1. Project Management Office
Vendor/Contractor
Relationships
OPS450
Ken Hogan

2. Vendor/Contractor Relationships
Vendors and contractors bring specialized skill, knowledge, and
capability to technical project work, as well as provide
products/services that support of projects through established
contracts/agreements.

3. PMO Vendor/Contractor Relationship Management Responsibility
The PMO provides oversight of vendor/contractor
performance management to maximize their value on
projects and optimize their use within the PM
environment.
• Identify/qualify vendors/contractors who add value to
project efforts.
• Develop guidance for managing vendor/contractor
participation on projects.
• Develop guidance for managing vendor/contractor
contracts within the relevant organization.

4. Vendor/Contractor Relationship Activities Across the PMO Continuum
Project Office Basic PMO Standard PMO Advanced PMO Center of
Excellence
Manages Introduces Manages customer Manages Evaluates
vendor/contractor vendor/contractor relationships across vendor/contractor vendor/contractor
project participation management project duration relationships performance
• Monitors • Identifies/qualifies • Establishes • Analyzes
vendor/contractor preferred vendor/contractor
vendors/contractors vendor/contractor business value
business/relationship programs
information • Develops • Examines
vendor/contractor • Develops vendor/contractor
• Develops responsibilities vendor/contractor participation and
vendor/contractor partnerships effectiveness
management • Monitors across
guidance vendor/contractor industries
performance

5. Vendor/Contractor Relationship Activities across the PMO Continuum
The PMO establishes processes to qualify vendor/contractor candidates,
make them a project resource, and manage their performance.
• Project Office – Direct responsibility for managing vendor/contractor
project performance using established guidance for oversight actions.
• Mid-range PMO – Develops processes to acquire/manage
vendor/contractor participation on projects, prescribe
vendor/contractor roles/responsibilities, prepare guidance for project
managers to oversee vendors/contractors, and examine opportunities
for closer vendor/contractor relationships that offer distinct business
advantages.
• Center of Excellence – Examines/analyzes business results of
vendor/contractor participation.

6. Vendor/Contractor Relationship Function Model
Manage Manage Manage
Vendor/Contractor Vendor/Contractor Vendor/Contractor
Relationships Acquisition Performance
• Identify Vendor/Contractor • Identify/Qualify • Administer
Needs Vendors/Contractors Vendor/Contractor
Contracts
• Manage Vendor/Contractor • Solicit Vendor/Contractor
Information Proposals • Monitor
Vendor/Contractor
• Prescribe Vendor/Contractor • Prepare Performance
Participation Vendor/Contractor
Contracts

7. Manage Vendor/Contractor Relationships

8. Identify Vendor/Contractor Needs
The PMO collaborates with project managers to determine the
vendor/contractor support needed within the PM environment.
• Vendor/contractor partnerships – A formal business relationship to
facilitate the mutual pursuit and achievement of common business
objectives.
• Vendor/contractor affiliations – A formal business relationship to enable
pre-qualified vendors/contractors to be identified and positioned for use
on projects relative to the appropriateness of their products/services.
• Project-specific relationships – A formal business relationship established
to obtain vendor/contractor participation on one or more specific
projects.
• Service provider relationships – A formal/informal business relationship
for a pre-qualified service provider with available services for projects.
• Supplier relationships – A business relationship for providers of products,
supplies, and equipment needed for projects.
• Food service and meal providers.

9. Manage Vendor/Contractor Information
The PMO initiates the acquisition/management of
vendor/contractor information as a basis for establishing
preferred vendor/contractor relationships.
• Vendor/contractor presence – Vendors/contractors that
exist in the market place and their contributing capabilities
for projects efforts.
• Vendor/contractor qualification.
• Vendor/contractor performance.
• Vendor/contractor business profile.
• Vendor/contractor relationship history.
• Vendor/contractor business fit.

10. Prescribe Vendor/Contractor Participation
The PMO establishes processes for how to use vendors/contractors on projects
within the PM environment.
• Vendor/contractor sourcing responsibility – Determines if it is a clearinghouse
for vendor/contractor acquisition or just as a vendor/contractor information
resource.
• Vendor/contractor oversight responsibility - Determine PMO involvement in
managing vendor/contractor participation.
• Vendor/contractor project affiliation – Determines the approach to
vendor/contractor management on projects relative to the type of
vendor/contractor.
• Vendor/contractor PM responsibility – Establishes common
activities/expectations for vendor/contractor participation in PM activities.
• Vendor/contractor technical performance responsibility – Establishes guidance
for vendor/contractor use of acceptable technical performance standards and
technical competency requirements to apply to vendor/contractor efforts within
the PM environment.
• Vendor/contractor business management responsibility – Establishes guidance
for vendor/contractor business activity management.

11. Manage Vendor/Contractor Acquisition

12. Identify/Qualify Vendors/Contractors
The PMO establishes processes to identify and qualify vendors/contractors according to
established business relationships.
• Identify vendor/contractor requirements.
• Perform make-or-buy analysis.
• Qualify vendors and contractors.
• Technical capability.
• Staff experience.
• Familiarity with vendor/contractor products/services.
• Vendor/contractor familiarity with the organization.
• Geographic location and coverage.
• Previous similar jobs completed.
• Financial stability and bonding capacity.
• Determine pricing arrangements.
• Develop independent cost estimates.
• Create vendor/contractor plan.

13. Solicit Vendor/Contractor Proposals
The PMO establishes guidance for preparing vendor/contractor solicitation, manage their distribution, and review responses
toward selecting a qualified vendor/contractor.
• Prepare internal requisition material.
• Determine type of solicitation.
• Prepare solicitation.
• Scope of work.
• Technical requirements.
• Schedule.
• Proposal format requirements.
• Terms and conditions.
• Subcontract type.
• Evaluation criteria.
• Specify optional proposal actions.
• Distribute the solicitation and manage vendor/contractor responses.
• Evaluate vendor/contractor responses.
• Conduct vendor/contractor negotiations.
• Select vendor/contractor.
• Debriefing.

14. Prepare Vendor/Contractor Contracts
The PMO establishes processes to prepare
vendor/contractor contracts in the relevant organization.
• Verify contract documents.
• Obtain vendor/contractor contract approvals.
• Book the contract.
• Transfer vendor/contractor responsibility to project
managers.

15. Manage Vendor/Contractor Performance

16. Administer Vendor/Contractor Contracts
The PMO administers vendor/contractor contracts to ensure the fulfillment of the contractual
obligations by all parties.
• Verify vendor/contractor contract booking.
• Organize vendor/contractor contract files.
• Establish procedures for contract claims and dispute resolution.
• Establish procedures to solve issues/problems.
• Establish communication guidance.
• Monitor vendor/contractor performance.
• Manage vendor/contractor relations.
• Conduct meetings with vendor/contractor representatives.
• Manage vendor/contractor contract changes.
• Monitor vendor/contractor contract compliance.
• Manage acceptance of vendor/contractor deliverables.
• Manage vendor/contractor payments. Following are several types of payments.
• Review and close out vendor/contractor contract.
• Manage vendor/contractor resource departures.
• Prepare a post-project vendor/contractor performance report.

17. Monitor Vendor/Contractor Performance
The PMO facilitates project manager oversight for vendor/contractor
performance management.
• Price variation analysis.
• Deliverable performance analysis.
• Contract add-on/extension analysis – Identifies particular
vendors/contractors having a recurring needs to request/negotiate work
extensions.
• Billing practices analysis.
• Management retention analysis.
• Customer satisfaction analysis.
• Project manager oversight analysis.
• Business/investment posture.