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Procurement Strategy

The buyer's plan for choosing the project delivery approach and the form(s) of enforceable contract to achieve the desired results.

Key Points

  • Specifies how the project will be delivered (for example, design-bid-build, design-build, EPC, or phased delivery).
  • Selects contract type(s) and pricing models (fixed-price, cost-reimbursable, or time and materials) to align risk and incentives.
  • Informed by risk, complexity, schedule, budget, market conditions, and make-or-buy analysis.
  • Guides solicitation method, supplier selection, negotiation approach, and contract governance.

Example

A city plans a new water treatment facility. The buyer chooses a design-build delivery method and a fixed-price contract with schedule incentives. This procurement strategy drives the RFP content, prequalification of vendors, and the negotiation plan.

PMP Example Question

During planning, the project manager must decide between design-build and design-bid-build and whether to use a fixed-price or cost-reimbursable agreement. Which document captures these decisions?

  1. Procurement management plan
  2. Procurement strategy
  3. Source selection criteria
  4. Statement of work

Correct Answer: B — Procurement strategy

Explanation: The procurement strategy records the chosen delivery method and contract type; the plan describes the overall procurement process, the criteria define how offers are evaluated, and the SOW describes the work to be done.

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