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12 - PROJECT PROCUREMENT MANAGEMENT

12.1.1.8 Enterprise Environmental Factors

Described in Section 2.1.5. The enterprise environmental factors that can influence the Plan Procurement
Management process include, but are not limited to:

• Marketplace conditions;
• Products, services, and results that are available in the marketplace;

• Suppliers, including past performance or reputation;
• Typical terms and conditions for products, services, and results or for the specific industry; and
• Unique local requirements.

12.1.1.9 organizational Process Assets

Described in Section 2.1.4. The various types of contractual agreements used by the organization also influence
decisions for the Plan Procurement Management process. The organizational process assets that influence the Plan
Procurement Management process include, but are not limited to:

• Formal procurement policies, procedures, and guidelines. Most organizations have formal procurement
policies and buying organizations. When such procurement support is not available, the project team
should supply both the resources and the expertise to perform such procurement activities.
• Management systems that are considered in developing the procurement management plan and selecting
the contractual relationships to be used.
• An established multi-tier supplier system of prequalified sellers based on prior experience.

All legal contractual relationships generally fall into one of two broad families: either fixed-price or cost
reimbursable. Also, there is a third hybrid type commonly in use called the time and materials contract. The more
popular contract types in use are discussed below as discrete types, but in practice it is not unusual to combine
one or more types into a single procurement.
• Fixed-price contracts. This category of contracts involves setting a fixed total price for a defined product,
service, or result to be provided. Fixed-price contracts may also incorporate financial incentives for
achieving or exceeding selected project objectives, such as schedule delivery dates, cost and technical
performance, or anything that can be quantified and subsequently measured. Sellers under fixed-price
contracts are legally obligated to complete such contracts, with possible financial damages if they do
not. Under the fixed-price arrangement, buyers need to precisely specify the product or services being
procured. Changes in scope may be accommodated, but generally with an increase in contract price.

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