Procurement is the acquisition of goods, services or works from an outside external source. It is favorable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the project in terms of quality and quantity, time, and location.
Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.
- Identification of need
- Supplier Identification
- Supplier Communication
- Supplier Liaison
- Logistics Management
Procurement contract types
- Firm Fixed-Price Contracts (FFP)
- Fixed-Price Incentive Fee Contracts (FPIF)
- Fixed Price with Economic Price Adjustment Contracts (FP-EPA)
- Cost-reimbursable contracts
- Cost Plus Fixed Fee Contracts (CPFF)
- Cost Plus Incentive Fee Contracts (CPIF)
- Cost Plus Award Fee Contracts (CPAF)
- Time and Material Contracts (T&M)