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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PREFACE
The Project Procurement Management (PPM) Template is intended as guidance for procurement
managers and the teams involved in complex project procurements. It should be considered to
be a work in process that will be refined as feedback becomes available from users.
In order to make this document widely available, it is being posted on the PWGSC web site at
http://www.ames-mpsl.com
Some hardcopies also are being distributed for the convenience of many interested professionals.
However, distribution is not controlled. Therefore, hardcopy updates cannot be provided to
holders of the document. Rather, you are requested to check the web site to obtain the latest
revision which will be indicated by the revision number and date on the cover page.
Your comments are solicited. The collective knowledge and experience of the many people
involved in complex procurement can be of great value in improving the content of the
Template. Please forward your comments by E-mail to tritesr@sos.pwgsc.gc.ca.
The author acknowledges the importance to this work of several documents cited herein:

SOSB Business Process Renewal Blueprint, Final Report, October 2, 1998;

Canadian Government Procurement Guide, Computer Sciences Corporation; 1997.

Draft DND Acquisition Reform Guide, Directorate of Business Change Management,


March 31, 1998;

Systems Engineering Management, Computer Sciences Corporation, October, 1998.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

TABLE OF CONTENTS
Section

Title

Page

1.

FOCUS OF THE PPM TEMPLATE............................................................................ 1

2.

FORCES FOR CHANGE ............................................................................................. 2

3.

THE PPM TEMPLATE AND DESKTOP TOOL ....................................................... 6

4.

INTEGRATED PROCUREMENT TEAMS................................................................ 7

5.

PROJECT PROCUREMENT MANAGEMENT FRAMEWORK .......................... 10


5.1
Phase 1 - Project and Procurement Planning (P&PP) ................................... 10
5.1.1 Validate Requirements ........................................................................... 12
5.1.1.1 Analyze (Review Clients) Requirement ..................................... 13
5.1.1.2 Define Procurement Concept ...................................................... 15
5.2
Phase 2 - Solicitation Planning ........................................................................ 19
5.2.1 Define Procurement Requirements ......................................................... 21
5.2.1.1 Define Business and Technical Requirements ............................. 23
5.2.1.2 Define Project Management Strategy .......................................... 25
5.2.1.3 Define Scope of Contract(s)........................................................ 34
5.2.1.4 Define Reporting Strategy........................................................... 35
5.2.1.5 Define Approval Strategy ........................................................... 36
5.2.1.6 Define the Change Management Strategy.................................... 36
5.2.2 Define Procurement Strategy.................................................................. 36
5.2.2.1 Validate Sources of Supply ......................................................... 38
5.2.2.2 Define Procurement Methodology (Tools & Techniques) ........... 39
5.2.2.3 Define Bid Evaluation Criteria and Basis of Source Selection ..... 39
5.2.2.4 Prepare Bid Solicitation Document ............................................. 40
5.2.2.5 Obtain Management Approval of the Procurement Strategy........ 44
5.3
Phase 3 - Solicitation and Source Selection (S&SS)........................................ 45
5.3.1 Execute Procurement Strategy................................................................ 47
5.3.1.1 Solicit Bids ................................................................................. 48
5.3.1.2 Receive Bids............................................................................... 48
5.3.1.3 Evaluate Bids.............................................................................. 49
5.3.1.4 Select Contractor ........................................................................ 50
5.3.1.5 Negotiate Contract...................................................................... 51
5.3.1.6 Prepare Contract ......................................................................... 52
5.3.1.7 Obtain Contract Approval ........................................................... 52
5.3.1.8 Award Contract .......................................................................... 53
5.4
Phase 4 - Contract Management ..................................................................... 54
5.4.1 Manage Contract .................................................................................... 56
5.4.1.1 Manage Technical, Systems and Quality Performance ................ 57

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.5

5.4.1.2 Manage Cost/Schedule and Delivery Performance ...................... 58


5.4.1.3 Manage Government Furnished Resources (GFR) Performance.. 59
5.4.1.4 Administer Contract ................................................................... 59
Phase 5 - Contract Closeout ............................................................................ 59
5.5.1 Contract Closeout................................................................................... 61
5.5.1.1 Physical Disengagement ............................................................. 62
5.5.1.2 Administrative Disengagement ................................................... 62

Figures
Figure

Title

Page

Figure 1 Procurement Types ...................................................................................................... 2


Figure 2 Social, Industrial and Economic Objectives.................................................................. 3
Figure 3 Desktop Tool Main View .......................................................................................... 7
Figure 4 Integrated Procurement Team....................................................................................... 8
Figure 5 Complex Procurement Effort Profile ............................................................................ 9
Figure 6 Project and Procurement Planning Process ................................................................. 13
Figure 7 Integrated Procurement Team Concept....................................................................... 15
Figure 8 Market Research Service............................................................................................ 16
Figure 9 Procurement Management Plan .................................................................................. 19
Figure 10 Solicitation Planning Process Part I ....................................................................... 21
Figure 11 Options Analysis ...................................................................................................... 22
Figure 12 Business Case Analysis ............................................................................................ 24
Figure 13 SEI Continuous Risk Management Model ................................................................ 26
Figure 14 Dealing with Risk..................................................................................................... 28
Figure 15 Risk Mitigation Through Contract Management....................................................... 29
Figure 16 Choosing From a Plethora of Standards.................................................................... 31
Figure 17 Determining Contract Scope .................................................................................... 35
Figure 18 Solicitation Planning Process Part II...................................................................... 37
Figure 19 Alternative Procurement Strategies........................................................................... 38
Figure 20 Requirements Management Leading to Product Acceptance..................................... 41
Figure 21 Communicating in the Contracting Process .............................................................. 42
Figure 22 Typical Structure of an RFP ..................................................................................... 43
Figure 23 Selection of the Winning Proposal............................................................................ 44
Figure 24 Solicitation and Source Selection Process................................................................. 47
Figure 25 Proposal Evaluation ................................................................................................. 50
Figure 26 Contract Management Process ................................................................................. 56
Figure 27 Contract Management .............................................................................................. 57
Figure 28 Delivery and Acceptance.......................................................................................... 58
Figure 29 Contract Closeout Process........................................................................................ 61
Figure 30 Contract Closeout..................................................................................................... 61

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Tables
Table
Table 1
Table 2
Table 3
Table 4
Table 5

Title

Page

PPM in the Project and Procurement Planning Phase................................................... 11


PPM in the Solicitation Planning Phase ....................................................................... 20
PPM in the Solicitation and Source Selection Phase .................................................... 46
PPM in the Contract Management Phase ..................................................................... 55
PPM in the Contract Closeout Phase............................................................................ 60

Annexes
Annex

Title

A
B
C
D

MPSL Services
Project Procurement Management (PPM) Template
PPM Work Breakdown Structure
The Relationship Between The Complex Procurement Functions and Core Competency
Areas
Life Cycle Wall Charts
Sample Activity Templates

E
F

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ACRONYMS
ABE

Automated Buying Environment

ACRO

Advisory Committee on Repair

AIT

Agreement on Internal Trade

AMESS

Aerospace, Marine and Electronics Systems Sector

ASD

Alternative Service Delivery

BDP

Benefits Driven Procurement

BPR

Business Process Renewal

BRU

Bid Receiving Unit

CBP

Core Best Practice

CCC

Canadian Commercial Corporation

CFP

Canadian Forces Publication

C/SPMS

Cost/Schedule Performance Management Standard

CDRL

Contract Data Requirements Lists

CEIL

Contract End Items List

CIS

Customer Information Service

CITT

Canadian International Trade Tribunal

CMF

Contract Management Framework

CMIS

Configuration Management Information System

COTS

Commercial-Off-The-Shelf

CPAA

Contract Planning and Advance Approval

CPP

Common Purpose Procurement

CSC

Computer Sciences Corporation

DID

Data Item Description

DMS

Document Management System

DND

Department of National Defence

DoD

Department of Defense (US)

EPA

Effective Project Approval

FAA

Financial Administration Act

FTE

Full Time Equivalent

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

GBO

Government Business Opportunities

GCRs

Government Contract Regulations

GETS

Government Electronic Tendering System

GFR

Government Furnished Resources

IM/IT

Information Management/Information Technology

IP

Internet Protocol

IPPD

Integrated Process and Product Development

IPS

Informatics Professional Services

IPT

Integrated Procurement Team

IT

Information Technology

LOI

Letter Of Interest

LSAR

Logistics Support Analysis Record

MA&S

Material Acquisition and Support

MCP

Major Crown Project

MOU

Memorandum Of Understanding

MPSL

Major Project Service Line

MRP

Manufacturing Resource Planning

NAFTA

North American Free Trade Agreement

NDI

Non-Developmental Item

NSN

NATO Stock Number

OBS

Organization Breakdown Structure

P&A

Price and Availability

P&PP

Project and Procurement Planning

PFC

Pre-Facilitated Contract

PIP

Project Implementation Plan

PMBOK

Project Management Body Of Knowledge

PMI

Project Management Institute

PMO

Project Management Office

PMP

Procurement Management Plan

PNs

Part Numbers

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PO&M

Personnel, Operations and Maintenance

PPA

Preliminary Project Approval

PPM

Project Procurement Management

PPMS

Project Performance Management Standard

PPRA

Project Profile and Risk Assessment

PRC

Procurement Review Committee

PWGSC

Public Works and Government Services Canada

RCI

Request for Contractor Information

RFP

Request For Proposal

ROM

Rough Order of Magnitude

SAR

Search and Rescue

SEI

Software Engineering Institute

SI

System Integration

SOA

Special Operating Agency

SOI

Solicitation Of Interest

SOO

Statement of Operational Objectives

SOP

Solution Oriented Procurement

SOR

Statement of Operational Requirements

SOSB

Supply Operations Service Branch

SOW

Statement of Work

SPAC

Senior Project Advisory Committee

SRB

Senior Review Board

SS(ID)

Synopsis Sheet (Identification)

S&SS

Solicitation and Source Selection

TB

Treasury Board

TPP

Total Package Procurement

TQM

Total Quality Management

UGD

Unique Government Development

WBS

Work Breakdown Structure

WTO-AGP

World Trade Organization-Agreement on Government Procurement

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PROJECT PROCUREMENT MANAGEMENT TEMPLATE


1.

FOCUS OF THE PPM TEMPLATE

Among a broad range of common services, Public Works and Government Services Canada
(PWGSC) provides procurement services to federal government departments and agencies. Of
the $8 Billion annual expenditure on goods and services, roughly half of this expenditure is in
the area of complex procurement that is characterized by significant technical and business risk.
Project Procurement Management (PPM) is the effective integration of project management
principles and practices in the procurement process. PPM is the PWGSC discipline applied to
major acquisition and support projects.
The PPM Template presented in this document is based on work processes and the business
environment of the Aerospace, Marine and Electronics Systems Sector (AMESS), and
specifically, the Major Project Service Line (MPSL) that manages the government's most
complex and sensitive project undertakings, characterized by capital expenditures above $50
Million (CAN), with significant risk and project management implications.
Within PWGSC there is a well-known distinction between standard and complex procurement.
The former is transaction based, characterized by the purchase of commercial goods and services
using automated techniques and customer direct-order supply arrangements, such as standing
offers. Individual transactions are relatively low dollar value and thousands of contractual
documents are issued1. The focus is on Part Numbers (PNs), NATO Stock Numbered (NSN)
items and Commercial-Off-The-Shelf (COTS) procurement.
In comparison, complex
procurements are higher dollar value, more complex, often involving development, integration,
business process change, or outsourcing. Complex procurement typically results in fewer
contractual transactions, and far more effort in project and procurement planning, source
selection, and contract management.
Figure 1 illustrates both standard and complex procurement types. On the far left of the figure,
Client Delegated procurement activity is performed locally by the client departments within their
delegated authority. Catalogued item procurement refers to the simplest type of procurement
performed by Supply Operations Services Branch (SOSB), where technical compliance, price
and availability are the main selection criteria. Simplified procurement is one step up on the
complexity scale because there may be a simple Statement of Work (SOW) or technical
specification, or there may be additional selection criteria2.

1
2

Taken from the SOSB BPR Requirement, 14 September 1998


Taken from the SOSB BPR Requirement, 14 September 1998

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

STANDARD PROCUREMENT

DELEGATED PROCUREMENT
AUTHORITY

Goods &
Services Requests

COMPLEX PROCUREMENT

DEGREE OF COMPLEXITY

LOW

Manufacturers
Part Numbers,
NATO Stock Numbers,
Commercial-Off-The-Shelf

Low Risk and


Complexity
Simple Spec/SOW

Higher Risk,
Complex SOW,
Pre-Facilitated Contracts,
Capital Equipment,
Major System Procurement

Catalogued Item
Procurement
Process

Simplified
Procurement
Process

Integrated
Procurement
Team

Client Delegated
Procurement Process

Local
Purchase
Orders

PWGSC
Enablers Standing
Offers,
Catalogues

HIGH

Quick Competitions,
Electronic Business
Via Internet

SOSB
Facilitated

Review Policies
Reduce Open Bidding
Times
Pre-Qualify Vendors
Use of E-Business

SOSB
Contracted

Integrated
Procurement Team,
Contract Management
Framework based on Risk,
Contract Administration
and Resources on
Contractors Site
SOSB
Contracted

Figure 1 Procurement Types3


There is only one category of complex procurement shown in Figure 1; however in reality there
are many gradations of complexity. What distinguishes complex procurement is the need for
teamwork between SOSB, the client department and industry through an integrated procurement
process to ensure a successful project. This teamwork involves more extensive and earlier
teaming with the client, and consultation with industry in order to better define the procurement
requirements and position the solicitation process.

2.

FORCES FOR CHANGE

In Canada complex procurement is an instrument of public policy. The social, industrial and
economic objectives of federal government procurement projects are identified in Figure 2. The
government Treasury Board has emphasized that all procurement must be guided by principles
of value for money, fairness, openness, and transparency. In large, sensitive procurements the
interests of regional and industrial policy and priorities come into play through a network of
advocacy organizations.

Taken from SOSB BPR Report, dated 14 September 1998

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

SOCIAL, INDUSTRIAL AND ECONOMIC OBJECTIVES

Within the constraints of trade agreements, contribute to a favorable balance of


payments, by ensuring that sufficient expenditures occur in Canada to offset
project expenditures in other countries

Develop the nations industrial base by taking advantage of opportunities


presented by major projects to expand Canadian industrial capability in terms of
technological opportunities, managerial capability, and production capacity

Improve Canadian competitiveness in world markets by stimulating Canadian


exports and promoting replacement of imports

Provide employment, especially in economically disadvantaged regions of the


country

Consistent with government obligations under Comprehensive Land Claims


Agreements, take into account the current capacity and increased ability over
time of aboriginal firms, within settlement areas, to compete for and to
successfully complete government contracts.

Figure 2 Social, Industrial and Economic Objectives


Within the last several years, national legislation, international trade agreements and aboriginal
land settlement agreements have been added to the procurement context. The North American
Free Trade Agreement (NAFTA), the World Trade Organization Agreement on Government
Procurement (WTO-AGP), and the Agreement on Internal Trade (AIT) govern much of federal
government procurement. The Canadian International Trade Tribunal (CITT) is a quasi-judicial
body that investigates complaints by potential suppliers. When the CITT investigates a
complaint, it makes a determination and recommendations, for example, re-evaluation, retendering or providing compensation. The recommendations of the tribunal are generally
implemented by the government organization in question.
The federal government has been downsizing in recent years. In the Supply Operations Service
Branch (SOSB), program reviews and employee departure programs have reduced the workforce
by about 30%. During this period the procurement environment has become more complex.
Both internal and external audits and challenge processes are signalling that some core
competencies are suffering due to a lack of experienced personnel.
As a result of these environmental changes, there is a need to provide guidance and tools for
complex procurement. The purpose of the Template is to assist procurement managers and
their teams in performing work more effectively. Also, it will assist MPSL in identifying
competencies, and in related training and professional development initiatives. The template is
also intended to provide an orientation and reference for new employees, customers and other
stakeholders, and to support:

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

A more disciplined, repeatable, and measurable process;

PPM competencies;

Training requirements;

The capability and approach to benchmark the process; and

The capability to evaluate the process, products (i.e. RFP, Contract) and the people
working in complex procurements.

It is not intended that the Template be used to generate policy for complex procurement.
The PPM Template focuses on the procurement services of Major Project Service Line (MPSL)
organization, although the processes are generic enough to be applicable branch-wide in complex
procurement. Annex A describes the range of MPSL procurement, project and program services
that are available to client departments. Some of the driving forces behind the template are:

In conducting complex procurement, sophisticated strategies and models are used to


incorporate a range of business, technical, and program/project management practices
which require high skill levels;

The effects of downsizing, outsourcing, and business renewal in PWGSC, client


departments and industry means that it is no longer practical to rely exclusively on
mentoring to maintain and pass on knowledge; and

There is a growing trend toward "projectising" work, even in program service


environments, supported by knowledge repositories, accessible through Internet Protocol
(IP) based technologies.

The PPM Template approach reflects several major initiatives currently impacting PWGSC
procurement operations. The first of these, La Releve is a public sector-wide initiative sponsored
by the Clerk of the Privy Council that seeks to modernize service delivery and re-position the
human resources to meet present and future needs. The overall PWGSC initiatives supporting
La Releve are to:

Review the procurement process, mechanisms, and technology;

Improve the working environment, increase efficiency, reduce costs, and enhance human
resource skills;

Identify needed productivity improvements; and

Define the impact on PWGSC of the reengineering of PWGSCs largest single customer,
the Department of National Defence (DND) and recommend responses that are also
suitable for other client departments.

Another high profile PWGSC initiative is Benefits Driven Procurement (BDP). BDP is a set of
procurement principles and processes that recognizes the sources and consequences of risk in

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

complex project procurements, and promotes intervention at appropriate times. It has evolved
from experience in Information Technology and System Integration procurements. Under BDP,
the contractor is brought in early, before the requirements are fully defined. The contractor
works closely with the customer in defining and implementing an appropriate solution. BDP
seeks:

A reduction in procurement process time and cost to government and industry;

Long term business relationships between customers and contractors,

Continuous risk management;

Business-case management, and

The use of best practices.

The PPM Template incorporates BDP processes that have been identified for information
technology and systems integration projects.
In September 1998 the SOSB business process renewal study phase was completed. The key
message in the Report is the need to:
Respond to the Shift
in Business

from transaction to knowledge-based procurement.

Foster a Results
Oriented Culture

methods for meeting productivity demands and government


procurement objectives will require employees to assume greater
responsibility and accountability in meeting client needs and
managing contractual risks.

Prepare for
Electronic Business

select Information Management/Information Technology (IM/IT)


tools that ensure a lead role in the selection and management of EBusiness tools.

Create a Learning
Organization

provide the necessary resources to sustain the change effort,


communicate best practices, lead communications, and support a
learning organization culture.

The Template also considers acquisition process change underway in DND, for example:
Equipment
Management Teams

organizational alignment by system being procured or supported;

New relationships
with industry

such as long term business relationships, for example in partnering,


support and bundling of procurements using Pre-Facilitated
Contracts (PFC);

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Alternative Service
Delivery (ASD)

provision of non-core services by the most appropriate means.


After evaluation of alternatives, a government agency or industry
will be chosen to provide the service whichever is the most cost
effective.

Strong preference for


teaming

that integrates procurement and project management capability


outside functional stovepipes.

The new procurement methods, such as BDP, PFC and ASD are addressed later in the Template.
However, it should be noted here that such methods demand a very knowledgeable PWGSC
Contract Authority able to devote considerable time to individual complex procurements,
supported by project management and contract process expertise.

3.

THE PPM TEMPLATE AND DESKTOP TOOL

PWGSC and customer procurement personnel do not have a comprehensive, easy-to-use


guidance document to assist them in doing their work. This need led to the development of the
PPM Template and its presentation on a desktop computer tool.
The idea of the desktop originated in the US Department of Defense (DoD). A Canadian version
is being created by the Department of National Defence (DND) as part of its Acquisition Reform
initiative. The MPSL desktop will be linked in the area of common processes to that of DND, in
order to ensure compatibility, and to maximize the synergy of guidance tools being used by the
two departments.
The PPM Template has two immediate customers. First, the MPSL has a requirement for the
Template (and the related training gap and needs assessment) as a deliverable for the Branch
Business Plan. Second, the branch-wide business renewal process defined a requirement for a
Contract Management Framework (CMF) in response to various audits, effectiveness studies and
focus group feedback. Detailed activity level templates are being prepared to provide guidance
in preparing project and procurement documents, and for different PPM processes, for example,
contract management.
The Template will be linked through the MPSL web page4 with information on policy, guidance,
training and innovative procurement practices, including a library with search and query
capability.
The Template will also be made available as part of a desktop tool, and in Work Breakdown
Structure (Annex C) and wall chart (Annex E) formats. In addition to the template or process
view, the desktop tool will contain several other views that allow users to find related
4

MPSL web page: http://www.ames-mpsl.com

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

information or ask questions and provide input to the desktop repository. The main view of the
desktop tool is shown in Figure 3.
PROJECT PROCUREMENT
MANAGEMENT
SEARCH
QUERY
STRUCTURED BUSINESS PRACTICES
TOOLS
PROCESSES
People

DESKTOP
MAIN VIEW
TRAINING

Processes

Tools

LIBRARY
EDUCATION AND TRAINING
WHATS NEW

Figure 3 Desktop Tool Main View


The desktop tool enables direct support of all those performing procurement activities who need
guidance, templates, computer tools, etc. Updates are immediately available to all users, without
the previous cost and time delay associated with distribution of paper. Also, feedback can be
readily obtained electronically, enabling lessons learned for example, to be provided when they
occur rather than months or years later.

4.

INTEGRATED PROCUREMENT TEAMS

One of the acquisition reforms in the US, UK and Australia is the introduction of integrated
product and process teams. Benchmarking studies have concluded that using such teams is a
Core Best Practice (CBP) for organizations that manage project business.5 Multi-disciplinary
project teams improve the effectiveness of project decisions and work delivery. Many customer
and contractor organizations have replaced functional stovepipes with teams and integrated
processes that support this concept. The U.S. Department of Defense (DoD) acquisition projects
use teaming arrangements that involve government and industry in the development of
equipment, software, and business systems.
The IPT is a natural evolution of the industry concept of concurrent engineering that replaces the
lengthy, sequential processes of design-production-logistics engineering with a much shorter and
5

Project Management Institute (PMI) Benchmarking Research Report, Page 22.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

more effective and integrated process. The IPT is characterized by physical co-location of
integrated teams, concurrent design, production and logistics engineering; parallel, incremental
product and data releases; electronic data replacing paper, GroupWare and collaborative work
tools; and overall, integrated product teams and management structure6. The IPT may also
include joint contractor and customer decision making through alliances or long-term business
relationships.
In Canada, federal organizations take on very little system design and development. Most
development effort involves modification of existing products to suit customer needs. In DND
projects, the IPT has been adapted to the modest scope associated with "development effort", and
the customer does not share design authority responsibility with the contractor. However, the
IPT approach has a significant impact on the contractor. With the IPT approach, contractors
need not write many of the documents now used to describe how it conducts project business.
These business practices should be evident to the government team members who participate in
the project along side the contractors personnel. Depending on the contract provisions, project
business processes can be influenced by all team members.
In the Template, the phrase Integrated Procurement Team (IPT) has been used to describe the
team concept. (DND uses the term: Integrated Project Team.) One of the most important
recommendations from PWGSC and DND business process renewal is the early formation of the
IPT. Larger projects often have specialists in functional areas, such as systems engineering and
integrated logistics support. Some teams will have a member from Industry Canada who will
address Industrial, Regional and Aboriginal Benefits. A few projects will also have a small team
co-located with the contractor. The concept of an IPT is illustrated in Figure 4. Significant
effort needs to be devoted to training procurement personnel in the reform concepts that are
being implemented, for example the roles of IPT members in relation to departmental mandates.
CLIENT DEPARTMENT

Finance
Operations

Contracting

PWGSC

OTHER
DEPARTMENTS

Technical

r
r

Use of information technology


Shared access to computer tools and databases

CONTRACTOR

Figure 4 Integrated Procurement Team


6

Taken from the Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

"During interviews conducted as part of the PWGSC and DND business process a common
theme was the importance of adequate staffing to manage the procurement. Obtaining qualified
people, ensuring adequate training, avoiding excessive staff turnover, and benefiting from prior
project management experience were all concerns. Human resources deficiencies can adversely
affect the ability of a project office to progress in a timely and efficient manner.7"
This research suggested that SOSB and client departments no longer have the necessary
experienced personnel to manage complex procurements. To partially offset this problem, many
project offices have obtained expertise and assistance by contracting for support. Examples are:

Establishing a cadre of contractor support staff called a Project Management Support


Office - to provide specialized engineering, logistics and project management support;

Hiring experts in specialized topics where such highly skilled resources are not available
within the Branch; and

Hiring consultants to perform or assist with time consuming tasks, such as drafting the
Statement of Work and specifications8.

These concerns are being addressed by MPSL in the competency/gap/training and recruitment
process, and in DND through implementation of the Project Management Occupational Analysis
and related improvements in training.
Figure 5 illustrates the project procurement life cycle, and the five (5) the PPM phases. IPT
members work together throughout the project to achieve the procurement objectives.

EFFORT

PHASE 1

PHASE 2

PHASE 3

Objectives &
Constraints
Defined
Requirements
Defined
Solution
Defined

ACQUISITION
MILESTONES

PHASE 4

PHASE 5

Product
Accepted
Delivery &
Installation
Complete
Logistics
Product
Support
Qualified
Fielded
Support
Planned
INDUSTRY
GOVT

KEY
DOCUMENTS

Statement of
Requirements
Performance
Specification
Detailed
Specifications

Maintenance
Plan
Test &
Evaluation
Reports
Product Baseline

TIME

Figure 5 Complex Procurement Effort Profile


7
8

DND and PWGSC interviews conducted in 1998.


Taken from DND Acquisition Reform Guide, Team Leader G. Reinhardus, Author B.F. Hough.

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.

PROJECT PROCUREMENT MANAGEMENT FRAMEWORK

The approach taken in defining the Project Procurement Management (PPM) business process
was a topdown, hierarchical method comprising the following elements:
Governance and
Accountability
Framework

a review of government, central agency and departmental mission and


business planning documents to verify that PPM is an initiative
consistent with the current vision for the Branch.

PPM Concepts

were developed to link PPM activities with goals, competencies and


responsibilities.

PPM Process
Template

were defined to relate the objective of each activity to the process and its
output/outcome.

PPM Activity
Templates

are being prepared in order to provide detailed guidance for each PPM
process. These templates will contain how to information that will be
contributed and maintained by subject matter experts.

The PPM processes identified in the Template are shown in a Work Breakdown Structure (WBS)
in Annex C. Sample Activity Templates are contained in Annex F.
5.1

Phase 1 - Project and Procurement Planning (P&PP)

The Guide to the Project Management Body Of Knowledge (PMBOK) defines the procurement
planning process as "determining what to buy and when"9. The process includes identifying
project needs that can be best met by procuring products or services outside the project
organization.
The concepts presented in Table 1 are aimed at giving a high-level view of PPM in relation to the
project phase goals, responsibilities, and needed competencies. PPM is also linked to inputs,
tools and techniques, and outputs of the project phase.

PMBOK, Procurement Page 132.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Table 1 PPM in the Project and Procurement Planning Phase


GOALS10

COMPETENCY AREA

RESPONSIBILITY
IPT = Input D = Decision

Financial Management

Confirm project priority and affordability

D = Strategic, financial and user


organizations

Project/Technical
Management

Determine or confirm project feasibility

IPT
D = Project Leader/Manager/Director

Capability Assessment

Assess project organization capability

D = Project Leader/Manager

Risk Management

Assess the project risks

IPT
D = Project Manager

Procurement Management

Determine allocation and IPT


membership

IPT
D = Project Manager

Procurement Management

Determine the overall procurement


approach

IPT
D = Project Manager

INPUTS
Program approval to proceed
with planning
System or commodity
designation

TOOLS & TECHNIQUES


Concept/Development phase outputs
Project and Procurement business
capital plans and resource forecasts

OUTPUTS
Planning for P&PP phase and
definition of project performance
objectives
File allocated within Branch, and IPT
defined

Business Requirements and Case

Business Case Template

Life Cycle Costing Model

Statement of Operational
Requirements (SOR)

SOR Template and preliminary


SOW/SPEC

Project Scope Statement and Work


Breakdown Structure (WBS)
COTS, SOP, UGD11 content

Results of Capability & Risk


Assessment

Capability and risk impacts

Mitigation plans and action

Project constraints and


assumptions

Expert judgement

Refine/integrate with risk planning

Options analysis, trade-off


studies

Surveys, Market/Product Research,


Letter of Interest

Potential Sources of Supply and


Capability Assessment

National objectives in
procurement

Industry Canada review

Procurement Review Committee12


Record of Decision

Other planning outputs

Preliminary WBS, cost, schedule,


quality, cash flow, risk management
planning, phasing, gates, ramps

Procurement Management Plan (PMP)


- draft

10

The idea of linking PPM processes to goals and inputs-outputs is taken from the BDP Guide (Godcharles, Goulet and Fournier) and the
PMBOK.
11
Commercial-Off-The Shelf, Solution Oriented Procurement, Unique Government Development these are Treasury Board Secretariat defined
procurement strategies
12
For major Crown projects, the Senior Project Advisory Committee; for R&O, the Advisory Committee on Repair and Overhaul

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.1.1

Validate Requirements

Validate Requirements starts with review and analysis, from a procurement perspective, of the
outputs of the client departments project identification phase. Based on the review of the draft
requirement documents, the procurement responsibilities, including planning and control are
determined, and the Integrated Procurement Team (IPT) membership is determined.
The process is defined in the Supply Manual Memorandum Of Understanding (MOU) of
Procurement Activities as: the definition of operational needs13. It starts with problem
identification and is completed with the start of the Development Phase when a number of
options to satisfy the requirement are examined. Validate Requirements is the first point of
contact between an SOSB account manager and customer requirements and/or project office
staff. This contact may occur prior to or during the identification/concept phase when the project
objectives and requirements are being defined. The typical program management activities in
the identification phase are:

Description of the operational deficiency;

Identification of potential solutions in broad terms;

Rough Order of Magnitude (ROM) cost estimate;

Creation of Project Charter;

First Statement of Operational Requirements (SOR) or Business Requirements; and

Identification of cash phasing in the capital planning process.

In DND, the Identification Phase culminates in a Program Decision Document, the Synopsis
Sheet (Identification) or SS(ID). The purpose of the SS(ID) is to obtain:

Agreement on the deficiency or need;

Agreement on the proposed options to be examined;

Funding for the Development Phase; and

Planning approval for the anticipated capital cost.14

The PPM Process in the Project and Procurement Planning Phase is shown in Figure 6. Each
process is then described below.

13
14

DND/PWGSC Responsibility Matrix, Page 3.


CFP 125, Chapter 7, Page 46. Note: This is not capital project cost approval.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PHASE 1 PROJECT AND PROCUREMENT PLANNING15


VALIDATE REQUIREMENTS
Analyze (Review Clients) Requirement
Define Performance Objectives
Determine Allocation and Teaming
Identify and Form Integrated Procurement Team (IPT)
Define Procurement Concept
Identify Sources of Supply
Identify and Define Procurement Concept
Refine Performance Objectives
Prepare Procurement Management Plan (PMP)

Figure 6 Project and Procurement Planning Process


5.1.1.1

Analyze (Review Clients) Requirement

Objective: To understand the problem, deficiency, or opportunity; to


understand the views of the sponsor and stakeholders; to ascertain the state of
requirement documents; and to determine the project management required
for the procurement.

Process: Contact the project sponsor and stakeholders. Review the


preliminary requirement documents and background project documentation
such as the deficiency description, ROM estimates, Project Charter, Work
Breakdown Structure (WBS), and Risk Assessment to determine procurement
implications and obtain inputs for the Procurement Management Plan (PMP).

Output: Customer contact is made, project and requirement documents are


reviewed and analyzed, and procurement implications are determined The
PMP is started for the project, with inputs from key documents and contact
points.

Define Performance Objectives

15

Objective: To assist the client department in defining the top-level


acquisition objectives of the project.

The PPM process is shown without numbering. Annex C contains a numbered of WBS view of PPM.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Process: Review requirements documents, such as draft Statement of


Operational Requirements (SOR) and the options analysis that identify
alternative ways to satisfy the required capability of the project. Since the
identified options are the basis for Development Phase trade-off decisions, the
earlier that all credible solution alternatives are considered, the more quickly
the procurement can proceed. Since project performance objectives typically
relate directly to procurement objectives (expressed later as contract
performance requirements), it is essential that there is procurement input to
the customer at this point in the project.

Output: Project objectives expressed in the requirement documents and in


the Project Charter are clarified.

Determine Allocation and Teaming

Objective: To determine which SOSB organization and personnel should


team with the client department organizations to conduct the project
procurement.

Process: The procurement file is allocated based on considerations such as


system or commodity designation, product and project management
complexity, and the need for planning, control and risk management expertise
in support of the procurement. Teaming within and between sectors also is
identified where procurements cross organization boundaries.

Output: File allocation, SOSB and sector teaming is identified and recorded
in the PMP. The Contracting Authority office and individual file holder is
identified as the single point of contact with customer requirements staff and
the Project Manager. Teaming within and between sectors is established. The
source of particular expertise, for example planning and control, is identified.

Identify and Form Integrated Procurement Team (IPT)

Objective: To identify and assign the IPT members that will be responsible
to execute the end-to-end procurement process, including the transition from
capital acquisition to operations and support procurement.

Process: The IPT is formed at the call of the Project Manager, and in
conjunction with other product or process teams supporting the project
objectives. The IPT is composed of core members (technical specialist,
logistics/financial specialist, operations specialist (user representative),
contracting specialist and many supporting specialists that provide, for
example, legal, cost, risk, policy, trade agreements, and security advice.
Figure 7 illustrates operation of the IPT.
The IPT operates under the direction of the Project Leader from the client
department. Under the Project Manager, the core team accomplishes the

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

many tasks in the procurement process. The specialists provide inputs as


needed. Interaction with industry is via procurement instruments, such as the
Request For Proposals and resulting contract. The selected contractor is
responsible for satisfying the specified requirement by developing/providing
the needed new or enhanced operational capability.

Output: IPT membership and responsibilities are established and recorded in


the PMP.

SPECIALIST SUPPORT

Policy Advise

Cost Accounting

Legal Advice

Risk Assessment

Security Advice

CORE TEAM
Project
Management
Operations
Technical
Contracting
Finance

PROJECT
LEADERS
DIRECTION

Test and Evaluation


Capability

REQUIREMENT

Quality Standards
Expertise

INTERACTION
WITH
INDUSTRY

Supply System
Expertise

Documentation Support

Configuration Management
Support

PROCUREMENT PROCESS

OPERATION
CAPABILITY

Figure 7 Integrated Procurement Team Concept


5.1.1.2

Define Procurement Concept

Using the output of Validate Requirements, this process identifies potential sources of supply,
links project and procurement objectives, and starts the formal procurement planning process.
Identify Sources of Supply

Objective: Using requirement documents, suppliers are assessed to verify the


availability of products that meet the requirements; their ability to modify
products to meet user requirements; and their willingness to propose solutions
that maximize Commercial Off-The-Shelf (COTS) product and service
content.

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Process: Researching sources of supply can involve interaction with users,


contacting companies for information, and getting source and product
information from other users (e.g. allies) or mining the wealth of information
on the internet.16 In addition to these methods, technical journals, unsolicited
proposals, Price and Availability (P&A), catalogues and conferences, surveys,
and plant visits are techniques to identify potential sources. Information on
the historical performance of these sources can also be useful, even at this
stage of planning. This Process should stimulate industry interest in the
project, and focus on their capability to adapt existing (COTS) solutions to the
project requirements.
PWGSC provides a valuable service to client
departments in assisting with Market Research as suggested by Figure 8.

Output: The potential sources of supply, and the procurement assessment of


the COTS alternatives identified for the project are recorded in the PMP.
MARKET RESEARCH SERVICE
USERS

ALLIES

INTERNET

JOURNALS

COMPANIES

...

SOURCES OF SUPPLY

Before buying goods and services, get to know the market.

Availability of products to meet the requirement as is;

Ability of suppliers to modify their products to meet


the users requirement; and
Flexibility of users to modify their requirements to
allow the purchase of commercial-off-the-shelf goods
and services.

Figure 8 Market Research Service


Identify and Define Procurement Concept

Objective: To identify and conduct preliminary analysis of considerations


that will impact the procurement strategy.

Process: The procurement concept includes an examination of topics such as:

16

Identifying opportunities for using Benefits Driven Procurement


(BDP). In this phase the Project Team is:

Preparing a Business Case

DND Acquisition Reform Guide, Team Leader G. Reinhardus; Author B.F. Hough.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Determining if information technology solutions for the need


exist
Performing an evaluation of the departments project
management and software process management capability
Preparing project scope and risk assessment
Assess applicability of the BDP approach and seeking project
approval

In addition to BDP considerations, the procurement concept involves


consideration of:

Canadian vs. off-shore industrial capability, that may require


assessment of major policy and trade legislation issues

Need for Government Furnished Resources (GFR)

Technology transfer, patents, licensing and royalty issues

The overall procurement timeline and process; major project


and contract milestones

Preliminary identification of procurement effort/resource level

Target cost and cash flow

Identification of appropriate authorities (technical, design,


system, inspection, quality assurance)

Need for and coordination of interdepartmental or international


agreements

Identification of relevant standards and templates for technical


and project management disciplines

Project Management needs and capability

Risks and mitigation strategies17

With the introduction of trade agreements like NAFTA, WTO-AGP


and AIT, the non-competitive approach to the procurement process is
called limited tendering. It is a deviation from the competitive process
including the ability to contact a sole or single supplier or a number of
suppliers individually. The conditions under which limited tendering
may be used are very specific, and the Supply Manual, paragraph
5.030 should be consulted for the details. In all cases the client must
provide the rationale for exceptions to competitive procurement before
a procurement strategy that uses limited tendering can be followed.

The appropriate procurement approach for the project depends upon many
factors, such as the nature of the project, the time and resources that you have
and the market place availability of a solution.
The points of involvement and resulting effort profiles vary, depending upon
the procurement concept selected. For example, under BDP, industry is
17

Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

brought in when the project objectives are clear, but requirements have not yet
been specified. The requirements definition work is largely transferred to
industry.
Under Commercial-Off-The-Shelf procurement, product
development effort and risk is avoided. However, the specific (logistics)
support requirements must still be planned. With Total Package Procurement,
life cycle product support is provided by industry, and maintenance planning
is simplified18.
Feedback on the Procurement Concept should be sought within the IPT(s) and
from potential sources of supply.

Output: A preliminary review and analysis of factors contributing to the


procurement concept is recorded in the PMP. In many cases, this analysis will
raise questions that may not be answered until later in the procurement
process, or conditions may change, requiring further review of how these
factors will influence the procurement.

Refine Performance Objectives

Objective: To review and refine the procurement objectives using feedback


from within the IPT and from potential sources of supply.

Process: Using the outputs of early dialogue with industry, requirements and
business planning documents, the procurement concept, and the project life
cycle methodology, review and refine the procurement performance
objectives.

Output: Using project, requirements, and procurement planning and industry


feedback (e.g. homepage, industry days, plant visits, company presentations),
update the performance objectives and requirement documents. This results
in revisions to requirements definition documents, such as Statement of
Operational Requirements, Statement of Objectives, Business Requirements
and any preliminary specifications.

Prepare Procurement Management Plan (PMP)

18

Objective: To integrate the planning effort of the IPT in a single procurement


plan that will be used for overall management, coordination and
communication of procurement activity, and as the basis for the contract
approval strategy.

Process: Using information gathered in the activities to date, prepare a draft


of the PMP and review it within the IPT. The PMP evolves over the life of
the procurement as it adds content on project, contract management and
contract administration activities. An outline of the PMP is presented in

DND Acquisition Reform Guide, Team Leader- G. Reinhardus; Aughor B.F. Hough.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Figure 9. The PMP is both a plan and a record of the key activities and
decisions during the life of the project procurement.

Output: The draft PMP is prepared.


1.

Description

Requirement

5.

Budget and Financial Code

2.

Need Date
Policy Issues

Authorization Reference
Risks (Time, Cost, Performance)

Protection of the Crown

4.

Contract Administration
Sourcing

Procurement Method

Trade Agreements
Competitive vs Sole Source

Multi-Sourcing

RFP Issued
Bids Closed

Contract Award

Deliveries Commence
Contract Complete

6.

Additional Comments

Any additional information that


the Approval Authority should
be aware of.

7.

Revisions To The Plan

3.

Procurement Milestones

Approved By:

Evaluation Criteria

Best Price, Best Value, Best


Technical

Socioeconomic Considerations

Figure 9 Procurement Management Plan


5.2

Phase 2 - Solicitation Planning

The PMBOK defines solicitation planning as "documenting the project requirements and
identifying potential sources of supply"19. The process includes preparing all the documents that
will be necessary in the solicitation and source selection phase. These concepts are presented in
Table 2.

19

PMBOK, Procurement, Page 137.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Table 2 PPM in the Solicitation Planning Phase


COMPETENCY AREA

GOALS

RESPONSIBILITY
IPT = Input D = Decision

Multidisciplinary

Define Procurement Requirements in Bid


Solicitation Documents

IPT
D = Project Manager

Project/Procurement/Technical
Management

Determine contract scope (WBS), for


example bundling, PFC, BDP, ASD
opportunities

IPT
D = Project Manager

Determine applicability of trade agreements

D Procurement Manager20

Multidisciplinary

Define Contract Management and


Administration strategies

IPT
D = Procurement Manager

Technical/Procurement/Cost &
Pricing Management

Define evaluation methodology and basis of


selecting the winning bid

IPT
D = Project Manager

Procurement Management

Obtain advance approval for procurement


strategy

IPT
D = Procurement Manager

INPUTS
Scope Documents: WBS,
SOW, SPEC, Plans, cash flow

TOOLS & TECHNIQUES


Document templates

OUTPUTS
Requirements documents
consistent with procurement
strategy and best practices
Contract documents: T&Cs,
SOW, SPEC, Plans,
DIDs/CDRL, Master Schedule,
WBS

Draft Contract documents:


T&Cs, SOW, SPEC, Plans,
DIDs/CDRL, Master Schedule,
WBS
Evaluation Methodology and
Basis of Selection

Document templates

Evaluation Plan- Methodologies,


criteria (attributes, weighting,
thresholds) and basis of
selection. Evaluation team
resources.

Potential Sources of Supply

Guidance documents: Communication with


industry- Industry Days, feedback on draft
solicitation documents, site visits and
presentations

Suppliers aware of pending


procurement, knowledgeable
about requirements in relation to
capabilities

Risk Mitigation Plans and


Results

Procurement risk assessment, risk tools

Update mitigation plans

Life Cycle Costing and


preliminary Estimates

Expert judgement, estimating techniques

Independent estimates

20

In this context Procurement Manger is the PWGSC lead IPT position. Finance and logistics represents the DND procurement position.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Solicitation planning processes are grouped under:

Define Procurement Requirements; and

Define Procurement Strategy.

Part I, the PPM Process in the Solicitation Planning Process, is shown in Figure 10. Each
process is then described below.
PHASE 2 SOLICITATION PLANNING (PART I)
DEFINE PROCUREMENT REQUIREMENTS
Define Business and Technical Requirements
Define Project Management Strategy
Define Risk Management Strategy
Define Contract Management Strategy
Define Delivery and Acceptance Strategy
Define Quality Assurance Strategy
Define Financial Management Strategy
Define Government Furnished Resources (GFR) Strategy
Define Bid Solicitation Strategy
Define Contract Administration Strategy
Define Scope of Contract(s)
Define Reporting Strategy
Define Approval Strategy
Define Change Management Strategy

Figure 10 Solicitation Planning Process Part I


5.2.1

Define Procurement Requirements

This group of processes involves developing procurement strategies and preparing the
solicitation documents and resulting contract(s). The emphasis is on defining strategies, within
the IPT, for project and risk management, contract management and administration.
These strategies are defined during the project Development Phase when the selected options are
being studied in detail. The process provides the Rough Order of Magnitude (ROM) costs
(capital and personnel, operating and maintenance costs). It also identifies the benefits, risks and
opportunities of each option with a view to finding the best option to further define in detail, if
necessary, during a Definition Phase. Options analysis is conducted in an iterative fashion,
starting with an assessment of the various ways of meeting the need. For example, an
operational capability (e.g. sovereignty patrol) could be carried out in many different ways.
Figure 11 illustrates options analysis and provides basic advice. In the development phase, one
would examine the options selected during the identification phase, before selecting long range

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

patrol aircraft, and then define the particular aircraft that will best meet the operational
requirement.
Example:
6
Conventional Jet Aircraft
Total System Cost Per Pound of
Payload on Station

5
Small Long-Endurance
Aircraft

Define operational need

Identify options

Analyse each option

Select preferred option

2
Large Long-Endurance
Aircraft
1

0
0

50

100

150

200

250

Aircraft Payload Weight (Thousands lbs.)

Note: Stay at high level. Leave


implementation details to
industry.

Antisubmarine Warfare Patrol Aircraft Operations


Source: Cost Considerations in Systems Analysis, G.H. Fisher, Rand, 1971

Figure 11 Options Analysis


Key program management activities in the Development Phase are:

Options analysis/feasibility studies to examine the capability levels that would be


provided by the options;

Cost estimates of both acquisition and life cycle support;

Assessment of industry capability in terms of technology, personnel and priorities;

Socio-economic21 and market studies;

Price and availability studies;

Refinement of the SOR;

Project Profile and Risk Assessment (PPRA)22 for large projects;

Shift of project leadership from sponsoring organization to the implementing


organization; and

Substantive estimate of the Definition Phase cost.23

21

Typically these are Industry Canada assessments of the project potential to generate Industrial Regional Benefits
This is an assessment used by the Treasury Board Secretariat to determine how the project should be managed
23
CFP 125, Chapter 7, Project Approval, a substantive estimate is one that is sufficiently accurate to support entering into contract
22

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.2.1.1

Define Business and Technical Requirements

Objective: To define, in terms suitable for contracting, the operational


requirement or business case, and the technical description of the operational
need, including applicable portions of specifications and standards.

Process: The definition of technical requirements is an iterative process that


starts with operations/user personnel describing their needs in a Statement of
Operational Requirements (SOR) or in a Business Requirements document. A
Statement of Operational Objectives (SOO) may also be used to define the
primary performance, operational and support system objectives of the
project. This permits earlier contractor participation in defining performance
specifications. In general, requirement documents should state performance
or functional objectives rather than require design solutions.24
In this phase, the SOR or Business Requirements should be refined with user,
stakeholder, and potential supplier input. Potential suppliers will need key
operations, system and support information to assist in providing input on the
SOR or Business Requirements, and or to help in preparing or validating
specifications. 25
Many departments now require business case methodology to obtain approval
for any capital major expenditure. Preparation of the Business Case, in
conjunction with the business requirements document is commonplace in
Information Technology projects. Figure 12 describes a business case
analysis approach that can be used to establish and maintain a business
requirements baseline for the project.

24
25

Canadian Government Procurement Guide, B.F. Hough, CSC.


Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

1.

DEFINE
OBJECTIVES

2. BASELINE CURRENT
PARAMETERS

5.

3.

IDENTIFY
ALTERNATIVES

4.

FORMULATE
ASSUMPTIONS

DETERMINE
COSTS OF EACH
ALTERNATIVE

6.

DETERMINE
BENEFITS OF EACH
ALTERNATIVE

7.

COMPARE
ALTERNATIVES

9.

PERFORM
RISK ANALYSIS

10.

MAKE
DECISION

11.

8.

IDENTIFY
RISKS

MAINTAIN
BUSINESS CASE

Figure 12 Business Case Analysis


The process of preparing a business case involves:
Define
Objectives

Define the required capability.

Baseline
Current
Parameters

Record the life cycle costs and benefits/


shortcomings of the existing situation to provide a
baseline against which to measure future costs and
benefits.

Identify
Alternatives

Identify viable alternatives. (This step is iterative


main alternatives are addressed first, then subalternatives.)
Collect, organize, evaluate and
summarize necessary data.

Formulate
Assumptions

Identify important assumptions up front. (These


become evident as the business case is developed.)

Determine
Costs

Identify and estimate life cycle costs for each


alternative. Perform crosscheck analysis to validate
important data.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.2.1.2

26

Determine
Benefits

Identify life cycle benefits for each alternative.

Compare
Alternatives

Compare alternatives. Focus on cost drivers and


their impact on the decision. Conduct payback
analysis to determine when the investment will be
recovered. Establish a tentative ranking of the
alternatives.

Identify Risks

Determine the significant risks associated with each


alternative.

Perform Risk
Analysis

For each significant risk, assess its likelihood and


potential impact, and identify a risk mitigation
method. Determine if the risks alter the ranking of
alternatives.

Make Decision

Weigh the evidence, determine the preferred


solution and list the main reasons this alternative is
selected.

Maintain
Business Case

During implementation, maintain and update cost,


benefit and risk analysis data to verify the decision
and demonstrate goal achievement. Use this data to
guide refinements26.

Output: Statement of Operational Requirements (SOR), Statement of


Objectives (SOO), business requirements or Business Case, as appropriate, is
prepared or refined. Combining the SOR, and other requirement documents
(e.g. Concept of Operations and systems studies) is also good practice in
streamlining project documentation.

Define Project Management Strategy

Objective: To develop strategies for each of Risk and Contract Management,


and Contract Administration.

Process: Developing the project management strategy, in conjunction with


the procurement strategy well in advance of the solicitation, emphasizes the
importance of project management as applied to contract management. These
strategies become elements of the PMP, and they form the basis for the
various roles of the project team after the contract has been awarded. It is

CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

important to ensure adequate resources are available to the IPT to support


contract management, for example, in the area of earned value management.

Output: The IPT defines and records in the PMP the project, risk and
contract management strategies that will be used in the contracting process.

Define Risk Management Strategy


Risk management is recognized by client departments as an important aspect of the
acquisition process. A risk assessment is required as part of the project approval process.
Bidders are often required to identify significant risks and risk mitigation methods in their
proposals. Project implementation often involves preparation and implementation of a risk
management plan.27

Objective: To apply continuous risk management in the project procurement.

Process: Figure 13 illustrates the principles behind the Software Engineering


Institute (SEI) Continuous Risk Management model which has been
specifically developed to apply to complex procurement projects, particularly
projects involving significant design, development, and integration effort.
These projects often involve risk to cost/schedule/performance objectives.
Process, methods and tools that encourage communication and teamwork are
part of the full SEI model.

TR

OL
ID
EN

N
CO

TI
FY

AN

AL

YZ

TRACK

COMMUNICATE

CON P L A N
TIN
GEN
CI

ES

Source: SEI Continuous Risk Management Guidebook

Figure 13 SEI Continuous Risk Management Model28


27
28

DND Acquisition Reform Guide, Team Leader G. Reinhardus; Author B.F. Hough.
Continuous Risk Management Guide. Carnegie Melon University, Software Engineering Institute. Page 267.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

The steps in the SEI Continuous Risk Management Model are:


Identify Risks

Search for and capture risks before they become


problems. Capture statement of risk and context.

Analyze Risk
Data

Transform risk data into decision-making


information. Determine what is important and set
priorities.
Evaluate impact, probability, and
timeframe; and, classify and prioritize risks.

Plan
Contingencies

Translate risk information into decisions and


mitigation plans and implementation.

Track Risks
and Responses

Monitor risk indicators and mitigation plans/actions.


Acquire, compile and report data on risk mitigation.

Control
Mitigation

Correct for deviations from the mitigation plans.


Corrective actions impact process and product.
Change plans as needed. Analyze tracking data and
make decisions.

Communicate

Provide information and feedback on current and


emerging risks. This is the key function that links
and drives the others. Steps are iterative, and each
step is a vehicle for the communication of risk.

Given that much of the project risk occurs within the procurement process, it
is important that risk management is a continuous process. Figure 14
indicates the some methods that can be used to identify and manage risks, and
a short discussion of techniques follows the figure.

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EXPERIENCE-BASED RISK MANAGEMENT


RISK IDENTIFICATION

RISK ANALYSIS

Brainstorming

Structured Walk-Throughs

Estimated Impact On:


Technical
Schedule
Cost
Socio-Economic Benefits
Other

Problem Reporting
COMMUNICATION
RISK TRACKING AND CONTROL
Risk Matrix in Bid
Risk Management Plan
Risk Tracking Process

CONTINGENCY PLANNING

Technical Margins and Fallbacks


Slack in Schedule
Contingency in Budget
Flexibility in Economic Benefits
Risk Mitigation Planning

Figure 14 Dealing with Risk29

Brainstorming is effective during early project planning. What


problems were experienced with similar projects? Are all stakeholders
on side? Is the schedule overly optimistic? Is the state of the art being
exceeded?
Once a project plan has been developed, a structured walk-through of
project information the work breakdown structure, critical path
method schedule, product breakdown structure, etc. can be used to
identify potential problem areas.
During project implementation, a problem reporting process should be
established. Typically the government project manager and industry
counterpart can designate issues as risks to be entered into a problem
tracking database. Each identified risk is assigned to someone, get
well plans are formulated and the risk is tracked to resolution.30

The project plan should include contingencies to allow for technical problems,
work slippage, cost over-runs, and difficulties in accomplishing economic
benefits goals.

29
30

Systems Engineering Management, B.F. Hough, CSC.


DND Acquisition Reform Guide

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Output: Strategy is prepared by IPT and recorded in PMP to identify and


analyze risks; plan contingencies; and track, control and communicate project
risk status.

Define Contract Management Strategy

Objective: To develop, within the IPT, an overall framework and individual


strategies for contract management in the areas of Delivery and Acceptance,
Quality Assurance, Financial Management, and Government Furnished
Resources.

Process: In developing the contract management strategy, the IPT focuses on


the work areas of contractor performance that will be monitored after contract
award, and the associated contractor processes that will be evaluated during
source selection. Contractors should be aware of the nature and degree of
contract management envisaged by the IPT, and its consistency with the
procurement strategy. Figure 15 illustrates the risk mitigation function of
contract management.

Output: Strategy is prepared by the IPT and recorded in PMP for Delivery
and Acceptance, Quality Assurance, Financial, and Government Furnished
Resources.
Strategies to
Mitigate Risk
(Examples)

Risk
Identification
and Evaluation
Delivery
Objective
To Manage
Risk

Financial Mgt

Value for
Money

Technical
Performance

Fit with
Performance
Specification

Tech
Perf

RISK
GFR

Critical
Indicators
(Examples)

QA Test and
Acceptance

QA
Inspection
and
Acceptance

Fin Mgt
Delivery

GFR

Time and
Location of
Delivery

Fitness
for Use

Figure 15 Risk Mitigation Through Contract Management

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Define Delivery and Acceptance Strategy

Objective: To develop and record the strategy for continuous monitoring,


including feedback and corrective action, of activities associated with delivery
and acceptance.

Process: The strategy should address all mechanisms that will be used to
monitor delivery and perform acceptance, for example:

Establishing credible product/service delivery and in-service dates

Preparing acceptance criteria for deliverables

Monitoring of contractor progress reports; master, support, and special


schedules; earned value data; and the effectiveness of related project
management processes including change control;

Packaging, Handling, Support, Transportation (PHST) (e.g. hazardous


materials) planning; and

Expediting and follow-up on delivery status and delays, and


unsatisfactory performance until final delivery.31

Output: Strategy prepared by the IPT and recorded in the PMP of all
mechanisms that will be used to monitor delivery performance and perform
acceptance.

Define Quality Assurance Strategy

Objective: To develop and record the Quality Assurance Strategy that will be
used to monitor contractor performance.

Process: Quality Assurance processes include the ISO 9,000, 10,000 and
14,000 series standards and guidelines, proprietary approaches (e.g. Deming,
Juran, Crosby) and non-proprietary approaches such as Total Quality
Management (TQM) and Continuous Improvement.
Quality Assurance is typically a technical specialist function, and a subject
matter expert should form part of the IPT and should lead the effort to define
this strategy. The strategy should address the following elements:

Quality Planning (identification of standards and tailoring);

Quality Assurance (ensuring project/contract activity meets standards);


and

Quality Control (monitoring project/contract results for compliance,


and resolving unsatisfactory performance).32

31
32

BPR Team #1 Report.


PMBOK. Quality Assurance.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

With the cancellation by the US DoD of its military standards and the growing
use of international and commercial standards, it is becoming more difficult to
define quality and process related requirements. There are many competing
standards to choose from. Just staying informed about what standards exist,
which are widely accepted, and what is the latest version, is a real challenge.
Also, selection of any given set of standards may have unintended effects on
companies ability to bid. This new challenge, highlighted in Figure 16,
applies to quality assurance, engineering and logistics, and project
management disciplines.

Output. Strategy prepared by the IPT and recorded in the PMP for Quality
Planning, Assurance and Control.

CHOOSING FROM A PLETHORA OF STANDARDS


- A NEW CHALLENGE IN PROCUREMENT
INTERNATIONAL STANDARDS

ISO 9,000 Series


ISO 10,000 Series
ISO 14,000 Series

INTERNATIONAL ASSOCIATION
AND INSTITUTIONS STANDARDS

- Capability Maturity Model


- Continuous Risk Management
- Configuration Management
- Failure Modes, Effects and
Criticality Analysis
Total Quality
IEEE - Systems Engineering
Management
SOLE - Supportability
Continuous
Improvement

PROPRIETARY
GUIDANCE

SEI
SEI
EIA
SAE

Deming
Juran
Crosby
etc.

NON-PROPRIETARY
GUIDANCE

Figure 16 Choosing From a Plethora of Standards


Define Financial Management Strategy

Objective: To develop and record the Financial Management Strategy that


will be used to monitor contractor performance.

Process: The strategy should address all mechanisms that will be used to
monitor delivery performance, for example:

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Verify the time, cost elements and other factors charged to the
contract;
Ensure that contract billings are in accordance with contract
provisions;
Ensure that the work is performed; that products and services have
been delivered, or (in the case of progress payments) that work in
progress is reasonable and payment is in accordance with contract
provisions;
Correlate progress and earned value status and projections with actual
and planned billings;
Monitor time recording system and cost accounting system;
Monitor contractor financial and cost/schedule performance; and
Verify financial input to contract closeout.

Output: Strategy prepared by the IPT and recorded in the PMP for
management of cash flow, funds, budget, payment, cost, price and rate
determination, and performance management.

Define Government Furnished Resources (GFR) Strategy

Objective: To develop and document the GFR Strategy that will be used to
monitor contractor performance.

Process: GFR should be provided on an exception basis only when


contractors cannot provide the appropriate resources. Coordination of the
provision of GFR may impose significant administrative effort on the IPT.
The timeliness and quality of GFR delivery brings with it contract risk and the
need to track the availability of incoming/outgoing resources in order to avoid
consequential delays and cost growth. The strategy should address all
mechanisms that will be used to manage the GFR, for example:

GFR requirements in the form of information, materials, test


equipment, system assets and personnel;

Agreements in the form of loans or other formal agreements; and

Tracking mechanisms to coordinate resource movements, repairs,


upgrades, and corrective action at operational units/supply locations
and contractor facilities.

Terms and Conditions that specify rights and obligations with regard
to GFR.

Output: Strategy prepared by the IPT and recorded in the PMP for GFR
management.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Define Bid Solicitation Strategy

Objective: To develop and record the Bid Solicitation Strategy that will be
used to solicit bids, evaluate proposals, select the winning contractor, and
negotiate an acceptable contract package.

Process: The strategy should address all mechanisms that will be used to
manage the bid solicitation, for example:

The main elements of the Solicitation Document (Certifications,


Terms and Conditions, Statement of Work, Evaluation Criteria, Basis
of Selection, Attached Documents);

The evaluation elements (e.g. Technical Proposal, Presentation and


Interviews, Historical Performance and Risk Assessment, Cost
Evaluation);

The basis of selection (e.g. best price, best value, best technical)

The evaluation methodology (e.g. criteria, attributes, weighting,


thresholds);

The evaluation plan (detailed process and scoring formats that the
valuation team uses);

Evaluation team (core members, subject matter experts, challenge


committee);

Debriefing unsuccessful bidders; and

Negotiation strategy and process.

Output: Strategy prepared by the IPT and recorded in the PMP for bid
solicitation.

Define Contract Administration Strategy

Objective: To develop and document the Contract Administration Strategy


that will be used to administer the contract.

Process: The strategy should address all mechanisms that will be used to
administer the contract. Whereas contract management is concerned with
performance monitoring, contract administration deals with the day-to-day
administration of the contract: verification and payment of claims/invoices;
filing and data management; loan administration; and contract reporting.
Preparing for administration includes:

Review of the procurement file to identify anticipated contract


provisions and preparation of a list of administrative functions;

Allocating contract administrative functions to various team members;

Providing notice and instructions to those involved in administration;

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

After contract award, ensuring the contractor is notified of personnel,


roles and delegated authority, and having contractor counterparts
named with their authorities; and

Considering past performance and issues that have occurred with the
contractor in performing contract administration.33
It is important that all team members know their administrative roles. Some
redundancy may be desirable in key areas. However, duplication between IPT
members should be avoided.

5.2.1.3

Output: Identification of contract management and administration functions


to be performed, and the resources necessary to perform them, prepared by the
IPT and recorded in the PMP.

Define Scope of Contract(s)

Objective: To develop and record the strategy for Pre-Facilitated Contracting


(PFC), designation as a Benefits Driven Procurement, Alternative Service
Delivery, Total Package Procurement, or other scope alternatives.

Process: Dramatically different contract scopes are now available to choose


from. Opportunities to bundle and establish pre-facilitated contracts are now
being examined across systems and commodity classes on an ongoing basis.
However, new opportunities will occur as acquisitions move into a support
mode, and personnel are encouraged to exploit these opportunities in order to
move from repetitive transactions into higher value contracting activity.
Figure 17 presents four different contract scopes. Each of these approaches
involves establishing a long term relationship with the contractor. Early
PWGSC participation in planning is essential.

33

Output: Strategy prepared by IPT for Pre-Facilitated Contracts (PFC),


Benefits Driven Procurement (BDP) application of Total Package
Procurement (TPP), Alternative Service Delivery, or some other approach,
recorded in the PMP.

BPR Team #1 Report.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

CONTRACT SCOPE - CONSIDERATIONS


ALTERNATIVE SERVICE DELIVERY

Non-core services are competed between


industry and in-house provider
Costs are reduced for both retained and
contracted-out services
Logistics support is greatly simplified

BENEFITS DRIVEN PROCUREMENT

PRE-FACILITATED CONTRACTS

Contractor selection is based on


capability and track record
Contractor is brought in early before
requirements are fully defined
Government prepares statement of
objectives in lieu of SOW/Specification

Related goods and services are bundled


Number of contracting transactions are
greatly reduced
Based on long term relationships with
competent supplier

TOTAL PACKAGE PROCUREMENT

Contract is for system and life cycle support


Basis of source selection is life cycle cost
Contractor guarantees reliability and bears cost
of excessive repairs/overhauls

Figure 17 Determining Contract Scope


5.2.1.4

Define Reporting Strategy

Objective: To develop and document the Reporting Strategy that will be used
to administer the contract.

Process: To define the format and content of contract management and


administration reports that will be required of the contractor. Care should be
taken to minimize the reporting burden by tailoring required reports to the
scope and complexity of the anticipated contract. Government and industry
resources for oversight are limited, and it is important that reporting (indeed
all contract data requirements), are reviewed before being specified in the
contract. Templates of Data Item Descriptions (DIDs) and Contract Data
Requirements Lists (CDRLs) are often available from previous contracts,
however each data item should be challenged as to its need and cost
effectiveness.

Output: Strategy prepared by IPT and recorded in the PMP for contract and
project reporting.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.2.1.5

5.2.1.6

5.2.2

Define Approval Strategy

Objective: To define and document the Approval Strategy.

Process: To define and document the approval strategy applicable to the


procurement. Unless appropriate approval lead time is planned for, the
process can impose delays on the overall procurement time-line pushing out
contract award and contractor delivery dates. BPR has recommended
increased delegation, and a simplified approval and reporting system,
however, these recommendations apply to complex procurements within
departmental approval limits. Many complex procurements will require
Treasury Board Approval because of the size and sensitivity of public
expenditure involved.

Output: Strategy prepared by IPT and recorded in the PMP for procurement
strategy approval, and contract approval and signing authorities.

Define the Change Management Strategy

Objective: To define and document the change management strategy that


will be used in the contract administration phase.

Process: The technical configuration management, contractual contract


change and amendment processes should be integrated in an overall change
process for the contract. Configuration management is focused on changes to
the contract specification.
Contract change management incorporates
approved changes to all contract elements, including the terms and conditions,
statement of work, specification, delivery dates and quantities, etc. Close
coordination of project team and contractor processes and systems is
necessary for an effective change management process. Special attention
should be given to the cycle time for administrative processes such as change
impact assessment, and the implementation and verification of approved
changes.

Output: Strategy prepared by IPT and recorded in the PMP for contract
change management, including necessary configuration and data management
processes.

Define Procurement Strategy

Figure 18 shows Part II of the solicitation planing process and each process is described below.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PHASE 2 SOLICITATION PLANNING (PART II)


Define Procurement Strategy
Validate Sources of Supply
Define Procurement Methodology (Tools and Techniques)
Define Bid Evaluation Criteria and Basis of Source Selection
Prepare Bid Solicitation Document
Obtain Management Approval of the Procurement Strategy

Figure 18 Solicitation Planning Process Part II

Objective: To develop, within the IPT, an overall procurement strategy in the


areas of sources of supply, procurement methodology, bid solicitation and
evaluation, and contract approval.

Process:
The Treasury Board Secretariat identifies three principle
procurement strategies: Commercial-Off-The-Shelf (COTS) or buying an
existing solution; Solution-Oriented Procurement (SOP) or adapting an
existing solution; and Unique Government Development (UGD) or developing
a new solution. These three alternatives are illustrated in Figure 19.
It is essential that an appropriate strategy be agreed upon within the IPT
before the solicitation documents are prepared. The challenge in identifying
the strategy being pursued is that these categories are not mutually exclusive.
Often complex procurements include all three elements. Also, many COTS
products and services can be customized and thus de-linked from standard
product update cycles when in-service. Therefore, the extent of change
anticipated to a COTS product, and the approach taken for life cycle support
has a major influence on the complexity of the procurement strategy.

Output: Strategy prepared by IPT and recorded in the PMP for the overall
management/timeline of the procurement and its major milestones. The
strategy should consider COTS, SOP, and UGD alternatives.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PROCUREMENT STRATEGIES
COMMERCIALOFF-THE-SHELF

SOLUTION ORIENTED
PROCUREMENT

UNIQUE GOVERNMENT
DEVELOPMENT

RISK

High

Medium

isk
gR
n
i
s
rea
Inc

Low
Low

Medium

High

EXTENT OF DESIGN, DEVELOPMENT AND INTEGRATION

Figure 19 Alternative Procurement Strategies


5.2.2.1

Validate Sources of Supply

Objective: To review, validate and record the interest and capability of


potential sources of supply.

Process: Using market research, source and supplier information, potential


sources should be kept informed of the pending solicitation and be offered the
opportunity to comment on draft iterations of the requirements. During this
early communication, information on the evaluation approach or criteria
should not be disclosed to individual companies as this could disadvantage
other suppliers that may choose to bid.
Continuing market research activity and contacts are aimed at keeping the
pending procurement visible in the supplier community in order to stimulate
competitive, high quality responses to the solicitation. Source capability
information can obtained through a number of formal and informal channels,
including historical contract performance, other customer references, and
plant visits and capability presentations.
Price and Availability (P&A), Letter of Interest (LOI), also known as a
Solicitation of Interest (SOI), or Request for Contractor Information (RCI)
documents can also be used to more formally communicate the timing and

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

significance of the project procurement. These approaches can also be used to


stimulate industry partnering/teaming in the project, and to obtain feedback on
requirement documents such as the SOO, SOR, SOW or Specifications.

5.2.2.2

5.2.2.3

34

Output: Strategy prepared by IPT and recorded in the PMP for informal
(non-solicitation) interaction with industry using various instruments in order
to obtain feedback on requirement documents, and assess industry interest and
capability.

Define Procurement Methodology (Tools & Techniques)

Objective: To define and record the methodology that will be used to manage
the procurement.

Process: The procurement methodology is the detailed "how to" of the


remaining activities in the PPM process. It consists of refining the strategies
("the what") previously identified, including the definition/selection of
specific tools and techniques, operating procedures, and recruitment and/or
training of core and matrix team members. Examples of methodology
include:

Financial Management System (system composed of people, defined


process, and software tools);

Contract Change Management System;

Performance Management System (e.g. C/SPMS34 and PPMS);

Data Management System;

Risk Management System;

Reviews and Reporting; and

Project Office Management.

Output: Procurement tools and techniques, selected and reflected in the


PMP.

Define Bid Evaluation Criteria and Basis of Source Selection

Objective: To define and record the evaluation and selection methods that
will be used in the bid solicitation document.

Process: Refine the bid solicitation strategy in order to identify the detailed
evaluation criteria and basis of source selection. The evaluation approach and
criteria details must be traceable to the SOW and specification and other
provisions of the solicitation document. The selection of mandatory and rated
requirements should be reviewed carefully to ensure potential bidders are able
to understand the evaluation/selection approach, and know where to

Cost/Schedule Performance Management Standard. Project Performance Management Standard

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

concentrate their effort and resources in creating the most effective response
possible. Mandatory requirements must be scrutinized to make sure that they
are truly essential and do not exclude good potential sources of supply. A
partial dry run of the evaluation process and training for team members, at the
appropriate time, is a good practice.

5.2.2.4

Output: Strategy prepared by IPT and recorded in the PMP for the bid
evaluation and basis of source selection, including criteria, attributes, scoring,
thresholds, and technical/price selection considerations.

Prepare Bid Solicitation Document

Objective: To define and prepare the bid solicitation document.

Process:
Using the previously defined bid solicitation strategy and
evaluation/ selection methodology, the solicitation document is prepared. The
document can be prepared using Policies, the Automated Buying Environment
(ABE), by cut and paste from the SACC Manual, and/or using templates from
previous project procurements. In a complex procurement, the sheer size of
the solicitation document represents an integration challenge. It is important
that the Procurement Officer ensures the overall integrity of the document by
doing at least three full review cycles of the entire document. Peer and
independent review are also good practices to further validate the integration
and consistency of the entire document, and challenge the necessity of all of
the information requirements it places on potential bidders.
A draft Request For Proposal (RFP) is prepared first. After sufficient
consultation and revision, this document is revised and becomes the final
RFP. The final RFP reflects the considered views of the IPT and other
stakeholders, including potential bidders.35 The RFP and the associated bid
evaluation process should be as brief and simple as possible. Although a large
number of requirements often are identified, only a few factors are usually
critical to selection of the winning bid. For example, in the Search and
Rescue (SAR) helicopter project, the most critical factors were helicopter size,
range, adverse weather capability and reliability. Bid packages that are large,
complex and lengthy may involve far more evaluation effort than is essential
to make a sound decision. Dealing with evaluation minutiae increases the
chance of error and the potential for challenge from a disgruntled bidder. 36
The Terms and Conditions, found in the main body of the RFP and
subsequently, in the contract, are known as the Articles of Agreement and
they are prepared by the procurement officer. The approach should be kept

35
36

DND Acquisition Reform Guide, Project Leader G. Reinhardus, Author B.F. Hough
Canadian Government Procurement Guide, B.F. Hough, CSC.

Public Works and Government Services Canada

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

simple using terms and conditions that are suitable for the nature of the
work, easy to understand, and no more onerous than necessary37.
The General Conditions, used in virtually all government contracts, provide
powerful protection to the government. For example, they require the
contractor to be competent to perform the work, to supply everything
necessary for its performance, to use properly qualified personnel and proper
procedures and to warrant that the products and services provided are free
from defects.
Clauses specific to the project cover many topics, such as basis of acceptance,
method of payment, warranty provisions, management of government
property, etc. The draft terms and conditions should be subject to a
requirements scrub, just like the other parts of the RFP. Examples of
questions that should be asked are:

Are the terms and conditions consistent with the procurement strategy?

Do any clauses impose requirements that would unnecessarily increase


the cost of the work?

Are the clauses consistent with the procurement reforms being


applied?38
The contract should include a basis of acceptance of the goods and services.
For services, one may use the performance thresholds established in a Service
Level Agreement or interim and final reports. For goods, a test and evaluation
program may be needed. A contract specification states what is required
(section 3 of the specification) and how it will be shown that the requirements
have been met (section 4). One must be able to trace from requirements, to
test and evaluation results, as illustrated in Figure 20.

VALIDATION AND VERIFICATION - PRODUCT ACCEPTANCE

--------------- Customer --------------

REQUIREMENTS

------------------------ Contractor Validation ------------------------------

TEST AND EVALUATION

RESULTS

-- Customer Verification --

ACCEPTANCE
4
4
4
4

Figure 20 Requirements Management Leading to Product Acceptance

37
38

Canadian Government Procurement Guide, B.F. Hough, CSC.


Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Although the role of industry in complex procurement is increasing under


procurement reform, it remains the responsibility of the IPT to define
requirements and, having been shown that these requirements have been met,
to accept the product. In other words:
The contractor must know:

What is the basis of acceptance and


payment?

The customer must know:

Have the performance, interface


support requirements been met?

and

There are several computer tools on the market that may be used to facilitate
requirement management, from requirement definition to product acceptance.
Figure 21 shows the importance of a logical process from needs analysis
through contract signing.

Needs Analysis

Needs change over time.

Requisition

Tasks Contracting Authority.

Solicitation

Properly structured, clear


Request for Proposals.

Responses

Compliant, clear, credible.

Evaluation & Selection

Using stipulated criteria.


Includes risk assessment.

Negotiation
Agreement

Resolves major concerns.


Defines work, product,
schedule, price, industrial/
regional benefits. Includes
agreed specification.

Figure 21 Communicating in the Contracting Process39

39

Canadian Government Procurement Guide, B.F. Hough, CSC.

Public Works and Government Services Canada

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

The typical structure of an RFP is shown in Figure 22.


Section A:

Instructions to Bidders

Section B:

Inquiries and Request for Clarifications

Section C:

Evaluation Criteria

Section D:

Resulting Contract Clauses


Part A:

Requirements Clauses

Part B:

Financial Clauses

Part C:

General Conditions

GUIDANCE TO BIDDERS

Annexes to Part A:
Annex A

MODEL CONTRACT

REQUIREM ENTS

Statement of Work
Appendix 1

- Contract Data Requirements List


- Data Item Descriptions

Appendix 2

- Contract End Items List

Annex B

Performance Specification (goods)

Annex C

Qualifications, Knowledge and Experience Requirements (services)

...

Other annexes as required

Figure 22 Typical Structure of an RFP40


An overview of the proposal evaluation process is shown in Figure 23. The
Proposal Evaluation Plan should be prepared at the same time as the RFP. In
this way it is more likely that all of the information for the evaluation will be
solicited. The RFP should state the evaluation criteria and their relative
importance.
To ensure a fair bid evaluation, there must be an objective way of confirming
the bidders contention that each requirement has been met. The instructions
to bidders in the RFP must be consistent with the Proposal Evaluation Plan.
It is good practice to evaluate and score the proposed approach to meeting all
requirements both mandatory and desirable in order to verify the integrity of
the intended process.

40

Canadian Government Procurement Guide, B.F. Hough, CSC.

Public Works and Government Services Canada

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Prepare a Proposal Evaluation Plan at the same time as statement of work (and
specification) is written.
State in the RFP the Source Selection Rule to be used:

Best Price

Best Value

Best Technical
State the proposed Evaluation Criteria and allocated
Point Scores in the Instructions to Bidders in the RFP.
Organize the Proposal Evaluation Team, ensuring
that all stakeholders are represented.
Record the detailed evaluations so that the source
selection decision can be justified.
Have an independent group perform a challenge function of the evaluation
results.

Figure 23 Selection of the Winning Proposal41

5.2.2.5

Output: The Bid Solicitation Document is prepared by the IPT, and updated
as necessary to incorporate potential source42, peer and independent reviews
that assure the completeness and integrity of the bid package.

Obtain Management Approval of the Procurement Strategy

Objective: To conduct a thorough review of the procurement planning in


order to ensure that it is properly defined and organized prior to soliciting
bids.

Process: The PMP is reviewed by the IPT to ensure that it is complete,


accurate, and reflects the needs of the client department as well as realistic
assumptions about the potential industry response to the requirement. The
size and content of the PMP should reflect the complexity of the procurement.
The Plan should be similar in size and scope to the relevant parts of the
Project Management Plan that is normally required from contractors. The
Plan is the basis for allocating IPT roles, work definition, performance
measurement, and guidance regarding interaction with contractors. It should
be concise, readable, and flexible enough to accommodate changes.
The Contract Planning and Advance Approval (CPAA) process allows
contracting officers to award contracts without further reference to the
approval authority when there are no significant changes from an approved
CPAA form. A Procurement Plan is used for procurements exceeding the

41

Canadian Government Procurement Guide, B.F. Hough, CSC.


Potential sources should not see evaluation, selection and pricing elements. Their role is limited to feedback on the clarity/necessity of
requirements.
42

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

approval levels of directors general; and those procurements with significant


socio-economic impact; or those that may require the Ministers involvement
at some stage of the procurement.

5.3

Output: PMP document updated and reviewed by the IPT to ensure


completeness and accuracy. Management approval of the Procurement
Strategy is received. Project funding is available.

Phase 3 - Solicitation and Source Selection (S&SS)

The PMBOK defines solicitation as "obtaining quotations, bids, offers, or proposals as


appropriate" and source selection as "choosing from among potential sellers"43. The source
selection process involves the receipt of bids and the application of evaluation criteria and source
selection rules to identify the winning contractor. The phase culminates in the awarding of a
contract to the successful bidder. These concepts are shown in Table 3.

43

PMBOK, Procurement, Page 141.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Table 3 PPM in the Solicitation and Source Selection Phase


COMPETENCY AREA

GOALS

Multidisciplinary

Prepare fully integrated bid


solicitation document

RESPONSIBILITY
IPT = Input D = Decision
IPT
D- Procurement Manager

Verify availability of funds under


Financial Administration Act (FAA)
and project approval status
Multidisciplinary

Receive Bids and conduct


evaluations in accordance with the
solicitation document and evaluation
plan

IPT
D- Procurement Manager

Procurement

Select recommended contractor(s)

IPT
D- Procurement Manager

Multidisciplinary

Negotiate contract provisions and


financial incentive package

IPT
D- Procurement Manager

Project Management

Update and implement project and


risk management strategies

IPT
D- Project Manager

Procurement Management

Prepare contract document and


obtain approval and signing
authorities. Award contract(s)

IPT
D- Procurement Manager

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

Procurement Management Plan


(PMP)

Expert Advice

Risk and Capability Assessment and


Project Management Strategies

Repository knowledge and


templates

Continuous risk management

Bid Solicitation Document (Request


for Proposal (RFP)

Government Electronic Tendering


Service, Government Business
Opportunities, Bidders Conference,
Clarifications, Questions and
Answers

Proposals

Evaluation Plan and Resources

Evaluation team and procedures

Proposal ranking and source


selection
Evaluation Report
Debriefings

Draft Contract Documents

Clarification and negotiations


Risk Assessment, Independent
review

Gates, Ramps, Financials, Delivery/


incentives, update to Business Case,
Requirements and Contract
Final changes and contract award

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.3.1

Execute Procurement Strategy

Execute Procurement Strategy includes the solicitation, receipt and evaluation of proposals,
source selection, negotiation, contract preparation, and contract approval and award. These
processes are listed in Figure 24.
EXECUTE PROCUREMENT STRATEGY
Solicit Bids
Receive Bids
Evaluate Bids
Select Contractor
Negotiate Contract
Prepare Contract
Obtain Contract Award
Award Contract

Figure 24 Solicitation and Source Selection Process


This process may be conducted at the beginning of both the project definition and
implementation phases. During project definition there is significant expenditure to define the
project in detail, and to select contractor(s) to provide the solutions in the implementation phase.
Key program management activities are:

Conduct of studies that produce a "final" Statement of Operational Requirements, and a


substantive estimate of the system acquisition, transition and recurring Personnel
Operations and Maintenance (PO&M) costs for the implementation of the project;

Update of the Project Profile and Risk Assessment (PPRA);

Preparation of the Project Implementation Plan (PIP);

Senior Management review of project documentation;

Synopsis Sheet, Effective Project Approval44 is obtained for:

The preferred solution

Commitment to the Personnel, Operations and Maintenance cost estimate

Agreement and funding to proceed with the implementation phase;

The Senior Project Advisory Committee (SPAC), or Procurement Review Committee


(PRC), or Advisory Committee or Repair and Overhaul (ACRO) review of the planned
procurement and resolve any interdepartmental issues;45 and

44
45

Synopsis Sheet, Effective Project Approval is the expenditure authority for the project given by the Treasury Board Ministers
These committees provide advice and direction through the project sponsor/leader and senior departmental managers.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

The project moves to priority status on phase completion and to implementation status
when Minister and Treasury Board (TB) expenditure authority is obtained.46

Output: The processes of bid solicitation, receipt and evaluation of proposals, source
selection, negotiation and contract preparation, contract approval and award come under
this heading and generate solicitation and source selection outputs.

5.3.1.1

Solicit Bids

Objective: To obtain responsive proposals from suppliers.

Process: Bid solicitation involves posting the solicitation document on the


Government Electronic Tendering System (GETS) provided through
MERX47, placing the requirement in the Government Business Opportunities
(GBO) publication, holding a Bidders Conference, answering questions from
bidders or providing clarifications and, if necessary, amending the solicitation
document. The bid solicitation period ends with the close of the bid period,
sometimes a minimum period stipulated by the relevant international trade
agreement.
It is good practice to limit the number of pages allowed in the proposals48.
This focuses the bidders attention on the need to be concise and to concentrate
on the essential points of the RFP. Page limits control the size of the
proposals, assisting the bid evaluation team in understanding the proposal in
its entirety.

5.3.1.2

Output: Advertised and electronically posted bid solicitation document,


Bidders Conference, and clarifications or amendments to the solicitation.

Receive Bids

Objective: To obtain proposals from suppliers on/before the bid period


closing date/time and at the bid receiving site specified in the solicitation
document.

Process: Proposals can be received at the Bid Receiving Unit (BRU) of the
SOSB or at any other location specified in the bid document. Proper receipt
and custody of the bids during the open bid period is important, especially if
there are clarifications or questions/answers and amendments that are
distributed to prospective bidders.
A record of all document transactions is kept to determine which bids are
responsive and which must be rejected, and returned to the bidder. A bid that
is late or sent to the wrong location is returned to the bidder with a regret letter

46

CFP 125, Chapter 7, Project Approval.


Unless the solicitation is exempt from trade legislation or uses limited tendering.
48
US Army Acquisition Reform Summary, Contract Management, June 1998.
47

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

explaining why the bid will not be evaluated. At the close of the bid period,
the procurement officer receives the original and the specified number of
copies of the proposals for evaluation. The procurement officer maintains a
transaction record of all communications during the bid period. It is essential
that all communication about the solicitation document is channelled through
the procurement officer in order that correct and timely response information
is available to all prospective bidders.

5.3.1.3

Output: Bids received in accordance with the instructions in the solicitation


document, and a record of all communications during the bid period.

Evaluate Bids

Objective: To evaluate bids in a fair and transparent manner, following the


evaluation methodology specified in the solicitation document, in order to
select the winning proposal.

Process: Using the previously defined bid evaluation criteria, evaluate the
proposals. The solicitation document, in effect, establishes an obligation
between the procurement officer and the bidders that the proposals will be
evaluated in accordance with the methodology specified in the solicitation
document. Proposals are first screened for compliance. Non-compliant bids
are eliminated from further consideration. The evaluation team will then
score each responsive proposal by subject area. The final selection is based
on technical merit, price and risk. Figure 25 presents an overview of this
process using example criteria and weightings.
The sequence of steps in the evaluation follows the RFP and may include:

Overall review of proposal for completeness and checking required


certifications;

Check to make sure that Mandatory Requirements have been met;

Evaluation of the Technical Proposal (e.g. systems engineering,


production, test and evaluation);

Evaluation of the Management Proposal (e.g. company and personnel


qualifications, project management capability);

Evaluation of presentations and interviews of key personnel;

Evaluation of historical performance and assessment of proposal risks;

Determination of any areas of the proposal that require clarification,


obtaining the clarification, and making any resulting change to the
scoring;

Evaluation of the Financial Proposal;

Identification of potential negotiation issues;

Identification of the proposal with the highest (winning) score; and

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Third party challenge independent review of the evaluation findings.

Output: An Evaluation Report with proposals ranked in accordance with the


evaluation methodology.

.6

Evaluation criteria are logically


broken out and weighted. Some
criteria may be mandatory. Each
proposal is scored against all criteria.
Scores are totaled.

Technical
Merit
.2
Management
Capability

Risks are identified and assessed.


e.g. Technically achievable
solution, consistent with price.

.1
Schedule
Compliance

Price

.1
Industrial, Regional
Benefits (IRB)
Weight
= Importance

The price is compared with


the score and risk level to
determine the winning bid.

Risk

(example)

Figure 25 Proposal Evaluation49


5.3.1.4

Select Contractor

Objective: To select the recommended contractor based on the results of the


proposal evaluation by applying the selection basis to the evaluation results.

Process: The basis of selection is first determined as a strategy and then


defined in the solicitation document. This approach is determined by the
source selection rule (best price, best value, best technical). The scoring
emphasis placed on various elements of the proposal should reflect the
customer and market preferences and knowledge about the trade-off between
capability and price.
The proposal evaluation process results in the identification of a ranked list of
bids/proposals. However, it is possible that no bid/proposal is selected,
particularly if stringent thresholds/ratios are use for source selection. In the
event there is no proposal that qualifies under the selection criteria, the bid
solicitation process may have to be repeated (with adjustments) because a
non-compliant bid cannot be accepted.
Bidders that were not selected are debriefed.

49

Output: Notification of winning bidder and debriefing of losing bidders.

Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.3.1.5

Negotiate Contract

Objective: To clarify contract wording and negotiate acceptable contract


provisions with the winning bidder.

Process: Negotiation issues are identified during the proposal evaluation.


Preparation for negotiations should include determining:

Objectives;

Team and roles;

Agenda: issues and positions;

Behaviour and tactics;

Use of questions;

Negotiating techniques; and

Closing method.50
Once the winning proposal has been selected, a contract can be established.
Often this involves negotiations with the contractor to achieve a meeting of
minds and to ensure clarity. A good contract benefits both parties and
establishes a climate of good will. Negotiation involves knowledge of human
behaviour and basic tactics and techniques of negotiation. In a successful
negotiation it is also important that the negotiator satisfy the opposing party's
needs in order that a successful business relationship is established at the
outset of the contract. Win-win positions are necessary in complex, long-term
contracts where managing the relationship is an essential ingredient for
contract and project success.
A contract involves rights and responsibilities of both buyer and seller. The
buyer obligations must be treated as seriously as those of the seller. For
example, the buyer may be obligated to provide information, to review and
approve documents, and to accept and pay for goods and services. Contracts
must include a process for making changes. Without such a process, the work
may be frustrated by altered circumstances. Also, if changes are not strictly
controlled and a constructive change results, the contractor may submit a
claim for the cost of extra work51.
The contract should include procedures that enable the government to monitor
contract performance, cost and schedule. Examples include clearly defined
deliverables, monthly progress reports and technical reviews at milestones.
Conduct IPT and independent review of the contract package.

50
51

Taken from Nierenberg on Negotiation Strategy.


Canadian Government Procurement Guide, B.F. Hough, CSC.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.3.1.6

Output: A draft contract package that is acceptable to the client department


and contractor, and meets the approval criteria (e.g. protection of the Crown
and mitigating potential risks) set out in the advance approval received.

Prepare Contract

Objective: To incorporate the results of clarifications and negotiations in the


contract.

Process: Virtually all of the contract provisions are brought forward from the
solicitation document along with any changes that result from clarification and
negotiations.
Delivery, price, method of payment and contract type, in conjunction with any
contentious requirements, tend to be the closing negotiation issues.
Performance incentives in the form of a target incentive for performance that
exceeds the target or an award fee incentive for exceptional performance, are
two examples of performance contracting. All provisions of the contract
should be given a thorough, final review for consistency with best practices.
Peer and independent reviews of the full contract package should be held
using the results of the terms and conditions, requirements and data scrubs
previously held.

5.3.1.7

Output: Contract package initialled by both parties ready for contract


approval and signing. The contract package incorporates clarifications and
negotiation results, and reflects intended best practice and reform concepts.
The contractor must know:

What is the basis of acceptance and


payment?

The customer must know:

Have the performance, interface


support requirements been met?

and

Obtain Contract Approval

Objective: To obtain authority to enter into contract or to amend a contract


and authority to sign a contract or the amendment to a contract.

Process: Procurement Officers are required to have a Delegation of Authority


(Letter) from management that specifies the authorities delegated to them.
There are two kinds of authority: approval authority and signing authority.
The delegated authorities vary between goods and services, real property,
construction and maintenance, and architectural and engineering services
contracting. Authority levels also vary with the procurement method.
Approval authority must also consider set aside provisions, for example in
aboriginal treaty areas. Signing authorities should ensure their contractor
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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

counterparts are formally authorized to enter into contracts or contract


amendments.

Approval Authority - The Minister has delegated authority to the


incumbents of positions up to specified dollar limits to enter into
contracts or to amend contracts. Subject to applicable legislation and
PWGSC General Conditions, this constitutes approval to accept the
Terms and Conditions in the (approval) submission on behalf of the
Crown.

Signing Authority - The Minister has delegated authority to


incumbents of positions up to specified dollar amounts to sign on his
behalf, after ascertaining that approval authority has been received,
and also that the terms and conditions written in the documents reflect
those approved by the contract approval authority.

Expenditure Authority - Treasury Board Ministers delegate to


departments and agencies expenditure authority levels based on the
nature of their procurement requirements. Due to size of public
expenditure, and the complexity, sensitivity and public interest in
complex project procurements, expenditure authority is usually
required from the sponsoring department Minister or the Treasury
Board. Expenditure authority may be Preliminary Project Approval
(PPA), to cover project definition costs or Effective Project Approval
(EPA), to cover project implementation costs.

5.3.1.8

Output: Authority to approve and to sign the contract, in accordance with


delegated authority, and in conjunction with sponsoring department project
expenditure approval.
This leads to the contract being executed
(signed/sealed).

Award Contract

Objective: To award the contract and authorize the contractor to commence


work on the contract.

Process: A contract is a set of promises that the law will enforce. It forms the
original baseline for change management. A fax award notice, letter of intent
or go-ahead letter may be used to authorize the commencement of work,
however formal approval, signature and seal on the documents is required by
the authorized representatives of the contracting parties.

Output: A signed and sealed contract, and authority for the contractor to
commence work.

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5.4

Phase 4 - Contract Management

The PMBOK defines contract management as "managing the relationship with the seller"52. The
process involves ensuring that both the vendor and the government meet their contractual
obligations. It also involves the monitoring of contractor performance and the timely completion
of both parties' administrative responsibilities. As noted earlier, contract management also
involves the application of project management processes to the contractual relationship, and the
integration of the outputs of these processes into the overall management of the project. Table 4
shows these concepts.

52

PMBOK, Procurement, Page 144.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Table 4 PPM in the Contract Management Phase


COMPETENCY AREA
Multidisciplinary

GOALS

RESPONSIBILITY
IPT = Input D = Decision

Meet contract performance objectives:


Cost/schedule

IPT
D = Procurement Manager

Delivery

IPT
D = Project Manager

Performance
Validation and Verification
Delivery and Acceptance

IPT
D = Project Manager

Quality

IPT
D = Project Manager

Risks

IPT
D = Project Manager

Government Furnished Resources (GFR)

IPT
D = Project Manager

Multidisciplinary

Maintain win-win relationship between


the contracting parties

IPT
D = Procurement Manager

Multidisciplinary,
Procurement

Resolve significant performance


problems and disputes

IPT
D = Procurement Manager

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

Contract provisions

Change management system

Authorized changes, amendments

Contract provisions,
progress reports, claim for
payment, invoices,
cost/schedule performance,
delivery, technical, quality
production and support data

Performance monitoring and analysis,


and payment system

Performance tracking and payments

Requirements tracking,
progress, problem, quality,
schedule/cost reports

Requirements and business review and


changes

Changes to business case and


requirements leading to contract
changes and amendments

Contract provisions

Contract administration procedures

Correspondence, loan agreements,


financial agreements and guarantees

Contract provisions

Project and risk management tools

Status and projections to support


decisions
Evaluation of gates, off-ramps

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.4.1

Manage Contract

Figure 26 identifies the contract management process.


CONTRACT MANAGEMENT
MANAGE CONTRACT
Manage Technical, Systems and Quality Performance
Manage Cost/Schedule and Delivery Performance
Manage Government Furnished Resources (GFR) Performance
Administer Contract

Figure 26 Contract Management Process


Manage Contract includes managing contract performance and administering the contract
provisions. Contract management may be conducted in any project phase where goods or
services contracts are awarded. Its takes on increasing importance from the development to the
definition and implementation phases as the project size and complexity and the expenditure
level of contracts increases. Using the results of the definition phase, implementation
contractor(s) are selected to design, develop, build, test, integrate, deliver and support the
selected solution.
The key program management activities in the Implementation Phase are:

Execution of the Project Implementation Plan (PIP), including the project scope that is
contracted to industry and the transition from acquisition to life cycle management;

Transfer of project leadership from the sponsoring to the implementing organization, (this
transition is at the start of the definition phase for MCPs);

Monitoring implementation;53 and

Preparation of a Project Closeout Report and Lessons Learned.

Contract management involves close interaction among the government authorities contract,
technical, inspection, industrial regional benefits and the contractor, as suggested by Figure 27.
In successful projects the working relationship is positive, with each participant fulfilling his/her
obligations in a professional and timely manner. The government team members provide
essential information when needed, review and approve deliverable documents quickly and
competently, provide government furnished resources as promised, etc. The contractor performs
its work professionally, delivering quality goods and services on schedule. When either the
government or contractor fails to meet its obligations, or has unreasonable expectations, then the

53

CFP 125, Chapter 7, Project Approval.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

relationship becomes adversarial. The lack of a working together atmosphere characterizes a


project drifting into failure.

CONTRACT MANAGEMENT
- WORKING TOGETHER TO ACHIEVE PROJECT SUCCESS
GOVT FURNISHED RESOURCES

TEST AND EVALUATION

DELIVERY SCHEDULE

Functional Test

Concept of Operations

Qualification Tests
-- Shock
-- Temperature
-- Humidity
-- Sand
Trials

Computer Models
Electronic Units

Actual

Plant Machinery

CONTRACTOR
COST

CONTRACT
AUTHORITY

TECHNICAL
AUTHORITY

DOCUMENTATION

Figure 27 Contract Management


5.4.1.1

Manage Technical, Systems and Quality Performance

Objective: To monitor contract performance in the work areas of technical,


systems, and quality performance; to verify corrective action taken; and to
assess if the contract requirements are being achieved.

Process: Using the contract statement of work and specification (or in the
case of BDP, the SOR), and the project and risk management strategies and
contractor work plans, the IPT assesses work progress, problems, variances,
deviations and corrective actions. Methods such as requirements tracking,
configuration and data management, technical and production reviews, and
project management data such as schedule status and earned value
measurement are used to keep a running list of problem areas, nonconforming items, and variances. If the monitoring is a dedicated function at
the contractor site, the strategy established in the PMP should be developed
into an ongoing product/process surveillance plan.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.4.1.2

Output: Information on contractor performance, feedback on problems, and


status of corrective action. Inputs to administration of contract remedies, as
required.

Manage Cost/Schedule and Delivery Performance

Objective: To monitor contract performance of cost/schedule and delivery


contract performance; to verify and monitor corrective action taken; and to
assess if the contract requirements are being achieved.

Process: Using the defined project and risk management strategies and
contractor work plans (WBS, Master Schedule, CDRL/DID, work packages,
progress and earned value data), the IPT assesses work progress, problems,
variances, deviations and corrective actions.
By tracking schedule
performance on interim activities leading to deliveries and analyzing cost
trend indices, the IPT will have early warning of significant cost growth,
schedule/delivery delay and technical or quality problems.
Delivery and acceptance activities are depicted in Figure 28. The contractor is
required to deliver the contracted goods and services on schedule and for the
cost stipulated in the contract. The customer accepts the product if it meets
the requirements in the contract specification, as demonstrated through test
and evaluation. Successive units coming off production are accepted if they
pass the factory acceptance test, indicating a sustained high quality of
manufacture.

Output: Cost/schedule and delivery status.


contract remedies, as required.

Inputs to administration of

DELIVERY AND ACCEPTANCE


- PERFORMANCE, SCHEDULE AND COST OBLIGATIONS
DELIVERY

Delivery is on schedule
Costs are as per contract

ACCEPTANCE

Product meets specification


Production quality is sustained

Figure 28 Delivery and Acceptance

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5.4.1.3

5.4.1.4

5.5

Manage Government Furnished Resources (GFR) Performance

Objective: To monitor contract performance in the area of Government


Furnished Resources (GFR) work; to verify corrective action taken; and to
assess if the contract requirements are being achieved.

Process: The contractor states when GFR are required. The Contract
Authority ensures that GFR are delivered on time and consistent with
technical requirements. The Contract Authority ensures that the contractor
properly manages and accounts for GFR.

Output: GFR provided by the government as stipulated in the contract.

Administer Contract

Objective: To administer and monitor contract provisions in the area of the


Crown's contract obligations to the contractor; to verify corrective action
taken; and to assess if the contract requirements are being achieved.

Process: Using the strategy defined in the PMP, develop a sub-plan for
contract administration by going through the contract provisions and
identifying administrative tasks and who within the IPT will perform them. A
sample list of areas of contract administration includes:

Roles of Technical, Inspection, Quality, Industrial Regional Benefits


and Contracting Authorities in communicating and interacting with the
contractor;

Formal notice under the contract;

Interim and final data item feedback and acceptance/rejection. This is


done in accordance with the Terms and Conditions, Technical Plans
and CDRL/DIDs;

Method of Payment administration;

Changes and amendment administration;

Design-development-production-support milestones and gates;

Test and acceptance process and feedback; and

Contract provisions related to contract finalization and close-out.54

Output: Formal communications with the contractor regarding contract


administration matters.

Phase 5 - Contract Closeout

The PMBOK defines contract closeout as completion and settlement of the contract, including
resolution of any open items."55 The closeout process involves product validation by the
54

BPR Team #1 Report.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

contractor and verification by the customer (Was all the work completed correctly and
satisfactorily?), and administrative closeout (Updating of records to reflect final results and
archiving of such information for future use.). The contract may include specific provisions for
closeout, including early closeout in the form of termination. The concepts are shown in Table
5.
Table 5 PPM in the Contract Closeout Phase
COMPETENCY AREA

GOALS

RESPONSIBILITY
IPT = Input D = Decision

Procurement/
Multidisciplinary

Close-out of successful contract where


contract performance objectives and
administrative obligations have been met

IPT
D = Procurement Manager

Procurement/
Multidisciplinary

Early close-out contract using gates or


ramps if performance of the contract can
no longer meet the performance
objectives

IPT
D = Procurement Manager

Multidisciplinary/
Procurement

Complete physical and administrative


close-out, resolve any outstanding issues,
make final payment/amendment

IPT
D = Procurement Manager

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

Contact Provisions

Procurement audit

Feedback and corrective action

Contract Deliverables

Review and acceptance/rejection

Final Acceptance or stop work

Business Case,
SOW/SPEC, Acceptance
criteria

Product Acceptance

Product in-service

Issues, disputes, claims

Negotiation/litigation/ arbitration

Resolution/amendment

Unresolved issues and


claims

Negotiation

Termination (off-ramp or gate)

All issues resolved

Final contract amendment/releases

Close contract file, process/ product


evaluation, feedback to PPM
repository

55

PMBOK, Procurement, Page 146.

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5.5.1

Contract Closeout

Contract closeout process is identified in Figure 29.


CONTRACT CLOSEOUT
DISENGAGE CONTRACT
Physical Disengagement
Administrative Disengagement

Figure 29 Contract Closeout Process


Contract closeout processes may be conducted in any project phase where goods or services
contracts have been fully performed. Contract closeout also is required in the event the contract
will not be performed, and an early closeout is pursued using the termination provisions.
Figure 30 highlights contract closeout actions. Contract deliverables are verified and accepted,
disputes or claims are settled, contract work and charges are ceased. Contract administration is
completed, including audit adjustments, return of inventory or other Crown assets, warranty
management, and any releases or undertakings that support the final contract
amendment/payment. A PPM performance evaluation is conducted, providing lessons learned
and feedback to the PPM repository. This information should be used to update training and
professional development programs.
The key program management activities are completion of the project closeout report and
documenting the lessons learned.
CONTRACT CLOSEOUT
- NO LOOSE ENDS!

Confirmation of Completion
Loans of Equipment
Government Inventory Closeout
Claim Settlement
Warranty Action
Final Payment
Project Evaluation
Record Retention

Figure 30 Contract Closeout

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

5.5.1.1

5.5.1.2

Physical Disengagement

Objective: To finish the contract work and, based on substantial or final


completion, accept delivery of all products and return of government assets,
and stop work at the contractor facilities.

Process: Based on work inspection, quality assurance and product acceptance


and warranty provisions, determine the point at which all the contract work
has been completed or, in the event not all the work is to be completed,
negotiate adjustments to the contract provisions as part of the contract
closeout. This includes the return of government loaned assets, inventories
and other GFR. Physical disengagement is aimed at bringing the contract
work to an end in an orderly fashion, including any adjustment to the contract
value to recognize contract work that will not be completed.

Output: Receipt and acceptance of the contract deliverables, settlement of


the disposition of outstanding work, and cessation of further work and charges
to the contract.

Administrative Disengagement

Objective: To complete the contract administration, issue the final contract


amendment and closeout the contract file.

Process: To finish the administrative activity associated with contract


obligations. An example list includes:

Determine if the contract will be completed by performance or if


contract performance is frustrated and termination for convenience or
default is required;

Examine results of quality assurance, inspection, test and acceptance


processes and accept final deliverables under substantial or final
completion terms;

Closeout inventories including credits or back charges for any product


assets that will not be returned to the Crown;

Complete audits and claims adjustments for over/underpayments;

Prepare release that holds both parties harmless from future claims by
either party;

Prepare and execute final amendment and release final payments


including the holdback in recognition of contract completion;

Perform a performance evaluation of the procurement process (i.e.


PPM), product (RFP and contract), people and relationships/teaming
(IPT).

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56
57

Produce final lessons learned56 and provide update to the PPM


knowledge repository; and
Inventory and put away contract files.57

Output: Completed contract administrative obligations; orderly closeout of


the contract file, including the final contract amendment; PPM product,
process and people performance evaluation, and feedback to new project
procurements.

Lessons learned should be gathered throughout the project, at least at key milestones.
BPR Team #1 Report

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ANNEX A
MPSL SERVICES

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

MPSL SERVICES
MPSL AT A GLANCE
MPSL is recognised for its track record in managing the Governments most complex and
sensitive project procurements. Our focus is on working with clients to achieve successful
procurement and project outcomes.
We work with you to meet the challenges of improving acquisition quality, efficiency and
effectiveness, in an environment of increasing expectations, fewer resources and greater
complexity.
MPSL is based in Hull, Quebec, with a network of project offices throughout the National
Capital Region. Our team of 140 professionals, with over 30 project procurements and an annual
cash flow of over $ 2 Billion, brings a wealth of experience to meet your procurement, project
and program management challenges.
Why MPSL
We work collaboratively with each client. We identify the key issues, and develop and
implement solutions suitable to your environment.
Our matrix structure means that we are flexible and responsive. We are able to apply expertise
quickly, assisting you in solving the problems that influence project success.
Our team can provide you with the experience and tools you need to meet your objectives and
obtain results.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

How we work with you

Output/Outcome

Before the project

Consult with you to assess needs


identify problem areas
outline proposed services
agree on client roles, involvement
develop approach
complete service proposal

Service Agreement

During the project

Work with you to provide the agreed upon services


provide knowledge and skill transfer
assess our performance throughout

Project Report(s)

During/After the project

Follow up with you to-

Improved
Performance

ensure your satisfaction with MPSL


services
provide you with feedback on how to
improve performance on future projects
apply our learning to follow on or
related projects in your organisation

Public Works and Government Services Canada

A-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Where we can help


Our core competency is project-procurement management (PPM), the effective integration of
project management principles and practices in the procurement process.

Procurement Services

Project + Procurement Planning

Solicitation Planning

Solicitation & Source Selection

Contract Management & Closeout

Our PPM experience has led to the following experience and products

Project Services

Planning & Control

Risk Assessment

Data Management

Change Management

Program Services

Strategic Planning

Business Improvement

Business Process Re-engineering

Project Management Systems

Performance Evaluation

Standard Project Reporting

Professional Development

E- Business Initiatives

Training & Effectiveness Workshops

Project and Contract Standards

If we can help please contact Rick Trites at (819) 956-0846 or tritesr@sos.pwgsc.gc.ca

Public Works and Government Services Canada

A-3

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Selected Assignments
DISCIPLINE

SITUATION

SOLUTION

Strategic Planning

An organisation needed to
restructure in the face of a
changing business environment,
and demands for increased
efficiency, improved flexibility
and responsiveness, and business
growth.

Strategic planning assisted the


organisation in forming a cohesive
management team, and positioning
the organisation with strategies
and business objectives for the
medium and long term.

Project Procurement
Management

A major equipment project


procurement experienced
significant cost; schedule and
performance problems that would
have impacted project completion.

Through fact-finding and analysis,


the contract was restructured to
better allocate the remaining
business and technical risks. The
Crown accepted system
responsibility and completed the
project within the performance
constraints.

Project Procurement
Management

A major IT project procurement


was in trouble and facing the
prospect of cancellation.

After addressing the key issues of


stakeholder relationships and
technical requirements, the
contract was restructured,
providing a more realistic baseline
for the remaining project work.

Performance
Evaluation

An organisation wished to improve


its management control
framework, and to implement
performance measures.

The framework and evaluation


methodology was developed using
best practices. It is being
implemented with full consultation
with users and other stakeholders.

Public Works and Government Services Canada

A-4

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ANNEX B
PROJECT PROCUREMENT MANAGEMENT (PPM)
TEMPLATE

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PROJECT PROCUREMENT MANAGEMENT (PPM)


TEMPLATE
This annex is a work in progress. Figure B-1 identifies PPM processes, outputs, competencies,
project phase and other references. Figure B-2 provides the competency grid for the Template.
The Knowledge and Skills competencies are taken from the BPR Report58, with the exception of
tools, where for the nine PMBOK process-tools lists as indicative of the tool competencies
required59. The competencies have not been defined below summary PPM processes.
Competencies are just one of several inputs to recruitment and selection. This task will require
analysis of the MPSL human resource profile, position descriptions, and work assignments. The
competency gird in this annex is descriptive, and is not yet derived from the human resources
profile. A more complete list of competencies is given in Annex D.
Template Format and Content
The PPM Template is organized by Project and Procurement phase. The Template column
headers are:
1.

PPM and Project Phase - PPM phases are based on the Project Procurement Module of
the Guide to the PMBOK. The project phases follow DND practice, but are close to
PMBOK terminology.

2.

PPM Process - The forty-nine steps of the PPM process. The terminology is based on
the BPR initiatives common to both PWGSC and DND.

3.

Output/Outcome - of the PPM process.

4.

Competencies - The knowledge, Skills, and Tools that have been identified for complex
procurement.

5.

PPM Activities (Guidance/Tools and Techniques) - These are how to process and
document guides that are being prepared. Four example templates are provided in Annex
C for the Define Procurement Strategy Process (WBS 2.7).

6.

Point of Contact - The MPSL contact for information on the specific activities or
functional specialty. Sub-elements of the process will be assigned to directors, managers
and officers based on organizational responsibility.
In addition to operational responsibilities, it is planned that subject matter experts would
take responsibility for processes, and update the Template from time-to-time, to reflect
changes in the business environment.

58
59

BPR Team Report on Professional Development and Human Resources, Page 17.
PMBOK tools and techniques are primarily judgement, expertise and document templates, although some software is noted.

Public Works and Government Services Canada

B-1

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM TEMPLATE
PPM /Project
Phase
(49 Steps)

PPM Process
Title
(WBS
Numbering)

1.
All

2.
Phase 1-Project
and Procurement
Planning /
Identification
Phase

1. Validate
Requirements

3.

1.1 Analyze
(Review Clients)
Requirements

4.

1.1.1 Define
Performance
Objectives
1.1.2 Determine
Allocation and
Teaming

5.

6.

7.

8.

1.1.3 Identify &


Form Integrated
Procurement Team
(IPT)
1.2 Define
Procurement
Concept

1.2.1 Identify
Sources of Supply

Output/Outcome

Competency Knowledge
Skills Tools

Disciplined, repeatable, and measurable


business process.
PPM competencies
Training requirements
Benchmarking
Performance Evaluation

All

It starts with problem identification and


is completed with the start of the
Development Phase when a number of
options to satisfy the requirement are
examined. Validate Requirements is
the first point of contact between an
SOSB account manager and customer
requirements and/or project office staff.
This contact may occur prior to or
during the identification/ concept phase
when the project objectives and
requirements are being defined.
Customer contact is made, project and
requirement documents are reviewed
and analyzed, and procurement
implications are determined The PMP
is started for the project, with inputs
from key documents and contact points.
Project objectives expressed in the
requirement documents and in the
Project Charter are clarified.
File allocation, SOSB and sector
teaming is identified and recorded in
the PMP. The Contracting Authority
office and individual file holder is
identified as the single point of contact
with customer requirements staff and
the Project Manager. Teaming within
and between sectors is established. The
source of particular expertise, for
example planning and control, also is
identified.
IPT membership and responsibilities
are established and recorded in the
PMP.

K- 1-14, 19
S- 1-11
T- 1-9

PPM Activities
(Guidance/Tools
and Techniques)
Branch/SectorStrategic Plan
Operational
Plan/Budget
Performance
Measurement
Framework

Point of
Contact60
Senior Director
J.G. Roy
(819) 956-0846

R. Trites
(819) 956-0846

Using the output of Validate


Requirements, this process identifies
potential sources of supply, links
project and procurement objectives, and
starts the formal procurement planning
process.
The potential sources of supply, and the
procurement assessment of the COTS
alternatives identified for the project are
recorded in the PMP.

60

Operationally, the Point of Contact (POC) is the senior Procurement Officer that holds the Contracting Authority responsibility. The POC for
the PPM process is indicated in this column.

Public Works and Government Services Canada

B-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM TEMPLATE
PPM /Project
Phase
(49 Steps)

PPM Process
Title
(WBS
Numbering)

9.

1.2.2 Identify and


Define
Procurement
Concept

10.

1.2.3 Refine
Performance
Objectives

11.

1.2.4 Prepare
Procurement
Management Plan
(PMP)
2. Define
Procurement
Requirements

12.
Phase 2Solicitation
Planning/Develo
pment Phase

13.

2.1 Define
Business and
Technical
Requirements

14.

2.2 Define Project


Management
Strategy

15.

2.2.1 Define Risk


Management
Strategy
2.2.2 Define
Contract
Management
Strategy

16.

17.

2.2.2.1 Define
Delivery and
Acceptance
Strategy

Output/Outcome

Competency Knowledge
Skills Tools

PPM Activities
(Guidance/Tools
and Techniques)

Point of
Contact60

A preliminary review and analysis of


factors contributing to the procurement
concept is recorded in the PMP. In
many cases, this analysis will raise
questions that may not be answered
until later in the procurement process,
or conditions may change, requiring
further review of how these factors will
influence the procurement.
Using project, requirements, and
procurement planning and industry
feedback (e.g. homepage, industry
days, plant visits, company
presentations), update the performance
objectives and requirement documents.
This results in revisions to requirements
definition documents, such as
Statement of Operational
Requirements, Statement of Objectives,
Business Requirements and any
preliminary specifications
The draft PMP is prepared.

This group of processes involves


developing procurement strategies and
preparing the solicitation documents
and resulting contract(s). The emphasis
is on defining strategies, within the IPT,
for project and risk management,
contract management and
administration.
Statement of Operational Requirements
(SOR), Statement of Objectives (SOO),
business requirements or Business
Case, as appropriate, is prepared or
refined. Combining the SOR, and other
requirement documents (e.g. Concept
of Operations and systems studies) is
also good practice in streamlining
project documentation.
The IPT defines and records in the PMP
the project, risk and contract
management strategies that will be used
in contracting.
Strategy prepared by IPT and recorded
in PMP to identify

K- 1-19
S- 1-11
T- 1-9

R. Trites
(819) 956-0846

Mike Cody
(819) 956-0312

Keith Adams
(819) 956-0334

Strategy prepared by the IPT and


recorded in PMP for Delivery and
Acceptance, Quality Assurance,
Financial, and Government Furnished
Resources.
Strategy prepared by the IPT and
recorded in the PMP of all mechanisms
that will be used to monitor delivery
performance and perform acceptance.

Public Works and Government Services Canada

B-3

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM TEMPLATE
PPM /Project
Phase
(49 Steps)
18.

19.

20.

21.

22.

PPM Process
Title
(WBS
Numbering)
2.2.2.2 Define
Quality Assurance
Strategy
2.2.2.3 Define
Financial
Management
Strategy
2.2.2.4 Define
Government
Furnished
Resources (GFR)
Strategy
2.2.3 Define Bid
Solicitation
Strategy
2.2.4 Define
Contract
Administration
Strategy

23.

2.3 Define Scope


of Contract(s) (e.g.
Bundling, PFC,
BDP)

24.

2.4 Define
Reporting Strategy

25.

2.5 Define
Approval Strategy

26.

2.6 Define Change


Management
Strategy

27.

2.7 Define
Procurement
Strategy

28.

2.7.1 Validate
Sources of Supply

29.

2.7.2 Define
Procurement
Methodology
(Tools and
Techniques)

Output/Outcome

Competency Knowledge
Skills Tools

PPM Activities
(Guidance/Tools
and Techniques)

Point of
Contact60

Strategy prepared by the IPT and


recorded in the PMP for Quality
Planning, Assurance and Control.
Strategy prepared by the IPT and
recorded in the PMP for management
of cash flow, funds, budget, payment,
cost, price and rate determination, and
performance management.
Strategy prepared by the IPT and
recorded in the PMP for GFR
management.

Strategy prepared by the IPT and


recorded in the PMP for bid
solicitation.
Identification of contract management
and administration functions to be
performed, and the resources necessary
to perform them, prepared by the IPT
and recorded in the PMP.
Strategy prepared by IPT for PreFacilitated Contracts (PFC), Benefits
Driven Procurement (BDP) application
of Total Package Procurement (TPP),
Alternative Service Delivery, or some
other approach, recorded in the PMP.
Strategy prepared by IPT and recorded
in the PMP for contract and project
reporting.
Strategy prepared by IPT and recorded
in the PMP for procurement strategy
approval, and contract approval and
signing authorities.
Strategy prepared by IPT and recorded
in the PMP for contract change
management, including necessary
configuration and data management
processes.
Strategy prepared by IPT and recorded
in the PMP for the overall
management/timeline of the
procurement and its major milestones.
The strategy should consider COTS,
SOP, and UGD alternatives.

Anna Best
(819) 956-0320

Implement COTS
Procurement
Implement SOP
Implement UGD
Implement BDP

Strategy prepared by IPT and recorded


in the PMP for informal (nonsolicitation) interaction with industry
using various instruments in order to
obtain feedback on requirement
documents, and assess industry interest
and capability.
Procurement tools and techniques,
selected and reflected in the PMP.

Public Works and Government Services Canada

B-4

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM TEMPLATE
PPM /Project
Phase
(49 Steps)

PPM Process
Title
(WBS
Numbering)

30.

2.7.3 Define Bid


Evaluation Criteria
and Basis of
Source Selection

31.

2.7.4 Prepare Bid


Solicitation
Document

32.

2.7.5 Obtain
Management
Approval of the
Procurement
Strategy
3. Execute
Procurement
Strategy

33.
Phase 3Solicitation and
Source Selection
/ Project
Definition (or
Implementation)
Phase
34.

3.1 Solicit Bids

35.

3.2 Receive Bids

36.

3.3 Evaluate Bids

37.

3.4 Select
Contractor
3.5 Negotiate
Contract

38.

39.

3.6 Prepare
Contract

40.

3.7 Obtain
Contract Approval

Output/Outcome
Strategy prepared by IPT and recorded
in the PMP for the bid evaluation and
basis of source selection, including
criteria, attributes, scoring, thresholds,
and technical/price selection
considerations.
The Bid Solicitation Document is
prepared by the IPT, and updated as
necessary to incorporate potential
source, peer and independent reviews
that assure the completeness and
integrity of the bid package.
PMP document updated and reviewed
by the IPT to ensure completeness and
accuracy. Management approval of the
Procurement Strategy is received.
Project funding is available.
The processes of bid solicitation,
receipt and evaluation of proposals,
source selection, negotiation and
contract preparation, contract approval
and award come under this heading and
generate solicitation and source
selection outputs.

Competency Knowledge
Skills Tools

K- 1-19
S- 1-11
T- 1-9

PPM Activities
(Guidance/Tools
and Techniques)

Point of
Contact60

R. Trites
(819) 956-0846

Advertised and electronically posted


bid solicitation document, Bidders
Conference, and clarifications or
amendments to the solicitation.
Bids received in accordance with the
instructions in the solicitation
document, and a record of all
communications during the bid period.
An Evaluation Report with proposals
ranked in accordance with the
evaluation methodology.
Notification of winning bidder and
debriefing of losing bidders.
A draft contract package that is
acceptable to the client department and
contractor, and meets the approval
criteria (e.g. protection of the Crown
and mitigating potential risks) set out in
the advance approval received.
Contract package initialled by both
parties ready for contract approval and
signing. The contract package
incorporates clarifications and
negotiation results, and reflects
intended best practice and reform
concepts.
Authority to approve and to sign the
contract, in accordance with delegated
authority, and in conjunction with
sponsoring department project
expenditure approval. This leads to the
contract being executed (signed/sealed).

Public Works and Government Services Canada

B-5

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM TEMPLATE
PPM /Project
Phase
(49 Steps)

PPM Process
Title
(WBS
Numbering)

41.

3.8 Award
Contract

42.
Phase 4Contract
Management /
Project
Definition and
Implementation
43.

4. Manage
Contract

44.

45.

46.

4.1 Manage
Technical,
Systems and
Quality
Performance
4.2 Manage
Cost/Schedule and
Delivery
Performance
4.3 Manage
Government
Furnished
Resources (GFR)
Performance
4.4 Administer
Contract

47.
Phase 5Contract
Closeout /
Project
Implementation
and Closure
48.

5. Disengage
Contract

49.

5.2 Administrative
Disengagement

5.1 Physical
Disengagement

Output/Outcome
A signed and sealed contract, and
authority for the contractor to
commence work.
Manage Contract includes managing
contract performance and administering
the contract provisions.

Competency Knowledge
Skills Tools

PPM Activities
(Guidance/Tools
and Techniques)

K- 1-19
S- 1-11
Far more
emphasis and
specialization
in/on T- 1-9

Information on contractor performance,


feedback on problems, and status of
corrective action. Inputs to
administration of contract remedies, as
required.
Cost/schedule and delivery status.
Inputs to administration of contract
remedies, as required.

Point of
Contact60

R. Trites
(819) 956-0846

Mike Cody
(819) 956-0312

GFR provided by the government as


stipulated in the contract.

Formal communications with the


contractor regarding contract
administration matters.
The physical and administrative
processes of completing or ending
contract work, and finalizing the
contract obligations of the parries.

K- 1-19
S- 1-11
Far more
emphasis and
specialization
in/on T- 1-9

R. Trites
(819) 956-0846

Receipt and acceptance of the contract


deliverables, settlement of the
disposition of outstanding work, and
cessation of further work and charges to
the contract.
Completed contract administrative
obligations; orderly closeout of the
contract file, including the final
contract amendment; PPM product,
process and people performance
evaluation, and feedback to new project
procurements.

Figure B-1 Project Procurement Management (PPM) Process Template

Public Works and Government Services Canada

B-6

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

The following table contains the competencies for complex procurement that has been used in
the template.
CATEGORIES
Knowledge

COMPETENCIES
1. Teaming roles and responsibilities
2. Commodity- systems, products, services
3. Marketplace
4. Industry
5. Business
6. Client
7. Competition
8. Economic development factors
9. Risk management
10. Project management
11. Contract management
12. Innovative contracting
13. Budgeting and financial planning
14. Managing IT required to support PPM
15. Quality management
16. Performance management
17. Data management
18. Configuration management
19. Marketing

Skills

1. Strong in planning and organizing


2. Strong in analysis
3. Advanced project management
4. Teamwork
5. Strong in interpersonal
6. Influencing
7. Creative problem solving
8. Risk management
9. Decision-making
10. Self-assurance, confidence

Public Works and Government Services Canada

B-7

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

CATEGORIES

COMPETENCIES
11. Strong in negotiation

Tools- PMBOK

1. Integration project and procurement processes in PPM


2. Scope management
3. Time management
4. Cost management
5. Quality management
6. Human resource management
7. Communications management
8. Procurement management
9. Risk management

Figure B-2 Competencies for Complex Procurement

Public Works and Government Services Canada

B-8

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ANNEX C
PPM WORK BREAKDOWN STRUCTURE

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM WORK BREAKDOWN STRUCTURE


1.

VALIDATE REQUIREMENTS
1.1

1.2

2.

Analyze (Review Clients) Requirements


1.1.1

Define Performance Objectives

1.1.2

Determine Allocation and Teaming

1.1.3

Identify and Form Integrated Procurement Team (IPT)

Define Procurement Concept


1.2.1

Identify Sources of Supply

1.2.2

Identify and Define Procurement Concept

1.2.3

Refine Performance Objectives

1.2.4

Prepare Procurement Management Plan (PMP)

DEFINE PROCUREMENT REQUIREMENTS


2.1

Define Business and Technical Requirements

2.2

Define Project Management Strategy


2.2.1

Define Risk Management Strategy

2.2.2

Define Contract Management Strategy


2.2.2.1 Define Delivery and Acceptance Strategy
2.2.2.2 Define Quality Assurance Strategy
2.2.2.3 Define Financial Management Strategy
2.2.2.4 Define Government Furnished Resources (GFR) Strategy

2.2.3

Define Bid Solicitation Strategy

2.2.4

Define Contract Administration Strategy

2.3

Define Scope of Contract(s) (e.g. Bundling, PFC, BDP)

2.4

Define Reporting Strategy

2.5

Define Approval Strategy

2.6

Define Change Management Strategy

2.7.

Define Procurement Strategy


2.7.1

Validate Sources of Supply

2.7.2

Define Procurement Methodology (Tools and Techniques)

2.7.3

Define Bid Evaluation Criteria and Basis of Source Selection

2.7.4

Prepare Bid Solicitation Document

2.7.5

Obtain Management Approval of the Procurement Strategy

Public Works and Government Services Canada

C-1

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

3.

4.

5.

EXECUTE PROCUREMENT STRATEGY


3.1

Solicit Bids

3.2

Receive Bids

3.3

Evaluate Bids

3.4

Select Contractor

3.5

Negotiate Contract

3.6

Prepare Contract

3.7

Obtain Contract Approval

3.8

Award Contract

MANAGE CONTRACT
4.1

Manage Technical, System and Quality Performance

4.2

Manage Cost/Schedule and Delivery Performance

4.3

Manage Government Furnished Resources (GFR) Performance

4.4

Administer Contract

DISENGAGE CONTRACT
5.1

Physical Disengagement

5.2

Administrative Disengagement

Public Works and Government Services Canada

C-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ANNEX D
THE RELATIONSHIP BETWEEN
THE COMPLEX PROCUREMENT FUNCTIONS AND CORE
COMPETENCY AREAS

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

THE RELATIONSHIP BETWEEN


THE COMPLEX PROCUREMENT FUNCTIONS AND CORE COMPETENCY AREAS61
COMPETENCY AREAS

PPM PROCESSES62
KNOWLEDGE
1.

VALIDATE
REQUIREMENTS
1.1
Analyze (Review
Clients) Requirements

1.1.1
Define Performance
Objectives
1.1.2
Determine Allocation
and Teaming
1.1.3
Identify and Form
Integrated Procurement Team
(IPT)
1.2
Define Procurement
Concept
1.2.1
Identify Sources of
Supply
1.2.2
Identify and Define
Procurement Concept
1.2.3
61
62

Refine Performance

Procurement
Contract Management Principles
Materiel Management Principles
Procurement process, procedures and framework
Policies
World Trade Organization - Agreement on
Government Procurement (WTO - AGP)
North American Free Trade Agreement
(NAFTA)
Agreement on International Trade (AIT)
Financial Administration + Government
Contracting Regulations
PWGSC Act/Policies
Canadian Government Procurement Policy, and
Government Contract Regulations (GCRs)
Interpretation Act
Statutory Instruments Act
Financial Administration Act
Defence Production Act
Access to Information Act
Bankruptcy Act
Bills of Exchange Act

SKILLS

Business Skills
Goal setting/
Planning
Priority setting
Organizing
Chairing meetings
Managing stress
Managing change
Managing risks
Consulting
Marketing
Negotiating
- contractual
- non-contractual
Presentations
Writing
- memos, letters,
reports (management)
- specifications/
standards (technical)
Leading teams
Managing people

TOOLS

PC/Network Workstation
- Word processing
applications
- Graphics
applications
- Spreadsheet
applications
- Presentation
applications
- Project and Time
Management
- Foundation software
(i.e. MS DOS, Windows)
- E-Mail
- Internet/Intranet
Browsers
Operational
- MERX
- Automated Buyer
Environment (ABE)
- Vendor Information
Management (VIM)

Taken from Annex 2 to Appendix 4 of the SOSB BPR Final Report, dated 14 September 1998.
The table does not read across. Competencies have not been identified with PPM sub-processes.

Public Works and Government Services Canada

D-1

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

COMPETENCY AREAS

PPM PROCESSES62
Objectives
1.2.4
Prepare
Procurement Management
Plan (PMP)

2.

DEFINE PROCUREMENT
REQUIREMENTS
2.1
Define Business and
Technical Requirements
2.2
Define Project
Management Strategy
2.2.1
Define Risk
Management Strategy
2.2.2
Define Contract
Management Strategy
2.2.2.1 Define Delivery and
Acceptance Strategy
2.2.2.2 Define Quality
Assurance Strategy

2.2.2.3 Define Financial


Management Strategy
2.2.2.4 Define Government
Furnished Resources (GFR)
Strategy

KNOWLEDGE
Canadian Charter of Rights and Freedoms
Competition Act
Criminal Code
Department of Justice Act
Fair Wages and Hours of a Labour Act
Federal Real Property Act
Official Languages Act
Privacy Act
- Public Service Employment Act
- Government Contract Regulations
- TB Contracts Directive
- Federal Contractor's Program for Employment
Equity
- Conflict of Interest and Post-Employment
Code for Public Office Holders
- Security Policy
- Treasury Board Delegation of Powers Order
- James Bay and Northern Quebec Agreement
- Procurement Strategy for Aboriginal Business
- Comprehensive Land Claims Agreements
Canadian Commercial Corporation (CCC)
Canadian International Trade Tribunal (CITT)
Methods of supply
Contracts
Standing Offers and Catalogues
Supplier Arrangements
Contribution Agreements
Pre-facilitated contracts
Principles of Transportation
Legal requirements of contracting

Public Works and Government Services Canada

SKILLS
Teamwork
Facilitation
Innovation and risk
taking
Intellectual Skills
Creative Problem
Solving
Analytical
Thinking
Strategically
Identifying Links
Information Search
Model Building
Observing
Visioning
Interpersonal/Interaction
Skills
Listening/
paraphrasing
Coaching/mentoring
Relating to others
Conflict resolution
Verbal/non-verbal
communication
Networking/building
relationships
Influencing
Telephone skills
Self-Management Skills
Assertiveness

TOOLS
- Customer
Information Service
(CIS)
- ACCORD/SPEC
- Item Information
Systems
- Automated Buying
Environment (ABE)
- Informatics
Professional Services
(IPS) Marketplace
- Client Systems

D-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

COMPETENCY AREAS

PPM PROCESSES62
2.2.3
Define Bid
Solicitation Strategy
2.2.4
Define Contract
Administration Strategy
2.3
Define Scope of
Contract(s) (e.g. Bundling,
PFC, BDP)

2.4
Define Reporting
Strategy
2.5
Define Approval
Strategy
2.6
Define Change
Management Strategy
2.7.
Define Procurement
Strategy
2.7.1
Validate Sources of
Supply

2.7.2
Define Procurement
Methodology (Tools and
Techniques)
2.7.3
Define Bid
Evaluation Criteria and Basis
of Source Selection
2.7.4
Prepare Bid
Solicitation Document

KNOWLEDGE
Pricing Models
Accounting Principles
Indemnification
Selection/Evaluation Criteria
Value Analysis
Budgeting and Financial Planning Theories
Financial Contracting
Contract Costing Principles
Limitation of costs
Methods of payment
Unallowable costs
Variable Rates
Price and fee adjustments
Progress Payments
Firm Rates
Pricing Methods
Process Settlement/Arbitration
Innovative pricing mechanisms/models
Risk Management Theories and Principles
Project Management Theories and Principles
Integration Management
Scope Management
Time Management
Cost Management
Quality Management
Human Resources Management
Reporting Management
Risk Management
Project Procurement Management
IT Management

Public Works and Government Services Canada

SKILLS
Flexibility
Self-assurance/
confidence
Good judgement/
common sense
Endurance/
Persistence
Determination
Initiative/Drive

TOOLS

D-3

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

COMPETENCY AREAS

PPM PROCESSES62
2.7.5
Obtain
Management Approval of the
Procurement Strategy

3.

EXECUTE
PROCUREMENT
STRATEGY
3.1

Solicit Bids

3.2

Receive Bids

3.3

Evaluate Bids

3.4

Select Contractor

3.5

Negotiate Contract

3.6

Prepare Contract

3.7
Obtain Contract
Approval
3.8

4.

Award Contract

MANAGE CONTRACT
4.1
Manage Technical,
System and Quality
Performance
4.2
Manage
Cost/Schedule and Delivery

KNOWLEDGE
Lifecycle Management
Tools and Techniques Management
Architecture Management
Quality Management Theories
Data Management Theories
Performance Management Theories
Configuration Management Theories
Commodity Area
(Products, Services, Systems)
Commodity specifications and standards
Products, services, systems
Procurement history
Commodity features and benefits
Value and frequency of purchased
commodity
Value and volume of commodity at large
Average unit price, quantity
Methods of supply options
Sources of supply (sourcing)
End users and originators of requirements
Geographic distribution
Policies, regulations or standards affective the
commodity
Projected volume growth rate
Projected revenue contribution
Current revenue/cost ratio
Competitiveness of commodity to the extent
it warrants continued existence in its present form
Intellectual Properties
(Market Environment)

Public Works and Government Services Canada

SKILLS

TOOLS

D-4

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM PROCESSES62
Performance
4.3
Manage
Government Furnished
Resources (GFR)
Performance
4.4
Administer
Contract

5.

DISENGAGE CONTRACT
5.1
Physical
Disengagement
5.2
Administrative
Disengagement

COMPETENCY AREAS
KNOWLEDGE
Market size
Present market share
Limitation of market share
Historical trends in market share
Best competitive markets
Markets needs
Market growth
(Client Profile)
Major clients within a Department
Client locations
Clients' business volumes
Client attitudes towards product/service
Client commodity usage data/trends
Forecasted requirements
Special requirements
(Business Activity)
Total business by commodity
Volume trends for the commodity
Comparative performance by particular
segments of the market
(Competition)
Major competitors
Locations
Competitors market share
Strengths and weaknesses
Historical competitor trends in market share
Marketing methods used
Future trends
Future competitors
Potential market share

Public Works and Government Services Canada

SKILLS

TOOLS

D-5

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

COMPETENCY AREAS

PPM PROCESSES62

KNOWLEDGE
Current and past sales/revenue volume trends
New products/services/systems
Their technological efficiency or cost
advantage
Competitive marketing strategy
(Industry)
Major suppliers/contractors
Production capabilities
Location
Sales and volume trends
Products, services, systems
New product, services or systems
development
Pricing information
Cost information
Seasonal manufacturing trends
Packaging
Warehouse/Distribution network
Sales network
Services
Quality Assurance
Security
Labour situation unionized/non-unionized
Local/National/ International markets
Production cycle
Type of supplier
Economic Development Factors
Economic factors impacting commodity
(government restraint programs, inflationary
pressures, labour disputes, increased petroleum

Public Works and Government Services Canada

SKILLS

TOOLS

D-6

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

COMPETENCY AREAS

PPM PROCESSES62

KNOWLEDGE
costs, interest rates, value of Canadian dollar, etc.)
Socio/Political Environment
Government Regulations for:
- products/services/systems
- pricing
- competitive practises
- advertising and promotion
- import/export
Policies/set asides
Government fiscal policies/Special Operating
Agency (SOA)/Crown Corporations/Operating
budget, etc.
Increased client delegation
Industrial and Regional Benefits
Team roles and responsibilities
Reporting procedures
Client Relations
Service Provider Behaviours
Communications channels
Marketing of Procurement Services
Marketing Principles
Promotional Techniques
Organizational/Client and PWGSC
Mission/Objectives
Organizational Structures
Policies, procedures and directives
Government Structure and Operations

Public Works and Government Services Canada

SKILLS

TOOLS

D-7

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ANNEX E
LIFE CYCLE WALL CHARTS

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

LIFE CYCLE WALL CHARTS


The purpose of this Annex is to provide a graphic overview of the procurement process that can
be used to orient discussions, further analysis and training. The wall charts are designed as
wall displays and also as overhead projector slides. The author plans to integrate some of these
information elements into an office wall chart; hence the name.
Figure E-1 presents a high-level view of the project planning and procurement management
processes from the governments perspective. It integrates the complex procurement activities of
PWGSC with the project/program focus of the client department. The time line goes from need
recognition to product delivery. The information is organized into columns reflecting each of the
Treasury Board recognized project phases of: identification, development, definition,
implementation and close-out.
The detail presented is limited by a desire to present the information on one page and to keep to a
high enough level so that one can easily grasp the big picture. Certain boxes are marked to
draw attention to key decision documents: the Statement of Operational Requirements,
Procurement Management Plan (PWGSC), Project Implementation Plan (client department),
Synopsis Sheet (iterative project authorization document), Statement of Objectives (used in
Benefits Driven Procurement), the Request For Proposal and the Contract. The chart allows for
a separate definition phase contract, but has a more detailed breakout for the implementation
phase.
The remaining figures address the interaction between the contractor and the government. These
three Figures (E-2, E-3 and E-4) share a common product life cycle timeline: product definition,
design, development, integration, test and evaluation, production, installation (or deployment)
and operation. Disposal is not shown, but it does require early consideration for example, how
one gets rid of nuclear waste. The terminology used here is widely accepted in industry.
Definition and development refer to the product; whereas, in Figure E-1 these terms had a
different meaning and referred to the government project.

Public Works and Government Services Canada

E-1

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

LIFE CYCLE WALL CHART


1. IDENTIFICATION

2. DEVELOPMENT

3. DEFINITION

4. IMPLEMENTATION

Project & Procurement Planning

Solicitation Planning

Solicitation & Source Selection

Operational/Business
Need

Business/Technical
Requirements

Definition Phase
Contracting Process

Integrated
Procurement Team

Project Management
Strategy

System Definition &


Project Planning

Options Analysis

Project
Implementation Plan

Substantive Cost
Estimate & Risk Analysis

Market Research Sources of Supply

Refined Cost Estimate

Synopsis Sheet (EPA) Implement Authorized

Mgt. Engineering &


Production Performance

Operations & Support


Concept

Risk Assessment &


Mgt. Strategy

Implementation SOW &


Specification

Mgt. Logistics
Acquisition Processes

Performance Objectives

Business Case

CDRL/DIDs
& CEIL

Mgt. Govt Furnished


Resources

Statement of Operational
Requirements

Procurement Strategy Defn & Approval

Terms & Conditions &


Bid Evaluation Criteria

Mgt. Cost/Schedule &


Delivery Performance

Indicative Cost Estimate

Synopsis Sheet (PPA) Project Defn Authorized

RFP
(Implementation Phase)

Mgt. Quality
Performance

Procurement Concept

Statement of Objectives
(if BDP)

Bid Evaluation &


Contractor Selection

Product Acceptance &


Payment

Procurement
Management Plan

Industry Days
(if BDP)

Contract Negotiation

Manage Product
Support Processes

Synopsis Sheet (ID) Long Term Capital Plan

RFP (Definition Phase)

Contract - Preparation,
Approval & Award

Contract Management
and Administration

Contract Management

Manage Systems:
Requirements Mgt.
Risk Management
Data Management
Configuration Mgt.
Etc.

5. CLOSEOUT
Close-out

Physical
Disengagement

Admin.
Disengagement

Figure E-1 Government Processes/Major Documents


Figure E-2 presents an overview of the engineering and production process implemented by the
contractor and overseen by the government team. These processes start with definition of system
requirements and end with acceptance of the product design and the production units. In
between, the technical reviews are conducted to make sure that the engineering and production
effort in each phase is achieving the contract objectives. The engineering documentation is
reviewed progressively by the government Technical Authority and feedback is provided to the
contractor. Also shown are the major baselines, declared upon successful completion of the
corresponding technical review, which are used to control the evolving product configuration.
This overview is based on an equipment system project procurement, however the principles are
applicable to Information Technology (IT) /System Integration (SI) projects, regardless of the
project and product life cycle or orientation (e.g. waterfall, spiral, incremental release).

Public Works and Government Services Canada

E-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

LIFE CYCLE WALL CHART


DEFINITION

DESIGN

DEVELOPMENT

INTEGRATION

Define System
Requirements

Define
Segments and
Equipment

Conduct
Preliminary
Design

Conduct
Detailed
Design

System
Requirements
Review

Segment/
Equipment
Technical
Reviews

Preliminary
Design
Reviews

Critical
Design
Reviews

TEST &
EVALUATION

PRODUCTION &
INSTALLATION

OPERATION

SYSTEM
DEFINITION

TECHNICAL
REVIEWS

CONFIGURATION
BASELINES
Functional
Baseline

PRODUCT
ACCEPTANCE

Conduct
Functional Tests,
Qualification Tests,
User Trials

Test
Readiness
Reviews

Release
Engineering To
Production

Perform
Operational
Trials

Production
Readiness
Review

Software
Specification
Review
Product
Baseline

Allocated
Baseline

Formal
Qualification
Review

Functional
Configuration
Audit

Design
Acceptance

Physical
Configuration
Audit

PRODUCTION ACCEPTANCE

Figure E-2 Engineering and Production


Figure E-3 provides an overview of the logistics planning and acquisition activities on the same
timeline as the previous figure. The engineering reviews and audits are presented to link this
figure back to the engineering processes in Figure E-1. The logistics activities can be grouped
into: logistics engineering (to influence the design to achieve supportability objectives);
maintenance planning (to select a support system alternative (or strategy) and to then develop a
detailed list of maintenance tasks and required resources); logistics acquisition (to
purchase/develop the logistics support recommended in the maintenance plan) and early product
support (funded under capital acquisition). Logistics acquisition includes many sub-processes,
not broken out, such as the conduct of provisioning conferences and the approval of a training
strategy. Intensive interaction between the contractor and the government team specialists
occurs at this time. Interim contractor support is shown to reflect the reality that measures must
be taken to ensure adequate support while the logistics support is being fielded.

Public Works and Government Services Canada

E-3

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

LIFE CYCLE WALL CHART

REVIEWS
& AUDITS

DEFINITION

DESIGN

DEVELOPMENT

INTEGRATION

TEST &
EVALUATION

PRODUCTION &
INSTALLATION

Functional
Baseline

Allocated
Baseline

Preliminary
Design
Reviews

Critical
Design
Reviews

Functional
Configuration
Audit

Physical
Configuration
Audit

LOGISTICS ENGINEERING

LOGISTICS
DECISION
POINTS

Provide
Concept
of
Operations

Design System
Select Equipment
Perform R&M Modelling
Provide Engineering Data

MAINTENANCE PLANNING

Select
Support
System
Alternative

LOGISTICS ACQUISITION

PRODUCT SUPPORT

Interaction:
Contractor/
Technical Authority

Approve
Maintenance
Plan

TECHNICAL
DATA PACKAGE
SUPPLY PROVISIONING

PHST DEVELOPMENT

ADAPTATION/
DEVELOPMENT
OF LOGISTICS
SUPPORT

OPERATION

INTERIM
CONTRACTOR
SUPPORT

R&O REQUIREMENTS
TECHNICAL PUBLICATIONS DEVELOPMENT
SUPPORT & TEST EQUIPMENT DEVELOPMENT

LIFE
CYCLE
PRODUCT
SUPPORT

ATE AND TEST PROGRAM SETS


TRAINING DEVELOPMENT
SOFTWARE SUPPORT FACILITY

PERSONNEL PLANNING
FACILITIES CONSTRUCTION

PERSONNEL REQUIREMENTS
FACILITIES REQUIREMENTS

PERSONNEL ALLOCATION
FACILITIES CONSTRUCTION

Figure E-3 Establishing Logistics Support


Figure E-4, shows the operation, maintenance and support part of the life cycle. This diagram
typically spans many years, depending upon the technology. Information technology projects
have special support considerations, such as loading existing (legacy) data into the new system
and then solving all the detailed problems that emerge. Most products require a range of
contractor support services repair and overhaul; engineering support services (technical
investigations, modification development, etc.); change and revision services (for technical
publications, drawings, etc.); software support services (for example operation of a software
support facility); and in-service supportability analysis (to detect and correct support problems).
Mid-life upgrades, common with major systems, are often major support project procurements,
linking back to Figure E-1.

Public Works and Government Services Canada

E-4

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

LIFE CYCLE WALL CHART

OPERATION, MAINTENANCE AND SUPPORT


PRODUCTION &
INSTALLATION

DATA
MIGRATION

IT PROJECTS

MOST PROJECTS

//
//

OPERATION

USER
ACCEPTANCE

DISPOSAL

HOT LINE, HELP DESK,UPGRADES . . .

CONTRACTOR
SUPPORT
OF TRIALS

CONTRACTOR REPAIR AND OVERHAUL

ENGINEERING SUPPORT SERVICES

INTERIM
CONTRACTOR
SUPPORT

CHANGE AND REVISION SERVICES

SOFTWARE SUPPORT SERVICES

IN-SERVICE SUPPORTABILITY ANALYSIS

MID-LIFE UPGRADES

OR
ALTERNATIVE
SERVICE
DELIVERY

CONTRACTOR PERFORMED MAINTENANCE AND SUPPORT

DISPOSAL PLANNING

SAFE,
ECONOMICAL
DISPOSAL

Figure E-4 Operation, Maintenance and Support


The strategy of Alternative Service Delivery affects both Figure E-3 and E-4. With ASD, the
government may hand the responsibility for logistics support over to industry. This greatly
simplifies the procurement processes. However, enforceable (measurable) quality of service
measures are needed to define the performance expected of the contractor.

Public Works and Government Services Canada

E-5

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

ANNEX F
SAMPLE ACTIVITY TEMPLATES

Public Works and Government Services Canada

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM ACTIVITY TEMPLATE


Title:

Implement COTS Procurement

PPM Process Reference:

2.7 Define Procurement Strategy

Description
The federal governments preferred acquisition strategy is Commercial-Off-The-Shelf (COTS).
The main benefits of this approach are that a satisfactory solution can be deployed quickly,
relatively inexpensively and at low risk. Also, a large customer base ensures on-going product
support and commercially funded product evolution.
COTS procurement should be the norm.
COTS procurement is possible if the:

Required goods have already been brought to production status and have a proven
performance, and the

Required services have been established and are commercially available.

In this template, the term Non-Developmental Item (NDI) is synonymous with COTS. The
product may be marketed commercially (COTS), or may have been produced for some other
military (NDI) the point is that development is not required.
Market research is used to identify COTS products that meet your need. You must be willing to
accept an 80% or 90% solution - one that may lack a few desirable features. You also may need
to be innovative in addressing issues such as system interfaces, environmental conditions and
product support.
The challenge in COTS procurement is to keep it simple:

Resist the temptation to modify the product;

Keep the RFP and subsequent contract straightforward

Terms and conditions appropriate to COTS procurement;

Statement of Work limited to essential tasks with no engineering program typical


of development;

Data requirements kept minimal, consistent with commercial practice;

Technical requirements presented in either a brief performance specification or in


a commercial product description no new requirements forcing development;

Logistics support consistent with commercial best practice no costly


development effort.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Outputs

Needs analysis, option analysis, trade-off studies > Statement of Operational


Requirements

Market research, gap analysis, requirements scrub > Performance Specification or


Commercial Item Description

Project planning, cost estimating, risk analysis > Synopsis Sheet

Solicitation process > Proposal Evaluation Plan, Request for Proposals, Contract

Contract implementation > essential, commercial style documentation

Product support > commercial warranty; possibly commercial maintenance and support

Techniques
Effective market research and gap analysis can lead to COTS procurement. Having chosen a
COTS procurement strategy, you will typically face the practical issues discussed below.
Product performance is important. However, you cannot push the state of the art via COTS
procurement. So select a suitable solution from among existing products. Do not specify
performance beyond that available in the marketplace.
Do not specify a composite of what is commercially available. Any real system is a compromise
among competing objectives for example, aircraft design involves a trade-off between range
and payload. So find the balanced solution that most closely meets your needs.
Seek technical solutions consistent with widely accepted international standards, as applicable.
For example, there are standards for:

Open architecture interfaces among databases;

Digital data transmission in communications systems;

Electronic busses linking equipment;

Software language in imbedded systems; and

Linking of information in electronic documents.

This will prevent future problems with interfaces, technology upgrades, product support, etc.
Minor modifications are acceptable. But be careful not to impair the design integrity of the
product. You may inadvertently stress the product beyond its design limits. A few examples
are:

Public Works and Government Services Canada

F-2

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Adding enough equipment to a ship to change its center of buoyancy;

Changing the suspension system on an all terrain vehicle, transferring stress to its frame;

Increasing the load on a diesel generator, causing overheating and early failure.

Do not specify a worst case scenario operating environment without considering measures to
shelter the system from environmental stress. For example, most equipment onboard a ship is
sheltered from the salt spray and freezing ice of the North Atlantic. Equipment installed at a
northern radar site need not operate at cold arctic temperatures the radome can be heated.
Relatively delicate equipment need not survive an unprotected fall from a transport truck
proper packaging and handling offset the risk.
Logistics support usually must be adapted to suite the particular operational scenario. However,
do not impose costly changes merely to be consistent with past practice and general policy. For
example, the product vendor may have excellent maintenance manuals which, however, are not
in the Canadian military format. Before requiring them to be restructured, be sure that the value
of this effort is commensurate with its cost. Similarly, carefully assess existing training before
launching a unique and expensive training development effort. Investigate rapid commercial
parts supply before investing in traditional provisioning and warehousing.
With COTS procurement, the supplier retains proprietary data rights. Determine what data you
really need and how you can obtain it. It may be best to arrange for data access on an asrequired basis, rather than delivery of a technical data package.
Software Tools
Templates
Mandatory References
LEGISLATION
N/A
POLICY
Policy - Treasury Board
Treasury Board Manual Capital Plans, Projects and Procurement, Chapter 3-1 Policy on
Selecting Preferred Procurement Strategies. (As of July, 1998 this Chapter was still in
draft form.)
Policy - Department of National Defence
The Defence Management System, A-AD-125-000/FP-00I - Preparation of Synopsis
Sheets; Procurement Strategy
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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Discretionary References
POLICY
N/A
GUIDANCE
N/A
STANDARDS
N/A
MIL-STD-810E, Environmental Engineering Considerations and Laboratory Tests,
defines military environments and associated environmental qualification tests. This
standard is used to identify applicable conditions, select parameter values and define
tests. Be realistic and innovative do not over specify requirements.
Standards - NATO
NATO STANAG 2895, Climatic Conditions Affecting the Design of Materiel for use by
NATO Forces defines climate conditions throughout the world. It is used to specify
military environments in which equipment must be able to operate. Be realistic and
innovative do not over specify requirements.
Best Practices
When buying COTS, you should use commercial:

Contract terms and conditions;

Project management practices;

Quality assurance processes;

Inspection and testing methods;

Distribution and support capabilities; and

Warranties.

You should not normally require a company to:

Apply military standards in a commercial environment;

Furnish information not essential and not customarily provided;

Relinquish intellectual property rights.

Comply with terms and conditions inconsistent with the nature of the contract.
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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Lessons Learned
An example of COTS procurement is a satellite signal receiving and transmission unit required
for ground radar sites in the far north of Canada. The units installed at the sites were ageing;
therefore, replacement units were needed. The original units, developed specifically for the
military, cost $20,000 each. They met the military prepared specification and could still be
procured. Market research revealed that a similar unit was now commercially available for $500
per unit. However, it did not work properly in the low temperatures sometimes experienced at
the unheated radar sites. This problem was resolved by installing small heaters inside the
radome. The inexpensive COTS units were bought. They were delivered quickly, installed and
worked well.
The Coast Guard needed lap top computers for use by the Chief Engineers aboard their ships. A
military ruggedized computer capable of withstanding exposure to oil, salt spray, freezing water
and shock and resistant to fungus growth could be bought for $15,000 per unit. A commercial
computer with equivalent functionality could be bought for $3,000 per unit. It was decided that
the less expensive items would be bought. Even though the ship as a whole was exposed to a
severe environment, the Chief Engineer would use the computer only in his cabin, which had a
benign environment.
Training
COTS procurement is addressed in the Statements of Work and Specifications and Systems
Engineering Management courses at the Materiel Management Training Center.
Support OPI
TBD

Public Works and Government Services Canada

F-5

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM ACTIVITY TEMPLATE


Title:

Implement Solution-Oriented Procurement

PPM Process Reference:

2.7 Define Procurement Strategy

Description
Under the solution-oriented procurement strategy, you ask industry to meet a need or solve a
problem by adapting an existing solution, or by harnessing industry expertise previously
demonstrated in similar circumstances. A major redesign effort, or establishment of a new
service capability, is not required.
The solution-oriented procurement strategy is in-between Commercial-Off-The-Shelf (COTS)
and unique government development. It involves some design and development effort. Often
one procures an existing, proven platform and installs unique mission systems (or kits).
Examples are:

Buying a helicopter with a certified airworthy airframe and engine, but selecting,
integrating, installing and testing mission systems to meet specified Canadian
requirements;

Buying a proven army vehicle, but developing and installing kits designed to support
Canadian military operations mobile communications facility, deployable maintenance
shop, emergency medical center, etc.; and

Buying an existing coastal patrol vessel, but fitting it with specific minesweeping,
communication and weapon capabilities.

Outputs
The outputs are the same as for Implement Unique Government Development but are focussed
primarily on the part of the overall system being adapted to meet your needs. For example, the
specification for a maritime helicopter would stipulate performance requirements (speed, range,
payload, reliability, etc.) that could be met by more than one existing, certified aircraft. These
requirements would be stated at the aircraft level, and not address requirement allocations to
the engine, gearbox or other subsystem integral to the proven design. Unique requirements, such
as a submarine hunting capability, would be expressed in performance terms that typically would
allow the selection and integration of proven system elements.
The tests and trials, technical reviews and audits and product acceptance would focus on those
areas requiring design and development, not on the off-the-shelf elements.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Techniques
Read the techniques section for both Implement COTS Procurement and Implement Unique
Government Development. Apply this guidance where it pertains to your specific project.
Software Tools
Same as for Implement Unique Government Development. However, the software tools will
be used selectively as appropriate for the design and development effort.
Templates
Templates are provided in related procedures for each of the documents that must be prepared by
the Technical Authority. Also, check lists are provided in related procedures for each respective
technical review and audit.
Mandatory References
LEGISLATION
N/A
POLICY
N/A
Discretionary References
POLICY
N/A
GUIDANCE
N/A
STANDARDS
N/A
Best Practices
Conduct market research to identify existing solutions as close as possible to your capability
requirements. Settle for less than 100%, if necessary.
Be careful not to destroy the design integrity of an existing system. Engineering changes can
have unexpected consequences so change as little as possible.

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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Pay close attention to system interfaces. For example, a new mission suite installed in an
existing platform may impact power usage, cooling requirements, electromagnetic compatibility,
total weight, center of gravity (or center of buoyancy), system reliability and maintainability, etc.
Often, adaptations are achieved by changing or adding software. Allow considerable extra time
and money for this effort problems usually are encountered.
With major software systems, be careful about changes in fundamental parameters. For
example, an information management system that works well with a small number of users may
not be robust enough to handle many users.
Do not under-estimate the amount of effort required for system integration and test. Interfacing
existing equipment to create a system often introduces problems that are only evident during
testing and take time to solve.
Lessons Learned
Do not force design and development where it is avoidable.
Take advantage of existing logistics support manuals, training, support equipment, etc. to the
maximum extent possible. Consider the value added of contemplated re-work and avoid reformatting, etc. where there is little real benefit.
Training
This topic is addressed in the Systems Engineering Management course given at the Materiel
Management Training Center (DND).
Support OPI
TBD

Public Works and Government Services Canada

F-8

PROJECT PROCUREMENT MANAGEMENT TEMPLATE

PPM ACTIVITY TEMPLATE


Title:

Implement Unique Government Development

PPM Process Reference:

2.7 Define Procurement Strategy

Description
Unique government development is necessary when no suitable product exists to meet you
needs, and a new capability must be developed. A significant design, development and test effort
is required. This approach thus involves more risk than other strategies.
As in all procurement projects, the Technical Authority must prepare:

Project approval documentation

Cost and schedule estimates.

When development is required, the Technical Authority must prepare:

Statement of Work (SOW) identifying the activities to be performed by the contractor;

Contract Data Requirements List (CDRL) identifying the deliverable data and indicating
its due dates;

Set of Data Item Descriptions (DIDs) defining the data content and media;

Specification defining the system performance requirements; and

Contract End Items List (CEIL) identifying the hardware and software deliverables.

Preparation of each of the above items, which are key elements of the Request for Proposals
(RFP) and subsequent contract, is described in separate procedures.
The project may proceed in phases. For example, the phases may be:

Project Definition preparation of plans, investigation of risk areas, implementation cost


and schedule estimate;

Project Implementation design, development, integration and test, production,


delivery/installation.

This phased approach ensures proper planning and allows for risk mitigation. Successful
completion of one phase may be required before authorization to proceed with the next phase is
granted.
Once work is underway under contract, the Technical Authority:

Approves project plans


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PROJECT PROCUREMENT MANAGEMENT TEMPLATE

Approves system level specifications and test plans;

Participates in system level technical reviews and audits;

Authorizes changes to the contract specification; and

Accepts the system based on test and evaluation results.

The contractors engineering activities should follow a logical process shown below at a high
level for services, hardware and software type projects. The early work of needs analysis and
concept exploration may be largely complete prior to contract award. For example, often the
development effort involves selection and integration of existing elements to create a new system
with a specified capability.
SERVICES
Needs Analysis
Demonstration Project
Full Scale Implementation
Support

HARDWARE
Needs Analysis
Concept Exploration
Demonstration and Validation
Full Scale Development
Production and Installation
Support

SOFTWARE
Needs Analysis
Preliminary Design
Detailed Design
System Integration and Test
Installation and Conversion
Support

Outputs
The following list of outputs is indicative of the documentation generated in a development
project. The list could be greatly expanded and, of course, varies by project.
Project Approval
(Government)
Bid Solicitation
(Government)
Implementation
(Contractor)

Project Management

System Engineering

Detailed Design
Test and Evaluation

Synopsis Sheet
Project Profile and Risk Assessment
Procurement Plan
Request for Proposals
Proposal Evaluation Plan
Contract
Project Plans
Progress Review Documentation
Contract Change Requests
Equipment Breakdown Structure
Specifications system, subsystem, equipment
Interface Control Documents
Design Documents
Engineering Change Requests
Technical Review and Audit Documentation
Drawings and Parts Lists
Software Code and Documentation
Test Plans
Test Procedures and Test Cases
Test and Evaluation Reports

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Production

Bill of Material
Product Specifications
Production Flow Diagrams
Process and Material Specifications
Quality Control Instructions
Maintenance Plan
Provisioning Data
Technical Publications
Training Program
User Manuals

Maintenance

Operation

Techniques
An overview of the system development process is shown below.
OVERVIEW OF SYSTEM DEVELOPMENT PROCESS
DEFINITION

DESIGN

DEVELOPMENT

INTEGRATION

Define System
Requirements

Define
Segments and
Equipment

Conduct
Preliminary
Design

Conduct
Detailed
Design

System
Requirements
Review

Segment/
Equipment
Technical
Reviews

Preliminary
Design
Reviews

Critical
Design
Reviews

TEST &
EVALUATION

PRODUCTION &
INSTALLATION

OPERATION

SYSTEM
DEFINITION

TECHNICAL
REVIEWS

CONFIGURATION
BASELINES
Functional
Baseline

PRODUCT
ACCEPTANCE

Conduct
Functional Tests,
Qualification Tests,
User Trials

Test
Readiness
Reviews

Release
Engineering To
Production

Perform
Operational
Trials

Production
Readiness
Review

Software
Specification
Review
Product
Baseline

Allocated
Baseline

Formal
Qualification
Review

Functional
Configuration
Audit

Design
Acceptance

Physical
Configuration
Audit

PRODUCTION ACCEPTANCE

The system development process involves top-down requirements allocation and design and
bottom-up build, integration and test.
The starting point is analysis and clarification of system level requirements. Performance
requirements are documented in a system level specification, which is the subject of the System
Requirements Review. Once the functions to be performed by the system are properly described
and agreed to, then the system Functional Baseline is established.

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The system level requirements are then allocated to the system segments (subsystems) and in
turn to the individual equipment (hardware and software) comprising the system. These
requirements are described in the respective top-down layers of specifications. Satisfactory
completion of the technical reviews establishes the Allocated Baseline at each level.
If the system includes extensive software, then a separate Software Specification Review is
conducted to address design issues specific to software.
The next phase of the systems engineering process is preliminary and detailed design. The
Preliminary Design Review ensures that the development requirements are being achieved and
that the evolving configuration is properly and accurately documented. It confirms that the
design engineers are on the right track and identifies technical risks that must be closely
managed.
The Critical Design Review is held to confirm that the design is sufficiently mature to enable the
team to proceed with qualification testing and production. At this time representative and
(hopefully) stable technical data are provided for maintenance planning.
The Test Readiness Review confirms that preparations for the test program are complete that
the test plans, test procedures and test cases have been prepared, that the test facilities are
available and ready, and that the needed test prototypes have been built. The test and evaluation
program includes analyses, functional tests, environmental qualification tests and possibly, user
trials. It verifies that each specified requirement has been met.
The Formal Qualification Review confirms that the qualification test program has been
satisfactorily completed. The Functional Configuration Audit confirms that the specification
requirements have been met. These two activities may be combined.
Engineering data are issued to production through a formal, controlled Engineering Release
process. The Production Readiness Review confirms that the design is sufficiently proven and
stable to start production, that preparations for production are complete and that the required
material is being purchased and will be available as needed.
The Physical Configuration Audit is performed by comparing an early production item to the
technical data, to confirm that the item conforms to its approved technical documentation. The
Product Baseline is declared upon successful completion of this audit. (Items delivered prior to
this point may have to be retrofitted to a common standard.) The technical data required for
operation and maintenance of the system are then turned over to the customer.
Software Tools
Industry uses many software tools in development and production programs. Examples are:

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Requirements Management Computer System

Configuration Management Information System (CMIS)

Document Management System (DMS)

Computer Aided Design/Computer Aided Manufacturing (CAD/CAM)

Computer Aided Software Engineering (CASE)

Manufacturing Resource Planning (MRP)

Logistics Support Analysis Record (LSAR)

Templates
Templates will be provided in related procedures for each of the documents that must be
prepared by the Technical Authority. Also, check lists will be provided in related procedures for
each respective technical review and audit.
Mandatory References
LEGISLATION
N/A
POLICY
N/A
Discretionary References
POLICY
N/A
GUIDANCE
N/A
STANDARDS
N/A
Best Practices
The specification included in the Request for Proposals and subsequent contract must be a
performance specification. An example of a performance requirement is:
The vehicle loaded to a maximum Gross Vehicle Weight Rating travelling over paved
roads at speeds between 50 and 90 km/h, with an average of 70 km/h, shall have a range
of 400 km between refuelling stops.

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The US DoD in some recent projects has prepared a Statement of Objectives and required
bidding companies to write the Statement of Work and specification. This takes advantage of
expertise in industry and ensures that best business practices are followed.
Seek ways of working together with the company rather than being adversarial. In successful
projects everyone works together in a team effort.
Lessons Learned
Some lessons learned on past projects are:

Do not under estimate the system integration effort when the project involves integrating
off-the-shelf elements.

Do not over specify your requirements this will drive up costs without commensurate
benefits

Do not specify design solutions if you do, it is the Technical Authoritys problem if
they dont work.

Give industry an opportunity to comment on the Statement of Work and specification


before formally issuing the RFP. Interested companies tend to have a great deal of
expertise in the applicable area.

If the project is broken into phases, contracted for separately, then make sure that there is
funded work bridging the successive contracts to keep the companys development team
together.

Ensure early and extensive testing.


operations.

Work closely with the company on clarifying technical requirements and authorizing
changes. Respond quickly to requests otherwise the project will be delayed.

Be willing to make trade-offs.

Otherwise problems will be uncovered during

Training
This process is taught in the Systems Engineering management course given that the Materiel
Management Training Center (DND).
Support OPI
TBD

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PPM ACTIVITY TEMPLATE


Title:

Implement Benefits Driven Procurement

PPM Process Reference:

2.7 Define Procurement Strategy

Description
Benefits Driven Procurement (BDP) originated in Information Technology projects, but has been
extended to any project requiring a development effort. BDP is identified by Treasury Board
Secretariat as a preferred approach for implementing Information Technology projects.
Under BDP a company is selected to implement a project, through a competitive solicitation
process, based on its competence in managing complex projects and its understanding of the
relevant technologies. This company is selected, and starts work under contract, without the
constraint of a government prepared technical specification. At this stage, the projects
objectives, i.e. benefits, have been defined by the client and these desired benefits drive the
implementation process.
The company performs requirements analysis and definition, does trade-off studies, develops and
implements a solution, and provides the required product support. An integrated product and
process team is established to ensure a close working relationship between the client and the
company.
BDP transfers to industry much of the work needed to plan and implement projects, while
retaining clear lines of accountability. Government staff are relieved of the difficult task of
performing in-depth requirements analysis and the company is free to use current rapidly
evolving technology.
BDP moves away from the rigid firm fixed price type of contract previously used for complex,
multi-year, high technology projects. Given the level of technical uncertainty, the contract
should be cost type, with a ceiling price consistent with the scope of work and project budget.
The contract may include incentives for early delivery, technical innovation or cost efficiencies.
The project may be implemented in phases, with off-ramps at the end of each phase to allow the
government to gracefully terminate the project if it is not proving to be successful.
In some instances, the contractor may share in the cost of implementing the project, if the
technical solution leads to an alternative assured source of revenue for the company. For
example, the company may be able to exploit the market for the resulting product. However, this
funding approach involves risk for the company that may result in it losing interest in continuing
with the project if the predicted market potential does not materialize.

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Outputs
A Statement of Operational Requirements (SOR) and Statement Of Objectives (SOO) are needed
to define the intended benefits, interfaces and project constraints.
Industry workshops are used to explore technical alternatives, clarify objectives and identify
risks.
The Request for Proposals (RFP), bid evaluation and contracting processes are normal, with the
caveat that the SOO replaces a technical specification and the statement of work (SOW) is high
level.
The contract should be cost reimbursable with ceiling price, and may include performance
incentives.
An integrated product and process team approach is followed, with the client and contractor
working closely together.
Techniques
Statement of Operational Requirements (SOR) The operational staffs prepare an SOR
explaining the projects objectives, describing critical interfaces and identifying significant
constraints. The requirements are expressed in operational or functional terms not in terms of a
preconceived technical solution. The SOR will go through a number of iterations, partly as a
result of feedback from industry.
Cost Estimates The cost of implementing the project is estimated by analogy with similar
projects, cross-checked, to the extent possible, using market research data. A substantial
contingency is allowed for risk, given the lack of detailed costing data. The cost estimates are
updated repeatedly as more information becomes available.
Preliminary Project Approval The Project Authority seeks approval to work with industry to
clarify project objectives.
Early Dialog with Industry Inputs are obtained from interested companies:

Home Page A project home page is created on the internet, contact information is
presented and the SOR is posted. Also the project milestones are listed, indicating the
steps in the acquisition process and their planned timing. A notice referring to the home
page is promulgated to industry via the Government Electronic Tendering System
(GETS) - now called MERX.

Solicitation of Interest (SOI) Companies that hope to participate in the project are asked
to indicate their interest by completing a one page form identifying the company,
providing contact information and summarizing their relevant capability.
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Project Briefing The Project Authority presents a briefing to companies who have
indicated an interest in the project. Companies are encouraged to form alliances, if
appropriate, to ensure a full capability and to reduce to a practical number the bids that
eventually will be submitted.

Industry Days Working sessions are held with the interested companies to validate the
objectives, schedule and budget, to explore concepts and to identify risks. The client
refines the SOR using knowledge gained from industry.

Requirement Scrub The requirements are challenged, by experienced people, partly based on
knowledge gained through the industry days process. This step eliminates requirements that are
not feasible or affordable or that introduce unnecessary risk.
Statement of Objectives (SOO) The Project Authority prepares a SOO stating the projects
refined objectives in short, precise paragraphs.
Project Effective Approval The Project Authority seeks approval to proceed with project
implementation, usually in predefined phases.
Request for Proposals (RFP) The Project Authority prepares an RFP. It includes instructions to
bidders, evaluation criteria, a Statement of Objectives and a draft contract. The RFP is kept as
short and clear as possible. It is promulgated via the OBS (MERX).
Submission of Proposals Companies submit proposals that are limited in number of pages.
Performance Specification - Depending upon the nature of the project, the bidders may be
required to prepare a performance specification. (This would be premature if concept
exploration and definition is necessary, but would be suitable if the project can go directly to
development, to integration and test or to delivery and installation.)
Oral Presentations Companies with responsive bids are asked to give an oral presentation
demonstrating their understanding of the problem, reviewing their proposed solution and
confirming their ability to manage the project.
Proposal Evaluation The Crown evaluates the proposals and determines which proposal
provides greatest overall value. The evaluation process includes reference checks, scoring of
proposals and, if necessary, on-site capability surveys.
Contract Negotiation PWGSC debriefs the loosing bidders and negotiates a contract with the
selected company. The contract is based on the selected proposal. It defines the project
objectives and provides a basis of acceptance and a basis of payment. It provides a risk
management process and a dispute settlement method. It may include off ramps, if appropriate,
to enable the government to gracefully escape from failing projects.
Project Implementation The project is implemented in phases, if appropriate. The emphasis is
on the use of commercial standards, best business practices, integrated processes, minimum
documentation and integration of acquisition and life cycle support. Where appropriate, the
solution is implemented progressively. Contractor performance is monitored making as much
use as possible of the contractors internal management controls.

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Acceptance Acceptance is based on confirmation that the objectives have been met. This may
not be as simple as in traditional contracting methods, because the government did not detail its
requirements as definitively as in the past.
Basis of Payment The contractor is paid its reasonable direct and overhead costs and a level of
profit based on performance. A ceiling price is dictated by the project budget. The contract may
involve performance incentives. For example, if contractor introduced innovations result in
significant cost savings, then these savings should be shared between the contractor and the
government.
Project Close-Out The Crown confirms that all goods and services have been delivered and
accepted, that costs have been invoiced and paid and that there are no outstanding problems and
actions. Any residual payments (for example resulting from holdbacks) are paid. To the extent
that payments were based on costs, an audit may be necessary.
Independent Review - An independent review of the project should be conducted to capture
lessons learned so that these may be used in subsequent projects.
Software Tools
Given the evolutionary nature of system development via Benefits Driven Procurement, a
requirements management computer tool, (e.g. RequisiteProTM, from Rational Software
Corporation) should be used.
Computer-Aided Software Engineering (CASE) tools should be used in large and complex
software development projects to facilitate modelling, code management, integration and test,
version control and documentation preparation.
Templates
Statement of Objectives: This is a short and to the point document stating:

What capability is needed functions that the system shall perform;

What quality is expected concise high level performance statements;

When the capability is required the schedule constraints;

How much the Department is willing to pay the budget constraints;

What technical constraints pertain such as interfaces with other systems;

Who is responsible - for requirements analysis, development, installation and life cycle
product support; and

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What company management and technical skills are needed as demonstrated through
past performance.

Company Proposals: The proposals are in two volumes:

Management, Technical and Past Performance Which includes an executive overview, streamlined Statement of Work, master
project schedule, implementation team organization chart, project methodology,
proposed solution architecture, innovative concepts, past performance (client
references), confirmation of ability to obtain needed resources and a risk
mitigation summary.

Financial and Industrial Benefits Which includes evidence of financial stability, price proposal, explanation of
business arrangements, proposed socio-economic benefits, acceptance of (or
revisions to) terms and conditions and any necessary certifications.

Mandatory References
LEGISLATION
N/A
POLICY
N/A
Discretionary References
POLICY
Policy Guidelines - Treasury Board
An Enhanced Framework for the Management of Information Technology Projects, Part
II Solutions: Putting the Principles to Work, Treasury Board Secretariat, March 1998
Policy Guidelines - Department of National Defence
GUIDANCE
Guidance - Other Government Departments
Benefits Driven Procurement Process, PWGSC, 27 March, 1997
Guidance - Other
STANDARDS
N/A

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Best Practices
The US DoD introduced the concept of a Statement of Objectives (SOO). The SOO is a brief
document (preferably one or two pages) identifying the project objectives to be achieved by
industry. Use of the SOO shifts the responsibility to prepare the statement of work (and
specification) from the government to industry. Companies present, in their bids, a proposed
SOW for the project. This allows industry complete freedom to define and organize the work as
necessary to accomplish the project objectives. It encourages innovation and cost consciousness.
Lessons Learned
BDP evolved out of experiments with a Canadian government acquisition process called
Common Purpose Procurement (CPP). CPP introduced a streamlined, competitive procurement
process. It brought industry into projects much earlier than before, when objectives were known
but detailed requirements were still being defined. As a consequence, the Crown didnt have to
write a detailed Specification the requirements were defined as necessary by an integrated
product and process team that included both government and contractor personnel. This process
avoided the difficulties that would otherwise have been faced by the Crown of:

Defining requirements without an in-depth understanding of current technology; and

Expressing requirements in terms of current technology merely to have these


requirements become obsolete before they could be implemented.

The difficulty experienced with CPP is that it established a partnering relationship between the
Crown and the contractor, whereby design decisions were made jointly. When the projects got
into difficulty, the contractor could not be held accountable. By establishing a normal
contractual relationship between the Crown and the contractor, whereby the contractor is
responsible for delivering a solution that meets the project objectives, these difficulties can be
avoided.
Training
Support OPI
TBD

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