Procurement Control

🎯 Procurement Control: Keeping Your Contracts on Track

The Story of the Watchful Shopkeeper

Imagine you own a small candy store. You ordered 100 boxes of chocolate from a supplier. The chocolates arrived, but wait! Some boxes are damaged, some arrived late, and the supplier is asking for extra payment because of “shipping costs.”

What do you do?

This is exactly what Procurement Control is about. It’s the art of watching over your agreements to make sure everyone does what they promised.

🌟 What is Control Procurements?

Think of it like being a referee in a soccer game. Your job is to:

• Make sure everyone follows the rules
• Watch for any fouls
• Keep the game fair

Control Procurements = Watching your contracts like a hawk to ensure:

• Sellers deliver what they promised
• Your team gets what they paid for
• Problems are fixed quickly

graph TD
    A["Contract Signed"] --> B["Monitor Performance"]
    B --> C{Everything OK?}
    C -->|Yes| D["Continue Monitoring"]
    C -->|No| E["Take Action"]
    E --> F["Fix Problems"]
    F --> B
    D --> G["Contract Complete"]

Simple Example

You hire a painter to paint your house blue in 5 days for $500.

Control Procurements means checking:

• Is the paint actually blue? ✅
• Are they finishing on time? ✅
• Is the quality good? ✅

📊 Procurement Performance Review

What Is It?

Imagine you’re a teacher grading a student’s homework. You look at:

• Did they answer all questions?
• Are the answers correct?
• Did they submit on time?

Procurement Performance Review = Giving your seller a “report card”

The Three Questions

Real Example

You hired a company to build your website.

Your Review:

• ✅ Quality: Website looks great!
• ⚠️ Schedule: 3 days late
• ❌ Cost: Asking for $200 extra

Now you know exactly what to discuss with them!

Tools for Review

1. Status Meetings - Regular check-ins (like weekly calls)
2. Progress Reports - Written updates from the seller
3. Inspections - Actually looking at the work
4. Performance Metrics - Numbers that show progress

⚖️ Claims Administration

The Cookie Jar Story

Little Timmy says: “Mom promised me 5 cookies, but I only got 3!” Mom says: “I said 3 cookies, not 5!”

Who is right? You need to look at the original promise (the contract).

What Is a Claim?

A claim is when the buyer or seller says:

“Hey! You owe me something extra, or you didn’t do what you promised!”

graph TD
    A["Claim Filed"] --> B["Review Contract"]
    B --> C["Gather Evidence"]
    C --> D["Negotiate"]
    D --> E{Agreement?}
    E -->|Yes| F["Settle Claim"]
    E -->|No| G["Escalate/Arbitrate"]

Types of Claims

How to Handle Claims

1. Document Everything - Keep all emails, notes, and records
2. Check the Contract - What did you actually agree to?
3. Stay Calm - Claims are normal, not personal attacks
4. Negotiate Fairly - Find a win-win solution

Real Example

Claim: “The construction took 2 extra months because you kept changing the building design.”

Your Response:

• Check the change order records ✅
• Review the contract’s change clause ✅
• Calculate fair extra time ✅
• Agree on 1 extra month ✅

🤝 Contract Negotiations

The Lemonade Stand Trade

Two kids want to trade. Alex has lemonade. Sam has cookies.

• Alex: “I want 5 cookies for 1 glass of lemonade!”
• Sam: “That’s too many! How about 2 cookies?”
• Alex: “Let’s meet in the middle - 3 cookies!”

Negotiation = Finding a deal both sides can accept

When Do We Negotiate?

The BATNA Secret

BATNA = Best Alternative To a Negotiated Agreement

Before negotiating, ask: “What’s my backup plan if this fails?”

Example:

• If this vendor says no, can you hire someone else?
• If yes → you have leverage
• If no → you need this vendor more

Golden Rules of Negotiation

1. Prepare - Know your numbers, facts, and limits
2. Listen - Understand what they really want
3. Be Creative - Find solutions that help both sides
4. Document - Write down what you agree on
5. Stay Professional - Keep emotions out

Quick Example

Your IT vendor wants $10,000 extra for urgent support.

Your Negotiation:

• “We’ll pay $5,000 extra now”
• “Plus a 2-year contract extension”
• “Everyone wins!”

🏁 Contract Closure

The Finish Line Celebration

Remember crossing the finish line in a race? You don’t just stop running - you:

• Confirm you actually finished
• Get your medal
• Thank everyone
• Go home happy

Contract Closure = Officially ending the contract the right way

graph TD
    A["Work Complete"] --> B["Verify Deliverables"]
    B --> C["Final Payments"]
    C --> D["Collect Documentation"]
    D --> E["Lessons Learned"]
    E --> F["Archive Records"]
    F --> G["Contract Closed ✓"]

The Closure Checklist

Why Proper Closure Matters

• Legal Protection - You have proof of completion
• Financial Clean-Up - No surprise bills later
• Knowledge Capture - Learn for next time
• Relationship Building - End on good terms

Real Example

Website project complete!

Closure Steps:

1. ✅ Website tested and approved
2. ✅ Final invoice of $2,000 paid
3. ✅ Source code handed over
4. ✅ Training documentation received
5. ✅ Sign-off document signed
6. ✅ Contract archived

🔍 Project Audits

The Health Check-Up

Just like visiting a doctor for a check-up, your project needs regular “health checks” too.

Audit = An independent expert checks if everything is running properly

Types of Procurement Audits

Who Does Audits?

• Internal Auditors - People from your own organization
• External Auditors - Independent experts from outside
• Government Auditors - For public projects

The Audit Process

graph TD
    A["Plan Audit"] --> B["Collect Documents"]
    B --> C["Review Records"]
    C --> D["Interview Teams"]
    D --> E["Identify Issues"]
    E --> F["Write Report"]
    F --> G["Recommend Fixes"]

What Auditors Look For

1. Contract Compliance - Did everyone do what they promised?
2. Proper Approvals - Were changes authorized correctly?
3. Fair Pricing - Did you pay reasonable amounts?
4. Record Keeping - Is documentation complete?
5. Risk Management - Were problems handled well?

Real Example

Audit Finding: “Invoice #4532 was paid without proper approval.”

Action:

• Add extra approval step for invoices over $1,000
• Train team on approval process
• No more skipping steps!

🎯 The Big Picture: How It All Connects

graph TD
    A["Control Procurements<br>The Watchful Eye"] --> B["Performance Review<br>Report Card"]
    A --> C["Claims Administration<br>Dispute Resolution"]
    A --> D["Contract Negotiations<br>Finding Agreement"]
    A --> E["Contract Closure<br>Happy Ending"]
    A --> F["Project Audits<br>Health Check"]

    B --> G["Fix Problems Early"]
    C --> G
    D --> G
    E --> H["Learn for Next Time"]
    F --> H

🌈 Remember These Key Points

💪 You’ve Got This!

Procurement Control is like being a great parent:

• You watch over things carefully 👀
• You help solve problems fairly ⚖️
• You make sure everyone learns and grows 🌱
• You celebrate endings properly 🎉
• You check that everything is healthy 💚

Congratulations! You now understand how to keep your contracts running smoothly from start to finish. Go forth and manage those procurements like a pro! 🚀