Www.tils.qut.edu.au PROJECT PORTFOLIO OFFICE Procurement for Project Managers 16 February 2015

www.tils.qut.edu.au

P R O J E C T P O R T F O L I O O F F I C E

Procurement for Project Managers

16 February 2015

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Project Portfolio Office

Housekeeping – toilets, phones, evacuation or procurement emergency…

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Participants will gain a broad understanding of the procurement lifecycle in a project context

This session is designed for project managers who are currently or potentially working on or around procurement projects at QUT.

Facilitators

This workshop is facilitated by staff from Project Portfolio Office, FRP Strategic Procurement, DAS, Governance and Legal Services, and ITS. Special guests include Corrs - QUT’s Lawyers and QUT Project Managers speaking to their own experience.

Format

We will have 2 x 15 minute breaks at 10:05am and 11:25am

*A light lunch will be served from 1pm to 1:30pm

*A Panel Discussion will take place from 1:30pm - 2pm with opportunity during this time to ask more questions.

Objective

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Procurement for Project Managers – Presenters

Robyn Warren, Project Office Specialist, PPO

Janet Porchun, Manager, FRP Procurement

Michael Boyle, Associate Director, Infrastructure Services, ITS

Helen Clarke & Melissa Pratt, Corrs Chambers Westgarth

Ian McDonald, Administrative Systems Coordinator, DAS

Eliza Boddington, Legal Officer, Governance and Legal Services

Nathan Howard, Project Manager, Staff Email in the Cloud Project

Sue Burdon Jones, Project Manager, Engage Project

Phil Webster, Project Manager, Web Application Security Project

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9:00am Welcome and Overview Robyn 5 Mins9:05am Requirements Identification Robyn 10 Mins Email & Calendar in Cloud Project Nathan 10 Mins Q&A 5 Mins 9:30am Procurement Approach Planned Procurement Approach Janet & Aroha (FRP) 15 Mins Risk and Reward Michael 15 Mins Q&A 5 Mins 10:05am BREAK Coffee and refreshments 15 Mins10:20am Request for Offer Going to Tender Janet & Aroha (FRP) 10 Mins When to RFI or RFO Helen & Melissa (Corrs)

GITC Helen & Melissa (Corrs) Changes to GITC Helen & Melissa (Corrs) Templates Helen & Melissa (Corrs) 25 Mins

Q&A 5 Mins 11:00am Vendor Selection Ian 10 Mins Engage Project Sue 10 Mins Q&A 5 Mins 11:25am BREAK Coffee and refreshments 15 Mins11:40am Contract Negotiation Negotiating the Contract Ian 10 Mins Legal Advice and Services Eliza (Legal Services) 10 Mins Web Application Security Phil 10 Mins Q&A 5 Mins 12:15am Contract Management Managing the contract and vendor Ian 10 Mins CaseStudies Ian 10 Mins Q&A 5 Mins 12:40am Parked Q&A 20 Mins1:00pm LIGHT LUNCH 30 Mins1:30pm Panel Discussion and Audience Questions 30 Mins2:00pm CLOSE

AGENDA

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PPO Procurement/PurchasingProcurement Arrangements SOAs and PSAs

PMF7 Tool (Project Notification, Proposal and Plan)Handout from Email in the Cloud Project

FRP Strategic Procurement Procedure FMPMPPS Template Purchasing Process FlowchartPlanned Procurement Approach Process

MOPP F/1.2 Information SecurityCloud Computing (Checklist))

Engagement of ConsultantsTender ProcessGITC

QUT RFI & QUT RFO TemplateConsultancy Services Agreement - QUTStandard GITC Contract – QUTShort Form ICT Contract - QUT

Handout from Engage Project

QUT Procurement Policy

Ensure the right representation on selection panels -

stakeholders

Communication with vendors

Governance & Legal Services Contract Management

PROCUREMENT LIFECYCLE

Requirements identification

Request for Offer

Vendor selection

Contract negotiation

Contract management

LINKS -

HANDOUTS

Legal Advice

Budget and Timeline Impact

Focus on Project and Post Project

Address Risks (incl security & privacy)

Acceptance Criteria (Project) &

Performance Management (Service)

Vendor relationship management

Handover

Procurement approach

TOPICS -

(SPEAKERS)

LEARNING OBJECTIVES

Planning for projects:business

requirements, scope, deliverables, estimations,

phases

Timelines for Procurement

The Planned Procurement Approach

at QUT (FRP)

Risk and Reward (Michael)

- Equipment – SOAs and POAs

- Consultants- Trainers

- Software – installed or hosted (cloud) - Infrastructure

Enterprise Architecture considerations / RISK

Going to Tender (FRP)

When to RFI or RFO

GITC

Changes to GITC

QUT Templates

(Corrs)

Evaluating Submissions (Ian)

* Engage Project (Sue)

Negotiating the contract (Ian) 10

Legal Advice and Services

(Eliza, Governance & Legal Services) 10

* Web Application Security Project (Phil)

Managing the contract and vendor

(Ian)

* Case Studies (Ian)

What problem are you addressing?

- Business Objectives- Deliverables

- Benefits (PPO)Plan to - Buy? Build?

Outsource? Get Advice? Train?

Constraints and Resourcing (PPO)

* Email in Cloud Project (Nathan)

Contract Management

Procurement for Project Managers Workshop Overview 16 February 2015

Importance of Selection Criteria

GITC implications

Templates & Guidelines

Base of contract

The QUT Approach

Governance – project and procurement

Process for Projects

Ethics Probity and accountability

http://www.tils.qut.edu.au/ppo/

http://www.frp.qut.edu.au/services/procurement

http://www.frp.qut.edu.au/services/procurement/soa_psa.jsp


http://www.tils.qut.edu.au/ppo/framework/documents/PMFv7_V3.7_LOCKED_002.xlsx

http://www.frp.qut.edu.au/services/procurement/Procedure.jsp


http://www.frp.qut.edu.au/services/policy/financial_management_manual/

http://www.frp.qut.edu.au/forms/

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/documents/PurchasingProcess.pdf

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/documents/PlannedProcurementApproachProcess.pdf

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/documents/PlannedProcurementApproachProcess.pdf

http://www.mopp.qut.edu.au/F/F_01_02.jsp


http://www.itservices.qut.edu.au/staff/cloud.jsp


http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/documents/EngagementofConsultantsProcess.pdf

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/documents/TenderProcess.pdf

http://www.frp.qut.edu.au/services/procurement/GITC.jsp



http://www.governance.qut.edu.au/legal/index.jsp

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#ContractMgmt

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#ContractMgmt

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REQUIREMENTS IDENTIFICATION

Robyn Warren, PPO

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What problem are we addressing?

Why are we doing this project?

What are the business objectives, deliverables, benefits?

Why are we doing this project? (in greater detail)

Get these right first before we rush out to buy (or build anything)

As this will help determine our scope…

What are Procurement Prompts?

What will my project be purchasing?

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What problems or business requirements are we addressing through the project?

• Business Objectives

• Deliverables

• Benefits

• Urgency

Will our scope include procurement?

Almost all projects include procurement. It should be a part of the project plan if we plan to:

• “BUY” – software, hardware, services, contractor, catering, travel (Will I need a contract agreement?)

• “OUTSOURCE” – services or systems (I will need a contract)

• “PAY FOR ADVICE, CONSULTANCY OR TRAINING” (Will I need a Consultancy Services Agreement or

is there an existing contract, Standing Offer Arrangement (SOA) or Preferred Supplier Arrangement (PSA)

Where do I start?

• Seek expert advice - Contact FRP Strategic Procurement or PPO

• Look for information (FRP website), QUT templates, mentors, similar projects, current agreements or contracts

• Think about what our project needs, how much it might cost, and our planned procurement approach

• Seek expert advice - Contact Eliza Boddington, QUT Legal Officer, for advice on contracts


PLANNING FOR PROJECTS

Procurement planning is an integral part of the project proposal and project plan

• Deliverables – Request for Expression of Interest, Request for Offer, PPS, executed contract, new system?

• Scope – How will we procure? (planned procurement approach/s with detail)

• Quality – Evaluation criteria for tenders, security and privacy, acceptance criteria for delivery, testing, service levels for

contracts

• Stakeholders – Stakeholder requirements, participation & governance (including selection panels and reference groups)

• Schedule – Activities, stakeholders, vendors, consultants, legal advice, negotiations, risk

(Assume there will be delays & allow time for procurement – effort and duration)

• Budget – Consider the total cost of all procurement, including QUT integration, managing the process and post project

annual license and support costs…

• Risks – consider procurement or vendor risks that can impact on project timeline, scope, quality, resources, budget and

benefits

PHASES – Can the project be broken into phases that align with major procurement deliverables?

– Feasibility Phase (Requirements, Market scan / Request for Expression of Interest / Pilot or POC)

– Implementation Phase (this could include Request for Offer right through to Contract Management)

KNOWLEDGE – Does the Steering Committee or Reference Team have procurement experience?

Seek advice!

Think about the bigger picture. Where does this product, vendor, project, or ongoing service fit in QUT…10

CRICOS No. 00213Ja university for the worldrealR

Procurement

“Our aim is to achieve Best Value for Money”Janet Porchun & Aroha Simpson, FRP Procurement


Things to Consider What will my project be purchasing? How much will it cost? Will I need a contract agreement? Will I need consultants or contractors? Will I need to go to the market place to gain

information? Will I go to tender? Who can I buy from? Who are the experts that can help me? When do I need to think of these things?

Identify the project requirements at the beginning of your planning


Purchasing Process


Required for ‘significant’ purchase/s of a value >$100,000 or high risk purchases. The Planned Procurement Approach is used to ensure value for money is achieved, and supply is secured, for both high value and risk purchasing categories. By following this process the most appropriate purchasing strategy can be identified. What to include: Objective Demand Analysis Sustainability Impact Assessment Supply Market Analysis Strategy Indicators Approved by Head of School/Division

Planned Procurement Approach


Planned Procurement Approval

Once you decide on a purchasing strategy have it approved by the appropriate financial delegate.

This person should be senior to the person who has been involved in developing the purchasing strategy and have the appropriate financial delegation within the Oracle Hierarchy.

Example Microsoft Word Document


Risk and Reward

Michael Boyle, Infrastructure Services


Lowering Your Risk to get a Higher Reward

Nature of procurement People, Services or Things Level of engagement Clarity of objectives Understanding the market Architectural fit


What is Enterprise Architecture?


Choices (or are they?)

As a ServiceCloud

On-Campus

Turn-key

Solution

Solution

Solution

Solution


The Spectrum

Use of arrangements in place ‘as is’Eg Standing Offer

New Procurement

Variation to existing contract

Consistent with- Architecture- Policy- Guidance

Innovative‘New’ need

Operational

Tactical

Strategic

Reuse before buy before build


To Be Considered Whole of life cost Integration Security Privacy, IP and other Legislative

Compliance Performance End of life/Unexpected termination


References MOPP (particularly F1.2 and D3.1

http://www.mopp.qut.edu.au/F/F_01_02.jsp)

Cloud Checklist http://www.itservices.qut.edu.au/staff/cloud.jsp

Standing Offers – IT Services -> Services for Staff -> Hardware, Software, etc

FMPM http://www.frp.qut.edu.au/services/policy/financial_management_manual/







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BREAK


Engaging Consultants and

the Tender Process

Janet Porchun & Aroha Simpson, FRP Procurement


Engaging ConsultantsConsultancy services typically involve professional services provided by an individual or company where the consultant uses their skills and knowledge to produce a specified deliverable for QUT. Examples of when the Consultancy Services Agreement may be used include for:

• Providing expert advice and reports on technical and professional matters;

• Carrying out research projects, feasibility studies and fact finding investigations where recommendations are made;

• Developing and designing a benchmarking framework/process and standards; and

• Providing written advice in the development of policy and strategic planning issues.

When engaging External Consultants remember to comply with the purchasing process. Main points to cover is the value of the contract and the requirements for either a letter of offer or a formalised agreement


Engaging Consultants

When is the Consultancy Services Agreement not to be used?

The Consultancy Services Agreement should not be used for services which are provided by a contractor working under QUT’s direct supervision, predominantly on QUT’s premises and using QUT’s facilities and equipment. If the services to be provided involve backfilling a position, working under the direct guidance of QUT or ongoing work with no set deliverable.

Upon completion of the Consultancy works a Consultant Performance Report to be completed and sent to Procurement to be recorded.


Tender Process Before you go to tender

Consult with Strategic Procurement Consider allocated resources, budget and time Planned Procurement Approach to be approved

Establishing the tender GITC – must be considered for all ICT procurement Written specification and final scope will be required at

this stage Establish an Evaluation Panel and evaluation criteria Method of tender: Request for Expression of Interest or

Request For Offer Open or Closed Tender (Consult with Strategic

Procurement)

Tender is uploaded to QTender by Strategic Procurement


Tender Process Tender closed

Shortlisted tenders evaluated – Best and Final Offer reviewed

Finalise evaluation report Successful and unsuccessful tenders notified by

Strategic Procurement Negotiations with successful tender

Contract process Preparing the Contract/GITC Contract (Consult with

Strategic Procurement) Legal review of contract if required Execution of contract Carry out procurement Contract manager or PM to manage contract


Strategic Procurement – Procedure: http://www.frp.qut.edu.au/services/procurement/Procedure.jsp

Procurement/Purchasing - http://www.frp.qut.edu.au/services/procurement/

Planned Procurement Approach http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#PPPA

Planned Procurement Approach Template - http://www.frp.qut.edu.au/forms/index.jsp

RFI & RFO - http://www.frp.qut.edu.au/forms/ (templates) GITC - http://www.frp.qut.edu.au/services/procurement/GITC.jsp Engagement of Consultants - http://

www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/Chapter4d.jsp

Tender Process - http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#TenderProcess

Procurement Arrangements (SOAs & PSAs) - http://www.frp.qut.edu.au/services/procurement/soa_psa.jsp

Useful Links


http://www.frp.qut.edu.au/services/procurement/

http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#PPPA




http://www.frp.qut.edu.au/forms/index.jsp

http://www.frp.qut.edu.au/forms/index.jsp




http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/Chapter4d.jsp



http://www.frp.qut.edu.au/services/policy/financial_management_manual/chapter4/chapter4a.jsp#TenderProcess





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PROCUREMENT FOR PROJECT MANAGERS WORKSHOP

16 February 2015

Helen Clarke and Melissa PrattCorrs Chambers Westgarth

12798397/4

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EXPRESSIONS OF INTERESTAND

REQUEST FOR OFFER

•What is an Expressions of Interest (EOI)?

•What is a Request for Offer (RFO)?

•When to use each template.

PROCUREMENT FOR PROJECT MANAGERS WORKSHOP 16 February 2015

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GITC• Government Information Technology and

Communications framework.

• What is GITC?

• Why do we use GITC?

• Queensland Government Short Form Terms and Conditions.


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QUT TEMPLATES• Consultancy Services Agreement


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QUESTIONS?


Queensland University of Technology

CRICOS No. 00213J

ICT Solution

Evaluation to Vendor Management

Ian McDonald

February 2015


Context• Vendor selection

• Negotiating the contract

• Vendor management


Vendor Selection• Important and challenging task – but fun

• Need to keep the process fair and in the best interests of organisation

• Establish requirements– Clear statement of the problem being solved– What is the potential solution provider being asked to provide? –

solution, product, service– Establish business, technical and vendor requirements– Indicate items mandatory for solution– Publish requirements via appropriate process – RFI, RFO etc– Provide indication of high level selection process for clarity, including

cost, experience, evidence of success, HEd, due diligence, references, etc


Vendor Selection• Shortlist

– Need an evaluation team – across business, process and technology expertise could be SC+ others with direct impact

– First pass - match solution requirements with vendor response – Assign importance value for each requirement – Calculate a total score for each team member and look at

average – weighted and unweighted– Select the ‘shortlist’ solution provider/s for further evaluation

• Preferred supplier– Presentations against use cases + particular items identified

through the shortlisting process– Could expand the evaluation group to include a broader range of

stakeholders


Vendor Selection– Rescore from broader group assessment – Capture commentary to identify any particular issues to be taken

up in negotiation phase– Due diligence and reference checks– Review outcomes– And the winner is? – subject to executing a formal contract– Don’t close the door on the runners’ up - just in case

• But there is more – Develop contract negotiation strategy– Undertake negotiation develop contract– Execute contract

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BREAK


Negotiation• Authority to negotiate from SC • Your focus

– Remember that you want to “partner’ with the vendor and the negotiation is the start of this relationship

– Understand the business deal – what you want out of the negotiation – what does the vendor want?

– Need to be mindful of the vendor you are negotiating with – understand the vendor’s market and other influences that control their environment

– The sky is the limit and finding creative and original alternatives of mutual benefit will result in a better outcome

– Need not to be too aggressive – there is a person representing the vendor on the other side of the table

– Price is not the only currency to use in the negotiation


Negotiation• Know your bottom line so you know when to walk away• Be mindful of the terminology being used – the agreed deal

needs to be clearly understood by both parties and captured in the contract document

• As the negotiation is captured in draft versions of the contract template– Look for inconsistencies across the contract– Avoid repeats – no need to keep restating the same thing just define

once and refer to it many times– Be clear on the sequence of documents going into the contact to ensure

what takes precedence

• Useful to develop the PIPP – this is the definitive statement of the plan, deliverables and payments – up front

• Establish ‘risk and reward’ upfront as a principle for a balanced negotiation


Negotiation• Vendor focus

– Lots of $s– No risk – want to use their terms and conditions – Payments frontloaded, ie., most of payment up front– No warranties, no recourse if things go wrong– An opportunity to charge you more when things change– To create impression there are more buyers out there – you are not that

important

• Be honest, ethical and fair• Exchange draft versions of contract with in context revisions

capturing progressive agreement on issues – legal advice through this process as appropriate is essential

• Execute final agreed version once issues are resolved


CRICOS No. 00213J


CRICOS No. 00213J

Legal Advice & Services

• Templates and QUT Standard Terms• How I can help • High risk/complex contracts• Significant legal issues• Allow time • Budget for Legal Fees Governance and Legal Services

16 February 2015


Vendor Management

• Vendor management is about how best to drive vendor behaviour to obtain optimal IT and business outcomes/value for you

• Impacts on areas of contracts, performance and risk• Goal is to ensure any contractual behavior is adhered

to, renewal and termination provisions are clear• Ongoing monitor of support and performance• Useful in extracting the maximum value from the

relationship – or make different choice = risk• Ongoing communication to make it happen


Vendor Management• Needs

– Governance – authority and decision making flow– Relationship building capability – roles and responsibilities– An ongoing investment of effort– Ongoing communication for high level issues and

opportunities

• Is a place to go if provision has been made to intentionally exploit the relationship – eg., IP and future development opportunities and execution models


Vendor Management• Benefits?

– Get best IT and business outcomes– Leverage off insights of vendor roadmaps and business

intelligence– How vendors are dealing with opportunities re digital

transformation – dealing with agility and innovation– Barometer of when sourcing solutions and strategies need

to be revised– Continue to leverage off good pricing models– Have better insight on how to manage hybrid/integrated

environments – traditional : cloud : externally delivered– Can help respond quickly to new business demands– Can influence future directions


Negotiation Case Study

• Supply, integration and support of ICT solution• RFI – selection process – preferred provider• Best and Final Offer (BAFO) + chat about all the stuff

referred to previously re clarity of the deal and developing the relationship - going well

• Solution = application + developed functionality + integration

• All good until – acquisition• Mmm – so who are we contracting with?• Complex – vendor, approved party for application and

QUT



• Issues– Support arrangement – with contracting party and

they deal with all backend relationships as they are an approved party

– Negotiate with acquiring party CEO and yet acquired party has expertise – internal disconnect

– Resolve issues only to see them return – technology stack support

– Liability and indemnity; MSA



• Supply, integration and support of ICT solution• Technical environment is patched to latest for

security• Includes latest versions of RedHat Linux,

Apache and PHP• Application provider supports earlier versions of

the above• How does this get supported?



• Supply, integration and support of ICT solution• Contracting party needs to deal with support• New releases etc are part of this• QUT technical environment also needed to be

part of this• Resolution was

– Vendor reviews new releases and advises any issues– If yes what assistance can be provided and what $s– If we agree to engage them then 50% discount– Clear process – win/win


Questions ?

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Parked Questions

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LUNCH BREAK

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PANEL DISCUSSION

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Www.tils.qut.edu.au PROJECT PORTFOLIO OFFICE Procurement for Project Managers 16 February 2015