developed and implemented through
projects. Projects require project management activities and skill sets, while operations require
business process management, operations management activities,and skill sets.
Operational stakeholders should be engaged and their needs identified as part of the

stakeholder register, and their influence (positive or negative) should be addressed as part of the
risk management plan.
Projects (and programs) are undertaken to achieve strategic business outcomes, for which
many organizations now adopt formal organizational governance processes and procedures.
Organizational governance criteria can impose constraints on projects.
Organizational strategy should provide guidance and direction to project management.
Successful Business value realization begins with comprehensive strategic planning and
management.
In order to bridge the gap between organizational strategy and successful business value
realization, the use of portfolio, program, and project management techniques is essential.
Portfolio management aligns components (projects, programs, or operations) to the
organizational strategy, organized into portfolios or sub-portfolios to optimize project or program
objectives, dependencies, costs, timelines,benefits, resources, and risks. This allows organizations
to have an overall view of how the strategic goals are reflected in the portfolio, institute
appropriate governance management, and authorize human, financial, or material
resources to be allocated based on expected performance and benefits.
Program management, organizations have the ability to align multiple projects for optimized or
integrated costs, schedule, effort, and benefits. Program management focuses on project
interdependencies and helps to determine the optimal approach for managing and realizing the
desired benefits.
Project management, organizations have the ability to apply knowledge, processes, skills, and
tools and techniques that enhance the likelihood of success over a wide range of projects. Project
management focuses on the successful delivery of products, services, or results. Within programs
and portfolios, projects are a means of achieving organizational strategy and objectives.
Procurement
The project manager and the project team will be responsible for coordinating all the
organizational interfaces for the project, including technical, human resources, purchasing, and
finance. It will serve well to understand the policies and politics involved in each of these areas in
your organization.
Teaming agreements are contractual agreements between multiple parties that are forming a
partnership or joint venture to work on the project.
These are often used when two or more vendors form a partnership to work together on a
particular project. If teaming agreements are used on the project,typically the scope of work,
requirements for competition, buyer and seller roles, and other important project concerns should
be predefined.
When Teaming agreements are in force on a project, the planning processes are significantly
impacted. the teaming agreement predefines the scope of work, and that means that elements
such as the requirements and the deliverables may change the completion dates, thereby
impacting the project schedule, or they may affect the project budget, quality, human resources
availability, procurement decisions, and so on.
Make-or-Buy analysis
It is considered a general management technique and concludes with the decision
to do one or the other. It is whether its more cost effective to buy the products and services or
more cost effective for the organization to produce the goods and services needed for the project.
Costs should include both direct costs (in other words, the actual cost to purchase the product or
service) and indirect costs, such as the salary of the manager overseeing the purchase process or
ongoing maintenance costs. Costs dont necessarily mean the cost to purchase. It might weigh the
cost of leasing items against the cost of buying them i.e as Somethings get outdated by the end of
the project.
Market research
It can consist of a variety of methods to assist PM or the team in determining vendors, their
capabilities, and experience. Search engine. This can reveal information about experience,

market presence, customer reviews, and more. Conferences are method of discovering new
vendors or new services from vendors. It is concerned with a few key items when engaging vendor
services. First to know their experience levels with particular project or industry and the depth and
breadth of knowledge they have in the subject matter. Then interview them before they start work
on the project and learn the financial stability of the company.
Contracts and its type
A contract is a compulsory agreement between two or more parties and is used to acquire
products or services from outside the organization. Typically, money is exchanged for the goods or
services. Contracts are enforceable by law and require an offer and an acceptance.
Generally speaking, most organizations require a more extensive approval process for contracts
than for other types of procurements, contracts may require a signature from someone in the legal
department, an executive in the organization, the CFO, the procurement director, and the senior
manager from the department that is having the work performed.The types are

Fixed price
Cost reimbursable
Time and materials (T&M). Several factors will determine the type of contract you
should use.

The product requirements might drive the contract type. The market conditions might drive
availability and price and anyone with necessary skills.Also, the amount of riskfor the seller,
the buyer, and the project itself will help determine contract type. Contract types help to
determine the risk the buyer and seller will bear during the life of the contract. The project
manager should take this into consideration when purchasing goods and services outside the
organization and make certain it is in keeping with the risk attitudes of the organization and
stakeholders.
Fixed-Price Contracts
A contracts can either set a specific, firm price for the goods or services rendered
(known as a firm fixed-price contract, or FFP) or include incentives for meeting or exceeding
certain contract deliverables.
It can be disastrous for both the buyer and the seller if the scope of the project is not well defined
or the scope changes dramatically. Its important to have accurate,well-defined deliverables when
youre using this type of contract. Conversely, fixed-price contracts are relatively safe for both
buyer and seller when the original scope is well defined and remains unchanged. They typically
reap only small profits for the seller and force the contractor to work productively and efficiently.
This type of contract also minimizes cost and quality uncertainty.
Firm Fixed-Price (FFP)
In this contract, the buyer and seller agree on a well-defined deliverable for a set price.
In FFP the price never goes up. If the deliverables are not well defined, the buyer can incur
additional costs in the form of change orders. Its important to clearly describe the work to
avoid additional cost.In this kind of contract, the biggest risk is borne by the seller.The seller
or contractormust take great strides to assure they have covered their costs and will make a
comfortable profit on the transaction. The seller assumes the risks of increasing costs,
nonperformance, or other problems. However, to counter these unforeseen risks, the seller builds
in the cost of the risk to the contract price. This is the most common type of contract and the most
often used.
Fixed-Price Incentive Fee (FPIF)
The difference here is that the contract includes an incentiveor bonusfor early
completion or for some other agreed-upon performance criterion that meets or exceeds contract
specifications. The criteria for early completion, or other performance enhancements, are typically
related to cost,schedule, or technical performance and must be spelled out in the contract so both
parties understand the terms and conditions. The fixed-price, much like the FFP, is set and never

goes up. The seller assumes the risk for completing the work no matter the cost. Another aspect
of fixed-price incentive fee contracts to consider is that some of the risk is borne by the
buyer, unlike the firm fixed-price contract where most of the risk is borne by the seller. The
buyer takes some risk, though minimal, by offering the incentive to, for example, get the work
done earlier.
Fixed-Price with Economic Price Adjustment (FP-EPA.
This contract allows for adjustments due to changes in economic conditions such as
cost increases or decreases, inflation, and so on. These contracts are typically used when the
project spans many years. This type of contract protects both the buyer and seller from economic
conditions that are outside of their control.
The economic adjustment section of an FP-EPA contract should be tied to a known financial
index.
Cost-reimbursable contracts
The allowable costsallowable is defined by the contractassociated with
producing the goods or services are charged to the buyer. All the costs the seller takes on
during the project are charged back to the buyer; therefore, the seller is reimbursed.Costreimbursable contracts carry the highest risk to the buyer because the total costs are
uncertain. As problems arise, the buyer has to shell out even more money to correct the
problems. However, the advantage to the buyer is that scope changes are easy to make and
can be made as often as you wantbut it will cost.
Cost-reimbursable contracts have a lot of uncertainty associated with them. The contractor has
little incentive to
work efficiently or be productive. This type of contract protects the contractors profit because
increasing costs are
passed to the buyer rather than taken out of profits, as would be the case with a fixed-price
contract.
Be certain to audit your statements when using a contract like this so that charges from some
other project the vendor is working on dont accidentally end up on your bill.
Cost-reimbursable contracts are used most often when the project scope contains a lot of
uncertainty, such as for
cutting-edge projects and research and development. They are also used for projects that
have large investments early in the project life. Incentives for completing early, or not so
early,or meeting or exceeding other performance criteria may be included in cost-reimbursable
contracts.
Cost Plus Fixed Fee (CPFF)
These contracts charge back all allowable project costs to the buyer and include a
fixed fee upon completion of the contract. This is how the seller makes money on the deal; the
fixed fee portion is the sellers profit. The fee is always firm in this kind of contract, but the costs
are variable.
The seller doesnt have a lot of motivation to control costs with this type of contract, and
one of the strongest motivators for completing the project is driven by the fixed fee
portion of the contract.
Cost Plus Incentive Fee (CPIF).
A contract in which the buyer reimburses the seller for the sellers allowable costs
and includes an incentive for meeting or exceeding the performance criteria laid out in the
contract. An incentive fee actually encourages
better cost performance by the seller, and a possibility of shared savings exists between the seller
and buyer if
performance criteria are exceeded. The qualification for exceeded performance must be written

into the contract and

agreed to by both parties, as should the definition of allowable costs; the seller can possibly lose
the incentive fee
if agreed-upon targets are not reached.
There is moderate risk for the buyer under the cost plus incentive fee contract, and if well written,
it can be more
beneficial for both the seller and the buyer than a cost-reimbursable contract.
Cost Plus Percentage of Cost (CPPC)
In this contract, the seller is reimbursed for allowable costs plus a fee thats
calculated as a percentage of the costs. The percentage is agreed upon beforehand and
documented in the contract. Because the fee is based on costs,the fee is variable. The lower the
costs, the lower the fee, so the seller doesnt have a lot of motivation to keep costs low.
This is not a commonly used contract type.
Cost Plus Award Fee (CPAF)
This contract is the riskiest of the cost plus contracts for the seller. In this contract, the seller will
recoup all the costs expended during the project but the award fee portion is subject to the sole
discretion of the buyer. The performance criteria for earning the award is spelled out in the
contract, but these criteria can be subjective and the awards are not usually contestable.
Time and materials (T&M)
A contracts are a cross between fixed-price and cost-reimbursable contracts. The full amount
of the material costs is not known at the time the contract is awarded. It resembles a costreimbursable contract because the costs will continue to grow during the contracts life and are
reimbursable to the contractor. The buyer bears the biggest risk in T&M contract.
T&M contracts can resemble fixed-price contracts when unit rates are used, these rates are preset
and agreed upon by the buyer and seller ahead of time. T&M contracts are most often used when
you need human resources with specific skills and when you can quickly and precisely define the
scope of work needed for the project.
Plan Procurement Management Outputs
It is based primarily on the project scope and project schedule.
*The types of contract to use,*The authority of the project team in the procurement process, *How
the procurement process will be integrated with other project processes ,*Where to find standard
procurement documents (provided your organization uses standard documents) ,*How many
vendors or contractors are involved and how theyll be managed ,*How the procurement process
will be coordinated with other project processes, such as performance reporting and
scheduling,*How the constraints and assumptions might be impacted by purchasing,* How
independent estimates and make-or-buy decisions will be used during these processes and in
developing activity resource estimates and the project schedule,* Coordinating scheduled dates in
the contract with the project schedule *How multiple vendors or contractors will be managed ,*The
coordination of purchasing lead times with the development of the project schedule ,*The schedule
dates that are determined in each Contract ,*Identification of prequalified sellers (if known) ,*Risk
management issues and Procurement metrics for managing contracts and for evaluating sellers
Procurement Statement of Work
It contains the details of the procurement item in clear, concise terms.
*The project objectives* A description of the work of the project and any post-project operational
support needed
*Concise specifications of the products or services required * The project schedule, time period of
services, and work location.
The procurement statement of work is developed from the project scope statement and
the WBS and WBS dictionary.
The procurement SOW might be prepared by either the buyer or the seller.
The seller uses the SOW to determine whether they are able to produce the goods or services

as specified.
Projects might require some or all of the work of the project to be provided by a vendor.
The Plan Procurement Management process determines whether goods or services should be
produced within the organization or procured from outside, and if goods or services are procured
from outside, it describes what will be outsourced and what kind of contract to use and
then documents the information in the SOW and procurement management plan. The
SOW will undergo progressive elaboration as you proceed through the procurement processes.
There will likely be several iterations of the SOW before you get to the actual contract award.
SOW used during the Develop Project Charter process. can be used as the
procurement SOW during this process if youre contracting out the entire project.Otherwise, you
can use just those portions of the SOW that describe the work you have contracted.
Make-or-Buy Decisions
The make-or-buy decision is a document that outlines the decisions made during the process
regarding which goods and/or services will be produced by the organization and which will be
purchased. This can include any number of items, including services, products, insurance
policies,performance, and performance bonds.
Procurement Documents
Procurement documents are used to solicit vendors and suppliers to bid on your procurement
needs. Youre probably familiar with some of the titles of procurement documents.They might be
called request for proposal (RFP), request for information (RFI), invitation for bid (IFB), request for
quotation (RFQ), and so on.
When your decision is going to be made primarily on price, the terms bid and
quotation are used, as in IFB or RFQ. When considerations other than price (such as technology or
specific approaches to the project) are the deciding factors, the term proposal is used, as in RFP.
These document should clearly state the description of the work requested, they should include
the contract SOW,and they should explain how sellers should format and submit their responses.
These documents are prepared by the buyer to ensure as accurate and complete a response as
possible from all potential bidders. Any special provisions or contractual
needs should be spelled out as well.
Bids or quotations are used when price is the only deciding factor among bidders. Proposals are
used when there are considerations other than price.
Source Selection Criteria
The term source selection criteria refers to the method your organization will use to choose a
vendor from among the proposals you receive. The criteria might be subjective or objective. In
some cases, price might be the only criteria, and that means the vendor that submits the lowest
bid will win the contract. You should use purchase price (which should include costs associated
with purchase price, such as delivery and setup charges) as the sole criterion only when you have
multiple qualified sellers from which to choose.
Other projects might require more extensive criteria than price alone. In this case, you might use
scoring models as well as rating models, or you might use purely subjective methods of selection.
The following list are the criterias can be considered using for evaluating proposals and bids:
Comprehension and understanding of needs of the project as documented in the contract SOW
Cost, up front as well as total cost of ownership over the life of the product or service
Technical ability of vendor and its proposed team
Technical approach
Risk
Experience on projects of similar size and scope, including references
Project management approach
Management approach
Business type and size
Financial stability and capacity
Production capacity
Warranty or guarantee

 Reputation, references, and past performance

Intellectual and proprietary rights
You could include many of these in a weighted scoring model and rate each vendor on how well
they responded to these Issues.
Change Requests
As you perform the Plan Procurement Management process, the project management plan,
including its subsidiary plans, may require changes due to vendor availability, vendor
capability, or the vendors proposed solution, as well as cost and quality considerations.
Change requests must be processed through the Perform Integrated Change Control
Process.
Project Documents Updates
Some of the documents that may require updating as a result of the procurement processes are
the requirements document, the requirements traceability matrix, the risk register, and
others as needed.