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Close Procurements

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Close Procurements is the process of completing each project procurement. This involves verifying that all work and deliverables are acceptable and documenting lessons learned for future projects. This process involves finalising open claims, verifying that all deliverables have been received and accepted, evaluating supplier performance for future reference, and transferring completed procurement to relevant parties. The aim of this process is to ensure that the contracts are formally closed and any related matters are settled.

Guide: Close Procurements in Project Procurement Management

The concept of Close Procurements is an integral part of the Project Procurement Management knowledge area in CAPM and PMP certifications.

What is 'Close Procurements':
Close procurements is the process of completing each procurement contract. This could mean fulfilling the terms of the contract and terminating it amicably, resolving any disputes, or early termination if the terms cannot be met. It also involves reviewing the contracts to ensure all work and terms are completed satisfactorily.

Importance:
Managing the closure of procurements ensures that all agreements are met and any unresolved matters are concluded. It contributes to positive relationships with suppliers and mitigates the risk of future legal issues.

How it works:
Close procurements generally involves project management team, the vendors, and sometimes project stakeholders. The team reviews all procurement activities and documents to ensure accuracy, completeness and compliance. Any issues are resolved and lessons learned are documented for future references.

Exam Tips - Answering Questions on Close Procurements:
1. Understand the Process: Fully understand the process and its place in the overall project procurement management. Able to describe the process and its key elements.
2. Importance: Be able to explain why it's important to the overall project and organization.
3. Real-world Examples: Apply the concept to real world examples. Explain how it would work in a hypothetical project, or what would happen if it wasn't correctly implemented.
4. Lessons Learned: Understand the importance of documenting 'lessons learned' as part of the close procurements process.
Remember that thorough understanding and application are key to answering these types of questions successfully.

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CAPM - Project Procurement Management Example Questions

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Question 1

Your project has multiple ongoing procurements with a reputable supplier. One procurement is due for closing. Which document should you review before starting the close procurement process?

Correct Answer: The specific procurement contract for the completed work.

When closing procurements, the most relevant document to review would be 'the specific procurement contract for the completed work'. This document outlines the nature, conditions, and specifics of the delivered work which is under closure process, including obligations and penalties in the event that all terms were not met by either or both parties. It will give you the complete picture of what was expected, what has been delivered and therefore, help you determine whether the procurement can be closed or not. The supplier's general terms and conditions are not specific enough to a particular procurement. The entire project management plan contains other irrelevant information for the closing of a procurement. The statement of work for a different procurement is just that - for a different procurement.

Question 2

While processing the close procurement for a vendor, you receive feedback that suggests their performance was below expectations. How should you document this information?

Correct Answer: Create a performance report to include in the project's lessons learned.

The best way to document the vendor's subpar performance is to create a performance report and include that in the project's lessons learned. This method serves as a formal documentation of the vendor's performance and will be useful for future projects. Sending an email to the vendor expressing dissatisfaction does not formally document the issue and isn't professional. Simply documenting the poor performance in the project closure report only isn't comprehensive because it's important to detail these issues in lessons learned for the benefit of future projects. Including negative feedback in the vendor's final payment invoice is inappropriate and unprofessional, as invoices are not the correct medium for providing performance feedback.

Question 3

You are a project manager overseeing the construction of a new office building. The electrical contractor has completed their work, and it's time to close the procurement. What is the first step you should take?

Correct Answer: Confirm the work has been completed according to the contract.

The first step to take once a contractor has completed their work on a project is to confirm that the work has been completed according to the contract. This is to ensure that the specifications and guidelines outlined in the contract have been adhered to and that the quality of work meets the required standards before the procurement process can be closed. The other answers are incorrect. Terminating the contract without reviewing the work could lead to potential issues, as it's important to ensure the work has been done correctly. Asking the contractor to continue working on different aspects of the project is not relevant if the task specified in the contract is complete. Finally, beginning the close procurement process for another contractor is not a first step after one contractor has finished their work, as this step would only occur as a next stage or for other parts of the project.

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