Manage suppliers/contracts

Concepts

This facet of project management is even highlighted in the Project Management Professional (PMP) exam, a globally recognized certification that validates a project manager’s skills and knowledge.

I. Understanding Empowerment in Project Management

Empowerment in the context of project management means giving team members and stakeholders the authority to make decisions, have control over their tasks and work environment, and be actively involved in project execution. It involves creating a secure environment where individuals aren’t afraid to take risks and learn from their mistakes. Empowerment is also about fostering effective communication, trust, collaboration, accountability, and innovation.

II. Empowering Team Members

Delegation: This is the act of assigning authority to team members to handle specific tasks. It’s a demonstration of trust and confidence in your team members’ abilities. For example, delegating the task of resolving a technical issue to the IT team because of their expertise.
Training and Development: Empowering teams sometimes require the introduction of training and skill development opportunities. The PMP exam makes reference to tools such as Tuckman’s ladder for team development.

Encouraging Involvement and Innovation: Team members should be encouraged to provide input and innovative ideas. Employ brainstorming sessions and promote an environment where every opinion is valued.

III. Empowering Stakeholders

Inclusive Communication: Stakeholders need to be given the opportunity to voice their concerns, ideas and needs. Regular meetings, newsletters and other forms of communication can facilitate open dialogue.
Participation in Decision Making: Involving stakeholders in decision-making processes can also improve their sense of empowerment. For instance, seeking feedback from stakeholders on proposed changes to the project scope or deliverables.

Informing and Educating: Providing stakeholders with regular progress updates and detailed background information about the project, gives them context and a sense of ownership.

IV. Benefits of Empowerment

Empowered teams and stakeholders translate to increased productivity, improved quality of work, enhanced creativity and innovation, better risk management, and improved job satisfaction. For example, Google’s Project Aristotle found that “psychological safety” – having the confidence to take risks without feeling insecure or embarrassed – is a key element in successful teams.

Empowering team members and stakeholders is a regular practice in project management, so much so it is referenced in the PMP exam. As a PMP aspirant, understanding the dynamics of empowerment and the ability to create an enabling environment will be pivotal in passing the exam and achieving project successes.

Answer the Questions in Comment Section

True or False: Potential suppliers’ capability to meet technical requirements are not necessarily evaluated prior to contract award.

True
False

Answer: False.

Explanation: It is critical to evaluate a potential supplier’s capability to meet technical requirements prior to awarding a contract, to ensure they can deliver the goods or services as per the contract terms.

In PMP, which kind of contract has a fixed total price for a well-defined product?

A. Cost plus incentive fee

B. Time and Material
C. Fixed price
D. Cost plus fixed fee

Answer: C. Fixed price.

Explanation: A fixed price contract has a set price that doesn’t change, unless the scope of work changes.

The ____________ is a contractual document that is used for purchasing complex goods or services from a supplier.

A. Statement of work

B. Service Level Agreement
C. Request for proposal
D. Contract Agreement

Answer: C. Request for proposal.

Explanation: A Request for Proposal (RFP) is used when the project scope is complex, and suppliers are asked to propose a solution including the cost.

True or False: Awarding contracts always consider the lowest bid from suppliers.

True

False

Answer: False.

Explanation: Although cost is a factor in awarding contracts, it’s not the only consideration. Quality, delivery time, service, and the supplier’s history can also impact the decision.

If a contract is legally terminated without the actual completion of the work, this is called:

A. Contract Closure
B. Contract Completion
C. Breach of Contract

D. Conditional Contract

Answer: A. Contract Closure.

Explanation: Contract Closure refers to the process of an early termination of a contract by either party for any reason stipulated in the contract agreement.

True or False: The purpose of a statement of work (SOW) is to describe in clear, concise terms the work to be done by the supplier.

True
False

Answer: True.

Explanation: The SOW outlines the specific services or tasks the supplier is expected to perform, including the project’s goals, deliverables, timeline, and budget.

Which of the following is not a component of a procurement management plan?

A. Roles and responsibilities
B. Contract type selection

C. Risk management
D. Project plan

Answer: D. Project Plan

Explanation: A procurement management plan includes elements like roles and responsibilities, contract type selection and risk management but not a project plan.

True or False: Communication management is unrelated to supplier and contract management.

True
False

Answer: False.

Explanation: Effective communication plays a vital role in managing suppliers and contracts. It helps in maintaining synchronization between all parties and managing expectations.

Which of the following is not an objective of managing suppliers and contracts in a project?

A. Enhancing project profitability

B. Building long-term supplier relationships
C. Increasing project risk
D. Ensuring timely delivery of products/services

Answer: C. Increasing project risk

Explanation: Managing suppliers and contracts is done to minimize project risks, not to increase them.

True or False: A change in scope of work can lead to a change in the contract value.

True

False

Answer: True.

Explanation: If the scope of work changes during the course of a project, it can lead to changes in the value of the contract, either increasing or decreasing based on what the change entails.