Procurement — Buying Goods and Services

Procurement management involves acquiring products, services, or results from outside the project team.

Contract types — risk distribution:

Fixed Price (Lump Sum) — seller bears cost risk; buyer has certainty

FFP (Firm Fixed Price) — most common; buyer pays set amount no matter what

FP-EPA (Economic Price Adjustment) — fixed with inflation adjustment

Cost Reimbursable — buyer bears cost risk; seller gets paid actual costs plus fee

CPFF (Cost Plus Fixed Fee)

CPPC (Cost Plus Percentage of Costs) — most risky for buyer

CPAF (Cost Plus Award Fee)

Time and Materials (T&M) — hybrid; buyer pays hourly rate + materials; used when scope is unclear

Procurement documents:

RFI (Request for Information) — market research

RFQ (Request for Quote) — price for known quantities

RFP (Request for Proposal) — full solution including price and approach

Source selection criteria: Price, technical approach, management approach, past performance, references, certifications.

Reference:

Wikipedia: Procurement

https://en.wikipedia.org/wiki/Procurement